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Black culture in fashion seeks to move from the runway to the control tower

MORE than 40 years after Beverly Johnson became the first black model to grace the cover of Vogue, the fashion industry is facing its own reckoning over racism and exclusion.

Anna Wintour, regarded as one of the most influential figures in fashion, has apologized for “hurtful and intolerant” mistakes by the magazine during her 30-year tenure as Vogue’s editor-in-chief.

But Black members of the industry say real change must come from corporate boardrooms that often exploit Black culture but do too little to support its creators.

“I think fashion is a great example of a platform and business that loves Black culture, loves the Black body, but doesn’t want to pour back into the Black community financially,” said Emil Wilbekin, the former editor-in-chief of Essence magazine.

As mass protests took place nationwide this month about the killings by US police of unarmed Black men and women, Ms. Johnson proposed the Beverly Johnson Rule.

It would require fashion and beauty companies to interview at least two Black professionals for openings on executive boards and other influential positions.

“I believe that the door has been cracked open just a little bit,” said Ms. Johnson, who first graced the Vogue cover in 1974.

Washington Post fashion critic Robin Givhan said she can spot the lack of diversity in luxury brands by looking at their end products.

Egregious missteps in recent years include Prada’s 2018 keychain of a monkey with inflated lips and Gucci’s 2019 “black face” high-neck sweater with a mouth cut out and trimmed in red.

“There’s really only two that have men of color at the helm. Olivier Rousteing at Balmain. And Virgil Abloh who designs the menswear for Louis Vuitton,” Ms. Givhan noted.

“The place where the changes really have to happen are in executive suites, because that’s where the decisions are made about what the designer looks like, and the designer is then the person who is able to determine what the runway show looks like and what the advertising campaign looks like,” Ms. Givhan said.

Stylist Law Roach, who has worked with singers Zendaya, Ariana Grande, and Celine Dion, said he sometimes feels as if he does not exist in the industry.

“Have I ever been introduced as the assistant and my white female assistant as me? Absolutely, a thousand percent,” said Mr. Roach.

He said that at fashion shows in New York, he had been asked “to see my ticket or to see my text message with my seat assignment lots and lots of times.”

One of the first steps Mr. Roach will take to bring about change is to do better at championing Black brands.

“I’m holding myself accountable as somebody who has the power to make a difference in someone’s career and life. I’m holding myself accountable to make sure that I do it more frequently for people who look like me,” he said. — Reuters

Philippines detects 20 new ASF outbreaks; 10,543 more pigs culled

THE Philippines reported 20 new outbreaks of the African Swine Fever (ASF), culling an additional 10,543 pigs, according to the Bureau of Animal Industry (BAI).

In a report to the World Organization for Animal Health (OIE), the BAI said 3,018 hogs were culled in Malasiqui, Pangasinan, followed by San Carlos City, also in Pangasinan, at 1,933, and Pamplona, Camarines Sur with 1,170.

At the bottom end with fewest culls, three hogs were killed in San Fernando, Camarines Sur and 10 in Antipolo City, Rizal.

Other areas where ASF was detected were Banaue and Haliap, Ifugao; Calasiao, Alaminos City, Bolinao and Anda, Pangasinan; Canaman, Gainza, and Naga City, Camarines Sur; Ramon, Isabela; Botolan, Zambales; Tanay, Rizal; Sto. Tomas, La Union; Pinagbayanan, Quezon; and Los Baños, Laguna.

In a text message Sunday, BAI Director Ronnie D. Domingo said that according to the agency’s reports to the OIE, 298,975 pigs have been killed and disposed of.

The outbreaks were traced to illegal movement of animals and swill feeding, among others. — Revin Mikhael D. Ochave

Arthaland sets initial turnover of Cebu Exchange in fourth quarter

By Denise A. Valdez, Reporter

BOUTIQUE developer Arthaland Corp. is set to turn over the first 15 levels of its Cebu Exchange project to buyers by the fourth quarter of the year.

Despite work stoppage due to quarantine measures following the coronavirus disease 2019 (COVID-19) pandemic, Arthaland Vice-Chairman and President Jaime C. Gonzalez said the company has made substantial work in its projects to follow delivery targets as previously set.

