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Infrastructure spending up in April

STATE SPENDING on infrastructure surged in April as the government ramped up construction of quarantine facilities and purchases of medical equipment in response to the coronavirus disease 2019 (COVID-19) pandemic.

The Department of Budget and Management’s (DBM) latest disbursement report showed infrastructure and other capital outlays jumped 42% to P40.1 billion in April from P28.3 billion seen in the same month last year. However, this was lower than the P62.2 billion spent in March.

The DBM attributed the spending spike to the construction of quarantine facilities for COVID-19 patients and the Health department’s purchase of medical equipment.

The government had converted the Ninoy Aquino Stadium at the Rizal Memorial Sports Complex, World Trade Center and Philippine International Convention Center (PICC) Tent Forum into quarantine facilities for mild and asymptomatic COVID-19 patients.

The DBM said the higher infrastructure spending was also due to “acquisition of transport equipment under the Revised AFP Modernization Program of the DND (Department of National Defense), and implementation of regular road infrastructure programs of the DPWH (Department of Public Works and Highways).”

Despite the spending spurt in April, infrastructure spending was still down by 4.9% to P196.2 billion in the first four months of the year from P206.4 billion a year ago.

The DBM said infrastructure spending was lower year on year due to high base effects and the temporary ban on all construction activity during the enhanced community quarantine (ECQ).

“Infrastructure spending was lower year on year due to the base effect of high infrastructure expenditures in the same period last year brought about by the payment of prior years’ accounts payables, and the temporary suspension of construction activities due to the implementation of ECQ,” DBM said.

Luzon and other parts of the country were placed under strict lockdown starting mid-March to contain the spread of the virus. The lockdown continued through May in Metro Manila while other areas that have lower reported cases started easing restrictions in mid-May.

“The year-on-year increase in overall government spending as well as in infrastructure spending in April 2020, which already reflected the full effect of the lockdown/ECQ in Luzon, may reflect priorities by the government to increase spending and funding for fiscal stimulus measures, COVID-19 programs, and other financial assistance for the most vulnerable sectors, as these are needed most at the height of the lockdowns,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said via Viber.

Overall government spending more than doubled in April to P461.7 billion, bringing total spending for the four-month period to P1.31 trillion, up 31% year on year.

The DBM said it expects overall spending for the rest of the second quarter to be largely driven by pandemic expenses, particularly the second tranche of government’s subsidy programs.

As most of the country is now under general community quarantine, infrastructure-implementing agencies may soon be able to ramp up construction work.

“This should facilitate the resumption of construction activities of the DPWH, and the Department of Transportation so they can speed up the implementation of public infrastructure projects, with the intention to catch up with the unintended delays during the ECQ,” the DBM said.

In May, key infrastructure projects under the flagship “Build, Build, Build” program were given exemption to resume construction work while observing minimum health and safety standards, such as physical distancing and testing.

The infrastructure spending target for 2020 was slashed to P833 billion from the initial program of P989 billion as government’s funds were redirected for the COVID-19 response.

However, the government is eyeing a bigger, P1.131-trillion budget for infrastructure next year as it is touted to play a key role in economic recovery. — Beatrice M. Laforga

PLDT raises $600M in global bond float

PLDT, Inc. returned to the offshore bond market after 18 years. — REUTERS

By Arjay L. Balinbin, Reporter

STRONG investor demand welcomed PLDT, Inc.’s return to the offshore bond market after an 18-year absence.

The telecommunications giant on Wednesday told the stock exchange it raised $600 million from the issuance of 10-year and 30-year dual tranche senior unsecured fixed-rate notes.

PLDT said the notes drew combined final orders worth $10.2 billion, 17 times more than the amount it sold — the largest orderbook size for any Philippine issuer. Demand was strong, mostly from investors in Asia and Europe, it added.

“We are extremely gratified by the response of the international bond market to our return,” PLDT Chairman, President and Chief Executive Officer Manuel V. Pangilinan was quoted as saying in a statement. “The market’s overwhelming welcome only serves to validate PLDT’s record of resiliency and patented financial discipline over the years.”

