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PLDT sells Smart unit’s Makati HQ for $128 million

PLDT, Inc. has concluded the sale of the 37-storey Smart Tower in Makati City for $128 million to real estate development company DMC Urban Property Developers, Inc, according to commercial real estate services firm JLL in a statement Friday

In an e-mail, JLL, a unit of US-listed Jones Lang La Salle Inc., said its client, PLDT, will continue to occupy the building, which houses the headquarters of its wireless arm, Smart Communications, Inc., “for the next five years via an accompanying leaseback agreement.”

“The sale price represents the largest commercial real estate transaction completed in the Philippines in 2020,” it added.

The building, along Ayala Avenue, has a gross floor area of 38,000 square meters and 244 parking slots, JLL said.

In the statement, JLL Philippines Country Head Christophe Vicic said: “Investor appetite for grade A assets in the Metro Manila area has remained high throughout an unpredictable year.”

“The sale of the marquee Smart Tower reinforces the long-term confidence in the office market and the ambitions of corporate occupiers to reimagine their real estate holdings,” he added.

PLDT said last year it was planning to raise capital by selling company assets.

The company expects capital expenditure to hit P70 billion this year.

PLDT’s attributable net income in the third quarter rose 95% year-on-year to P7.41 billion, amid the rise in demand for digital or online services due to the pandemic.

PLDT closed up 0.38% at P1,335 on Friday.

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. — Arjay L. Balinbin

SEC warns public against investment schemes offered by Cubebit 2.0, Alisurvey

THE Securities and Exchange Commission (SEC) warned the public against investment schemes run by Cubebit 2.0 and Alisurvey Advertisement Marketing Services, which it said are not authorized to make such offers.

In two separate advisories on its website, the SEC said the two entities are soliciting investment without licenses.

The SEC said the Cubebit 2.0 scheme promises “ridiculous rates of return with little or no risk.”

According to the regulator, Cubebit 2.0 claims to give investors the opportunity to earn passive income via a number of online trading platforms.

The SEC said Cubebit 2.0 is not registered with the commission and is not authorized to solicit, accept or take investment from the public.

“Cubebit 2.0 is also not registered either as a crowdfunding intermediary or a funding portal under SEC Memorandum Circular No. 14, Series of 2019 or the Rules and Regulations Governing Crowdfunding,” it said.

The SEC said Alisurvey Advertisement Marketing Services’ “Buy, Wait, and Earn packages” contitute an unlicensed solicitation of investment.

The SEC said Alisurvey trades in load and ticketing services, conducts online surveys, and makes and retails perfume.

The SEC said Alisurvey is registered as a partnership but is not authorized to solicit investment from the public.

“It has not secured prior registration and/or license from the commission,” the SEC said.

According to the SEC, the packages offered by Alisurvey guarantee profits of 16.67% in monthly rebates over twelve months, or an annual guaranteed profit of around 200%.

“The public must be wary that any promise of ridiculous rates of return with little or no risk is an indication of a Ponzi Scheme where monies from new investors are used in paying fake ‘profits’ to earlier investors,” the SEC said.

BusinessWorld sought comment from the two groups in the wake of the advisories.

In a Facebook message, the official page of Alisurvey said it has responded to the advisory and will comply with the SEC’s requirements.

“Still it is an advisory, and the SEC is getting our side regarding this matter,” Alisurvey said.

Cubebit 2.0 had not responded at of deadline time.

Unlicensed selling of securities constitutes a violation of Republic Act No. 8799 or the Securities Regulation Code, making Cubebit 2.0 and Alisurvey potentially liable for fines of up to P5 million or 21 years’ imprisonment, or both. — Revin Mikhael D. Ochave

National Home Mortgage wins approval to securitize loans

The Securities and Exchange Commission (SEC) approved Friday a plan by the National Home Mortgage Finance Corp. (NHMFC) to securitize more than 1,200 residential loans, which will be held by a special purpose trust.

Under the plan, NHMFC will sell 1,291 mortgages to BALAI Bonds 2 Special Purpose Trust (BALAI Bonds 2 SPT).

