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TDF yields decline, track rates of US Treasuries

BW FILE PHOTO

YIELDS on the central bank’s term deposits slipped on Wednesday on easing US benchmark interest rates and as the Philippine government announced its plan to issue euro-denominated bonds.

Demand for the term deposit facility (TDF) of the Bangko Sentral ng Pilipinas (BSP) reached P582.773 billion on Wednesday, beyond the P490-billion offer but lower than the P634.779 billion in tenders seen a week earlier.

“The TDF auction results continue to show normal market conditions amid ample liquidity in the financial system,” BSP Deputy Governor Francisco G. Dakila, Jr. said

Broken down, tenders for the seven-day papers amounted to P179.141 billion, going beyond the P140-billion offer but lower than the P181.415 billion in bids logged during the previous auction.

Lenders asked for yields ranging from 1.7% to 1.7715%, a thinner band than the 1.7% to 1.8% seen last week. This caused the average rate for the one-week term deposits to drop by 1.96 basis points (bps) to 1.7541% from 1.7737% previously.

Meanwhile, the 14-day papers fetched tenders worth P403.632 billion, surpassing the P350 billion on the auction block but also below the P453.364 billion in bids on April 14.

Accepted rates for the two-week term deposits ranged from 1.725% to 1.8%, lower than the 1.78% to 1.83% band quoted a week ago. This caused the average rate of the two-week tenor to inch down by 2.37 bps to 1.786% from 1.8097% previously.

The BSP did not offer 28-day deposits for the 26th consecutive auction to give way to its weekly auctions of bills with the same tenor.

The term deposits and the BSP bills are instruments used by the central bank to mop up excess liquidity in the financial system and guide market interest rates.

The lower TDF yields seen on Wednesday followed the declining trend in rates of US Treasuries, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Yields on 10-year US Treasury notes dropped 3.7% to 1.562% on Tuesday’s early afternoon trading, Reuters reported.

Mr. Ricafort said the lower yields for term deposits also came amid the government’s return to the global debt market via its planned issuance of euro-denominated bonds.

Bloomberg reported the offering will have potential tenors of four years, 12 years and/or 20 years. The government last issued euro-denominated bonds in January 2020, raising €1.2 billion via its dual-tranche offering. — L.W.T. Noble with Reuters

Beko: Keeping veg fresh with light

Grocery shopping today can be fraught —  one risks catching COVID-19 when going to the supermarket while online shopping can be a headache, what with glitchy apps and unavailable products. So a refrigerator that keeps the food fresh longer helps to keep those trips (or app-induced headaches) infrequent.

A new line of fridges called HarvestFresh by Turkish appliances brand Beko was launched last week via an online conference. The HarvestFresh fridges — which come in two sizes, 13.1 and 14.4 cubic feet — come with a promise to keep fruits and vegetables fresh for longer through refrigerator technology that preserves vitamins A and C for up to five additional days, as verified and approved by leading Total Quality Assurance provider Intertek Laboratories.

The fridge works by mimicking daylight. During the first four hours of the HarvestFresh cycle, the crisper lights will shine blue, mimicking dawn and the first light of the day. This is followed by two hours of green light replicating midday, and a further six hours of red light imitating the more muted tones of dusk. The drawers then turn dark for 12 hours to represent nighttime.

To help households another way, the fridge also works on an inverter motor, cutting energy costs. Gurhan Gunal, Country Manager of Beko Pilipinas Corporation said during the press conference that separate refrigerator and freezer cooling levels also help reduce its energy consumption.

According to Mr. Gunal, the technology was patented two years ago, but only hit the market last year. “In terms of patents, Beko is one of the world-leading companies with its own unique features,” he said. Beko is the global home appliances brand of the Arçelik Group and belongs to Koç Holding. The company’s stop to the Philippines is due to its expansion: between 2015-2016 they opened subsidiaries in Vietnam, Malaysia, India, and Australia; they also have factories in India, China, Thailand, and Bangladesh. “The Philippines is the latest stop to invest in the market.”

