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Stocks close flat on foreigners’ window dressing

THE MAIN INDEX closed flat at the start of the third quarter amid a 142% jump in value turnover and month-end window dressing by foreign investors.

The 30-member Philippine Stock Exchange index (PSEi) picked up 1.99 points or 0.03% to end at 6,209.71 on Wednesday, while the broader all shares index gained 5.58 points or 0.15 to close at 3,650.75.

Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said in a text message that “the significant amount in value turnover came from the First Gen tender offer,” referring to the P9.6-billion tender offer of Lopez-led First Gen Corp.

Valorous Asia Holdings Pte. Ltd., a company under global investment firm KKR & Co., Inc., completed buying 11.9% of First Gen’s outstanding common shares through a tender offer on Monday. Shares in First Gen increased 2.04% at the end of Wednesday’s session.

Value turnover at the PSE jumped to P15.66 billion from P6.47 billion the previous day. Some 1.45 billion issues switched hands.

Mr. Tan said the net foreign buying of P6.24 billion seen on Wednesday, which was a turnaround from the net selling of P833 million seen the previous day, also helped push the PSEi up.

“We think that this is brought by the month-end window dressing,” he said.

For Regina Capital Development Corp. Head of Sales Luis A. Limlingan, the rally of Philippine shares is due to a good start for the third quarter, citing investor optimism over “positive trends in the virus, reopening of economies and a hope of a vaccine.”

Despite the continued rise in coronavirus disease 2019 (COVID-19) cases across the world, governments continue to allow the resumption of business activities in favor of an economic rebound.

Mr. Tan said this might also be spurring optimism in the Philippines, as the government decided Wednesday night to extend the relaxed lockdown in Metro Manila.

“I think that investors are somehow optimistic that the National Capital Region is not reverted back to (a strict lockdown),… and we think that investors are somehow positive about the COVID-19 cases,” he said.

Most sectoral indices at the PSE closed in green territory on Wednesday. Industrials rose 111.75 points or 1.45% to 7,814.16; property increased 21.79 points or 0.71% to 3,072.24; mining and oil improved 9.10 points or 0.17% to 5,219.37; and financials climbed 1.90 point or 0.15% to 1,235.86.

On the other hand, holding firms erased 39.79 points or 0.61% to 6,413.55; and services shed 6.31 points or 0.45% to 1,397.37.

Decliners beat advancers by three, 98 against 95, while 47 names ended unchanged.

Meanwhile, on Wall Street, the Dow Jones Industrial Average rose 217.08 points or 0.85% to 25,812.88; the S&P 500 gained 47.05 points or 1.54% to 3,100.29; and the Nasdaq Composite added 184.61 points or 1.87% to 10,058.77. — Denise A. Valdez with Reuters

Peso inches up on stronger manufacturing data

THE PESO closed sideways against the greenback on Wednesday after the release of stronger June manufacturing data as well as a weaker dollar on concerns over higher infections in the US.

The local unit finished trading at P49.82 per dollar yesterday, inching up by a centavo from its P49.83 close on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened the session at P49.76 per dollar, which was also its intraday best. Meanwhile, its weakest was at P49.87. Dollars traded rose to $681.45 million from the $642.73 million seen on Tuesday.

The stronger peso came on better manufacturing data, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“The peso closed slightly stronger after stronger manufacturing data almost back to expansion mode and the highest in four months or since February,” he said in a text message.

According to IHS Markit, the country’s Purchasing Managers’ Index rose to 49.7 in June, still in contractionary territory but better than the 40.1 seen in May.

The increase in the June index signals “further movement toward stabilization in the Filipino goods-producing sector” as the country’s movement restrictions are starting to be relaxed, IHS Markit said.

Meanwhile, a trader attributed the peso’s gain to weaker sentiment for the greenback as infections continue to surge in the US.

“The peso appreciated slightly as the dollar continues to weaken amid a spike in US coronavirus cases and dimming hopes of economic resumptions,” the trader said.

For today, Mr. Ricafort gave a forecast range of P49.70 to P49.95 while the trader expects the local unit to move within the P49.75 to P49.95 band. — L.W.T. Noble

Metro Manila will remain under general lockdown, Duterte says

MANILA and nearby cities will remain under a general lockdown until July 15, while a strict lockdown in Cebu City, where there has been a surge in coronavirus infections will be kept, President Rodrigo R. Duterte said late Tuesday.

