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How PSEi member stocks performed — May 14, 2020

Here’s a quick glance at how PSEi stocks fared on Thursday, May 14, 2020.


Which economies stand to lose the most if remittances run dry?

Which economies stand to lose the most if remittances run dry?

Peso weakens vs dollar on Fed comments

THE PESO succumbed to the greenback on Thursday as investors sought safer havens after officials said the US economy will likely see prolonged weakness due to the coronavirus disease 2019 (COVID-19) pandemic.

The local unit finished trading at P50.445 per dollar on Thursday, shedding 18.5 centavos from its P50.26 finish the prior day, according to data from Bankers Association of the Philippines.

The peso opened the session at P50.29 per dollar, which was also its intraday best. Meanwhile, its weakest showing for the day was at P50.50.

Dollars traded increased to $565.61 million on Thursday from the $390.5 million seen on Wednesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said there was risk-off sentiment in the market after the gradual lifting of lockdown in certain areas in the US.

“The peso exchange rate closed weaker after some concerns raised by US infectious disease officials that the reopening of the US economy might be too soon that could cause another wave of COVID-19 infections,” Mr. Ricafort said in a text message.

US National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci warned that the premature lifting of lockdowns may prompt additional outbreaks of the virus, according to Reuters.

The virus has already sickened more than 4.43 million all over the world, of which 1.43 million cases are in the US.

Meanwhile, a trader attributed the peso’s weakness to safe-haven demand after comments from the US Federal Reserve on the recovery of the world’s largest economy.

“The peso weakened from safe-haven demand following downbeat remarks from US Federal Reserve Chairman [Jerome J.] Powell over likely prolonged weakness in US economic activity,” the trader said in an e-mail.

The head of the Federal Reserve warned on Wednesday of an “extended period” of weak economic growth, vowed to use the US central bank’s power as needed, and called for additional fiscal spending to stem the fallout from the coronavirus pandemic.

Mr. Powell issued his sober review of an economy slammed by a record pace of job losses and bracing for worse ahead as most US states moved toward reopening after weeks of shutdowns aimed at slowing the spread of the novel coronavirus.

Mr. Powell pointed to uncertainty over how well future outbreaks of the virus can be controlled and how quickly a vaccine or therapy can be developed, and said policy makers needed to be ready to address “a range” of possible outcomes.

The US central bank has slashed interest rates to near zero and set up a broad network of programs to ensure financial markets continue to function during the pandemic. It has also established precedent-setting lending facilities for companies and the first-ever corporate bond purchases.

For today, Mr. Ricafort gave a forecast range of P50.30 to P50.55 while the trader expects the peso to move within the P50.30 to P50.50 band. — L.W.T. Noble with Reuters

PHL shares rise amid decline in global markets

PHILIPPINE SHARES bounced back yesterday as investors turned to the local market amid the decline in regional and global equities.

The benchmark Philippine Stock Exchange index (PSEi) picked up 28.45 points or 0.50% to close at 5,654.70 on Thursday. The broader all shares index added 8.67 points or 0.25% to 3,408.65.

“Investors parked funds into the Philippines market as investors grappled with regional downbeat remarks from Powell along with worries over the market’s valuation,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

The head of the Federal Reserve warned on Wednesday of an “extended period” of weak economic growth, vowed to use the US central bank’s power as needed, and called for additional fiscal spending to stem the fallout from the coronavirus pandemic.

Fed Chair Jerome Powell issued his sober review of an economy slammed by a record pace of job losses and bracing for worse ahead as most U.S. states moved toward reopening after weeks of shutdowns aimed at slowing the spread of the novel coronavirus.

Mr. Powell pointed to uncertainty over how well future outbreaks of the virus can be controlled and how quickly a vaccine or therapy can be developed, and said policymakers needed to be ready to address “a range” of possible outcomes.

This resulted in drops in stock markets abroad, which started in Wall Street on Wednesday. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices all fell 2.17%, 1.75% and 1.55%, respectively, after Mr. Powell’s remarks.

Asian stocks also closed in red territory on Thursday. Japan’s Nikkei 225 and Topix indices dropped 1.74% and 1.91%, respectively, while China’s Shanghai Shenzhen CSI 300 and Shanghai SE Composite indices gave up 1.08% and 0.96%, respectively.

Mr. Limlingan said this weakness led investors to flock to Philippine shores on Thursday, which was among the few stock markets that gained in the region.

The property index led the gainers among local sub-sectors, increasing 91.71 points or 3.25% to 2,909.80. Industrials climbed 21.47 points or 0.28% to 7,570.18; services added 0.93 point or 0.07% to 1,311.72, while mining and oil increased 1.67 point or 0.03% to 4,550.55.

Others closed in red territory, namely financials which lost 11.31 points or 0.97% to 1,151.46; and holding firms which shed 41.63 points or 0.74% to end at 5,553.28 yesterday.