IFR reported the $300-million January 2031 bond was priced at 99.39 with a coupon of 2.5% to yield 2.566% or Treasuries plus 180 basis points (bps).

The $300-million 30-year tranche was priced at 99.168 with a coupon of 3.45% to yield 3.495% or Treasuries plus 195 bps.

PLDT noted this was the “first ever 30-year offering for a non-government entity out of the Philippines.”

“Since we haven’t been around for such a long time, the interest then became very strong, that’s what we call the scarcity value. So because you are not there issuing all the time, it became quite an attractive investment opportunity for a lot of investors,” PLDT Chief Finance Officer Anabelle L. Chua said in a virtual interview.

On why it took 18 years for the company to return to the international capital market, Ms. Chua said: “What happened really in the last couple of years was … there were much more liquidity in the Philippine local market, longer tenors, and so it was easy to access.”

The rates in the local market had also been “quite attractive,” she added.

Now, Ms. Chua said PLDT wanted to take advantage of the historically low US interest rates.

“We also felt that we have a good story to tell. We are in a market which is very attractive for data take-up, and there’s the young population. A lot of Filipinos spend time online, and there’s a lot of growth in terms of data traffic. During the lockdown period, we saw how people really used a lot of data. Our traffic increased by about 25%,” she said.

Ms. Chua said PLDT is planning to use around $400 million from the bond proceeds to repay debt due in the second half of 2020 and in 2021, “and even selectively prepay some other debts.”

The remaining $200 million will fund PLDT’s capital expenditure (capex) requirements for this year and the following year, she added. The telco giant is allocating P63 billion in capex this year.

Ms. Chua said the company has no plans for another bond issuance for now.

“The good thing about this is in one exercise we were able to address the refinancing requirements for up to next year, so we have more time to plan how we want to tap financial markets after that,” she said.

Credit Suisse (Singapore) Limited and UBS AG Singapore Branch were the joint lead managers and joint bookrunners for the transaction.

PLDT is rated BBB+ stable by S&P, Baa2 stable by Moody’s and BBB stable by Fitch. S&P gave the dollar notes a BBB+ rating.

Shares in PLDT on Wednesday closed 0.25% lower at P1,220 apiece.

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.

Cojuangco, who built Southeast Asia’s biggest food empire, dies at 85

By Denise A. Valdez, Reporter

PHILIPPINE billionaire and San Miguel Corp. Chairman and Chief Executive Officer Eduardo “Danding” M. Cojuangco, Jr., who built Southeast Asia’s oldest and largest food and drink empire, has died. He was 85.

Mr. Cojuangco, an ally of the late dictator Ferdinand E. Marcos, died on June 16, San Miguel said in a disclosure to the Philippine Stock Exchange, without saying the cause of his death. He battled various ailments including lung cancer, according to ABS-CBN News.

“The board of directors and the entire San Miguel group deeply mourn the passing of our chairman and chief executive officer,” it said. “His contributions to our company’s history are numerous and indelible.”

Mr. Cojuangco survived political exile in 1986 and returned home to continue his political ambition, running for president in 1992 but lost.

He was governor of Tarlac province before Mr. Marcos came to power.

Mr. Cojuangco has held his seat in the listed group since July 1998. He led its growth from a food and beverage company into a diversified empire whose interests now include oil, infrastructure and power.

He emerged to be one of the wealthiest businessmen in the country, posting a net worth of $1 billion (about P50.61 billion) this year based on Forbes World’s Billionaires List.

Mr. Cojuangco founded the Nationalist People’s Coalition (NPC), the vehicle he used for his 1992 campaign.

Mr. Cojuangco was vital to San Miguel’s success as a conglomerate and “its pursuit of socioeconomic progress for the Philippines through its diversified corporate endeavors,” presidential spokesman Harry L. Roque said in a statement.

“He enabled the company to generate thousands of livelihood and employment opportunities, benefiting thousands of Filipino families,” he added.

“The legacy and vision of NPC’s big boss will continue with all its members, friends and especially among his family,” Senate President Vicente C. Sotto III who is a party member said in a statement.

