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Loans to Lopez firms were not condoned, say former DBP officials

FORMER officials of state-owned Development Bank of the Philippines (DBP) said on Tuesday loans extended to Lopez-led companies were not condoned before bad debts were sold to a special purpose vehicle (SPV).

They made the statement as lawmakers resumed their probe into the alleged write off of loans worth more than a billion pesos.

Vitaliano N. Nañagas II, former DBP chairman, said in the hearing on Tuesday that he also did not write off any fees owed by the Lopez companies, after lawmakers said he was the presiding officer who absolved the loans’ interest and other fees based on a DBP board resolution.

“It might have been the inclusion of those loans in the SPV, but if you look at the (financial) books of the DBP, I don’t remember having waived anything or foregone anything,” he said.

The hearing was called by the House Committee on Good Government and Accountability.

Mr. Nañagas was chairman when the DBP approved the creation of the SPV for the loans. He added that the SPV was approved in 2002, but the actual sale was made in 2006 when he was no longer chairman.

On Tuesday, the House Blue Ribbon panel resumed its probe on the alleged condonation by the DBP of non-performing assets worth P1.6 billion of the Lopez companies. In the panel’s past hearings, bank officials said no write-off was made but a sale under the SPV Act.

The non-performing loans were sold to the Asia-Pacific arm of defunct investment bank Lehman Brothers.

The loans were extended to four companies, which at that time were all led by the Lopezes. The companies are Bayan Telecommunications, Inc., Maynilad Water Service, Inc., Central CATV, Inc., and Benpres Holdings Corp.

Also invited in the hearing was Remedios Macalinag, former DBP president and vice-chairman, who said no loan write-off was made when she was in office from 1998 to 2002.

“There was no condonation or write off of these accounts during my term in DBP,” she said.

According to the panel’s chairman, DIWA Party-list Rep. Michael Edgar Y. Aglipay, Ms. Macalinag’s name was the one submitted by the current DBP legal team as the member of the board who approved the loans granted to the Lopez companies.

Ms. Macalinag was head of the lender when she approved the Maynilad loan, which was dollar-denominated and accounted for the largest extended by the DBP at P700 million at that time in the local currency.

Ms. Macalinag said there was no influence or preference in the approval of the loans nor was there any expedited process in their approval. — Gillian M. Cortez

Asian bonds provide refuge for global investors fleeing Treasuries turmoil

TOKYO — Global investors fleeing a shakeout in US and other developed market bonds are finding harbor in the higher yields and relative stability offered by Asian junk-rated debt.

The rise in long-term yields in major economies to multi-year highs is reminiscent of the 2013 taper tantrum, except that India, Indonesia and others in Asia aren’t seeing the selloff in bonds and currencies they did back then.

Now, with the backing of stronger economies, less profligate governments and healthier current accounts, the region is becoming a refuge for yield seekers.

Foreign investors have bought a net $41.5 billion of Chinese bonds since the start of the year, already about a third of what they did in all of 2020. Inflows into other emerging Asia bond markets this year are $2.8 billion, or 61% of last year’s total.

“Emerging markets Asia is attractive from a relative value perspective,” said JC Sambor, head of emerging markets fixed income at BNP Paribas Asset Management in London.

“We think there is more value in high yield. We think it is fundamentally mispriced,” he said, referring to the cheapness of bonds in markets such as China.

The spreads Asian junk bonds offer have been a big attraction for investors seeking returns that are better than inflation.

Bank of America’s high-yield Asian emerging markets index shows spreads are 671 basis points (bps) above Treasuries, versus a spread of 330 basis points for high-yield US credit, effectively an additional payout of more than 300 bps.

For investors who are more risk averse, government debt from China, Indonesia, and India offer spreads from 170 to 500 bps over Treasuries, so the carry pick up is “significant,” says Joevin Teo, head of Asian fixed income at Amundi Singapore.

VISITING OR STAYING?
Some asset managers expect these inflows to continue over the longer term as shell-shocked investors recover from their losses on Treasuries and euro-denominated debt and see the case for Asian bonds.

