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As Japan, Inc. battles coronavirus, liquidity and bank deposits rise at record annual pace in May

TOKYO — Japan’s money stock, or currency in circulation and bank deposits, rose at the fastest annual pace on record in May as companies hoarded cash to guard against slumping sales from the coronavirus pandemic, central bank data showed on Tuesday.

The data underscores the disruption the health crisis is causing to corporate activity and the flow of money, leaving policy makers dealing with the stiff challenge of reviving an economy in the throes of a deep recession.

Japan’s M3 money stock — or currency in circulation and deposits at financial institutions — rose 4.1% in May from a year earlier, marking the biggest increase since comparable data became available in 2004, Bank of Japan (BoJ) data showed.

The increase was faster than a 3.0% gain in April.

Of the total amount, deposits at financial institutions jumped 10.1% in May, the fastest pace of increase since 2017, to reach a record 770 trillion yen ($7.12 trillion).

“Companies are borrowing more amid the coronavirus pandemic and parking money in bank deposits, so they have more cash at hand to meet immediate funding needs,” a BoJ official told reporters.

Data released on Monday showed Japanese bank lending rose at the fastest annual pace on record in May, as cash-strapped firms tapped loans to pay for fixed costs that emerge even when they are suspending operations.

Prime Minister Shinzo Abe announced a state of emergency in April requesting citizens to stay home and businesses to close.

Although the emergency was lifted in late May, analysts expect the economy to recover only moderately from a deepening recession in the face of the pandemic’s sweeping global impact. — Reuters

How PSEi member stocks performed — June 9, 2020

Here’s a quick glance at how PSEi stocks fared on Tuesday, June 9, 2020.

Shares extend gains amid volatile trading session

By Denise A. Valdez, Reporter

THE MAIN INDEX closed with gains on Tuesday amid a volatile trading session that saw it falling by as much as 76 points.

The bellwether Philippine Stock Exchange index (PSEi) added 69.84 points or 1.07% to close at 6,583.84, while the broader all shares index picked up 34.69 points or 0.9% to end at 3,862.09.

The PSEi opened at 6,527.36 and hit a low of 6,438.97 before reaching its peak of 6,583.84 when it closed.

“The market closed up gaining 69 points to settle at 6,583 after dipping as low as 76 points intraday. We were expecting this volatility as bullish and bearish investors battled the past few days,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message.

“The bulls believe that the worst of the pandemic is behind us while the bears think that this rally doesn’t make sense given the impact of the pandemic on the real economy,” he added.

The market has been on an uptrend since mid-May when news of a potential coronavirus disease 2019 (COVID-19) vaccine came out. It sustained its climb and breached the 6,000 level as the days went on as investors were optimistic over the relaxation of quarantine measures in Metro Manila.

However, since there is still no cure to the virus and the number of COVID-19 cases continues to rise, some investors are doubting how sustainable the climb of the market will be. “For now the bulls seem to be winning as optimistic momentum prevailed for today (Tuesday),” Mr. Lisbona said.

For AAA Southeast Equities, Inc. Research Head Christopher John Mangun, it is notable that the PSEi’s drop at the open is steeper, signaling that more investors are beginning to secure profits.

“There are growing concerns that the rally is over extended and that we may see a strong pull back soon,” he said in an e-mail.

Mr. Mangun noted investors are more active now with value turnover at P8.54 billion and 980.8 million issues switching hands.

All sectoral indices closed the session in green territory. Services rose 38.45 points or 2.73% to 1,442.52; industrials climbed 217.89 points or 2.72% to 8,220.96; mining and oil increased 96.44 points or 1.79% to 5,470.55; financials gained 12.22 points or 0.91% to 1,352.68; holding firms accelerated 25.92 points or 0.38% to 6,716.32; and property improved 9.80 points or 0.29% to 3,314.61.

Advancers outnumbered decliners, 135 against 73, while 43 names ended unchanged.

Foreign investors became net buyers with net inflows of P62.32 million, a turnaround from net selling of P147.43 million a day ago.

“Foreign investors are still mainly undecided as fund flows go back and forth. We may see the main index retreat toward the end of the week,” Mr. Mangun said.