Some 1 billion issues valued at P3.78 billion switched hands yesterday, rising from Wednesday’s 422.90 million issues worth P4.79 billion.

Decliners outnumbered advancers, 114 against 56, while 53 names ended unchanged.

Despite the decline in global equities, foreign investors remained net sellers at the PSE, although net outflows dropped slightly to P367.02 million from P394.37 million. — Denise A. Valdez with Reuters

PHL spending half of what’s needed on vulnerable — Nomura

THE Philippines needs to double its aid to vulnerable members of the population after the lockdown strategy for containing the pandemic disrupted their earning capacity, Nomura Global Markets Research said.

It said the announced Philippine social assistance measures worth P1.17 trillion are about 1.7% of Gross Domestic Product (GDP), and that it estimates that spending of 3.7% is needed for such assistance to be “sufficient.”

“Overall, the total fiscal costs that we estimate to provide sufficient assistance to vulnerable groups is around 3.7% of GDP over the two-month period that the lockdown is in place, more than twice the total 1.7% of GDP worth of comparable measures announced by the government,” Nomura Global said in a note issued Thursday.

“We believe the government has available fiscal space as debt to GDP ratios have declined in the past several years, standing at 41.5% in 2019 from 74.4% in 2004,” it said.

Nomura Global added that additional health care spending of about 1% of GDP will give the Philippines adequate resources to deal with the outbreak.

“We estimate an additional 1% of GDP in healthcare spending is needed to adequately respond to the outbreak using the WHO’s (World Health Organization) estimates of required resources, and assuming the ‘true’ number of cases in the country peaks at 30,000,” Nomura Global said.

It said the Philippines is in the same category as Indonesia and India, with big populations of poor people, daily wage earners and informal workers, who are likely to be most adversely affected by the coronavirus disease 2019 (COVID-19) pandemic.

“This makes it even more challenging for their respective governments to deal with the dilemma of ‘saving lives (or) saving livelihoods,’” it said.

“Because imposing lockdowns or social restrictions in a bid to contain the spread of the COVID-19 is highly disruptive to economic activity and will adversely affect the vulnerable sectors the most, targeted government assistance will be urgently needed,” it added.

The report said the hotspots in India, Indonesia, and the Philippines were Mumbai, Jakarta, and Manila, which are also the economic centers of those countries.

It noted that Bangkok and Kuala Lumpur have much lower densities and poverty rates and have recorded declines in new cases thanks to containment measures.

Nomura cited data from the World Bank that in 2015, 22% of the Philippine population was below the poverty line, the same as India and higher than Indonesia’s 11%.

“The difficulty in addressing the local outbreaks is further compounded by very high population densities and urban poverty rates,” it said. — Luz Wendy T. Noble

SMC to resume construction work on Skyway extension

SAN MIGUEL CORP. (SMC) said Thursday that construction of the Skyway extension at the South Luzon Expressway (SLEx) will resume today, May 15.

SMC said this will partially mitigate the delay in the delivery of the project, which was halted by two months due to the government-imposed enhanced community quarantine (ECQ).

ECQ will be eased to a more relaxed modified ECQ in Metro Manila, though work on infrastructure projects is allowed subject to worker safety rules adopted for the pandemic.

SMC manages the Skyway Operations and Maintenance Corp. (SOMCO), which is undertaking a P10-billion extension on both ends of the Skyway from the toll plaza of the main line linking to Susana Heights. Construction of the four-kilometer elevated viaduct started in June 2019 and was initially scheduled for completion by December this year.

The company said it was “unable to determine yet a new completion date, given that only a limited number of workers could be deployed by contractor EEI Corp. as part of the quarantine measures identified.”

SMC President and Chief Operating Officer Ramon S. Ang said: “We have been given the go-signal by the government to resume work on the Skyway extension, and while we cannot yet go full blast, we will do whatever we can to deliver this project as close as we can to the original deadline. We have to work smart, be efficient, and most of all, keep the workers safe.”

Once completed, the project’s three new northbound lanes will accommodate an additional 4,500 vehicles per hour. The two additional southbound lanes will accommodate an additional 3,000 vehicles per hour.

“For a one-month period, Skyway management said that it will close about 700 meters of Lane 3 of the Skyway At-Grade section northbound from the old Alabang Entry Plaza,” SMC said. — Arjay L. Balinbin

DPWH resumes work on NCR flagship projects

THE DEPARTMENT of Public Works and Highways (DPWH) said Thursday that it resumed work on government flagship projects in Metro Manila.

The DPWH said in a statement that construction work resumed at Bonifacio Global City-Ortigas Center Link Road Project, Estrella-Pantaleon Bridge Project connecting Makati City and Mandaluyong City, and the Binondo-Intramuros Bridge in Manila.