The brand is currently available in select SM Appliance Centers, Robinsons, All Home, Anson’s, Savers, Great World, and Manila Imperial Appliances Stores, and Asian Home Appliance Center in Cebu, and in e-commerce partners: Lazada, Household Appliances Trading hat.com.ph. — JLG

Wage board defers decision on workers’ petition

REUTERS
Filipinos work at a factory in Malvar, Batangas, Aug. 10, 2018. — REUTERS/ERIK DE CASTRO

THE regional wage board has deferred its decision on a petition filed by a workers’ group seeking to raise the daily minimum wage by as much as P70 in Cavite, Laguna, Batangas, Rizal, and Quezon (collectively known as Calabarzon).

In a decision dated March 29, the Regional Tripartite Wages and Productivity Board of Calabarzon said it decided to defer action on the petition filed by the Federation of Free Workers (FFW) after seeing an increase in unemployment and underemployment in the region. 

The Employers Confederation of the Philippines (ECoP) on Wednesday provided a copy of the wage board’s resolution no. 1.

In the resolution, the regional wage board said unemployment and underemployment in the Calabarzon Region last year jumped to 11.6% (from 6.2% in 2019) and 17.20% (from 11.7% in 2019), respectively.

It also cited the rising inflation, as well as the Philippine economy’s record 9.6% contraction in 2020.

“In view of the preceding situation in relation to the minimum wage issue, the Board decided, as a collegial body, to defer its decision on the petition of the (FFW), without prejudice, however, to any further action the FFW, or any other concerned labor sector group may deem appropriate,” the wage board said.

In July 2019, the FFW filed a petition for a daily wage hike in the amount of P50.91 to P70.92, plus a P5 simplification increase for workers in the Calabarzon Region.

Several hearings have been conducted but were disrupted by the Taal Volcano eruption in January 2020 and the coronavirus pandemic. — GMC

Ransomware attempts versus small firms decline in 2020

PIXABAY

RANSOMWARE attacks on small and medium businesses (SMBs) in the Philippines declined last year, but internet security firm Kaspersky warned them not to relax because attackers are now focused on quality rather than quantity.

Ransomware attempts against Philippine SMBs declined 15.17% to 22,011 versus the 25,946 attempts detected in 2019, the latest Kaspersky Security Network report showed.

As a result, the Philippines fell from 45th to 50th place globally in terms of ransomware attempts versus SMBs last year.

Kaspersky defines ransomware as a “malware designed to infect computers of organizations and individuals, encrypt data in it, and block access to it.”

“Ransomware attackers then will demand a fee from the victims in exchange for enabling the system to work again,” it added.

“Ransomware attacks may be declining, but Kaspersky has been issuing a warning to companies, of all shapes and sizes, against the increasing activities of ‘Ransomware 2.0’ or what’s known as targeted ransomware,” the company noted.

Yeo Siang Tiong, general manager for Southeast Asia at Kaspersky, said: “The decrease of ransomware detections here should not make us complacent.”

“Since last year, we have been underlining the evolution of this threat. Ransomware groups are now more concerned about quality over quantity. Meaning, from blindly throwing a line into the ocean and waiting for an insecure user to bite, attackers are now more aggressive and targeted towards their victims,” he said. — Arjay L. Balinbin

AC Energy invests P4.5B in unit behind Zambales solar project

AYALA-LED AC Energy Corp. has infused P4.5 billion in its subsidiary Santa Cruz Solar Energy, Inc., which operates a 60-megawatt (MW) solar farm in Zambales, according to a regulatory filing on Wednesday.

AC Energy disclosed that its board of directors had recently greenlit the investment.

Three months ago, the company said that it had granted authority to share its credit facilities with Santa Cruz Solar to allow the latter to participate in electricity supply biddings.

The firm’s management also approved the issuance of a notice to proceed to develop the access, infrastructure and grid connection facilities of a solar power project, which will be built in San Marcelino, Zambales.