Aside from Metro Manila, the provinces of Benguet, Cavite, Rizal, Leyte and Southern Leyte, and the cities of Lapu-Lapu, Mandaue and Ormoc will continue to be under a general community quarantine.

Meanwhile, the lockdown in Talisay City in Cebu province was relaxed to a general community quarantine along with Minglanilla and Consolacion towns. The rest of the province has been placed under a modified general community quarantine.

“Cebu is now the hotspot for COVID-19,” Mr. Duterte said in a televised speech. “Why? Because many of you chose not to obey.”

The President also criticized Talisay City, which he said appeared like a marketplace everyday. “You’ve been on a drinking spree, drinking, gambling and almost nonchalant of the dangers that are lurking around,” he said in mixed English and Filipino.

Mr. Duterte earlier ordered Environment Secretary Roy Cimatu, a former military chief, to supervise the lockdown of Cebu City’s almost a million people.

Abra, Baguio City, Ifugao, Kalinga, Ilocos Norte, La Union, Pangasinan, Cagayan, Isabela, Bataan, Bulacan, Nueva Ecija, Pampanga, Angeles City, Batangas, Laguna, Quezon, Lucena City, Palawan, Puerto Princesa City, Albay, Camarines Norte, Camarines Sur and Naga City will be kept under an easier modified general lockdown.

The same is true for Capiz. Iloilo, Iloilo City, Negros Occidental, Bacolod City, Bohol, Negros Oriental, Tacloban City, Western Samar, Zamboanga City, Zamboanga del Sur, Bukidnon, Misamis Occidental, Misamis Oriental, Cagayan de Oro, Davao del Norte, Davao del Sur, Davao City, Davao de Oro, Cotabato, South Cotabato, Agusan del Norte, Butuan City, Lanao del Sur and Maguindanao.

Mr. Duterte locked down the entire Luzon island in mid-March, suspending work, classes and public transportation to contain a coronavirus pandemic. People should stay home except to buy food and other basic goods, he said.

He extended the strict lockdown on the island twice and thrice for Metro Manila, where infections have been mostly concentrated. But Health authorities have cited a spike in cases in Cebu City in central Philippines.

Almost all industries except for leisure have reopened under a general lockdown but with limited capacity.

The Department of Health reported 999 new coronavirus infections on Wednesday, bringing the total to 38,511.

The death toll rose to 1,270 after four more patients died, while recoveries increased by 205 to 10,438, it said in a bulletin.

Of the new cases, 595 were reported in the past three days, while 404 were reported late.

Also yesterday, Food and Drug Administration chief Rolando Enrique Domingo said the drug Remdesivir, which is used to treat Ebola, has been shown to shorten a patient’s illness by four days to 11 days.

He said the drug may be given to patients who are not enrolled in the clinical trials based on a “compassionate special permit. Nine people have been issued the permit so far, he said.

Meanwhile, Finance Secretary Carlos G. Dominguez III cited the need to monitor the COVID-19 situation in Metro Manila and the Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) region, which account for as much as 67% of the economy. Calabarzon is under a modified general lockdown except for Cavite and Rizal.

Localized lockdowns at the village, municipal, and even within companies could be enforced so the economy won’t get hit in case a spike in infections happens in some areas, he said at the event of Mr. Duterte’s Tuesday address. — Vann Marlo M. Villegas and GMC

Manila says it’s ready to protest Hong Kong sinking of fishing boat

THE PHILIPPINES would file a diplomatic protest if investigations show that a Hong Kong vessel had deliberately sunk a Filipino fishing boat in its territorial waters, its top diplomat said on Wednesday.

But the incident should not be politicized because it involved a commercial boat, Foreign Affairs Secretary told an online news briefing.

“Whether there’s negligence on their part is what we’re going to determine,” he said. “If there is a diplomatic note that’s required, it will be sent.”

Twelve Filipino fishermen and two passengers aboard the FV Liberty went missing after it collided with Hong Kong-registered vessel MV Vienna Wood in Occidental Mindoro province on Sunday July 28.

Some critics have compared the incident to the sinking of a Filipino fishing boat by a Chinese-owned ship while it was anchored at Reed Bank off Palawan province in June last year, when 22 Filipino fishermen were abandoned at sea.