The trust will then issue P319.32 million worth of asset-backed securities, comprising P150 million Class A senior notes and around P169 million Class B subordinated notes.

“Proceeds from the issuance will then be used to pay NHMFC the purchase price for the residential loans,” the SEC said in a statement.

Land Bank of the Philippines (LANDBANK) will serve as the underwriter for the notes issue.

The BALAI Bonds 2 issue is exempt from registration, because the securities will be issued to 19 investors or less. Under the Securities Regulation Code, securities sold or offered for sale to less than 20 individuals in a year do not need to be registered.

The NHMFC’s new securitization plan follows an earlier transfer of P270.25 million worth of mortgages to BALAI Bonds 1 Special Purpose Trust in December.

The purpose of the securitization exercise is to free up funds for NHMFC to lend while also helping develop a secondary market for home mortgages. — Angelica Y. Yang

PHL tells EU trade privileges will play crucial role in recovery

Trade Secretary Ramon M. Lopez told a European Commission official that the Philippines’ European Union zero-tariff privileges are important for the country’s small businesses, which were hit hard by the pandemic, the Department of Trade and Industry (DTI) said Friday.

Mr. Lopez and EC Executive Vice President Valdis Dombrovskis met on Dec. 8, the department said in an email.

More than 600 European legislators voted in September to revoke Generalized Scheme of Preferences Plus (GSP+) tariff privileges the Philippines has enjoyed since 2014, citing human rights violations under President Rodrigo R. Duterte.

The Philippines is one of eight countries with such perks. The others are Armenia, Bolivia, Cape Verde, Kyrgyzstan, Mongolia, Pakistan, and Sri Lanka.

“Our meeting today is indicative of the country’s continuing strong ties with the EU, and we hope to push for deeper trade and investment engagement by maximizing the benefits from the GSP+ and through a possible foreign trade agreement (FTA) with them,” Mr. Lopez said.

Mr. Lopez “reiterated the importance of GSP+ to the country’s micro, small, and medium enterprises (MSMEs) as well as small communities, in the wake of the economic challenges posed by the coronavirus disease 2019 (COVID-19) pandemic,” the department said.

GSP+ confers zero-tariff status to 6,274 Philippine products, subject to Manila’s compliance with 27 core international conventions that include human and labor rights, environmental protection and good governance.

Mr. Lopez said the Philippines is ready to engage the EU “in constructive dialogue with the conduct of a technical mission early next year,” the department said.

In a resolution posted on the European Parliament’s website in September, the European legislators cited the “seriousness of human rights violations” in the Philippines.

They called on the EC to immediately start the process for the temporary withdrawal of GSP+ preferences enjoyed by the Philippines given the government’s failure to improve the human rights situation.

A quarter of Philippine exports to the EU last year worth nearly 2 billion euros were admitted under the scheme, according to the resolution.

At the meeting, the two officials said they looked forward to the convening of the Sub-Committee of Trade, Investment and Economic Cooperation under the PH-EU Partnership Cooperation Agreement next year, the DTI said.

“Under the sub-committee, both sides are expected to discuss the negotiations for a bilateral FTA between the Philippines and the EU,” it added. — Arjay L. Balinbin

PHL metallic mineral output drops 4.75% in first nine months

METALLIC mineral production in the first nine months fell 4.75% year-on-year to P94.99 billion due to disruptions caused by the pandemic and the resulting lockdown, the Mines and Geosciences Bureau (MGB) said.

In a report Friday, the MGB said nickel ore and its by-products such as mixed nickel-cobalt sulfide and scandium accounted for 50.8% of the value of production or P48.22 billion, followed by gold at 36.7% or P34.85 billion, copper at 11.5% or P10.95 billion, and silver, chromite, and iron at a combined 1.02% or P966.05 million.

The MGB said the price of gold and silver rose during the period.

The average price of gold rose 27% year-on-year to $1,735.16 per troy ounce, while silver rose 21.6% year-on-year to $19.22.

“Analysts remain confident that demand for gold, as a store of value or the safe haven of investment, will continue during the rest of the year due to the global economic slowdown,” the MGB said.