AC Energy said that it had authorized a power supply agreement between the firm and DirectPower Services, Inc. and allowed its wholly owned unit Buendia Christiana Holdings Corp. to execute an option to a lease agreement — and eventually lease agreement — with Tabangao Realty, Inc. for properties in Brgy. Malaya in Pililla, Rizal, and Brgy. Libjo in Batangas City.

Shares in ACEN at the local bourse declined 1.34% or 10 centavos to close at P7.39 apiece on Wednesday. — Angelica Y. Yang

Loans disbursed by pawnshops drop

BW FILE PHOTO
PAWNSHOPS’ pledged loans posted an average decline of 28% last year, due to lesser customers who renew their loans or avail of new pledged loans. — BW FILE PHOTO

MAJORITY OF pawnshops in the country saw a decline in pledged loans last year due to lower demand, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Wednesday.

“Data from the players representing 71% of the industry network disclosed that some pawnshops have increased their pledged loans due to promotions or programs,” Mr. Diokno said at an online briefing.

“However, the majority of the pawnshops registered an average decline in pledged loans of 28% in 2020, primarily due to lesser customers who renew their loans or avail of new pledged loans because of business closures, slowed down operations and travel restrictions, among others,” he added.

Meanwhile, Mr. Diokno noted that pawnshops helped disburse cash aid worth P6.8 billion to more than 980,000 beneficiaries as of December 2020.

The footprint of the pawnbroking industry has surpassed the banking industry, as its head offices and branches reached 14,641 at end-2020 present in 82% of the country’s local government units. This is compared with the 13,044 physical network of universal, commercial, thrift, rural, and cooperative banks in the same period.

Pawnshops have also evolved to offer more services, as 83% of their offices and branches were already engaged in remittance and money changing activities as of last year.

The central bank has noted the role of pawnshops in financial inclusion as they provide credit and immediate liquidity to borrowers who have personal assets that can serve as collateral, regardless of whether or not they have a credit history.

“Pawnshops play a key role in inclusive finance because of their extensive network that serves as financial access points for low-income individuals, small businesses and social amelioration beneficiaries,” Mr. Diokno said. — L.W.T. Noble

Can’t eat out? In locked down Paris, a chef can come to you

LOUIS (ECLIPX) HANSEL/UNSPLASH

PARIS — Parisians yearning for haute cuisine dining since the coronavirus disease 2019 (COVID-19) pandemic closed down restaurants have found an alternative: private chefs who serve up meals in customers’ homes.

Fatiha El-Kaddaoui is a trained chef who takes bookings from private individuals, brings her ingredients to their home and uses their equipment to prepare and serve restaurant-quality dishes.

She was busy before the pandemic. But now, she said, she is having to turn away up to 30 bookings per month.

“There’s very, very big demand,” she said. “This demand exists because those people used to go to restaurants one, two, three times a week or even more.”

Last Friday, El-Kaddaoui had been booked by Valerie Lacroix, 35, to prepare a lunch for her and her mother.

Working in Ms. Lacroix’ kitchen, the chef prepared a foie gras entree, followed by a sea bream ceviche, then a dish of gambas and scallops.

“We obviously want to go out, see our friends and family, and spend time with them, but we can’t,” said Ms. Lacroix. “This is recreating that shared moment at home.”

Restaurateurs and chefs around the world have come up with creative ways to carry on working through a pandemic that has devastated their industry. Some make high-quality meals for delivery, while others offer cooking classes on social media.

French people spend more time than those of any other developed nation eating or drinking, according to the Organisation for Economic Cooperation and Development, so restaurant closures hit them particularly hard.

Some customers have flouted COVID-19 restrictions. Police caught more than 110 people dining at a clandestine restaurant in Paris earlier this month.

A French TV station broadcast what it said was hidden-camera footage of lockdown-busting private soirees at exclusive venues. Police mounted an investigation.

Ms. El-Kaddaoui said she operated within the rules by not catering to gatherings of more than six people, and not working after the 7 p.m. curfew.

But her service is not within the reach of every Parisian: a lunch for two comes in at 170 euros ($205.16) per person. — Reuters

Real property valuation reform seen to boost government revenues

REFORMING the country’s real property valuation system could generate more revenues for local government units (LGUs) and accelerate the rollout of infrastructure projects, according to experts.