“This is already being investigated by our Philippine Ports Authority, Maritime Industry Authority and our Department of Transportation,” Foreign Affairs Undersecretary Brigido D. Dulay said at the same briefing.

The Chinese Embassy in the Philippines has also asked parties not to politicize the incident. “Pending the investigation, we hope all parties refrain from politicizing the issue,” it said in a statement on Tuesday.

It also said China was coordinating with the Philippine government to resolve last year’s case. “The concerned Chinese fishing association has already offered a compensation proposal to the Philippine side and has been waiting for formal feedback from the latter.”

The presidential palace said Manila has exclusive jurisdiction over the case.

“We will not allow foreigners to exercise criminal and civil jurisdiction over the matter,” Presidential Spokesman Harry L. Roque told the ABS-CBN News.

He earlier said the incident fell under the country’s maritime laws and local courts should determine criminal and civil liability.

He also said the issue was unlikely to cause tensions with China because it happened in local waters.

The Philippine Coast Guard earlier said it had received a call from the captain of the Hong Kong-registered vessel about the incident that happened 14.57 nautical miles west-southwest off Mamburao in the province of Occidental Mindoro in the early hours of Sunday.

The Philippine boat was bound for Navotas City and had stopped for supplies in Tawi-Tawi in the nation’s south. The Hong Kong bulk carrier with 20 crew members had come from Subic Bay in Zambales province and was on its way to Australia.

The Coast Guard said it immediately activated search and rescue operations for the 12 missing fishermen, including its captain, and two passengers.

It sent a light utility aircraft and helicopter to support the operations, it said. They have not found any survivors.

Mr. Duterte had called last year’s sinking by the Chinese boat “maritime incident,” putting his policy on the South China Sea in the spotlight.

Mr. Duterte has sought closer trade and investment ties with China since he became president in 2016, unlike his predecessor Benigno S.C. Aquino, who sued Beijing at an international tribunal for its island-building activities and won.

China claims sovereignty over more than 80% of the South China Sea based on its so-called nine-dash line drawn on a 1940s map. It has been building artificial islands in the disputed Spratly Islands and setting up installations including several runways.

The Philippines this month protested China’s creation of two new districts — Nansha and Xisha — in the South China Sea because these are supposedly part of Philippine territory and sea zones.

Rival Southeast Asian claimant nations and the United States have criticized China’s recent assertive moves in the disputed waterway as the world battles the coronavirus disease 2019 pandemic.

Aside from China and the Philippines, other claimants to the main waterway are Brunei, Indonesia, Malaysia, Taiwan and Vietnam. — Charmaine A. Tadalan and Gillian M. Cortez

ABS-CBN not tax delinquent, says BIR

ABS-CBN Corp., which the regulator ordered closed after its franchise expired last month, had paid all taxes, according to the Bureau of Internal Revenue (BIR).

The media giant that is critical of President Rodrigo R. Duterte had paid more than P15 billion in taxes since 2016, BIR Assistant Commissioner Manuel V. Mapoy told congressmen at a hearing of the company’s franchise extension on Wednesday.

“There is no delinquent account,” he said. “ABS-CBN Corp. has been regularly paying its corporate taxes for the past years.”

ABS-CBN group Chief Financial Officer Ricardo B. Tan said the media group had paid P71 billion in taxes from 2003 to 2019.

The company is seeking to return on air after the National Telecommunications Commission stopped its operations when its franchise expired on May 4.

The regulator on Tuesday issued another order stopping the direct broadcast satellite service of unit Sky Cable Corp.

ABS-CBN has asked the Supreme Court to overturn the regulator’s first cease order.

Nueva Ecija Rep. Micaela S. Violago in a manifestation said some broadcast companies had been allowed to operate with an expired franchise. — Vann Marlo M. Villegas

Regional Updates (07/01/20)