“I have been with the NPC since the start of my political career and I witnessed how he has shaped, over decades, the ideals and objectives of the party that centered on love for country,” Senator Sherwin T. Gatchalian, another party member, said in a statement.

Mr. Cojuangco faced corruption charges for years because of his Marcos connection. He was accused along with other associates of conspiring with the dictator in pocketing taxes from coconut farmers.

The government of the late Corazon C. Aquino, Mr. Marcos’s successor and Mr. Cojuangco’s estranged cousin seized his stake in San Miguel, which he eventually got back during the presidential term of Joseph E. Estrada.

Since 2002, San Miguel has been led by Ramon S. Ang as president and chief operating officer. Mr. Cojuangco sold his stake to him and other allies in 2012.

“For the memories and all that you taught me, I will always remember you and keep you present,” Mr. Ang said in a Facebook post. “Thank you for always having my back, ECJ.”

Mr. Cojuangco was also a sports advocate, having supported professional basketball in the past four decades.

As San Miguel chairman, he “guided our expansion, diversification and transformation,” the company board said. “His vision for San Miguel — to be a beacon of hope for the Philippines and a partner in nation-building — remains at the core of everything we do.”

Mr. Cojuangco was the eldest child of Eduardo C. Cojuangco, Sr. and Josephine B. Murphy. His mother, the daughter of a US Army volunteer who married a Filipina, was born and raised in Baguio City. His father was of Chinese descent.

He attended De La Salle High School, University of the Philippines Los Baños and California Polytechnic College.

Mr. Cojuangco is survived by his wife Soledad “Gretchen” Oppen-Cojuangco with whom he had four children, and domestic partner Aileen Damiles with whom he had two children. — with Michael Angelo S. Murillo

Employment to rebound in 1-2 years, says Bello

Repatriated Filipino workers have their papers processed after being allowed to go home following weeks of quarantine amid the coronavirus outbreak, in Parañaque City, May 26. — REUTERS

THE Labor department chief expects the country’s labor market, battered by the coronavirus pandemic, to recover in one to two years.

“When we talk of rebound, my estimate is between one to two years. We cannot expect an immediate rebound in six months,” Department of Labor and Employment (DoLE) Secretary Silvestre H. Bello III said during “Flattening the Unemployment Curve,” a webinar hosted by human capital solutions provider Viventis on Wednesday.

“We are relying on our technology, BPO[s] (business process outsourcing), agribusiness, and especially the implementation of the ‘Build, Build, Build’ infrastructure project…, which is [under the industry of] construction,” Mr. Bello added.

Amid the pandemic, unemployment rate surged to 17.7% in April from a year earlier, the highest since the government adopted new definitions for the Labor Force Survey in 2005, according to the Philippine Statistics Authority’s latest round of the survey.

This translated to 7.25 million jobless Filipinos, more than three times from 2.27 million a year ago.

The statistics agency said the labor force size was about 41.02 million out of 73.7 million Filipinos aged at least 15 years, yielding the lowest labor force participation rate in the history of Philippine jobs market at 55.6%. In absolute terms, around three million Filipinos have left the labor force in April compared to the same month last year.

The government placed Luzon under an enhanced community quarantine starting mid-March to curb the spread of the coronavirus disease 2019 (COVID-19), resulting in the shutdown of all economic activity except essential services.

Unemployment was targeted to go down to 3-5% by 2022, according to the government’s Philippine Development Plan 2017-2022.

In the same webinar, Labor Undersecretary Benjo Santos M. Benavidez said retrenched employees are entitled to a separation pay and, if qualified, can apply for an unemployment insurance benefit from the Social Security System (SSS). By way of a long-term solution, government institutions and accredited agencies will also be opening training programs to re-skill the unemployed.

“We are in the process of profiling them, because we are just receiving the notices of the displaced,” he said.

A key feature of the Republic Act No. 11199 or the Social Security Act of 2018 is the unemployment benefit or involuntary separation insurance program, which was implemented in August 2019.