“Phase 1 of Cebu Exchange, which is up to level 15 out of the total 38 floors, is expected to start handover to buyers by the early fourth quarter of this year,” Mr. Gonzalez told stockholders in a virtual meeting on June 26.

“We’ve retained project target delivery dates despite work stoppage because we have built in sufficient flexibility in our timelines and because we have chosen to work with top-tier contractors,” he added.

Cebu Exchange is touted as a “green office building” located in Cebu I.T. Park, Cebu City. It is Arthaland’s first venture in the southern part of the Philippines and is seen to attract business process outsourcing locators in the region.

The completion of Cebu Exchange, along with Arthaland’s other large projects, namely Savya Financial Center in Taguig City and Sevina Park in Laguna, are seen to tide the company’s finances throughout the pandemic.

“We note about 88% of the growth strategy of our Five-Times-in-Five-Years plan is already accounted for by Cebu Exchange, Savya and Sevina Park. Given the current status of these projects, we have high confidence that Arthaland will achieve the growth target as planned,” Mr. Gonzalez said.

In 2018, Arthaland launched a plan to raise its gross floor area to a little over 500,000 square meters from 100,000 square meters, which would expand the company’s development portfolio by five times within the next five years.

Mr. Gonzalez said even with the pandemic, the company believes it will fulfill this target, considering the accomplishment of fund raising activities prior to the virus outbreak. “Arthaland raised a total of P5 billion which will provide substantially all the liquidity required for Arthaland’s projects in the near term,” he said.

“The recurring income of the company is more than sufficient to cover our operating costs, and we are quite happy about it. Over time, we expect that our recurring revenues will increase substantially,” he also said.

Arthaland booked an attributable net income of P10.34 million in the first quarter, down 95% from a year ago, despite a revenue growth of 24% to P577.21 million. The increase in the topline was due to revenue recognition from new office projects, while the bottomline decline was attributed to operational disruption and lower sales reservations and bookings due to the lockdown.

Shares in the company at the stock exchange picked up two centavos or 3.77% to close at 55 centavos each on Friday.

The Ford F-150 picks up where it left off

 

Comebacking truck expected to further strengthen segment presence of Ford Philippines

FORD PHILIPPINES AVP for Communications Edward Joseph “EJ” Francisco recalls to “Velocity” how the brand’s full-size pickup F-150 had passed a “test of temperature 22 years ago” when it was first made available here. Surely, it sated the market need for a hefty and powerful people/cargo mover. Just as there was a healthy following for its equally large sibling in the Expedition, the F-150 resonated in car buyers who wanted a burly, capable (and well-appointed) hauler. It was in many ways a statement vehicle.

But the love story eventually soured with rising gas prices, as the F-150 also proved to be a gas guzzler which easily burned through the good stuff, particularly when mired in gridlock.

So, we shouldn’t blame people who now wonder about the model’s reappearance (in a time of crisis no less) and given its rather checkered history. But that kind of thinking is not lost on Ford Philippines Managing Director PK Umashankar as well, who deserves credit for not dodging the obvious question. In an exclusive interview, the executive admits, “We were careful because we understood that feedback, and we wanted to make sure we got a more fuel-efficient F-150 engine.”

Of course, the F-150 then is not the F-150 that now returns. A lot more is figuratively and literally riding on today’s 13th-generation pickup. The F-Series has been America’s best-selling truck for 43 straight years, and its top-selling vehicle for 38 consecutive years.

Two variants of the Dearborn, Michigan-sourced nameplate are now here: the F-150 4×4 Platinum SuperCrew AT and F-150 4×2 Lariat SuperCrew AT. Both are powered by a 3.5-liter V6 EcoBoost engine with auto start-stop technology, mated to a 10-speed automatic transmission with SelectShift that promises, according to Ford, “unmatched power, fuel efficiency, and refinement.”

Engine choices for the F-150 nameplate include a 2.7-liter V6 turbo (325hp), a 3.0-liter V6 turbodiesel (250hp), a 3.3-liter V6 (290hp), and a 5.0-liter V8 (395hp). Ford Philippines eventually decided on the 3.5-liter (375hp, 637Nm) power plant largely for its proven relative fuel economy.