The MGB added that the average global price of nickel fell 2.6% to $13,059.28 per tonne, while the price of copper declined 3.2% to $5,837.89 per tonne.

By volume, nickel ore output fell 12% to 233,521 metric tons (MT).

Taganito Mining Corp. (TMC) in Surigao del Norte led all nickel ore producers at 53,541 MT, followed by Rio Tuba Nickel Mining Corp. (RTNMC) in Palawan at 35,451 MT, and Platinum Group Nickel Corp. (PGMC) in Surigao del Norte at 26,112 MT.

“The TMC and RTNMC production figures include the nickel ores delivered to Taganito HPAL Mining Corp. (THPAL) and Coral Bay Nickel Corp. (CBNC), respectively,” the MGB said.

Output of mixed nickel-cobalt sulfide rose 3% year-on-year to 39,708 MT, worth an estimated P22.80 billion.

THPAL accounted for 62% or 24,579 MT of total output, followed by CBNC with 38% or 15,129 MT.

Gold production fell 21.4% to 12,833 kilograms valued at P34.85 billion.

Philippine Gold Processing and Refining Corp. in Masbate was the top gold producer, accounting for 35% or 4,437 kilograms, followed by Mindanao Mineral Processing and Refining Corp. in Agusan del Sur with 18% or 2,336 kilograms.

Silver production declined 28.2% to 17,853 kilograms valued at P545.82 million .

The top silver producer was Apex Mining Co. Inc. accounting for 48% or 8,535 kilograms, followed by Philippine Gold Refining and Processing Corp. (PGPRC) at 18% or 3,280 kilograms, and Philex Mining Corp. at 11% or 1,933 kilograms.

Copper production fell 17.9% to 46,520 MT, valued at P10.95 billion.

Carmen Copper Corp. accounting for 79.59% or 37,024 MT, followed by Philex Mining Corp. with 19.73% or 9,180 MT, and Lepanto Consolidated Mining Co. with 0.68% or 316 MT.

In a mobile phone message, MGB Director Wilfredo G. Moncano expects output for the sector to improve going forward.

“The outlook for nickel will be good both for production volume and price,” Mr. Moncano said.

Mr. Moncano said non-traditional sources of mining production can also help the sector’s growth such as dredging and river restoration projects.

Separately, the MGB said it issued a memorandum on Nov. 16 that authorized its regional offices to allow mining companies to re-align their unutilized funds under the Social Development and Management Program (SDMP) to assist victims of recent typhoons within their communities.

According to MGB data, the metallic mining industry accounted for 0.6% of gross domestic product (GDP) in 2019. — Revin Mikhael D. Ochave

DoF expects P2.4 billion in collectibles from undervaluation of rice imports

The Bureau of Customs (BoC) expects to collect up to P2.4 billion worth of tax deficiencies from cooperatives found to have undervalued their rice imports in 2019 and 2020, the Department of Finance (DoF) said in a statement Friday.

Citing a report from the bureau, the DoF said P1.4 billion worth of underpaid taxes will be collected from 48 cooperatives after a post-clearance audit of rice imports in 2019. The corresponding amount from audits this year is P1 billion.

“They have been issued audit notices and subsequent demand letters for the payment of additional duties and taxes as a result of the under declarations (of their imports),” Customs Commissioner Rey Leonardo B. Guerrero said at a DoF Executive Committee (Execom) meeting.

Mr. Guerrero said the demand letters have been contested by a number of importers.

Last month, Finance Secretary Carlos G. Dominguez III told the BoC and the Bureau of Internal Revenue to help the Agriculture department investigate the alleged use by private rice traders of cooperatives as dummies to avoid taxes.

Agriculture Secretary William D. Dar, in Administrative Order (AO) No. 34, suspended the issuance of permits and the application process for sanitary and phytosanitary import clearances (SPSICs) to farmers’ cooperatives and irrigators’ associations.

As of October, the government collected P14.31 billion in tariffs from rice imports. Of these collections, the government must provide P10 billion a year to support the Rice Competitiveness Enhancement Fund (RCEF).