Under this program, the SSS allows qualified members who are involuntarily separated from work to claim for a cash allowance equivalent to a half of their average monthly salary credit for a maximum of two months

Members must not be more than 60 years old at the time of involuntary separation, except for underground and surface mineworkers, and racehorse jockeys whose age should not be more than 50 and 55 years old, respectively.

Laid-off applicants must submit a DoLE-issued certification establishing the nature and date of involuntary separation as well as the Notice of Termination from the employer or the Affidavit of Termination of Employment.

As for the private sector, Mr. Bello called on enterprises to facilitate digital retooling and upskilling of their employees. He also urged them to listen to the needs of their employees.

“Social dialogue is very important in these most challenging times. Consultation and tripartite collaboration are essential not only for us to understand the needs of various sectors, but also to build trust and commitment towards an effective and sustainable response,” he said. — Mariel Alison L. Aguinaldo

Iberdrola tops Ayala bid for Australia’s Infigen

By Adam A. Ang

AN AUSTRALIAN unit of electricity utility giant Iberdrola, S.A. presented an A$841 million takeover bid to acquire Australian renewables company Infigen Energy Ltd., beating the A$777 million offer by an affiliate company of Ayala-led AC Energy, Inc.

In a disclosure to the Australian Securities Exchange on Wednesday, Infigen said it entered into a bid implementation agreement with Iberdrola Renewables Australia Pty. Ltd. under which the latter lodges an A$0.86 per share bid to acquire the former.

Infigen noted the offer price represents a 70% premium to its three months volume weighted average price of securities.

Its board unanimously recommended its securities holders to accept the takeover offer, which is 7.5% higher compared to UAC Energy Holdings’s bid of A$0.80 per security.

“The Board unanimously recommends that security holders accept the offer from Iberdrola and each Director intends to accept the offer, or procure acceptance of the offer, in respect of all Infigen securities they control, in each case in the absence of a superior proposal,” the company said.

Iberdrola already gained an upper hand in taking over Infigen as it entered into a pre-bid agreement with Infigen’s biggest security holder London-based The Children’s Investment Fund Management (TCI), which agreed to sell 20% of its shares to the Spanish company if no higher bid emerges.

Its offer is still subject to the Foreign Investment Review Board’s approval and its move to acquire a relevant interest in more than half of Infigen’s securities, among other conditions.

“The offer from Iberdrola follows an extended period of engagement with Infigen regarding potential cooperation or a control transaction,” Infigen said.

Spanish group Iberdrola is one of the biggest global energy players having over 55 gigawatts (GW) of installed capacity in Spain, the United Kingdom, South America, and the United States. It serves around 34 million power consumers worldwide.

Meanwhile, UAC Energy is 75% owned by AC Energy. The remaining 25% is held by UPC\AC Renewables Australia, a joint venture of the Ayala unit and UPC Renewables Australia.

The joint venture is currently developing four renewables projects in Australia.

AC Energy on June 3 said it aspired to take over Infigen to boost its renewables portfolio with a goal to have 50% of its target capacity of over 5 GW to come from renewable sources in the next five years.

UAC Energy holds a 12.82% stake in Infigen.

Infigen said its board was pushing to reject UAC Energy’s offer. Full details on this recommendation will be disclosed next week, it said.

Infigen develops, generates, and sells renewable energy. It owns and operates 670 megawatts of wind farms in Australia, along with gas, battery, and contracted assets.

BusinessWorld reached out to AC Energy for comments but it has yet to respond as of press time. A spokesperson for UAC Energy said the company is “considering its position,” according to a Reuters report.

Jollibee in ‘precautionary’ fund-raising for pandemic impact

JOLLIBEE Foods Corp. (JFC) is planning to offer US unsecured securities to generate funds that will support it through the coronavirus disease 2019 (COVID-19) pandemic.

In a disclosure to the exchange Wednesday, the listed fast food operator said it had mandated several banks to arrange a series of fixed income investor calls starting June 17.

The banks are Citigroup, Goldman Sachs, J.P. Morgan and Morgan Stanley as joint global coordinators, and Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley, BPI Capital Corp., Credit Suisse and UBS as joint lead managers and bookrunners.