“What we wanted here is a right engine that delivers power performance, frugality and fuel economy — (while being) responsible environmentally,” says Mr. Umashankar, who further admits that it was a tough task to choose the variants to bring in. Eventually, they decided on the top variants. “That’s what the consumers in the Philippines would want,” he quips.

Far from being merely a utilitarian vehicle, the F-150 is equipped with “luxurious leather interior with 10-way adjustable driver and front passenger seats plus Active Motion massage available for the Platinum 4×4 variant.” Its array of features includes a Bang & Olufsen 10-speaker sound system, 20-inch alloy wheels, 360-degree camera with split view display, and others.

The original schedule for the local launch was March, until the pandemic scuttled plans. But the underlying confidence for the market’s readiness is undeniable. “Over the last three years, we’ve been observing the Philippine market. There are two changes we’ve observed,” says the executive. “One is the pickup industry is growing… Second, uniquely for us, in 2018 we introduced Raptor in the Ranger series, and we found overwhelming success after introduction.” For his part, Mr. Francisco reveals that from nine percent in 2017, the pickup share in total local market sales has steadily risen to 14% in 2018, then 17% in 2019.

The unmitigated success of the Ranger Raptor was a particular eye-opener for Ford Philippines — practically confirming the market readiness for a bigger, performance-oriented pickup. “In 2019, the mix of Raptors in the Philippines among the Ranger was the highest worldwide. No one sold as many Raptors to Rangers like we did in the Philippines. This goes on to prove that the customers here are driven by the emotional derivative that the Raptor is. The emotional connect that the Raptor exterior brings to the customer is so powerful that we were able to be so successful. In fact, some months, every second Ranger we sold in the Philippines was a Raptor,” shares Mr. Umashankar. “This gave us the confidence that this is the right time… to bring in another strong emotional derivative at the same time.”

Joins Mr. Francisco, “More customers are realizing the benefits of owning a pickup, so we’re very confident about the clamor and demand, especially since our range caters to different price points and needs.”

With the addition of the two F-150s, Ford Philippines further cements its position as having the widest pickup lineup in the country (a total of 15 now), and makes the company ideally poised to take advantage of the growing appetite for this segment. Since the unveiling was supposed to happen last March, Ford had already shipped F-150 units here, which means they’ve had a head start on stocking up with supplies.

The F-150 is now available in Ford dealerships nationwide, with a starting retail price of P2.698 million for the F-150 4×2 Lariat SuperCrew AT and P2.998 million for the F-150 4×4 Platinum SuperCrew AT. The F-150 4×4 Platinum comes in four colors: Blue Jeans, Star White, Iconic Silver and Agate Black. The Star White color variant, which is a special color for the F-150 4×4 Platinum, is available for an additional P15,000. The 4×2 Lariat variant also comes in four colors including Rapid Red, Oxford White, Iconic Silver and Agate Black.

“We’re confident that the timing is right,” underscores Mr. Umashankar. “COVID-19 put the system in flux, but we still believe it’s the right time to bring the F-150 in.”

You could say that Ford Philippines is banking that the segment will continue to, well, pick up.

Dior revives fashion shows — but with no front row

PARIS — French luxury label Christian Dior said last week that it would press ahead with a calendar of fashion shows for this year starting in July with an Italian catwalk display — but without the celebrated front-row audience of A-listers.

The coronavirus crisis has accelerated a rethink among high-end brands of how collections are presented, with some opting out of costly events and restricting the number of clothing ranges they produce.

Dior, one of the LVMH conglomerate’s biggest labels, said it was maintaining its calendar of industry fashion weeks that brings buyers and bloggers to Paris, and would produce other collections in between.

It will premiere a mid-season “cruise” range in the Italian city of Lecce on July 22 with a streamed live show, Chief Executive Pietro Beccari said, after a presentation planned for May was postponed.

“We would like to send a message of support, of hope, of optimism and of rebirth,” Mr. Beccari said. “I’m thinking about big suppliers but also the small ones, many tiny family businesses of artisans in France and in Italy… many of them didn’t know and still do not know how to survive.”

High-end brands often rely on firms to manufacture luxurious cloth or products that require special treatment, such as items covered in feathers or tinted by hand.