Cooperatives are not exempt from paying duties on rice imports but some are registered with the BIR for income tax exemptions on their activities, according to Finance Undersecretary Antonette C. Tionko. — Beatrice M. Laforga

Lockdown projected to dampen PHL fuel consumption by 18%

Philippine fuel consumption is expected to decline 18% in 2020, due to restrictions on transportation ordeed during the lockdown, the US Department of Agriculture’s (USDA) Foreign Agricultural Service said.

“The months of business and school closures and movement restrictions had a significant impact on fuel demand; (the USDA representative in Manila) estimates that overall fuel consumption in 2020 will drop 18% compared to 2019,” the USDA said in its annual biofuels report.

It added that fuel use by road vehicles, which include ethanol-gasoline and biodiesel, is expected to drop by “over 20% due to the significant restrictions on transportation.”

The Manila USDA representative “expects a decline in the Philippines’ ethanol-gasoline and on-road biodiesel-diesel pools of 16 and 21% from 2019 to 2020, respectively,” the USDA said.

It added that vehicle use remains lower than normal, even after quarantine restrictions were eased in recent months.

The USDA also estimated gasoline use of around 5.7 billion liters and 8.6 billion liters of diesel this year. In 2019, the correponding totals were 6.9 billion and 10.5 billion liters respectively.

Accordiong to US export data, the Philippines was the sixth-largest importer of US fuel ethanol in 2019, at 250 million liters valued at $94 million.

The Biofuels Act of 2006 and department circulars from the Energy Department set the fuel ethanol and biodiesel blends at 10% and 2% respectively. The recently approved 2018-2040 Philippine Energy Plan recommended maintaining the current blend mandates, while revisiting biofuel blends and feedstock availability in the medium to long term. — Angelica Y. Yang

Tarlac, Rio Chico Bridge sections of CLLEX completed – DPWH

The Department of Public Works and Highways (DPWH) said Friday that two major sections of the P14.94-billion Phase 1 of the Central Luzon Link Expressway (CLLEX) project are now complete.

In a statement, Public Works and Highways Secretary Mark A. Villar said the two contract packages that were completed are the 4.1-kilometer Tarlac Section and the 6.4-kilometer Rio Chico River Bridge Section of the project.

“The completed sections form part of the 30-kilometer, four-lane expressway project to connect and improve access between… Tarlac City and Cabanatuan City,” Mr. Villar added.

The department said the two remaining contract packages “will be delivered to full completion by April 2021.”

The remaining contract packages cover the construction of the 9.2-kilometer Aliaga section and the 10.3-kilometer Cabanatuan section.

“An additional 4.8-kilometer component of the expressway project from the junction of Carmen-Cabanatuan Road is the Zaragoza Interchange section, which comprises a 2.8-kilometer access free road and a two-kilometer interchange ramp that will cross over the embankment of CLLEX main expressway by an overpass,” the department said.

“Upon full completion of the entire alignment, CLLEX Phase 1 will cut travel time between Tarlac City and Cabanatuan City from 70 minutes to just 20 minutes,” it added.

It also said more than 11,000 motorists and commuters are expected to use CLLEX daily. The project is expected to ease traffic on the Maharlika Highway by 48%, ity added.

The P12.61-billion second phase of CLLEX is a 35.7-kilometer extension of the first phase, connecting Nueva Ecija’s Cabanatuan City and San Jose City. — Arjay L. Balinbin

Worst case for continuing with PHL coal projects seen at P372-B in long-term costs

The Philippines could sustain up to P372 billion in economic losses under a worst-case scenario of proceeding with all nine gigawatts of pending coal-fired power plants (CFPPs), the Centre for Research on Energy and Clean Air (CREA) said in a report.

CREA, in its “Air Quality & Health Impacts of Coal-Fired Power in the Philippines” report, also claimed that full implementation of the pending projects, in addition to the coal-fired plants currently in service with capacity of 10 GW, will lead to the premature deaths of over 26,000 people over 40 years, assuming all the new capacity becomes operational by 2024.