“Chart-wise, the momentum is starting to slow, especially in contrast to last week’s price action. If the market should correct, we are looking at immediate support at 6,200 with a line in the sand at 6,000,” Mr. Lisbona said.

Peso retreats as Diokno signals pause in easing

THE PESO retreated for the second straight day on Tuesday after gains in the US stock market and amid signals of a likely pause in easing by the Bangko Sentral ng Pilipinas (BSP).

The local unit finished trading at P49.95 versus the dollar on Tuesday, shedding five centavos from its P49.90 close on Monday, data from the Bankers Association of the Philippines showed.

The peso opened the session at P49.85 per dollar, which was also its intraday best. Meanwhile, its weakest was at P50.01 against the greenback.

Dollars traded increased to $887.46 million on Tuesday from $651.3 million on Monday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso’s depreciation came after better sentiment for the dollar following gains in the US stock market.

“The peso exchange rate closed weaker after upward correction in the dollar versus currencies as US stock market posted new 3.5 month highs,” Mr. Ricafort said in a text message.

Reuters reported Nasdaq hit a record high close on Monday. It is the first among Wall Street’s three main indexes to bounce back from the market crash due to the crisis.

The Nasdaq climbed 44.7% from its March 23 bottom, driven by gains from rising technology and communication stocks.

The Dow and S&P 500 climbed as well backed by heightened expectations for a swift recovery from the downturns caused by the pandemic. The S&P 500 is still 4.5% below its record high close while the Dow is about 6.7% below.

On the other hand, a trader attributed the peso’s weakness to signals from the central bank about holding policy rates in the upcoming policy-setting meeting on June 25.

“The peso depreciated after BSP Governor [Benjamin E.] Diokno hinted at the possibility of keeping policy rates steady at this month’s monetary policy meeting,” the trader said in an e-mail.

Mr. Diokno said on Monday they may opt to pause so the central bank will have space to maneuver in case of a worse fallout from the pandemic.

The central bank chief said while inflation continues to ease, some commodity prices have started to see an uptick, including fuel and rice.

Benchmark interest rates are currently at record lows after the central bank shaved a total of 125 basis points this year to cushion the impact of the crisis on the economy.

This brought the key policy rate or the overnight reverse repurchase rate to 2.75%, while overnight lending and deposit rates were trimmed to 3.25% and 2.25%, respectively.

For today, Mr. Ricafort sees the peso moving around the P49.80 to P50.05 levels versus the dollar, while the trader expects it to range around the P49.85 to P50.05 band.

Meanwhile, most emerging Asian currencies gained further ground against the dollar on Tuesday as easing coronavirus restrictions in the region fuelled hopes for a quick economic recovery from a coronavirus-induced slump. — Luz Wendy T. Noble with Reuters

Virus rush to push metro back to strict lockdown

MANILA and nearby cities, where coronavirus cases are mostly concentrated, could revert to a stricter lockdown after June 15 if cases continue to surge, the presidential palace said on Tuesday.

“If the trend continues, either the general community quarantine will continue or we will go back to a modified enhanced community quarantine,” presidential spokesman Harry L. Roque said at a news briefing in mixed English and Filipino.

An inter-agency task force made up of Cabinet secretaries will base their decision on data from the Department of Health, he added.

If cases continue to rise, “there’s a possibility that we won’t graduate to the next phase,” Mr. Roque said.

DoH reported 518 new infections yesterday, bringing the total to 22,992. The death toll rose to 1,071 after six more patients died, while 99 more patients have gotten well, raising the total recoveries to 4,736, it said in a bulletin.

Of the new cases, 280 results came out in the past three days while 238 came out late, the agency said.

President Rodrigo R. Duterte locked the main Philippine island of Luzon in mid-March, suspending work, classes and public transportation to contain the pandemic. People should stay home except to buy food and other basic goods, he said.

He extended the lockdown on the island twice and thrice for Metro Manila, where the lockdown has since been relaxed. Some businesses have been allowed to reopen with minimal workforce.

Metro Manila and Cebu were placed under a general community quarantine on June 1 along with Cagayan Valley, Central Luzon, Calabarzon (Calamba, Laguna, Batangas, Rizal and Quezon), Pangasinan, Albay, Mandaue City, Zamboanga City and Davao City.

Others were put under a more relaxed modified general community quarantine.