In a webinar organized by the Foundation for Economic Freedom, Inc. on Wednesday, Bureau of Local Government Finance (BLGF) Director Ma. Pamela P. Quizon said the existing system is plagued with problems such as overlapping valuations, outdated rates, lack of a single oversight agency and absence of a real property electronic database.

This resulted in inefficient collection of real property taxes by LGUs, foregone revenues due to over- and under-valuation of assets, and lengthy court litigation, among other things.

She said only 45% of LGUs have updated their schedule of market values (SMV) as of March 2019, leaving the rest of 98 cities and 46 provinces with outdated SMVs.

“[Property values for public purposes are outdated because] there is no sanction for noncompliance in the regular updating of LGU schedule of fair market values and BIR (Bureau of Internal Revenue) zonal values. LGUs fail to update and revise SMVs despite statutory requirement because it is unpopular. There is a fear of political backlash. They lack technical capacity and [their budgets cannot cover] costs of revaluation,” Ms. Quizon said.

The Duterte administration wants Congress to pass the proposed Real Property Valuation and Assessment Reform Act, the third part of its comprehensive tax reform program.

The House of Representatives approved its version of the bill on third reading in November 2019, while the Senate version is still pending at the committee level. The bill is part of the list of measures that the council of executive and legislative departments agreed on to pass before Congress adjourns in June.

Sought for comment, leaders in the Senate and House of Representatives did not respond at the deadline time.

Discrepancies over varying valuations of agencies also resulted in conflicts and delays in infrastructure projects, with BLGF’s estimates showing 23 state agencies have their own valuations.

Transportation Undersecretary for Railways Timothy John R. Batan said the rollout of several infrastructure projects was slowed by right of way (RoW) acquisition issues.

Mr. Batan said resolving RoW issues is a long and tedious process, especially with the absence of a uniform property valuation system. Reforming real property valuation will fast-track RoW and site acquisitions for infrastructure projects, he said.

“If we have better visibility and predictability on real property valuation, which is what this reform program is seeking to achieve, then we will be able to unlock this public wealth. The measure of the public wealth of the country is largely in its land assets and if we can unlock that, then 4-5 more times projects we need to build can find its financing from internally generated (revenues through) land value creation,” he said during the forum.

For instance, Mr. Batan said the government incurred around P7 billion in estimated financial losses due to delays in the implementation of the Metro Rail Transit (MRT) Line 7 and Light Rail Transit (LRT) Line 1 Cavite Extension projects. These losses are due mainly to valuation issues, additional payments to close expropriation proceedings and contingent liabilities incurred due to delayed RoW acquisition.

The estimated overall economic losses attributed to valuation issues in both railway projects totaled P31.34 billion so far, as the slow rollout also delayed the realization of economic benefits.

He said existing properties where the government’s railways are situated covered 844,000 square meters (sq.m.) to date. The railway footprint is expected to increase to 18.545 million sq.m. given the state’s current infrastructure pipeline.

By 2022, he said the government has to acquire RoW for 9.5 million sq.m. and 13.5 million sq.m. of project sites to establish 1,209 kilometers (km) of railways and install 168 stations where 1,381 trains will be deployed.

The proposed real property valuation reform bill aims to establish a single valuation base for taxation through SMVs of LGUs. The updated values can be used as a benchmark for other purposes as well, such as RoW acquisition, lease and rental, among other things.

“The real estate and housing development industry supports the passing of the valuation reform act. However, for it to effectively achieve its objectives, particularly, in generating investor confidence in the valuation system, checks and balances should be in place to render it truly fair, equitable and transparent especially to taxpayers,” Subdivision and Housing Developers Association Chairman Rosie Tsai said during the forum. — Beatrice M. Laforga

More businesses, advertisers shift to Viber amid pandemic

MESSAGING APPLICATION Viber Rakuten said its business users in the Philippines soared last year, suggesting that companies began to recognize the value of one-on-one conversations with their customers during the pandemic crisis.