Dior planned to go ahead with a womenswear fashion show usually held in Paris in September, Mr. Beccari said, adding that by then it might even bring in a front-row audience.

“Fashion week is important not only for the fashion family, it’s also important for the city where the shows are,” Dior’s designer Maria Grazia Chiuri said.

Fashion events are usually big business for cities like Paris, with hotels normally rammed during that period. — Reuters

Lawmaker seeks more funds for small businesses

A LAWMAKER has called on the government to provide more funding to help small businesses as they cope with the effects of the pandemic.

“We hope that more funding is given to MSMEs (micro, small and medium enterprises) especially because they do comprise about 99.6% of all the businesses here and they provide 70% of jobs in the Philippine workforce. So it’s very important that we give them all the support that they need,” Las Piñas Rep. Camille A. Villar, who is also a vice-chair of the House committee on MSME development, said in a televised interview on Thursday.

Small Business Corp. (SB Corp.), the financing arm of the Department of Trade and Industry, had announced it was opening a loan program for MSMEs to help them recover.

Its P1.5-million loan allocation is open to micro and small businesses that have been in at least a year of continuous operation by March 2020, and those that “suffered drastic reduction” in business during the pandemic.

Loans can be applied to keeping loan amortizations for vehicles and other fixed assets up to date, inventory replacement for damaged perishable stock, and working capital to restart the business.

Micro enterprises with assets of up to P3 million may borrow between P10,000 to P200,000, while small enterprises with assets not bigger than P10 million may borrow up to P500,000.

Initially, SB Corp. was to impose a 0.5% interest per month, but later scrapped the interest and would only charge 6% service fee. MSMEs that availed of the loan also have a six-month grace period before they start paying the loan for up to 30 months.

However, SB Corp. has reportedly stopped accepting new loan applications last week as the fund was not enough to cover small businesses still reeling from the effects of lockdowns and movement restrictions imposed more than three months ago.

“One of the reasons why it’s very important to discuss the plight of MSMEs is because now you have different sectors really in need of help during this pandemic. Sometimes we overlook MSMEs and the needs of our MSMEs and we focus on the other sectors,” Ms. Villar said, adding that information dissemination is key to address MSMEs’ concerns.

The House of Representatives passed the proposed P1.3-trillion Accelerated Recovery and Investments Stimulus for the Economy of the Philippines (ARISE) bill to boost economic recovery.

Under the measure, P50 billion will be allocated to SB Corp. for existing loans programs for MSMEs for this year and another P25 billion next year while the Philippine Guarantee Corp. will get P20 billion this year and another P20 billion in 2021.

“This (ARISE bill) would have addressed the additional funding for SB Corp. and other government financial institutions like Landbank, Philippine Guarantee Corp. which have programs to help MSMEs. We’re hoping to pass this in August to give help and support to our MSMEs,” Ms. Villar said, but conceding that it may be difficult to implement the measure since the government may not be able to fully finance a total of P1.3 trillion in recovery programs under the measure. — Genshen L. Espedido

Brazil soy exporters unable to promise China coronavirus-free cargos

SÃO PAULO — Brazilian grain exporters should not give China the guarantees it requested that their cargoes are free of the novel coronavirus, as that would require extensive testing, according to ANEC, an association representing local grain traders.

The exporters’ response to the Chinese request will emphasize that there is no evidence the coronavirus can be transmitted by food, Marcos Amorim, director of ANEC’s contract committee, said during a webinar hosted by law firm Mattos Engelberg on Thursday.

ANEC’s members include Cargill and China’s Cofco, as well as many of the world’s major agricultural commodity traders.

China is the world’s top soybean buyer and is expected to import about 94 million tons in the 2019/20 crop year, mostly from Brazil and the United States.

Imported soybeans are crushed to produce soymeal to feed livestock.

“Anec is preparing a letter for associates to respond in an equal manner. Preferably, we would like the declaration… not to be signed (by the exporters here),” Mr. Amorim said, referring to a Chinese document in which exporters would say their cargos are COVID-19 (coronavirus disease 2019) free.

As for exporters declaring they comply with Chinese laws, ANEC recommends against doing so.

“The Brazilian exporter cannot declare this because they do not know (Chinese laws])” he added. “Even the largest companies do not know.” — Reuters

Peso to rise on rate cut

THE PESO is seen to continue appreciating against the greenback as the surprise rate cut last week is expected to support market sentiment.