“In a scenario where all nine gigawatts (GW) of the proposed CFPPs are commercialized by 2024….these new plants would cause approximately 26,300 premature deaths over 40 years. The cumulative economic cost over such time is estimated at P372 billion,” according to the report’s authors, Lauri Myllyvirta and Isabella Suarez,

The Energy Department recently declared a moratorium on all new coal-fired projects, which will allow those in the construction stage to proceed. The authors based their 9GW capacity estimate on data compiled by the group said, citing data from Global Energy Monitor.

The authors calculated that the deterioration in air quality caused by the addition of new coal capacity would cause the Philippines to incur P317 billion in
extra costs in treating non-communicable diseases such as lower respiratory infections.

CREA, which was founded in Helsinki and employs analysts based in Europe and Asia, claims that the 10 GW of coal-fired capacity currently in service was behind about 630 air pollution-related deaths this year.

“The total annual cost borne by the public is estimated at $165 million (P8.5 billion),” according to the report.

It estimated that the annual deaths will rise to 1,000 a year if the new nine GW worth of capacity is commissioned, while economic costs will rise to $264 million (P14 billion) a year from $165 currently.

At the launch of the report on Friday, CREA Southeast Asia analyst Isabella Suarez said that there were around 45.3 air pollution-related deaths for every 100,000 people in the Philippines, citing 2018 data from the World Health Organization.

Although there is no evidence yet that links air pollution to the worsening of the global health crisis, she noted that there were emerging studies linking ambient air pollution to higher susceptibility to the coronavirus disease (COVID-19).

“There are emerging studies that show that long-term exposure to air pollution increases vulnerability to the virus. This is because air pollution increases the risk of many pre-existing conditions that are also linked to increased vulnerability to COVID-19,” Ms. Suarez said.

The authors acknowledged the input of organizations like Greenpeace Philippines, the Center for Energy, Ecology, and Development, and the Philippine Movement for Climate Justice in preparing the report. — Angelica Y. Yang

Stocks close higher on vaccine optimism; volume declines

SHARE prices closed higher Friday with investors upbeat after a series of developments on the vaccine front, which hold out the prospect of normalizing the economy after the pandemic.

The benchmark Philippine Stock Exchange index (PSEi) rose 91.73 points or 1.28% to 7,246.16, while the broader all-shares index was up 47.81 points or 1.12% at 4,318.73.

China Bank Securities Research Director Rastine Mackie D. Mercado said investor optimism was likely due to the start of the vaccine rollout in some countries.

“The strength of the market may be attributable to a risk-on stance stemming from investor optimism following vaccine developments (such as) FDA panel endorsement of emergency use of Pfizer’s COVID-19 vaccine (and) more countries preparing for vaccine rollout,” Mr. Mercado told BusinessWorld in an email.

Other sources of market buoyancy include improved consumer and business confidence as revealed by the central bank’s fourth quarter business and consumer expectations survey, he said.

He noted that the market could be ”choppy” in the coming weeks because shares have hit “lofty valuations.”

“Downside risks such as continuing delays in US stimulus talks, and the possibility of a no-trade deal Brexit may dampen investor sentiment, leading to possible declines,” Mr. Mercado said.

Timson Securities, Inc. Head of Online Trading Darren Blaine T. Pangan said that the market was hoping that the wider distribution of COVID-19 vaccines will help the economy recover faster.

“Investor sentiment may be described as optimistic, since market participants seem to be okay holding on to their positions over the weekend,” he told BusinessWorld in a Viber message.

The Philippine market ran against the grain of the US indices. The Dow Jones Industrial Average and S&P 500 Index both recorded losses. Asian stocks were mixed, with the Nikkei 225, China’s CSI 300, the S&P/ASX 200 and the MSCI AC Asia Pacific falling.

In the Philippine market, financials rose 12.36 points or 0.84% to 1,486.60. Industrials were up 22.47 or 0.24% at 9,420.92. Holding firms rose 86.28 points or 1.17% to 7,455.87. Services were up 3.82 points or 0.25% at 1,533.56. Mining and Oil rose 166.49 points or 1.82% to 9,305.97. Property was up 98.61 points or 2.72% at 3,719.23.