“Proceeds from the contemplated offering will be used for general corporate purposes, intended as a precautionary measure from unforeseen eventualities that may be caused by the COVID-19 pandemic, as well as fund initiatives of the group,” it said.

The offering will be done by JFC subsidiary Jollibee Worldwide Pte. Ltd. After the banks arrange the plan, the company will proceed with a Regulation S only, dollar-denominated guaranteed, senior unsecured securities offering subject to market conditions.

A Regulation S offer means the securities are executed in countries outside the United States. It can be used for the issuance of equity or debt securities to raise capital.

JFC noted while it is preparing for a larger impact of the pandemic, the group currently has P26.5 billion or $522.3 million cash as of end-March. This gives the company enough liquidity to support its existing operations and meet all obligations.

JFC reversed its income to a net loss of P1.8 billion in the first quarter, falling from a net profit of P1.46 billion the same period last year, due to temporary store closures triggered by the COVID-19 pandemic.

It warned losses in the second quarter may fall deeper due to a longer lockdown covered in April to June, thus financial performance for the whole year “will not be a good one.”

Part of the company’s initiatives to tide through the pandemic is cutting its 2020 budget for capital expenditures by 63% to P5.2 billion. It is also allocating P7 billion to “rationalize and re-design” its business structure to adapt to new consumer habits emerging from the pandemic.

JFC owns food brands such as Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Highlands Coffee, Hard Rock Café, Smashburger and Coffee Bean and Tea Leaf. It has 5,945 stores across the world, where 3,317 are in the Philippines.

Shares in JFC at the stock exchange gained P2.50 or 1.75% to P145 each on Wednesday. — Denise A. Valdez

Singaporean bidder not keen on taking First Gen cash dividend

A SINGAPORE-BASED holding firm buying some shares of Lopez-led First Gen Corp. refused to accept cash dividends in exchange for its offer price.

Last month, Valorous Asia Holdings Pte. Ltd., a unit of KKR Asia Pacific Infrastructure Holdings Pte. Ltd., publicized its tender offer to acquire 6% to 9% of the Philippine-listed energy company’s total issued and outstanding common shares at P22.50 each.

In its announcement posted in First Gen’s stock exchange disclosure on Wednesday, Valorous informed shareholders that it would close its bid on June 24 at noon.

“Valorous does not have any plan to either extend the tender offer or modify any of its terms (including the tender offer price),” the company added.

The KKR unit also said it would not accept cash dividends from them for its offer.

“Valorous hereby confirms that it will not be receiving that cash dividend on any [First Gen] shares tendered to Valorous under the tender offer,” it said.

Recently, First Gen said it would pay its shareholders their cash dividends of P0.28 per common share on July 20.

It told shareholders eligible for cash dividends that they may tender their shares to Valorous, “without prejudice to their receipt of the cash dividend.”

KKR Asia Pacific Infrastructure is owned by KKR Asia Pacific Infrastructure Investors SCSp based in Luxembourg. The latter is managed and advised by Kohlberg Kravis Roberts & Co. L.P., a unit of New York-listed investment firm KKR & Co., Inc.

Last month, KKR said its all-cash offer could bring immediate return on shareholders’ investments at an “attractive” premium.

“KKR has made this Tender Offer in good faith and would welcome the opportunity to be a minority investor available to positively engage with First Gen’s management team and the Lopez family as helpful in the future,” KKR Asia Pacific Infrastructure Head David Simon Luboff said.

On Wednesday, shares in First Gen inched up by 0.73% to close at P20.75 each. — Adam J. Ang

Grab to cut 360 jobs as pandemic hurts operations

SINGAPORE-BASED ride-hailing firm Grab said it would be cutting about 360 jobs or 5% of its employees due to the “stark impact” of the coronavirus pandemic on its operations.

Grab Philippines confirmed its employees are affected by the retrenchment move.

“It is with heavy heart that I share with you today that we will be letting go about 360 Grabbers, or just under 5 percent of our employees,” Grab Chief Executive Officer and Co-Founder Anthony Tan said in his note to employees posted on Grab’s website on Tuesday.