Global emerging market credit totals around $1.4 trillion, and Asia makes up the lion’s share of this market, but investors are missing out because they rely on benchmarks that understate Asia’s size, says Paul Lukaszewski, head of corporate debt for Asia-Pacific at Aberdeen Standard Investments in Singapore.

Sambor at BNP Paribas said he prefers Chinese hard currency corporate debt, which is denominated in dollars, for the added layer of protection. Other investors wary of currency risk also say they prefer dollar-denominated bonds.

“Given the levels of yields in places like Germany, it doesn’t make sense to hold them in any decent size if the aim is to protect against volatility. For this, we have a positive view on bonds from Korea and China,” said Justin Onuekwusi, portfolio manager at Legal & General Investment Management in London.

Yet, while China offers the biggest pool by far of high-yield credit in Asia, there are risks around corporate defaults as the government switches from its pandemic-era stimulus to more targeted lending.

Aberdeen’s Mr. Lukaszewski is also positive on Chinese dollar credit but is cautious about the power generation and industrial sectors, which he reckons could be adversely affected by plans to cut carbon emissions.

Mitul Kotecha, chief emerging market Asia and Europe strategist at TD Securities in Singapore, expects Asian bond markets will face periods of net outflows as some investors book profits on an increasingly crowded trade. But the long-term fundamentals look solid, he said. — Reuters

Philippine labor force situation (Jan. 2021)

AROUND four million Filipinos remain jobless in January, as more reentered the labor force with the further easing of quarantine restrictions around the country, government labor data released on Tuesday showed. Read the full story.

PHL labor force situation (Jan. 2021)

How PSEi member stocks performed — March 9, 2021

Here’s a quick glance at how PSEi stocks fared on Tuesday, March 9, 2021.

Peso climbs on factory output, labor data

THE PESO appreciated versus the greenback on Tuesday amid softer factory output data, which could translate to a slower recovery in imports. 

The local unit closed at P48.48 versus the dollar, gaining 8.1 centavos from its previous finish of P48.561, data from the Bankers Association of the Philippines showed.

The peso opened Tuesday’s trading session at P48.655 per dollar. Its weakest showing was at P48.67 while its intraday best was at P48.47 against the greenback.

Dollars traded increased to $890.25 million yesterday from $685.98 million on Monday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the peso’s gains to the softer manufacturing data released on Tuesday, which could mean a slower recovery in imports.

Preliminary results of the Monthly Integrated Survey of Selected Industries (MISSI) reported by the Philippine Statistics Authority (PSA) showed factory output gauged through volume of production index dropped 16.7% year on year in January, steeper than the 12% decline in December and a reversal of the 1.9% growth a year ago. It also marked the 11th straight month of a contraction in factory output.

Meanwhile, a trader said the peso was supported by the steady unemployment rate recorded in January.

The country’s jobless rate stood at 8.7% in January, unchanged from October last year but still higher than the 5.3% a year earlier, the Philippine Statistics Authority reported on Monday. However, unemployed Filipinos rose to 3.953 million from 3.813 million in October and was also higher than the 2.391 million in January 2020.

For today, Mr. Ricafort gave a forecast range of P48.42 to P48.55 per dollar while the trader expects the local unit to move within the P48.40 to P48.60 levels. — LWTN

PSEi inches up as rising cases keep mart cautious

THE MAIN INDEX rebounded on Tuesday despite rising concerns over the continued spike in coronavirus disease 2019 (COVID-19) infections in the country.

The benchmark Philippine Stock Exchange index (PSEi) inched up by 9.91 points or 0.14% to close at 6,766.83 on Tuesday. Meanwhile, the broader all shares index declined by 4.45 points or 0.1% to finish at 4,074.95.

“Market apparently worried about the economic growth fallout of the virus infection spike as herd immunity looks a lot slower to achieve. That, in turn, will slow the pace of economic reopening,” First Metro Investment Corp. (FMIC) Head of Research Cristina S. Ulang said in a Viber message.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan meanwhile pointed to a number of other events that kept investors on the sidelines, including the recent passage of a stimulus bill worth $1.9 trillion in the United States.