Jeepneys allowed back on 49 routes in Metro Manila by July 3

TRADITIONAL JEEPNEYS can start plying Metro Manila streets again by Friday, July 3, after the transport regulator issued late Wednesday the new guidelines for operations. The Land Transportation Franchising and Regulatory Board’s (LTFRB) Memorandum Circular 2020-026 lists 49 routes where licensed jeepneys can operate without getting a special permit. “In lieu of the Special Permit, a corresponding QR Code shall be issued to the operator prior to operation, which must be printed and displayed in the corresponding unit,” LTFRB said in a statement. The QR code can be downloaded from the agency’s site. LTFRB also stressed that operators “must provide PUJs (public utility jeepneys) that are currently registered roadworthy with the Land Transportation Office and with valid Personal Passenger Insurance Policy.” Health safety protocols such as distancing, provision of passenger contact forms, and wearing of face masks are also required. The existing fare rates of P9.00 for the first four kilometers and P1.50 for every succeeding kilometer will remain in effect. The routes are:

Camarin – Novaliches
Karuhatan – Ugong
Malabon – Monumento via Letre
Malabon (TP) – Navotas (TP)
Monumento – Navotas via Letre
Cubao – Proj. 4 via J.P. Rizal
Cubao – San Juan via N. Domingo
IBP Road – Lupang Pangako via Gravel Pit Road
Marikina – Pasig
Pantranco – Proj. 2 & 3 via Kamuning
Proj. 2 & 3 – Q Mart
Sucat-Highway – Bagumbayan
Ayala – Pateros via JP Rizal
A. Boni – A. Mabini via 10th Ave
A. Bonifacio – D Tuazon/E. Rodriguez Ave.
A. Rivera – Raon via Severino Reyes
Ayala – Mantrade via Pasong Tamo
Ayala – Washington
Balic-Balic – Quiapo via Lepanto
Balic-Balic – Bustillos via G. Tuazon
Balic-Balic – Espana/M. Dela Fuente
Balintawak – Frisco
Balut – Blumentritt
Blumentritt – North Harbor via Divisoria
Boni – Kalentong JRC via Boni Avenue
Dian – Libertad
Divisoria – Gastambide via Morayta
Divisoria – Pier North via Plaza Moriones
Divisoria – Quiapo via Evangelista
Evangelista – Libertad
Divisoria – Velasquez
Guadalupe Market – L. Guinto via Pasig Line
L. Guinto – Sta. Ana
Herbosa/Pritil – P. Guevarra via Tayuman
Kalentong/JRC – P. Victorino via P. Cruz
Divisoria – Sta. Cruz via San Nicolas
Kayamanan C – PRC via Pasong Tamo
L. Guinto – Zobel Roxas via Paco
Lardizabal – Rizal Ave. via M. Dela Fuente
Lealtad – Quiapo (Barbosa) via Lepanto
Kalentong/JRC – Libertad (Mandaluyong) Nueve de Pebrero
Kalentong/JRC – Namayan via Vergara
North Harbor – Quiapo via Evangelista
P. Faura – San Andres
Quezon Ave. – Sta. Mesa Market via Araneta Avenue
Crame – San Juan via Pinaglabanan
Alabang – Sucat via M.L. Quezon
Soldiers Hill (Phase IV) – Talon via Alvarez

EDSA BUSWAY

Meanwhile, the interim operations of the EDSA Busway, spanning from Monumento to the Parañaque Integrated Terminal Exchange, started on Wednesday. The busway system involves the use of designated bus stops located at the inner lane of EDSA, complementing the existing Metro Rail Transit Line 3 (MRT-3). The Department of Transportation said 550 bus units were authorized for service. “Bus operators committed to initially deploy 150 bus units starting today. This is in addition to the buses deployed under the existing MRT-3 Bus Augmentation Program. No fare increase shall be implemented,” it said in a statement. — Arjay L. Balinbin

Bangsamoro gov’t warns MILF members on peace pact violation after clan dispute settlement

MEMBERS OF the Moro Islamic Liberation Front (MILF) who are part of families involved in a clan dispute have been warned against renewed violence after a peace pact was signed over the weekend. Executive Secretary Abdulraof Macacua of the Bangsamoro government, in a statement on Monday, said MILF members who will violate the treaty will be removed from the organization that now holds a leadership role in the new autonomous region. The clan dispute, referred to as rido, involved the Sindatok and Tundok families in the town of Datu Saudi Ampatuan in Maguindanao. The peace settlement was mediated by the Bangsamoro government, Maguindanao provincial government, Ad Hoc Joint Action Group, Coordinating Committee on the Cessation of Hostilities, military, police, religious leaders, and other peace monitoring groups in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM). “We are thankful for both parties for agreeing to settle their understanding. This also benefits the civilians who always are the victims of violence due to armed conflict,” said Mr. Macacua, also the chief of staff of MILF’s armed forces known as the Bangsamoro Islamic Armed Forces (BIAF). Under the normalization process that is part of the MILF’s peace deal with the national government, about 30% of the BIAF’s 40,000 members were targeted for decommissioning by March 2020.