He said the company had tried “everything possible” to avoid cutting jobs.

“The difficult cuts we are making today are required, because millions depend on us for a living in this new normal,” he noted.

“Since February, we have seen the stark impact of COVID-19 on businesses globally, ours included. At the same time, it has become clear that the pandemic will likely result in a prolonged recession and we have to prepare for what may be a long recovery period,” he said.

Grab Philippines is affected, Grab Public Relations Manager Arvi P. Lopez told reporters via Viber late Tuesday.

“However, please note that we cannot disclose how many impacted Grabbers are from the Philippines,” he added.

He also clarified that the affected Philippine-based employees are office-based, “not driver-partners.”

Mr. Tan said the company had reviewed over the past few months all costs, cut back on discretionary spending, and even “implemented pay cuts for senior management.”

“In spite of all these, we recognize that we still have to become leaner as an organization in order to tackle the challenges of the post-pandemic economy,” he added.

At the weekend, Grab Philippines President Brian P. Cu said the rider demand for their GrabCar service had started to recover, with over 50,000 bookings made as of Saturday.

He said that in the first two weeks of the general enhanced community quarantine, Grab Philippines’ online drivers had received 10 to 12 trips per day.

The numbers were only around 15% of the average bookings made before the coronavirus pandemic, Mr. Cu said. “But we are growing quickly week on week.”

The rider demand is expected to increase in the second phase of the quarantine, he added. — Arjay L. Balinbin

New Normal? New Vikings

AS Vikings Luxury Buffet reopens this week, we look back on the times we’ve made utter pigs of ourselves and tried to form sushi and salad pyramids on our plates a few inches high. I cite this specific memory as we enter what everybody calls “The New Normal.” As per government regulations, while restaurants may operate on a limited basis during the general community quarantine, buffets are still very much closed to maintain social distancing. While Vikings may have been reopened, the experience won’t be quite the same: instead of getting up and getting food from various stations, one will just order-all-you-can from a menu.

A video released by Vikings showed the new measures they’ve put in place to ensure their adherence to government regulations (which include “no mask, no entry” rules, rubbing alcohol for one’s hands at the entrance, and temperature checks for everyone entering), but also making sure in their own way to protect both staff and customers. The video showed temperature checks, increased sanitation of work and dining areas, increased hygiene measures, social distancing in the queues, health declaration forms to be filled out by the customers via mobile, tableware covered in plastic, automated faucets in the bathrooms, and cashless payment options.

Charles Lee, marketing director of the Vikings Group, looked back on what the group experienced during the early days of the pandemic. The group is behind not only several branches of Vikings, but also Vikings Niu, Four Seasons Hotpot, and Tong Yang. They also have other ventures in a la carte dining, namely La Vita, Monga, and Putien, a franchise whose parent has a star in Singapore’s Michelin Guide.

“We were definitely affected by the COVID pandemic, but that also didn’t stop us from trying to work around it. During the initial phase of ECQ, we mobilized our people to cook bento boxes in order to donate to different institutions that are in the front lines. We then later on developed and tested out doing our own delivery services by using our current manpower (with motorbikes) to do the delivery of our ala carte brands such as Putien, Monga, and La Vita. Once we got to familiarize ourselves with the operations of it, we slowly introduced our buffet food trays to the public; we wanted our customers to experience feasting again safely in the comfort of their homes,” he said in an e-mail to BusinessWorld.

Responding to how the changes in how Vikings operates will change the experience, he said, “It’s going to change big time during the new normal period, but we are working around it. We are introducing an order-all-you-can system; we wanted our customers to experience unlimited feasting from a wide array of choice but in a safe manner. It might be different from how we [used to] do things and what our customers are accustomed to, but I do believe our loyal customers will appreciate the small innovations that we did during this new normal.”

Change doesn’t come cheap, and we asked about how the extra costs may affect the company. “At this point, our company isn’t looking so much into profit anymore during the pandemic,” Mr. Lee said. “Our goal is to be able to survive and as well as being able to support our employees and satisfying our customers. That’s the goal for now.”