“[This underlines] a stock market rotation driven by the rising US yields,” Mr. Limlingan said in a separate Viber message.

“[Yesterday] morning, Phivolcs (Philippine Institute of Volcanology and Seismology) raised the alert level status of Taal Volcano from level 1, low level of unrest, to level 2, increasing unrest, which advises the public against going to the direction of the volcano,” he added.

The government increased its alert level on Taal as the tourist attraction 65 kilometers south of the capital recorded increased unrest, Bloomberg reported.

Taal’s alert status was raised to level 2 after 28 volcanic tremors and four low-frequency volcanic earthquakes in the past 24 hours, Phivolcs said in a Tuesday advisory. It also recorded changes in the main crater lake and ground deformation.

Taal erupted in early 2020, killing dozens and forcing hundreds of thousands to evacuate.

Majority of sectoral indices went up marginally on Tuesday except for property, which fell by 26.79 points or 0.79% to 3,363.08.

Financials improved by 8.9 points or 0.62% to close at 1,437.87; holding firms increased by 17.93 points or 0.25% to 6,986.12; mining and oil went up by 21.14 points or 0.24% to 8,604.33; industrials inched up by 15.42 points or 0.17% to 8,656.62; and services rose by 1.54 points or 0.1% to 1,458.94.

Value turnover soared to P19.02 billion on Tuesday with 5.90 billion shares switching hands from the P9.85 billion seen on Monday. Decliners bested advances, 131 versus 83, while 48 names closed the session unchanged.

Net foreign selling surged to P10.55 billion on Tuesday from the P497.84 million seen on Monday.

Regina Capital’s Mr. Limlingan said the PSEi may finish at the 6,700 level today, depending on the performance of the US market overnight.

FMIC’s Ms. Ulang meanwhile expects the benchmark index to finish between 6,600 and 6,800.

“There could be slow accumulation as this [market] dip is a buying opportunity, but the buying might not be big enough to lift the market substantially,” Ms. Ulang said. — Keren Concepcion G. Valmonte with Bloomberg

Manila to deploy more cops amid virus surge

By Kyle Aristophere T. Atienza and Vann Marlo M. Villegas, Reporters

THE PHILIPPINE government will deploy more policemen on the streets to enforce health protocols amid a fresh surge in coronavirus infections in Manila, the capital, and nearby cities, according to the Interior and Local Government department.

About 180 more cops had been deployed in Pasay City to help local authorities enforce quarantine rules, Interior Undersecretary Jonathan E. Malaya told a televised news briefing on Tuesday.

More cops will be sent to the cities of Navotas and Malabon to ensure people follow health protocols especially in coronavirus hotspots, he added.

Mr. Malaya said Interior officer-in-charge and Undersecretary Bernardo C. Florence, Jr. gave the order after a meeting with Metro Manila chiefs and the Health department.

“The instruction from OIC Florence was to add more policemen in different parts of Metro Manila, he said.

Former Social Welfare Secretary Judy M. Taguiwalo on Monday criticized the Duterte administration for militarizing a public health issue.

More than 120,000 violators of quarantine protocols were arrested in the Philippines during the lockdown, United Nations High Commissioner for Human Rights Michelle Bachelet said last year.

The list included aid distributors, jeepney drivers, rallyists and other sectors critical of the slow delivery of social services during the pandemic.

Several countries including the Philippines have used the pandemic to harass journalists, opposition activists, health workers and “anyone else who dares to criticize the official response to the coronavirus,” according to Human Rights Watch.

Health Secretary Francisco T. Duque III said coronavirus cases in Metro Manila were a cause for alarm.

The cities of Pasay and Malabon were at a critical risk level, while Navotas, Makati and San Juan were high-risk areas, he said at a televised meeting with President Rodrigo R. Duterte on Monday night.

Coronavirus cases in the Philippine capital and nearby cities have been rising faster, hitting levels last seen in July, according to a group of researchers.