CONFLICT MONITORING

Peacebuilding group International Alert Philippines, in its April-May 2020 report on critical events in the region released last week, noted intensified violence over land disputes amid the lockdown prompted by the coronavirus crisis. These conflicts included those involving families with MILF members. International Alert Country Manager Nikki de la Rosa, in a statement released with the report, said while these “flashpoints are tied to land issues,” links to “State apparatus” worsen the violence. “They have access to resources and have political connections, that is why they are able to engage in long-term violence,” she said. Ms. Dela Rosa said it is crucial for the BARMM government to address these ridos during the transition period until 2022. “The next 18 months will be critical in the Bangsamoro because it can motivate warring groups to arrive into a political settlement to end longstanding conflict or provoke more community-level violence magnified by the loss of livelihood on the one hand and a scramble for resources for the 2022 national elections on the other,” she said. — MSJ

PHL obtains P23.5-B loan from Japan for pandemic response

THE Philippines signed on Wednesday a loan for 50 billion yen (around P23.5 billion) with Japan to add supplement its resources as it struggles to contain coronavirus disease 2019 (COVID-19).

During the signing ceremony on Wednesday, Finance Secretary Carlos G. Dominguez III said the loan, coursed through the Japan International Cooperation Agency (JICA), will add to funding for the pandemic-containment effort.

Japanese Ambassador to the Philippines Koji Haneda said the Philippines is “the very first recipient of this highly concessional loan” which falls under a Japanese program to assist countries in responding to the pandemic.

The loan comes with a 0.01% fixed interest rate and is payable over 15 years, including a 4-year grace period. It does not require policy conditions prior to release and will be disbursed immediately once the agreement takes effect, according to Mr. Dominguez.

The loan was co-financed by the Asian Development through its COVID-19 Active Response and Expenditure Support Program.

“We cannot understate the importance of this particular emergency support loan. As you may know, our deficit-to-GDP (gross domestic product) ratio will more than double this year as tax collections are down even as the government spends more to beef up our health care system and to provide relief to families, workers and other sectors hardest hit by the pandemic. We also need to fund our economic recovery program,” Mr. Dominguez said.

Aside from the loan, Mr. Haneda said the Japanese government will also extend two billion yen in grant aid for the country to buy several hospitals’ worth of medical equipment and to establish laboratories all over the country.

Japan is the country’s biggest development partner according to Undersecretary Mark Dennis Y.C. Joven.

Mr. Joven said the Japanese government has lent a total of 625 billion yen to the Philippines during the Duterte administration, accounting for almost half of the Philippines’ total official development assistance (ODA) portfolio.

In 2020, he said loans from Japan have totaled 158.46 billion yen, while grants amounted to 3.137 billion yen.

Mr. Joven said the government is looking to borrow around $8.6 billion in ODA from its development partners this year to add to its resources in dealing with the pandemic.

He said the government has gained access to nearly $5 billion so far.

As of June 4, the government has raised $6.508 billion for its COVID-19 response from foreign creditos via loans, including ODA, bond issues and grants.

Mr. Dominguez said domestic creditors will remain the largest source of financing with foreign lending capped at 25%.

As of June 24, the government has raised a net P1.2 trillion from domestic borrowing, while the budget deficit is projected to hit 8.4% of GDP this year.

Debt is projected to rise to 49.8% of GDP this year from a record low of 39.6% in 2019.

The government’s pandemic expenses have totaled P374.89 billion this year, counting from the allotment releases issued by the Budget department.

The biggest allocations went to the Department of Social Welfare and Development and the Department of Finance as the main implementing agencies of the government’s subsidy programs. — Beatrice M. Laforga

Permanent business closures estimated at 200, Labor dep’t says

THE Department of Labor and Employment (DoLE) has tallied about 200 permanent business closures during the public health emergency, which imposed lockdowns that did not allow them to operate or impaired the mobility of suppliers and potential customers.