Opening a string of a la carte restaurants a few years ago may have been a stroke of luck now that buffets are banned. Mr. Lee said, “Any brands we opened thus far are still important to us. We do believe that our current a la carte brands have a lot of potential in the future. We will still be expanding them in areas that we think will have demand.”

Around the world, buffets in cruise ships, hotels, and restaurants are already reexamining their purpose. Still, buffets are important to the concept of a Filipino feast geared towards celebration. Talking about changes in consumer patterns, Mr. Lee said, “I think we’re going to see people trying to save more money and a lot of restaurants maintaining the food delivery services, as well [as] frozen items so that customers can cook in their own homes. We are actually also anticipating this particular consumer behavior. That’s why we are enhancing the product line of delivery services by developing ready-to-cook, ready-to-eat and ready-to-heat meals.”

“Our brand is known for feasts or celebrations, and I think right now we are doing that by providing food trays for milestone occasions, and as well as opening our stores to our customers who want to take a break from quarantine,” he said. “In a sense, our store can also be seen as a safe space to gather and socialize (safely) again.

“I think being able to survive the pandemic together as a society is a milestone on its own, worthy of being celebrated.” — Joseph L. Garcia

SEC renews warning on Bitcoin Revolution

THE Securities and Exchange Commission (SEC) is warning the public against investment offers by a group named Bitcoin Revolution after finding it continues to operate without authority.

In a new advisory on its website, the regulator again told the public not to invest or to stop investing in Bitcoin Revolution, which it said now runs its business through the domain the-bitcoinrevolution.com.

The SEC first issued a warning against the group in March. Bitcoin Revolution offers an opportunity for investors to earn up to $1,000 a day from a minimum investment of $250 through a unique automated trading system.

But the SEC said Bitcoin Revolution does not have a registration with the commission and is operating an unregulated business likened to cryptocurrency scams.

“The public must be mindful that cryptocurrencies are very volatile and the process of digital asset trading is highly speculative and involves a higher degree of risk and that the operations of such unregulated entities engaged in digital asset trading are completely unaccountable,” the SEC said.

“[T]he public must observe and exercise conscious effort before dealing with such schemes,” it added.

Bitcoin Revolution, on its website, said it was formed by a “team of dedicated experts” that met at a finance conference. The SEC said its operators are unknown, but it claims to be endorsed by personalities such as Senator Emmanuel D. Pacquiao, former senator and businessman Manuel B. Villar, Jr. and television host Boy Abunda.

It also said the group had claimed to be promoted by Finance Secretary Carlos G. Dominguez III, which he denied.

“[T]he commission assures the public that it continuously monitors and oversees such entities and their activities in a way that it sees as proper in order to prevent the proliferation of scams and/or any other unauthorized or illegal schemes in the country,” it said.

“Bitcoin Revolution remains unregistered with the commission and is still not authorized to solicit, accept or take investments/placements from the public nor to issue investment contracts and other forms of securities,” it added.

In doing so, the group violates the Securities Regulation Code and may be penalized with a maximum fine of P5 million, 21 years of imprisonment, or both.

Bitcoin Revolution was sought for comment but was not able to respond as of press time. — Denise A. Valdez

Huawei sees opportunities in banks digitizing amid pandemic

AS THE coronavirus pandemic continues to trigger digital transformation in the financial industry, Huawei Technologies Co., Ltd. sees opportunities for its data infrastructure to support banks.

“A strong and powerful real-time connectivity is of the essence when the banking sector enters the digital world, and 5G, IoT (Internet of Things), and a flexible network are key technologies,” Huawei said in a statement e-mailed to reporters on June 10.

Huawei conducted its Global FSI (Financial Services Industry) Summit 2020 last week where it highlighted how the financial sector can thrive in a mobile future.

Huawei said mobile capabilities such as cloud, Artificial Intelligence, and 5G are essential to banks trying to digitize their services.

It also noted that the coronavirus pandemic has advanced digital operations in the financial sector.