There had been 1,025 infections daily in the capital region in the past seven days, 42% higher than a week earlier and more than double the number two weeks ago, the OCTA Research Group from the University of the Philippines said on Sunday.

The number could still go up this month.

Health Undersecretary Maria Rosario S. Vergeire on Monday said the rise could have been due to Filipinos ignoring health protocols.

More than 120,000 violators of quarantine protocols were arrested in the Philippines, which had one of the strictest and longest lockdowns in Southeast Asia.

The Interior and Local Government department earlier authorized local governments to crack down on quarantine violators.

TALLY
The Department of Health (DoH) reported 2,668 coronavirus infections on Tuesday, bringing the total to 600,428.

The death toll rose by seven to 12,528, while recoveries increased by 171 to 546,078, it said in a bulletin.

There were 41,822 active cases, 91.6% of which were mild, 3.9% did not show symptoms, 1.8% were critical, 1.9% were severe and 0.8% were moderate.

DoH said three duplicates had been removed from the tally, while two recovered cases were reclassified as deaths. Eight laboratories failed to submit data on Mar. 8.

About 8.5 million Filipinos have been tested for the COVID-19 virus as of Mar. 7, according to DoH’s tracker website.

The coronavirus has sickened around 117.8 million and killed more than 2.6 million people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization (WHO).

About 93.5 million people have recovered, it said.

Meanwhile, the WHO said the rising number of coronavirus infections in the country might not be entirely due to the spread of more contagious variants.

This is given the limited testing for these variants, WHO Country Representative Rabindra Abeyasinghe told an online news briefing.

“Part of the surge we are seeing within the National Capital Region (NCR) may be attributed to the presence of these new variants,” he said.

“But we believe that it’s not entirely being driven by the new variant because the number of cases detected and confirmed as opposed to the number of samples checked is limited,” he added.

Mr. Abeyasinghe said the WHO was still studying the new variants “to understand and describe the implications of increased transmissibility” and severity of cases.

Local health authorities on Friday reported 31 new cases, 28 of whom had addresses in Metro Manila and three others were still under verification, with the more contagious variant first detected in the United Kingdom, bringing the total to 118.

It also reported 52 more infections of the variant first reported in South Africa, 41 of which were from Metro Manila while the rest were still being verified, bringing the total to 58.

Mr. Abeyasinghe said the WHO has observed a community level transmission in Metro Manila, Central Luzon and the Calabarzon region since July last year.

While the country has been reporting more than 3,000 cases daily in the past few days, this is still “significantly lower” than the more than 6,000 cases reported at the height of the pandemic, he said.

The increase in cases should also not be considered as a “second wave.”

“If you’re talking of the second wave, we should have seen a complete flattening of the curve. And in the case of NCR, we didn’t see that kind of flattening,” he said.

Gov’t to sign supply deal for 30M vials of Novavax vaccines

THE PHILIPPINES will sign a supply deal with Novavax, Inc. this week for 30 million vials of its coronavirus vaccine, according to the Presidential Palace.

The two-shot vaccines are yet to be cleared for use in the United States. It’s efficacy was based on data from trials in the United Kingdom, where it was found to be 96% effective against the original coronavirus and 86% effective against the more contagious British variant.

The shot, however, was found to be only 50% effective against the South African variant, according to a website post of the MIT Technology Review.

Vaccine czar Carlito G. Galvez, Jr. visited India to negotiate the orders for the vaccines developed by Serum Institute of India with Novavax.

Presidential spokesman Herminio L. Roque, Jr. also told a televised news briefing the government had signed a purchase order for one million vials of CoronaVac made by China’s Sinovac Biotech Ltd.

The Chinese government earlier donated about 600,000 doses of the CoronaVac.

Mr. Roque said the government had also signed a supply agreement with Moderna, Inc. for 13 million doses of its coronavirus vaccine. The details of the supply deal with Johnson & Johnson were still in progress, he added.

“We have an emergency situation. We will get whatever vaccine we can get. We will use it,” he said.