Labor Secretary Silvestre H. Bello III said the count is based on businesses that have notified DoLE of their closure. Speaking at a Laging Handa briefing Wednesday, he added that over 3,000 businesses closed temporarily.

“From January this year to up to this time, we have received notice from 3,012 businesses establishments going into temporary closure,” he said.

All the closures affected “over 100,000 employees,” Mr. Bello said.

President Rodrigo R. Duterte first placed Luzon on enhanced community quarantine in mid-March, which halted economic activity except for sectors considered essential. First-quarter gross domestic product declined by 0.2%, according to the Philippine Statistics Authority.

Mr. Bello said he will meet with legislators, including Senate Committee on Labor Chairman Emmanuel Joel J. Villanueva, to discuss continuing the Department of Labor and Employment’s (DoLE) cash subsidy program, known as the COVID-19 Adjustment Measures Program (CAMP), for workers affected by the COVID-19 (coronavirus disease 2019) crisis.

CAMP stopped taking applications in April due to budget constraints. DoLE initially had a budget of P1.6 billion but was given an additional P2.5 billion. CAMP applicants who were not accommodated were referred to the government’s Small Business Wage Subsidy program. — Gillian M. Cortez

Philippine fruit production declines in first quarter

PRODUCTION of three major fruit crops — banana, calamansi and mango — declined in the first quarter while output of pineapple, the fourth major crop, rose, according to the Philippine Statistics Authority (PSA).

In its major fruit crops quarterly bulletin, the PSA said that banana output fell 2.4% year on year to 2.06 million metric tons (MT) in the first quarter.

Davao Region accounted for 36.7% or 757,261 MT of the banana crop, followed by Northern Mindanao at 25.4% or 524,728 MT, and SOCCSKSARGEN (South Cotabato, Cotabato City, Sultan Kudarat, Sarangani, and General Santos City) at 12.4% or 256,560 MT.

The Cavendish banana was the leading variety at 1.16 million MT, equivalent to 56.2% of total banana production, followed by the saba variety at 25.2% or 519,829 MT, and the lakatan variety at 9.1% or 187,485 MT.

Production of calamansi — a native lime — fell 10.9% year on year to 13,311 MT.

The top producer of calamansi was CALABARZON (Cavite, Laguna, Batangas, Rizal, and Quezon), accounting for 18.1% or 2,412 MT, followed by Central Luzon at 15.3% or 2,034 MT, and Davao Region at 12.4% or 1,646 MT.

Mango production fell 0.9% year on year to 94,068 MT.

The Ilocos Region was the top producer, accounting for 51.7% or 48,600 MT, followed by Central Luzon with 19.5% or 18,302 MT, and Western Visayas at 6.5% or 6,131 MT.

The carabao mango was the top mango variety with 81.5% of the harvest or 76,663 MT.

Pineapple production rose 0.8% year on year to 626,522 MT, compared to 621,374 MT in the same period in 2019.

Northern Mindanao was the top producer, accounting for 55.3% or 346,653 MT, followed by SOCCSKSARGEN with 34.6% or 217,083 MT, and the Bicol Region at 6.8% or 42,806 MT.

During the first quarter, the PSA estimated in May that the crop sector overall accounted for 54.9% of agricultural output, down 2.1% year on year. — Revin Mikhael D. Ochave

Palay farmgate price rises 0.2%

THE average farmgate price of palay, or unmilled rice, rose 0.2% week on week to P19.16 per kilogram in the fifth week of May, with prices up 6.4% year on year, according to the Philippine Statistics Authority (PSA).

In its weekly update on palay, rice, and corn prices, the PSA said the average wholesale price of well-milled rice fell 0.2% to P39.41 while the retail price fell 0.1% to P42.57.

The average wholesale price of regular-milled rice fell 0.5% to P35.83 while the retail price rose 0.3% to P38.37.

The farmgate price of yellow corn grain rose 0.7% week on week to P12.74.

The average wholesale price of yellow corn grain rose 9.7% to P21.05 while the retail price of yellow corn grain rose 6.3% to P24.77.

The farmgate` price of white corn grain fell 4.7% to P14.22.

The average wholesale price of white corn grain fell 7.5% to P17 while the retail price rose 0.4% to P27.50. — Revin Mikhael D. Ochave

SEC flags investment schemes posing as online sellers, cryptocurrency traders

THE Securities and Exchange Commission (SEC) warned the public against unlicensed investment companies pretending to be online sellers or cryptocurrency traders.