In the Philippines, “the amount of new brand-owned business channels launched soared by 211%” last year, Rakuten Viber said in an e-mailed statement.

Viber saw business messages sent surge by 244% last year versus 2019, with transactional messages growing by 299%.

Viber said its suite of business solutions enabled brands “to provide their customers with notifications about the products or services they availed — from the status of their lab tests or food orders to updates on the delivery time of their groceries and appointment with a dentist and more.”

“With this new trend on the rise, it’s safe to say that more brands are starting to see the importance of strengthening 1-to-1 conversations with their customers rather than just send one-way messages,” it added.

Businesses, Viber noted, also realized the value of providing customer support and receiving feedback and reviews.

Globally, Viber saw a 21% increase in the number of new businesses that started using the messaging application. The number of brands exchanging transactional messages with customers also grew by 37% last year. Viber recorded a 58% increase in the number of new business channels launched by brands.

The popularity of chatbots, which allow brands to give an automated reply to requests in real time, also increased by 48% globally, Viber noted.

“That’s because chatbots allow organizations to provide consumers with a more efficient way to respond to their needs — all without having to boost manpower,” it said.

Viber’s growing user base enticed advertisers to switch to the messaging application.

“As a result, Viber has noted a 115% increase in direct advertisers globally with top business verticals including food delivery which grew by 174%, social media by 244%, and mobile games by 122%,” it said.

In the Philippines, Viber said its direct advertisers surged by 312%. — Arjay L. Balinbin

First Gen powers Megaworld from Leyte geothermal plant

LOPEZ-LED First Gen Corp. said on Wednesday that it was tapped by property developer Megaworld Corp. to supply 6.17 megawatts (MW) of geothermal energy to the latter’s four office towers in Taguig City.

Under the two-year deal starting March 26, First Gen will be providing clean power to Uptown Place Towers 1, 2, 3, and the flagship Alliance Global Tower, which houses the headquarters of Megaworld’s parent firm Alliance Global Group, Inc. and its subsidiaries.

Carlos Lorenzo L. Vega, First Gen vice-president and head of power marketing, said the clean power will come from First Gen’s Tongonan geothermal power plant in Kananga, Leyte.

Ramon A. Carandang, First Gen vice-president and head of corporate communications, said in a statement that the power generation firm agreed to partner up with Megaworld because the latter and its parent company shared the Lopez-led group’s goals in promoting sustainable, affordable and clean energy while campaigning against climate change.

“We are grateful to Megaworld for responding to our offer for a collaboration in support of our shared clean energy advocacy. Collaborations even in small ways, like our partnership with Megaworld, can help reduce the buildup of toxic carbon dioxide in the atmosphere, if we keep replicating these partnerships,” he said.

As of end-2020, the company recorded a combined capacity of 3,492 MW from its portfolio of power plants.

Shares of First Gen in the local bourse inched down 0.79% or 25 centavos to close at P31.20 apiece on Wednesday. — Angelica Y. Yang

BDO’s ESG unit investment trust fund sees AUMs increase by 32%

BW FILE PHOTO

BDO UNIBANK, Inc.’s sustainability-themed unit investment trust fund (UITF) saw higher assets under management (AUM) in 2020, following the global trend of an increase in environmental, social, and governance (ESG)-themed investments.

The AUMs of the bank’s ESG UITF stood at P99.4 million as of end-2020, rising by nearly a third (32.1%) from the P75.2 million seen in 2019, the lender said in a statement on Wednesday.

It also climbed by 79% from the P55.5 million AUM level in 2016, which was when the fund was started.

“While the fund is still small, it has the potential to grow in size and importance as more investors are consciously looking for companies that protect the environment, are socially responsible, and practice good governance in a sustainable manner,” BDO said.

Meanwhile, the UITF’s returns were at 13.95% and 19.9% in the second half and the fourth quarter of 2020, respectively.

The bank noted the fund’s growing AUMs and higher return performance mirror the growth in global AUMs, which jumped 29% to $1.7 trillion in the fourth quarter last year.