Advancers led decliners 155 to 77, with 40 unchanged.

Value traded on Friday was P9.8 billion on volume of 75.92 billion shares. On Thursday the correponding totals were P7.64 billion and 150.03 billion shares. — Angelica Y. Yang

UAAP cancels Season 83

Putting above all else the health and safety of student-athletes and those involved in the operations of the competitions, the University Athletic Association of the Philippines (UAAP) has decided to cancel its Season 83.

The league in a statement said after a series of discussions, its Board of Trustees came to the tough decision to move for the cancellation of its 83rd season amid the uncertainty still prevailing because of the coronavirus pandemic.

The UAAP was not able to finish its Season 82 early this year as the pandemic started to make its presence felt, and mass gatherings like sporting events were prohibited.

It was angling to return to action either in the first or second quarter next year, albeit in a modified setting to conform with the conditions related to the pandemic, including the possibility of holding a “bubble,” where participants will be confined in a particular area for a duration of time to guard against the spread of the coronavirus.

But the league admitted that with face-to-face classes still not allowed staging competitions was made all the more difficult.

In making its decision, the UAAP is hoping that member-schools will use the time to plan their activities for the remainder of the academic year, as well as their athletic programs for next season.

It went on to say that both the Board of Trustees and Board of Managing Directors will further discuss the implications of the cancellation for stakeholders to be guided.

De La Salle University is the host for UAAP Seasons 83 and 84 with Cignal TV and its affiliate TV5 the new broadcast partners of the league. – Michael Angelo S. Murillo

Clark to host games for third window of FIBA Asia Cup qualifiers

By Michael Angelo S. Murillo

After the Philippine Basketball Association, Clark, Pampanga, will again host a hoops tournament, this time the third and final window of the FIBA Asia Cup Qualifiers.

In an announcement on Friday, world governing body FIBA said the Philippines is one of the sites serving as hosts for Asia Cup qualifying matches, along with Japan, Bahrain and Qatar.

Clark will be the venue for matches in Groups A and C, slated for Feb. 18 to 22.

Group A has the Philippines (3-0), Korea (2-0), Indonesia (1-2) and Thailand (0-4) while Group C is composed of New Zealand (2-0) Australia (1-1), Guam (0-1) and Hong Kong (0-1).

The decision to have Clark as one of the hosts came after the Samahang Basketbol ng Pilipinas Inc. offered the venue, touting, among other things, how the PBA successfully staged its “bubble” tournament there under strict health and safety protocols to guard against the spread of the coronavirus from October up to early this week when a champion was crowned in the Barangay Ginebra San Miguel Kings.

“The Samahang Basketbol ng Pilipinas is honored and humbled to be chosen as one of the hosts for the last round of the FIBA Asia Cup Qualifiers this coming February,” SBP president Al Panlilio said in a statement.

“We are thankful for FIBA’s trust in our capacity to host not just a successful tournament but, more importantly, a safe one. We’re glad to have met their health standards and we are looking forward to welcoming Korea, Indonesia and Thailand as well as Australia, New Zealand, Guam and Hong Kong from Group C in our country,” he added.

The SBP president went on to share that they will also show the Filipinos’ trademark hospitality notwithstanding the prevailing difficult conditions brought about by the pandemic.

Mr. Panlilio thanked as well the PBA for sharing its best practices in staging a successful bubble, where participants were holed up in a contained environment for the duration of its tournament.

The SBP is looking forward to working with the PBA, pertinent government agencies and other basketball stakeholders in the country for the successful staging of the February window of the qualifiers.

In the FIBA Asia Cup Qualifiers, the Philippines has remained unscathed, boosted by a sweep of Thailand in their two games in the second window last month in Manama, Bahrain.

For the other hosts, Tokyo will have Group B, Manama has Groups D and F, and Doha Group E.
The exact schedule of games will be confirmed at a later stage.

As per tournament format, the top two teams in the grouping at the end of the qualifiers advance outright to the FIBA Asia Cup set for August next year.

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