Public and private construction projects have been allowed to resume under the modified enhanced community quarantine (MECQ) but workers must be housed and fed onsite and observe distancing rules, among other requirements for construction work during the pandemic.

Public Works Secretary Mark A. Villar’s Department Order 35 sets rules for carrying out infrastructure projects during the coronavirus pandemic.

The department said the Estrella-Pantaleon Bridge Project is now 54% complete, while the Binondo-Intramuros Bridge is 32% complete.

The BGC-Ortigas Center Link Road Project, which is 51% complete, involves the construction of the 440-meter Sta. Monica-Lawton Bridge across Pasig River. The bridge will connect Lawton Avenue in Makati City and Sta. Monica Street in Pasig City.

“DPWH contractors are ready to take another step forward and ramp up work accomplishment in order to finish significant components of the project particularly the Sta. Monica-Lawton Bridge by December 2020,” Undersecretary Emil K. Sadain was quoted as saying. — Arjay L. Balinbin

NWRB hikes water allocation for NCR

THE National Water Resources Board (NWRB) has increased the raw water allocation of the Metropolitan Waterworks and Sewerage System (MWSS) starting May 14 until the end of the month.

In a text message, NWRB Executive Director Sevillo D. David, Jr. said that raw water allocation is now at 48 cubic meters per second (cms) against the previous 46 cms allocation.

Mr. David said that increase in water allocation is in response to the intense heat.

“The additional 2 CMS raw water allocation from Angat Dam is considered a special requirement due to the relatively high heat index in the month of May which results in higher water demand for consumers in Metro Manila and the adjacent provinces of Bulacan, Rizal and Cavite,” Mr. David said.

On Thursday morning, the water level of Angat Dam was at 187.75 meters, 0.24 meters lower than its Wednesday level, according to the Philippine Atmospheric, Geophysical, and Astronomical Services Administration (PAGASA).

The dam’s minimum operating level is 180 meters, while its normal level is 212 meters.

Angat Dam’s water level may improve as Typhoon Ambo is expected to traverse Luzon.

Mr. David said there is a chance that Ambo will augment the water level of Angat Dam by around 30-50 millimeters over 24 hours. — Revin Mikhael D. Ochave

Energy department proposes fuel discounts to aid agricultural sector

THE Department of Energy has proposed fuel discounts or subsidies for the agriculture sector to help it achieve food security for the Philippines.

At a recent virtual briefing, Energy Undersecretary Felix William B. Fuentebella said the department is looking at various areas in the agriculture supply chain which it can aid to ensure ample food.

He said it is proposing that fuel retailers partner with fuel-dependent farming businesses and offer them discounts of about 30% on fuel.

The DoE heads a sub-committee on petroleum products under the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) task group for food security, which is led by the Department of Agriculture (DA).

Citing government data, Mr. Fuentebella said the agriculture sector bought P15 billion worth of petroleum products in 2019.

He said oil companies stand to benefit from selling in bulk to agriculture.

“At the end of the day, it’s really sales; papaano natin ma-improve ang supply chain at maging mas efficient tayo sa food security (how can we improve the supply chain and become more efficient in food security),” he added.

The DoE is also proposing that service stations offer retail space for fresh farm produce, following the lead of Petron Corp.

He said partnering with agriculture will be “win-win” for the oil industry.

The task group is also looking into streamlining the registration of renewable energy-powered harvesting facilities for fiscal incentives, such as income tax holidays and value-added tax exemptions.

The DoE noted that these renewable facilities with below 100-kilowatt-hour capacity are not registered with the department.

May napansin din kami na ‘di sila nag-re-register sa DoE to avail of fiscal or non-fiscal incentives,” he added. (We observed that they have not applying with the DoE for fiscal or non-fiscal incentives).

The DoE is currently issuing IATF passes to energy industry personnel to ensure their unhampered operations, including imports and the delivery of retail goods during the lockdown. — Adam J. Ang

DICT asks local governments, homeowner groups to help expedite cell site rollout

THE Department of Information and Communications Technology (DICT) on Thursday appealed to local government units (LGUs) and homeowner associations (HoAs) to simplify their permit procedures for telecommunications companies erecting cell sites.

The department also asked government agencies, state universities and colleges, and government-owned and controlled corporations (GOCCs) to update their information and communications (ICT) equipment and software to optimize the use of available bandwidth.

In a statement, the DICT said streamlining the permit process will “support the accelerated rollout of cell sites and other ICT infrastructure for telecommunications companies and Internet Service Providers to benefit constituents and residents.”

It said LGUs and HoAs must do their part to address the need for connectivity during the pandemic.

“The DICT hopes that ICT infrastructure providers will be fostered at the local level to fast track their roll out and construction of much-needed infrastructure during this COVID-19 pandemic,” the department added.