The Philippines on Mar. 4 took delivery of about 487,200 vials of the vaccine developed by AstraZeneca Plc. More than 38,000 doses of the AstraZeneca vaccine also arrived on Mar. 7.

Mr. Roque said about 35,669 health frontliners had been inoculated against the coronavirus as of Mar. 7.

He said 379,840 doses of Sinovac and 83,700 vials of AstraZeneca have been delivered to 17 regions.

The Philippines aims to inoculate about 70 million Filipinos by yearend to achieve herd immunity.

The vaccine doesn’t need to be given to all Filipinos based on herd immunity, when a large portion of the population becomes immune to the disease, making its spread unlikely. — Kyle Aristophere T. Atienza

Taal Volcano alert raised to level 2 on magmatic activity

REUTERS/ELOISA LOPEZ

STATE seismologists on Tuesday raised the alert status for Taal Volcano in Batangas province to level 2 in a five-step system, citing probable magmatic activity that may lead to an eruption.

“At Alert Level 2, evacuation is not yet recommended,” the Philippine Institute of Volcanology and Seismology said in a bulletin posted on its website on Tuesday. “However, the public is reminded that Taal Volcano Island is a permanent danger zone.”

Entry into the Island especially around the main crater is prohibited, it said.

Seismologists said local governments should assess previously evacuated villages around Taal Lake for damage. This would let them strengthen preparedness, contingency and communication measures in case of renewed unrest.

“Residents of these barangays are advised to be always prepared, to keep calm and listen to information only from trusted or verified sources,” according to the bulletin.

Civil aviation authorities must advise pilots to avoid flying close to the volcano as airborne ash and ballistic fragments from sudden explosions pose hazards to aircraft.

The agency said it was closely monitoring Taal Volcano’s activity.

Seismologists recorded 28 volcanic tremor episodes, four low-frequency volcanic earthquakes, and one hybrid earthquake at depths of less than 1.5 kilometers beneath Taal Volcano Island in the past 24 hours.

“Volcanic tremors have increased seismic energy compared with previously recorded episodes and ranged between three to 17 minutes in duration,” according to the website.

Volcanic tremor events have risen to 866 since the onset of increased activity on Feb. 13.

Taal’s eruption starting in January 2020 forced thousands of people to flee and stay at evacuation centers for days.

Ashfall reached cities around the capital, forcing financial markets to suspend trading and the Manila airport to close. — Norman P. Aquino

Regional Updates (03/09/21)

Senate OK’s bill dividing Maguindanao into 2 provinces

THE Senate on Tuesday passed on third and final reading the bill that will divide Maguindanao province into two. With 22 affirmative votes and zero negative votes and abstention, the senators approved House Bill No. 6413, which creates the provinces of Maguindanao del Norte and Maguindanao del Sur. Senator Francis N. Tolentino, chair of the committee on local government and the bill’s sponsor, said the split will improve the delivery of government services and the people of Maguindanao “will be empowered to reach their aspirations for the region.” Under the proposed measure, Maguindanao del Norte will be composed of the towns of Datu Odin Sinsuat, which will become the capital, Barira, Buldon, Datu Blah Sinsuat,, Kabuntalan, Matanog, Northern Kabuntalan, Parang, North Upi, Sultan Kudarat, Sultan Mastura, and Talitay. Maguindanao del Sur, on the other hand, will be composed of Buluan as capital, Ampatuan, Datu Abdulla Sangki, Datu Anggal Midtimbang, Datu Hoffer Ampatuan, Datu Montawal, Datu Paglas, Datu Piang, Datu Salibo, Datu Saudi Ampatuan, Datu Unsay, Gen. Salipada K. Pendatun, Guindulungan, Mamasapano, Mangudadatu, Pagalungan, Paglat, Pandag, Rajah Buayan, Sharif Aguak, Sharif Saydona Mustafa, Sultan sa Barongis, Talayan, and South Upi. The House of Representatives approved the measure on third reading on Jun. 1, 2020. — Vann Marlo M. Villegas