The task force will discuss later this week what should be the next step, Mr. Roque said.

Health Undersecretary Maria Rosario S. Vergeire earlier on Tuesday said there was a case backlog of about 1,500.

“It’s erratic owing to the different operational issues that each laboratory is facing,” she said at a news briefing.

She also traced the backlog to more samples from highly populated areas, adding that zoning guidelines should address the problem.

Some facilities have failed to meet the daily deadline for reporting because of the lack of encoders, Ms. Vergeire said.

Meanwhile, she said mothers who have given birth at health facilities will be tested for the coronavirus disease 2019 under new guidelines on expanded testing protocol that will be signed by Health Secretary Francisco T. Duque III this week.

Pregnant women are among those most at risk of dying in case they get infected, aside from the elderly and people with underlying medical conditions.

Ms. Vergeire last week said the daily testing capacity had reached 10,000, allowing the expansion of the targeted testing to include patients without symptoms.

Anna Ong-Lim, president of the Pediatric Infectious Disease Society of the Philippines, said relatives, colleagues and health workers who got in contact with positive patients should be tested as well.

The virus has sickened 7.2 million and killed about 409,000 people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization.

About 3.6 million people have recovered, it said. —Gillian M. Cortez and Vann Marlo M. Villegas

South China Sea code of conduct on track

TALKS ON the code of conduct in the South China Sea are “proceeding smoothly and effectively,” Chinese Ambassador to the Philippines Huang Xilian said on Tuesday, as the Philippines and China celebrate 45 years of diplomatic relations.

“With joint efforts of China and ASEAN (Association of Southeast Asian Nation) countries including the Philippines, the consultation of the Code of Conduct in the South China Sea is proceeding smoothly and effectively,” he said in a statement.

Efforts include the establishment of a bilateral consultation mechanism, which serves as a venue for the Philippines and China to discuss maritime cooperation, he added.

China and ASEAN economies had agreed to a three-year timeline, or until 2022, to complete the code meant to ease tensions in maritime disputes.

A maritime expert earlier said the coronavirus pandemic has delayed consultations on the code.

“It’s delayed by half a year now — no negotiations, no meetings on the code of conduct took place, even virtually,” Nguyen Hung Son, director-general and head of the Institute for the South China Sea, Diplomatic Academy of Vietnam said in a May 15 online forum. “This further pushed whatever deadline that ASEAN and China have indicated in the negotiation process.”

The Philippines and China established diplomatic relations on June 9, 1975. The Southeast Asian nation also celebrates the Filipino-Chinese friendship day on the same day yearly, based on a law that took effect in 2002.

Mr. Huang said the partnership has boosted trade between the two countries and is helping to develop Philippine infrastructure.

Bilateral trade volume increased more than 800 times from about $72 million in 1975 to $60.95 billion last year, he said. He added that last year, China signed $6.24 billion in contractual projects with the Philippines.

The Chinese government said that aside from helping the Philippines fight the coronavirus pandemic, it remained committed to help the Philippine boost infrastructure projects under President Rodrigo R. Duterte’s “Build, Build, Build” program.

Mr. Duterte has sought closer trade and investment ties with China since he became president in 2016, unlike his predecessor Benigno S.C. Aquino III, whose government sued China before an international court in a sea dispute and won. — Charmaine A. Tadalan

Anti-terror bill now for Duterte’s signature

A BILL that seeks to expand the coverage of terrorist acts has been sent to the presidential palace for President Rodrigo R. Duterte’s signature, Senate President Vicente C. Sotto III said on Tuesday.

A copy of the enrolled bill, which critics said arms the government to violate human rights, had reached the office of Executive Secretary Salvador C. Medialdea, he said in a mobile phone message.

“We have a 30-day period to review, either to veto or to sign the bill,” presidential spokesman Harry L. Roque said at a news briefing. The bill will be automatically become a law if the President chooses not to act on it.

The measure allows an Anti-Terror Council (ATC) made up of Cabinet officials to do functions otherwise reserved for courts, such as ordering the arrest of suspected terrorists. It also allows the state to keep a suspect in jail without an arrest warrant for 14 days from three days now.

It also considers attacks that cause death or serious injury, extensive damage to property and manufacture, possession, acquisition, transport and supply of weapons or explosives as terrorist acts.