Through the UITF, clients can invest in a fund that covers several “socially responsible” companies, BDO said.

The Sy-led lender’s income dropped 36.2% to P28.2 billion in 2020 from P44.2 billion a year earlier due to increased loss provisions amid the crisis.

BDO shares closed at P105.60 apiece on Wednesday, down by 90 centavos or by 0.85% from its previous finish. — L.W.T. Noble

A rediscovered forgotten species brews promise for coffee’s future

JULIA FLORCZAK/UNSPLASH

IN DENSE tropical forests in Sierra Leone, scientists have rediscovered a coffee species not seen in the wild in decades — a plant they say may help secure the future of this valuable commodity that has been imperiled by climate change.

The researchers said on Monday that the species, called Coffea stenophylla, possesses greater tolerance for higher temperatures than the Arabica coffee that makes up 56% of global production and the Robusta coffee that makes up 43%. The stenophylla coffee, they added, was demonstrated to have a superior flavor, similar to Arabica.

Botanist Aaron Davis, who led the study published in the journal Nature Plants, said stenophylla was farmed in parts of West Africa and exported to Europe until the early 20th century before being abandoned as a crop after Robusta’s introduction.

Many farmers throughout the world’s coffee-growing belt already are experiencing climate change’s negative effects, an acute concern for the multibillion dollar industry.

Arabica’s flavor is rated as superior and brings higher prices than Robusta, which is mainly used for instant coffee and coffee blends. But Arabica has limited resilience to climate change and research has shown its global production could fall by at least 50% by mid-century.

Stenophylla grows at a mean annual temperature of 24.9 degrees Celsius (76.8 degrees Fahrenheit) — 1.9 degrees C (3.42 degrees F) higher than robusta coffee and up to 6.8°C (12.24 degrees F) higher than Arabica coffee, the researchers said.

The stenophylla rediscovery, Mr. Davis said, may help in the “future-proofing” of a coffee industry that supports the economy of several tropical countries and provides livelihoods for more than 100 million farmers. While 124 coffee species are known, Arabica and Robusta comprise 99% of consumption.

“The idea is that stenophylla could be used, with minimum domestication, as a high-value coffee for farmers in warmer climates,” said Mr. Davis, head of coffee research at Britain’s Royal Botanic Gardens, Kew.

“For the longer term, stenophylla provides us with an important resource for breeding a new generation of climate-resilient coffee crop plants, given that it possesses a great flavor and heat tolerance. If the historic reports of resistance to coffee leaf rust and drought tolerance are found to be correct, this would represent further useful assets for coffee plant breeding,” Mr. Davis added.

Leaf rust is a fungal disease that has devastated coffee crops in Central and South America.

The study included flavor assessments involving 18 coffee-tasting experts. Stenophylla was found to have a complex flavor profile, with natural sweetness, medium-high acidity, fruitiness and good “body” — the way it feels in the mouth.

In December 2018, Mr. Davis and study co-authors Jeremy Haggar of the University of Greenwich and coffee development specialist Daniel Sarmu searched for stenophylla in the wild. They initially spotted a single plant in central Sierra Leone. About 140 km away in southeastern Sierra Leone, they found a healthy wild stenophylla population.

“Both locations were thick tropical forest, but stenophylla tends to occur on drier, more open areas: ridges, slopes and rocky areas,” Mr. Davis said.

Stenophylla had not been seen in the wild in Sierra Leone since 1954 and anywhere since the 1980s in Ivory Coast, Mr. Davis said. A few examples were held in coffee research collections. Mr. Davis said stenophylla is threatened with extinction amid large-scale deforestation in the three countries where it has been known to grow in the wild: Sierra Leone, Guinea and Ivory Coast.

Unlike the red and occasionally yellow fruit of Arabica and Robusta plants, stenophylla’s fruit are intense black. The coffee beans are inside the fruit.

“I think we’re hugely optimistic for the future that stenophylla can bring,” said Jeremy Torz, co-founder of the specialty coffee business Union Hand-Roasted Coffee in East London where part of the taste-testing was held. —  Reuters

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