The local unit ended trading at P49.92 versus the dollar on Friday, stronger by eight centavos from its P50.00 finish on Thursday, data from the Bankers Association of the Philippines showed. The peso also appreciated by 14 centavos from its P50.06 close on June 19.

Analysts said the surprise rate cut by the Bangko Sentral ng Pilipinas (BSP) on Thursday is positive for the peso.

“[T]he impact has spilled over to the peso last Friday, fueling the currency’s strength,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a text message.

In a surprise move, the Monetary Board slashed rates by another 50 basis points (bps) on Thursday. With this, rates on the BSP’s reverse repurchase, lending and deposit facilities were reduced to record lows of 2.25%, 2.75, and 1.75% effective Friday, June 26.

The BSP has slashed rates by 175 bps this year in a bid to cushion the impact of the coronavirus pandemic on the economy.

Aside from the rate cut, recent data from the US showing signs of gradual economic improvement also supported the peso, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

“Improvements in some US economic data such as jobless claims and durable goods orders also supported improved sentiment and reduced safe haven demand,” he said in a text message.

The US Labor department reported initial claims for state unemployment benefits dropped 60,000 to a seasonally adjusted 1.48 million for the week ended June 20, according to Reuters.

The report showed that claims have been decreasing compared to the record 6.867 million in late March but are still at levels more than double their peak during the 2007-2009 Great Recession.

Meanwhile, data from the US Commerce department showed orders for durable goods meant to last for three years or more jumped by 15.8% in May after dropping by 18.1% in April. The trend was seen to be in line with improvements in regional manufacturing.

For this week, the rate cut will continue to affect foreign exchange trading, Mr. Asuncion said.

“The peso is expected to continue its strength as the surprise 50 bps cut continues to work its way through the market,” he said.

Meanwhile, Mr. Ricafort said updates on the coronavirus disease 2019 (COVID-19) will also affect the risk appetite of investors.

“Major leads for this week include the trend in new COVID-19 cases locally and in some countries especially in the US and the decision by Malacañang on whether or not to further ease the GCQ (general community quarantine) in Metro Manila and in other areas that would lead to further reopening of the economy,” he said.

Mr. Asuncion gave a forecast range of P49.60 to P49.90 while Mr. Ricafort sees the peso to move around the P49.75 to P50.15 level. — L.W.T. Noble with Reuters

Bentley Flying Spur makes Robb Report Best Cars 2020 list

US LUXURY-LIFESTYLE magazine Robb Report named the Bentley Flying Spur as among its Best Cars of the Year for 2020, with the ultra-luxury vehicle making the media group’s 32nd Annual Best of the Best list.

In its announcement, Robb Report cited only one model for each vehicle segment in Best Cars of the Year, with contenders no longer identified. The all-new Flying Spur was singled out among sedans.

While recognizing that “quick, capable luxury sedans are not as rare” as one might think, Robb Report also wrote: “The real challenge in this arena is offering a sense of glamour. Elevated performance and whispery isolation are quantifiable, but creating presence and a sense of occasion requires an alchemy of intangibles… Bentley’s new Flying Spur excels on all fronts.”

First appearing in the second half of 2019, the all-new Flying Spur has already collected several awards, including Luxury Car of the Year. Bentley started making the vehicle in November last year at its factory in Crewe, England.

The luxury grand touring sedan melds performance and limousine-levels of comfort. New from the ground up, the four-door car seamlessly integrates the very best in British craftsmanship with cutting-edge, innovative features.

Under the hood is an enhanced version of Bentley’s 6.0-liter, twin-turbocharged W12, which is mated to an advanced dual-clutch, eight-speed transmission promising faster and smoother gear changes. This new engine allows the car to accelerate from standstill to 100kph in 3.8 seconds, up to a top speed of about 350kph.

The all-new Flying Spur is the first Bentley to be fitted with electronic all-wheel steering, which is combined with an active all-wheel drive system and the Bentley Dynamic Ride — the world’s first 48-volt electric anti-roll system — to deliver elevated handling and ride.