“Based on cloud computing, big data, artificial intelligence, 5G, and other ICT technologies, innovative FinTech will embrace new opportunities and lead the upgrade of financial services,” said Peng Zhongyang, director of the board and president of the enterprise business group of Huawei.

Huawei stressed mobile capability will be the “core” of the future of the banking sector.

Jason Cao, president of global financial services business unit of Huawei said: “It not only is applicable to the interface that connects with client, but also to the internal operations and collaborations with partners.”

Joy Huang, Huawei’s chief strategy Officer, said some banks are able to sustain robust growth because of digital technologies.

“These growing companies have one thing in common, that is their good online services capabilities based on cloud, so that they can be very agile in innovation,” Huawei noted.

The company said it has served over 1,600 financial institutions worldwide, including 45 of the world’s top 100 banks.

It said it has also worked with 20 large banks, insurers, and securities companies around the world.

Fitch Ratings has said that banks in the ASEAN region are likely to hurry along their digital transformations due to the pandemic and the resulting social distancing measures.

It said major banks in the Philippines, Malaysia and Singapore have seen surging online banking activity since the onset of the pandemics.

Smaller banks, Fitch Ratings noted, are in danger in the shifting competitive dynamics, specifically those with below-par capabilities. — Arjay L. Balinbin

TDF yields dip as demand soars

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) dipped anew amid higher bids as liquidity improved.

Bids for the term deposits offered by the BSP on Wednesday amounted to P360.02 billion, going beyond the P150 billion auctioned off and also higher than the P353.789 billion in tenders seen last week for the P180 billion up for grabs.

The seven-day papers fetched bids totaling P268.44 billion, more than double the P120 billion on offer as well as the P284.139 billion in tenders last week for the P120 billion on the auction block.

Rates for the one-week papers ranged from 2.25% to 2.2508%, a tad narrower than the 2.25% to 2.2515% range logged on June 10. This caused the average rate for the seven-day papers to settle at 2.2505%, down by 0.02 basis point (bp) from the 2.2507% recorded last week.

Meanwhile, tenders for the 14-day papers hit P91.58 billion, surpassing the P30 billion offered by the central bank as well as the P70.65 billion worth of bids logged the previous week.

Banks sought yields from 2.25% to 2.252% for the two-week term deposits, a slightly slimmer band than the 2.25% to 2.254% logged last week. With this, the average rate for the 14-day papers settled at 2.2512%, dipping by 0.08 bp from the 2.252% logged on June 10.

The TDF is the central bank’s main tool to mop up excess liquidity in the financial system and to better guide market interest rates.

Term deposit auctions were suspended in March to provide liquidity during the lockdown. In mid-April, the BSP started offering the seven-day term deposits again, while the auction for 14-day papers resumed last week. Meanwhile, the one-month tenors have not been offered since March.

“Market appetite for the BSP’s deposit facilities remain very strong amid ample financial system liquidity,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.

BSP Governor Benjamin E. Diokno earlier said they have observed “significant” increase in liquidity in recent months.

M3, the broadest measure of money supply, rose 16.2% to P13.6 trillion in April, accelerating from the 13.3% pace in March, BSP data showed. This is its fastest pace since the 16.4% logged in September 2014.

Mr. Diokno said investors need not worry as “there is no threat that excess liquidity will translate into higher inflation”.

Inflation in May eased to 2.1% from 2.2% in April and 3.2% a year earlier, on the back of a decline in food and transport prices during the lockdown, data from the Philippine Statistics Authority showed.

Before the pandemic, TDF yields were slightly above the overnight reverse repurchase rate which currently stands at 2.75%, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“Thus, markets may have priced in possible cut in local policy rates, amid relatively higher peso liquidity in the financial system,” he said in a text message.

The BSP has slashed policy rates by 125 basis points this year, reducing the overnight reverse repurchase, lending, and deposit rates to record lows of 2.75%, 3.25%, and 2.25%, respectively, in a bid to cushion the economic impact of the virus.

Earlier, Mr. Diokno said they are “happy” with current rates but assured the central bank has ample space to do more when the worst comes.

The Monetary Board is set to have its next policy-setting meeting on June 25. — L.W.T. Noble

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