In a statement Wednesday, the regulator identified Forsage, RCashOnline and The Saint John of Jerusalem Knights of Malta Foundation of the Philippines, Inc. as companies not registered with the SEC.

In an advisory on its website, the SEC said Forsage is claiming to be a “crowdfunding international platform” or “smart contract crypto earning program” which uses cryptocurrency to generate earnings. It promises passive income via a crowdfunding referral system.

The SEC said this is equivalent to offering an investment contract. In order to be legal, Forsage should register with the commission and acquire a secondary license authorizing it to sell securities.

RCashOnline also solicits investments from the public via a selling and reselling model. The SEC said it offers business packages priced between P18,660 to P130,660, including products for resale, but tells investors that earnings will only be generated by recruitmenting new members.

Calling this model “clearly unsustainable,” the SEC said RCashOnline is not registered with the commission and has no authority to solicit investments.

These activities violate the Securities Regulation Code and may be penalized with up to a maximum fine of P5 million, imprisonment of up to 21 years, or both.

The SEC said it also investigated The Saint John of Jerusalem group and found that it promises members monetary support and overseas training opportunities in exchange for personal information.

A member may obtain P5,000 worth of groceries every month on a credit basis. Males aged 21 years old who are either studying or have graduated with an agricultural degree are also enticed with training opportunities in Israel for six months, all expenses paid, with a $1,000 allowance.

The SEC said the group’s registration was revoked by the commision in February 2003.

“The public is… warned that any matter entered into by a revoked corporation that is not for the purpose of liquidation will be a void transaction because of the non-existence of the corporate party,” it said.

“[T]he public is advised not to join in any scheme offered by any individuals/agents/entities representing (The Saint John),” it added. — Denise A. Valdez

ERC defends NGCP’s provisional 2020 revenue cap

THE Energy Regulatory Commission (ERC) is prepared to justify to Congress its decision to provisionally cap at P47.05 billion the revenue of the National Grid Corp. of the Philippines (NGCP).

A resolution was filed in the House of Representatives in June seeking an investigation into “unexplainable” increase in power rates and claiming that the energy regulator failed to keep transmission charges down.

Legislators claim that the increase in NGCP’s interim maximum annual revenue (MAR) this year by P3.3 billion, from the previous P43.8 billion, will “further increase the burden of consumers” during the pandemic.

They also raised the issue of the regulator’s failure to conduct the private transmission firm’s fourth regulatory reset of transmission wheeling rates, for which the ERC sought an extension until next year.

ERC Spokesperson Floresinda B. Digal told BusinessWorld that its “decision has basis.”

“We are open to any inquiry; we will extend full cooperation to clarify and explain issues,” she said.

The maximum revenue cap is the amount that the system operator can collect from customers for transmission operations.

Increasing MAR is expected to raise transmission charges paid for by consumers. But the ERC finds otherwise. In April, it said the interim cap would cut transmission charges by P0.0413 to P0.4701 per kilowatt-hour (kWh) from P0.5114/kWh in 2019.

Last month, the NGCP reported that the share of transmission in electricity bills is 4% of the total.

The ERC raised the NGCP’s revenue cap due to unplanned capital expenditure and the potential inclusion of Energy Projects of National Significance (EPNS), as designated by the Department of Energy (DoE).

The provisional cap, it said, is P11.8 billion lower than the NGCP’s proposed P58.8 billion 2020 revenue cap.

Legislators said the ERC “failed” to consider the annual depreciation of assets and the level of weighted average cost of capital, among other factors.

They further stated that the NGCP’s capital cost since 2016 should have fallen to about 7% as the country’s risk-free rate went down to 4% in 2015 from 10% in 2010.

According to Ms. Digal, the ERC can still adjust NGCP’s MAR as it continues to hear its application. An upcoming hearing is set on July 15.

She added that the company’s provisional MAR is a process “outside” of the regulatory reset. The NGCP last adjusted its revenue cap in 2016.

The House resolution introduced by Representatives Dan S. Fernandez, Luis Raymund F. Villafuerte, Jr., Eric Go Yap, Abraham N. Tolentino, Claudine Diane D. Bautista, and Alyssa Sheena P. Tan. It was filed with the House committee on good government and public accountability. — Adam J. Ang

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