The Senate passed the bill, which will repeal the Human Security Act as early as February. Mr. Duterte certified the bill as urgent last week.

Albay Rep. Edcel C. Lagman earlier sought a clarification on how the House of Representatives voted on the measure last week after some of his colleagues changed their mind.

Several lawmakers changed their votes after the bill was approved on third and final reading on Wednesday.

Albay Rep. Jose Maria Clemente S. Salceda withdrew his support for the measure and registered an abstention instead.

Deputy Speaker and Antique Rep. Lorna Regina B. Legarda also denied having co-authored the bill that critics said would allow the state to violate human rights.

Muntinlupa Rep. Rozzano Rufino B. Biazon withdrew his principal authorship of the bill, saying “there are inputs of House members that could refine and polish it to be more acceptable.”

Mr. Duterte has 30 days to either sign or veto the measure. Otherwise, the bill will lapse into law. — Charmaine A. Tadalan

More battered women, kids reported during lockdown

PHILIPPINE police recorded almost 3,700 cases of violence against women and children under a lockdown in many parts of the country meant to contain a coronavirus pandemic, according to the presidential palace.

In a report to Congress, Malacañang said police recorded 1,945 cases of violence against women and 1,754 cases of violence against children during the quarantine period.

The World Health Organization on June 3 said interpersonal violence is one of the “unintended” consequences of the global health crisis, as people were forced to stay home.

Presidential spokesman Harry L. Roque cited the irony of increased family violence at a time when families were supposed to stay together.

He urged victims to report cases of violence to authorities. In the palace report, the Philippine National POlice vowed to work with local governments to protect women and children.

The Philippine Commission on Women also vowed to respond to reports of household violence. — Gillian M. Cortez

#COVID-19 Regional Updates (06/09/20)

Fire bureau gets P55M in supplies from US gov’t; EU gives P10M aid to justice sector

THE United States government donated P54.8 million worth of supplies to the Bureau of Fire’s (BFP) Special Response Units, among the agencies conducting decontamination and response activities for the coronavirus outbreak. The US Embassy, in a statement, said the grant was made through the Defense Threat Reduction Agency, which has been assisting the BFP as the Philippines’ Chemical, Biological, Radiological, and Nuclear response agency. The European Union (EU), meanwhile, has allocated a P10 million financial support from the Governance in Justice Programme in support of agencies under the justice sector. The amount includes the P3 million worth of multi-media tablets and personal protective equipment turned over to the Bureau of Jail Management and Penology, said Thomas Wiersing, Chargé d’Affaires a.i. of the European Union Delegation to the Philippines. The tablets are used for the virtual visitation program in jails as well as help in pilot-testing the use of video teleconferencing for court proceedings. — Vann Marlo M. Villegas

Marawi hospital eyed as next COVID-19 test lab in Bangsamoro region

A P15-million fund has been allocated for the development of a second facility for testing the coronavirus disease 2019 (COVID-19) in the Bangsamoro region, Health Minister Saffrullah M. Dipatuan announced Friday. “We are strengthening the establishment of more subnational Covid-19 testing facilities in different regional provinces in BARMM (Bangsamoro Autonomous Region in Muslim Mindanao). Next in line is the Amai Pakpak Provincial Hospital of Marawi City, wherein Chief Minister Ahod Balawag Ebrahim has directed to allocate a sum of P15 million for testing lab construction,” he said. He added that the BARMM overnment aims to establish testing facilities in each of the island provinces of Sulu, Basilan and Tawi-Tawi. Samples from these areas are currently brought to Zamboanga City, the nearest mainland city which already has two accredited testing facilities. Mr. Dipatuan also announced that construction has started for a new 100-bed isolation facility at the Datu Blah Sinsuat District Hospital in North Upi, Maguindanao. The region currently has 138 isolation facilities across its five provinces, with a total 4,360-bed capacity. As of June 7, BARMM has recorded 28 COVID-19 patients, with eight recoveries and four deaths.

PEZA hoping to find jobs for displaced OFWs

THE Philippine Economic Zone Authority (PEZA) said it hopes to provide jobs for repatriated Filipino workers at ecozones in the countryside while tapping more domestic suppliers to minimize disruptions in the supply chain for imported materials.