Island provinces in the north, south start vaccination for health workers

VACCINE doses have been delivered by the military in the more remote parts of the country and inoculation has started among health workers. The chief doctors of the provincial hospitals in the island provinces of Batanes and Basilan were the first to receive their areas’ initial Sinovac allocation to boost vaccine confidence among other frontliners and the public. Chief of Hospital Jeffrey Antony T. Canceran in Batanes, the northernmost island province, led the vaccination for medical workers on Tuesday in two hospitals and other frontliners managing the quarantine facilities. In Basilan, located southwest of mainland Mindanao in the south, Basilan General Hospital Director Sitti Nurussami Casali-Amilhasan received her first dose Monday along with other health workers. The Basilan government, in a statement, said in Filipino, “The high confidence of each of our health workers is one of the solutions in encouraging people to get vaccinated.”

Tagum City opens Cultural Center with 1,000-seater theater, heritage museum

THE Tagum City Historical and Cultural Center, with its 1,000-seat Tagumpay Theater that is a first in Davao Region, was officially inaugurated Mar. 7 in time for the city’s 23rd founding anniversary. The center also has a heritage museum, historical gallery, and library, which will all open to the public on Apr. 1 with health protocols in place. Mayor Allan L. Rellon, who delivered his 7th State of the City Address at the Tagumpay Theater, said the capital city of Davao del Norte continues to be “very strong” despite the challenges brought by the coronavirus pandemic.

Nationwide round-up (03/09/21)

Consumer group turns to anti-red tape agency to speed up discount guidelines for online buys of seniors, PWDs

A CONSUMER group has turned to the government’s red tape watchdog to flag inaction on its request to issue guidelines on providing the mandatory discount for senior citizens and persons with disability (PWD) when buying online. In a letter to the Anti-Red Tape Authority (ARTA) on Mar. 5, Laban Konsyumer, Inc. President Victorio A. Dimagiba asked the agency to intervene after four months since filing their request to the Department of Trade and Industry (DTI) and the Department of Social Welfare and Development (DSWD). Laban Konsyumer, a non-profit organization focusing on consumer rights, sent its request to the Trade and Social Welfare departments in October, asking for clear and uniform rules for discounts for online purchases. Under Philippine laws, senior citizens and PWDs are entitled to a 20% discount and are exempt from value added tax on certain goods and services. In physical shops, beneficiaries are required to present their special ID. Both departments, the group said, have acknowledged the request. Trade Undersecretary Ruth B. Castelo said guidelines would be released by the end of last year, ABS-CBN news reported in December. Ms. Castelo has not yet responded to requests for comment.

NO CONSULTATIONS YET
“Up to now [there has been no] public consultation on online shopping guidelines for seniors’ privileges,” Mr. Dimagiba said in a statement on Monday. Online sellers, he said, “do not know what and how to grant the discounts.” More consumers have been buying goods online due to restrictions imposed to contain the coronavirus outbreak. The Trade department in August last year said that senior citizen discounts apply to online transactions and purchases done on behalf of senior citizens. Laban Konsyumer noted that the National Council on Disability Affairs said that the discounts do not apply to delivery charges for goods bought online. — Jenina P. Ibañez

Lawyers of anti-terror law petitions ask high court for TRO

LAWYERS involved in the petitions questioning the Anti-Terrorism Act asked the Supreme Court (SC) on Tuesday to immediately issue a temporary restraining order (TRO) against the law, citing escalating attacks on members of the judicial sector as well as those allegedly linked to armed rebel movements. More than 60 counsels of the anti-terror law petitioners said the country’s highest court must intervene and help stop the violence against lawyers, judges, and those who have been subject to police operations and said to have “fought back.” In a statement, they called on the SC “as the constitutionally-appointed guardian of civil liberties and protector of the legal profession to take immediate measures to stop these attacks including those committed against petitioners and counsel in the ATA (Anti-Terrorism Act) petitions.” They added, “The issuance of a TRO on the enforcement of the ATA pending the final adjudication of the 37 petitions could help address the worsening situation.” The lawyers also expressed grave concern over the killings and arrests of subjects during the simultaneous raids conducted in the provinces of Rizal, Laguna, and Cavite on Sunday. They noted that “these are members of groups also petitioning the (court) for the invalidation of (the ATA).” The signatories of the statement include the seven oralists for the ATA petitioners, former Solicitor General Jose Anselmo I. Cadiz, retired SC Senior Associate Justice Antonio T. Carpio, retired Ombudsman Conchita C. Carpio-Morales, and former Vice President Jejomar C. Binay, Sr. — Bianca Angelica D. Añago