Information and Communications Secretary Gregorio B. Honasan II was quoted in the statement as saying: “Internet access has become an essential utility in our collective efforts to significantly improve the public health situation. With that in mind, we should keep working together for the continued improvement of our Internet connectivity infrastructure.”

“Responding to our countrymen’s increased demand for connectivity is one of the President’s core priorities, and we encourage the accelerated rollout of more telco sites to promptly improve internet access,” he added.

The department also encouraged government institutions “to review and assess” their current ICT equipment and software.

“Updating ICT equipment and software is a step towards optimizing the use of available bandwidth, and minimizing risks associated with the use of old or outdated ICT hardware and software,” the DICT said.

“It is important to periodically check for updates in order to create a safe cyberspace for all, and to ensure that worries due to system bugs, lags, and errors are lessened during this time where government’s productivity relies heavily on ICT,” it added. — Arjay L. Balinbin

Palay farmgate price rises 0.76% in late April

THE average farmgate price of palay, or unmilled rice, rose 0.76% week-on-week to P18.66 per kilogram in the fourth week of April, with prices rising 1.41% 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 (WMR) rose 0.67% to P39.24 while the retail price fell 0.17% to P42.24.

The average wholesale price of regular-milled rice (RMR) rose 1% to P35.28 while the retail price rose 0.8% to P37.90.

The farmgate price of yellow corn grain fell 0.16% to P12.48.

The average wholesale price of yellow corn grain fell 0.84% to P18.97 while the retail price rose 0.64% to P23.44.

The farmgate price of white corn grain rose 0.4% to P15.16.

The average wholesale price of white corn grain rose 1.06% to P19.08 while the retail price rose 1.09% to P27.90. — Revin Mikhael D. Ochave

Filipinos allowed again to work overseas as lockdowns eased

THE government has lifted the ban on Filipino deployment for jobs overseas as part of easing the lockdown imposed on key cities and regions.

Land- and sea-based Filipino workers may seek employment abroad as long as they sign a waiver about the risks of getting infected with the coronavirus, presidential spokesman Harry L. Roque told a news briefing on Thursday.

The Department of Health reported 258 new infections yesterday, bringing the total to 11,876.

The death toll rose to 790 after 18 more patients died, it said in a bulletin. Eighty-six more patients have gotten well, bringing the total recoveries to 2,337, it added.

Meanwhile, the government was on track to boost its testing capacity for COVID-19 to 30,000 samples daily from 8,700 by the end of the month, Vince Dizon, deputy chief enforcer of the national policy against COVID-19, said at a news briefing.

He said they expect 66 laboratories to open by May 30, lower than the initial target of 78.

Meanwhile, Mr. Roque said workers were still barred from going to countries where there’s a ban by the Philippine Overseas Employment Administration.

President Rodrigo R. Duterte locked the entire Luzon island in mid-March, suspending work, classes and public transportation to contain the pandemic.

Metro Manila will remain under a so-called modified enhanced community quarantine, where some businesses will be allowed to reopen from May 16 to 30.

More than half of the country’s coronavirus disease 2019 infections and deaths are in the capital and nearby cities.

The government also barred health workers without job contracts as of March 8 from leaving the country amid the pandemic. That ban remains in force, Mr. Roque said.

He said job recruiters may resume operations in areas under both enhanced and general lockdowns.

The Philippine government has repatriated more than 20,000 Filipino workers during the health crisis, mostly seafarers displaced by the pandemic, according to the Foreign Affairs department.

Forty overseas Filipino workers from Papua New Guinea arrived yesterday, while 182 more from Thailand were expected to come home yesterday afternoon, the Foreign Affairs department said in a social media post.

More than 89,000 Filipinos overseas had either been displaced or were on a no-work, no-pay status due to lockdowns and slowdown of businesses in host countries, according to the Philippines’ Department of Labor and Employment.

The government calls them “modern heroes” because remittances they send home provide a steady stream of foreign exchange to help offset the widening trade gap and limit the current account deficit.

Personal remittances — whether in cash or in kind and capital transfers between households — hit a record $33.5 billion last year, a 3.9% increase from a year earlier and accounting for almost a tenth of the Philippine economy, data showed.

The data only counted money sent home by 2.3 million overseas Filipinos through official channels such as banks and remittance centers.

Global job losses that the International Labour Organisation (ILO) had estimated to reach 25 million this year is turning the $715 billion global remittance industry upside down.

Global remittances are expected to fall by 20% this year due to the economic crisis induced by the COVID-19 pandemic and shutdown, according to the World Bank.

The projected decline, which would be the sharpest in history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country, it said in a report last month.

Remittance flows to the East Asia and Pacific region, which includes the Philippines, are expected to fall by 13% this year from $147 billion in 2019. — Gillian M. Cortez and Charmaine A. Tadalan