PEZA will soon launch its Development Outreach for Labor, Livelihood, and Advancement of Resources program to help identify job opportunities at its locator companies in economic zones outside of Metro Manila, the investment promotion agency said in a statement Monday.

PEZA Director-General Charito B. Plaza in a mobile message Tuesday said that the program is still in the planning stages, with discussions ongoing with companies about their manpower and skills requirements.

She said the program will weigh the needs and resources of each region to encourage greater use of local suppliers.

“This program will encourage the growth of domestic enterprises that will produce the importation needs of export enterprises so that the supply chain is completed and jobs are provided as well,” she said.

“In other words, domestic markets will align their production to the products usually imported by export-producing companies in the Philippines. Through this, exporters will increase local purchases and spur the local economy.”

Ms. Plaza said that some companies were not able to operate during the lockdown due to the disruption of imports.

“This must be a challenge for domestic enterprises to become production and export driven rather than import and consumption dependent.”

Ms. Plaza said returning Filipino workers will need to be trained further to match their skills with the needs of local industries.

More than 27,000 overseas Filipino workers (OFW) have been repatriated due to the pandemic, with 42,000 more arriving or set to arrive this month.

PEZA plans to work with local governments, public economic zones, locators, and industry associations to identify job opportunities.

By May 25, 65% PEZA-registered companies were operating at different capacities while the rest had suspended operations. The companies employ 1.6 million workers.

The government relaxed the lockdowns in the first week of June, with some areas allowing all industries to operate with at least 50% capacity.

Ms. Plaza said the companies have placed 58% of their workforce on work-from-home or minimal in-office operations. — Jenina P. Ibañez

Japan agrees to P377-million aid package for PHL sugarcane

JAPAN has agreed to provide a P377-million grant to support sugarcane farmers affected by the coronavirus disease 2019 (COVID-19) pandemic, the Japanese Embassy to the Philippines said.

In a statement Monday, Japanese Ambassador to Manila Koji Haneda said he signed and exchanged notes with Philippine Foreign Affairs Secretary Teodoro L. Locsin, Jr. for a Japanese grant worth 800 million yen to assist around 84,000 Filipino sugarcane farmers.

The grant includes the provision of farm machinery such as tractors, harrows, whole-stalk sugarcane planters, and mulchers, among others.

The grant also helps the Philippine sugar sector address its productivity and cost issues.

“The program wishes to help farmers whose meager sources of income are aggravated by the COVID-19 pandemic,” the Embassy said. — Revin Mikhael D. Ochave

PHL, Japan exchange notes on 2 infrastructure projects

THE Philippine and Japanese governments signed diplomatic notes to formalize cooperation on two key infrastructure projects, the Department of Foreign Affairs said.

Foreign Affairs Secretary Teodoro L. Locsin, Jr. and Japanese Ambassador Koji Haneda exchanged notes late Monday on the Cebu-Mactan Bridge and Coastal Road project and the Davao City Bypass project.

“These yen loan projects to be financed by Japan seek to tackle connectivity and traffic congestion concerns confronting the rapidly developing metropolitan areas of Cebu and Davao,” the Embassy said in a statement.

The bridge and coastal road project in Cebu, estimated at 119 billion yen, includes the construction of a 3.3-kilometer (km) bridge and a 4.9-km four-lane coastal road.

The Davao City bypass, meanwhile, involves a 45.2-km road that will divert traffic from the Davao City center. Project cost is estimated at 35 billion yen.

The Embassy noted that both projects form part of the government’s infrastructure program and are well-placed to contribute to restarting the economy after the pandemic.

In addition, Mssrs. Locsin and Haneda also signed notes on agreements, granting 2 billion yen in aid to the Department of Health.

This will fund procurement of five CT scan machines, five X-ray machines, one MRI system and four infectious disease surveillance sites.

The two parties also agreed to a 337-million yen scholarship grant to 22 junior Filipino officials, as part of the Japanese Grant Aid for Human Resource Development Scholarship (JDS) for 2021.

“The project aims to enhance the JDS fellows’ expertise in their respective fields and to help build a pool of future Filipino leaders,” the Embassy said. A total of 361 officials have become JDS fellows since 2002. — Charmaine A. Tadalan

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