The interior design of the all-new Flying Spur features a new wing-themed fascia that connects the front and rear spaces, creating a completely integrated style. Plus, the cabin incorporates sustainable, natural, authentic materials while embracing a host of new technologies.

Robb Report also noted the all-new Flying Spur’s “toniest of trappings,” citing in particular the sedan’s three-dimensional leather quilting and Bentley’s revolving display which switches from a digital touch screen, analog gauges or a wood veneer blending into its surroundings.

Argentina, Brazil monitoring massive locust swarm; crop damage seen limited

BUENOS AIRES/SÃO PAULO — Argentina and Brazil are monitoring the movement of a 15-square-kilometer locust swarm in Argentina’s northeast, though authorities and specialists said so far it had not caused significant damage to crops in the South American countries.

Argentine food safety body SENASA said the swarm, which initially entered Argentina from Paraguay in late May, contained about 40 million insects. It is in the province of Corrientes, near borders with Brazil, Uruguay and Paraguay.

Argentina and Brazil are among the world’s largest soy and corn exporters.

“We are following the movement of the plague,” Héctor Medina, a coordinator at SENASA, told Reuters on Thursday. Due to the arrival of a cold weather front from the south, the movement of the locusts would be limited in the coming days, he added.

The low temperatures “will prevent them from moving and reproducing. The lethargy makes them stay still,” Mr. Medina said. Winds could eventually push the cloud of locusts into a neighboring country, he added.

Brazil’s agriculture ministry is also monitoring the swarm and has asked farmers in the south of the country to be on alert, although it has concluded that the locust cloud is unlikely to move into Brazilian territory for now.

Nevertheless, Farming Minister Tereza Cristina Dias, declared on Thursday a “phytosanitary emergency” in the states of Río Grande do Sul and Santa Catarina due to the swarm.

In Argentina, both SENASA and the Buenos Aires grain exchange said they were less worried by the locust swarm than issues of dry weather impacting crops.

“For now (the swarm) is not a problem, we are more concerned about the humidity issue for wheat planting than locusts,” said Esteban Copati, head of agricultural estimates at the exchange, who added the swarm was moving over a marginal farming areas.

The pests have raised concerns in Brazil. A representative from the Aprosoja growers association in Rio Grande do Sul said they feared the locusts would enter the state where corn is still being harvested and wheat being grown.

Eugenio Hack of the Copercampos cooperative in Santa Catarina told Reuters that if the locusts were to move to the state, producers would have to be trained to use the appropriate chemicals, which are different from those normally used.

“My grandfather dealt with locusts many years ago. Farmers used to dig ditches in the ground, cover insects with soil, and then set them on fire,” Mr. Hack said.

Shares to fall on continued rise in COVID-19 cases

LOCAL SHARES are expected to maintain a downward bias this week as weak investor sentiment over rising cases of coronavirus disease 2019 (COVID-19) patients prevail.

The bellwether Philippine Stock Exchange index (PSEi) advanced 73.58 points or 1.2% to close Friday’s session at 6,191.84.

However, the PSEi was lower by 1.95% on a weekly basis as it ended three out of five trading days in red territory.

Value turnover went down 29% to an average of P6.67 billion and net foreign selling rose 13% to an average of P1.15 billion.

“Trading volumes declined…as buyers moved to the sidelines and have let sellers take control of the market,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in a market note.

“(The market) traded lower for most of the week as news of an outbreak in Cebu City, which is considered the country’s ‘second-largest city,’ has dampened the sentiment and has raised concerns of a second round of quarantine restrictions,” he added.

The situation has led the government to put Cebu under strict quarantine measures again, which worried investors of a repeat of the lockdown imposed in March should the situation in the rest of the country worsen.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said these worries may still be the main driving force of the market this week.

“Bearish sentiment is seen to be building up as the local market posted two straight weeks of decline, shedding 4.39% in the process. This trend may continue next week as COVID-19 risks weigh on economic recovery hopes,” he said via text.

“(The rising number of cases) points to a possible extension of our social restrictions which will keep our economy from operating at full capacity. A reversion to stricter forms may even be possible, which if done, would aggravate the economy’s losses,” Mr. Tantiangco added.

But Mr. Mangun is more hopeful that the market will continue to post growth at the close of the month.