Indigenous people to get legal support from renewed DoJAC and IBP

THE Department of Justice Action Center (DoJAC) was reactivated on Monday to provide legal aid to members of indigenous people communities and others who do not qualify for the services of the Public Attorney’s Office. “From a program on the brink of dissolution, the DoJAC has been revived to become an important component of our government’s commitment to a people-centered leadership,” Justice Secretary Menardo I. Guevarra said in his message during the agency’s 36th anniversary celebration. The renewed center has partnered with the Integrated Bar of the Philippines (IBP), the official organization of all Philippine lawyers. Under the memorandum of agreement signed Monday by IBP and the Justice department, DoJAC would be responsible for endorsing clients to the lawyers’ group and guide them with the IBP’s rules and regulations. “(The) DoJAC as a frontline service assists our marginalized and disadvantaged countrymen in resolving many legal issues and concerns, including those arising from their dealings with any bureau or agency under the DoJ or with other government agencies,” Mr. Guevarra said. “The delivery of swift and fair justice — especially to those who have no resources to consult, much less litigate, their concerns — is DoJAC’s reason for being,” he added. The IBP will first evaluate the endorsed cases based on the group’s means and merits tests, among other factors. If the clients do not qualify for IBP’s legal aid, they will be referred to other lawyers or law groups who are willing to handle their case under reduced legal fees. — Bianca Angelica D. Añago

Recovery outlook turns cautious on laggard construction activity

THE RECOVERY this year will likely be slower than expected due to a delayed pickup in construction activity, according to a joint report issued by First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P).

“We have turned more cautiously optimistic about a quick economic recovery in 2021 as institutional/structural factors would likely slow down the rebound, even though the industry will shine,” FMIC and UA&P Capital Markets Research said in its Market Call report released Tuesday.

The construction sector will likely remain a laggard in the first half, with small contractors still struggling financially while demand remains muted, it said. Activity is expected to pick up in the second half ahead of the 2022 national elections.

“Construction will likely make a dent in Q2, even as infrastructure spending remains hampered by financial problems of small to medium sized contractors, but should gain traction in H2 as Presidential elections come closer,” it said.

Last year, the construction sector contracted by 26% year on year, helping pull down gross domestic product (GDP) for the year to minus 9.5%.

Infrastructure spending fell 22.7% from a year earlier to P681 billion in 2020, according to preliminary data cited by government officials.

“For private construction, more widespread work-from-home arrangements and restrictions have (led to) a sharp rise in vacancies. Residential condominiums have lost some appeal in favor of house-and-lot units farther away from dense workplaces,” according to the report.

It noted the recent uptick in manufacturing could support a faster recovery, but even this sector will take time to recover because of disrupted supply chains.

The Philippine Manufacturing Purchasing Managers’ Index in February was unchanged at 52.5, but above the 50-point level that separates growth from contraction. The reading was the highest in over two years or since the 53.2 in December 2018.

“This will be positive for employment generation since the sector’s output has high multiplier effects,” FMIC and UA&P Capital Markets Research said.

The government targets GDP of between 6.5% and 7.5% this year. Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the economic team is currently reviewing the forecast as lockdown restrictions have dragged on longer than expected.

“The inflation rate spike in the last few months may still be considered transitory, albeit longer than usual. Supply-side concerns due to supply chain rebuilding, LGU- (local government unit) dictated lockdowns and approvals, and the recent surge in crude oil prices as the world economy seems to recover faster will keep inflation (in line with the) central bank’s forecast 4% for 2021,” according to the report. — Beatrice M. Laforga

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