“The PSEi is currently up 6% for the month of June and with only two days of trading left, we could say that it will end on a positive note. This will mark three months of consecutive gains for the main index unless we see a flurry of selling throughout the week,” he said.

He, however, noted the market may keep slipping in the coming weeks with the anticipated release of second-quarter corporate earnings, which most are expecting to reflect huge declines.

“We continue to believe that the market will trade sideways with a negative bias over the next few weeks as investors weather a storm of weak earnings and negative growth figures for the second quarter,” Mr. Mangun said.

“We may see the market move lower at the beginning of [this] week as it tests support at 5,950 and then start to move higher towards the end of the week,” he added.

Mr. Tantiangco is putting support for the PSEi at 6,100 and resistance at 6,350. Mr. Mangun is projecting support within 6,160-5,950 and resistance within 6,350-6,800. — Denise A. Valdez

Yields on gov’t debt decline on central bank’s move

YIELDS ON government securities (GS) ended lower last week following a surprise 50-basis-point (bp) cut by the Bangko Sentral ng Pilipinas (BSP) on Thursday.

GS yields dropped by 35.6 bps week on week on average, the PHP Bloomberg Valuation Service Reference Rates as of June 26 published on the Philippine Dealing System’s website showed.

At the secondary market, rates on debt papers declined across-the-board. Yields on the 91-, 182-, and 364-day Treasury bills (T-bills) went down by 2.8 bps, 3.4 bps, and 3.5 bps, respectively, to 2.127%, 2.199%, and 2.563%.

At the belly, yields on the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) decreased by 24.6 bps (2.376%), 26.4 bps (2.483%), 28.2 bps (2.570%), 31.5 bps (2.642%), and 39.9 bps (2.764%).

Rates of the 10-, 20- and 25-year T-bonds were likewise down by 44.1 bps, 79.3 bps, and 108.3 bps to fetch 2.930%, 3.499%, and 3.313%.

“Yields initially shot up by 30-40 bps on the back of the BTr’s (Bureau of the Treasury) five-year auction. However, the BSP’s decision to cut the overnight policy rate by 50 bps at [Thursday’s] Monetary Board meeting has caused yields to rally to fresh year-low levels,” ATRAM Trust Corp. Head of Fixed Income Jose Miguel B. Liboro said in an e-mail.

Robinsons Bank Corp. Peso Sovereign Debt Trader Kevin S. Palma said in a Viber message that the news was welcomed by the local bond market and “caused massive buying interest across the curve.”

The central bank slashed rates on the BSP’s overnight reverse repurchase, lending, and deposit facilities by 50 bps to new record lows of 2.25%, 2.75%, and 1.75%, respectively. The cut, which took effect Friday, brought total reductions of the BSP this year to 175 bps.

The BSP also said on Thursday it now expects inflation this year and in 2021 to average at 2.3% (from 2.2%) and 2.6% (from 2.5%), respectively.

Headline inflation averaged at 2.5% as of May, lower than the 3.5% recorded in 2019’s comparable five months.

Meanwhile, the BTr borrowed P30 billion in reissued five-year debt papers last Wednesday as the offer was oversubscribed by more than two times, with the total bids at P80.58 billion. The BTr said on Thursday it is looking to borrow P205 billion in July, 21% higher than the P170-billion program in June and May.

The government borrows from local and foreign sources to fund its budget deficit which is now expected to hit 8.4% of gross domestic product.

“Robust demand will persist [this week] as market psychology remains to be in the positive territory all thanks to BSP’s dynamic efforts to safeguard the liquidity in the financial system and foster economic activity,” Robinsons Bank’s Mr. Palma said.

For ATRAM Trust’s Mr. Liboro: “The 50-bp policy cut was significant, and the market reaction [on Friday] has quickly reflected that. With the 10-year yield now trading at 2.7%, we expect the market to consolidate around current levels in the short term.”

“However, given additional bond supply via the BTr’s seven-year and 10-year auction program in July and the possibility of an RTB (Retail Treasury Bond) issuance, we expect yields to gradually adjust higher,” he added.

The BTr is seeking to raise P30 billion via the seven-year T-bonds on July 7 and another P30 billion via the 10-year T-bonds on July 21. — Marissa Mae M. Ramos

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