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Google, Deutsche Bank agree to 10-year cloud partnership

ALPHABET, INC.’S Google and Deutsche Bank AG have agreed to form a long-term partnership that will see the US technology company provide cloud computing capabilities to Germany’s largest lender.

“The partnership with Google Cloud will be an important driver of our strategic transformation,” Deutsche Bank Chief Executive Officer Christian Sewing said in a joint statement Tuesday, confirming an earlier Bloomberg News report. “It is as much a revenue story as it is about costs.”

The contract is set to last at least 10 years and Deutsche Bank expects to make a cumulative return on investment of 1 billion euros ($1.1 billion) through the alliance, according to people with knowledge of the matter, who asked not to be identified disclosing private information. The companies also plan to make joint investments in technology and share the resulting revenue, which could lead to engineers from both firms developing products together, they said.

Sewing a year ago unveiled a strategy centered around deep cost cuts, including spending on information technology. He also hired Bernd Leukert, a former executive at German software giant SAP SE, to accelerate the bank’s efforts to digitize its operations.

The companies declined to comment on how much Deutsche Bank will pay for Google’s services, and the bank didn’t indicate what cost savings it expects to generate from the arrangement.

European banks in recent years have started pouring billions of euros in attempts to modernize their IT, frequently opting to put more of their data onto the cloud. That has lured the big US providers including Google, Microsoft Corp. and Amazon.com, Inc., according to a Bloomberg survey conducted earlier this year.

WIN FOR GOOGLE
The deal is a notable win for Google as it tries to show that its cloud business can service the financial sector. To date, Google’s only major bank customer was HSBC Holdings Plc. But Thomas Kurian, the head of Google’s cloud division, has made the financial industry one of his key customer targets since joining in late 2018.

“We’re excited about our strategic partnership and the opportunity for Google Cloud to be helpful to Deutsche Bank and its clients as they grow their business and shape the future of the financial services industry,” Alphabet CEO Sundar Pichai said in the press release.

The companies have signed a non-binding letter of intent and plan to finalize the contract in the coming months, they said in the release.

Google’s latest cloud pitch involves including other parts of the search giant’s empire, such as its advertising business and stable of engineers. A recent cloud deal in travel, for instance, had Google co-developing products in the sector. That’s now happening in finance, another sector that Google has tentatively worked with for years.

The increasing reliance on US firms has stoked concerns in Europe’s technology industry, and banking executives have called on companies in the region to develop alternatives. Sewing in 2018 called “the likes of Google” the biggest threat to traditional banks. — Bloomberg

ICTSI unit Royal Capital raising $300M from new securities

LISTED International Container Terminal Services, Inc. (ICTSI) announced on Wednesday that its subsidiary Royal Capital B.V. was raising $300 million from the issuance of senior unsecured perpetual capital securities for refinancing and general corporate purposes.

Proceeds will also be used to “potentially fund a tender offer for certain existing senior guaranteed perpetual capital securities,” ICTSI said in a disclosure to the stock exchange.

The listed port operator said its board of directors approved on Tuesday the terms and conditions of the new securities offer of Royal Capital, setting the price at 98.979%. The distribution rate was set at 5% per annum, payable semi-annually in arrears.

The joint lead managers for the new securities offer are Citigroup Global Markets Ltd., The Hongkong and Shanghai Banking Corp. Ltd., and Standard Chartered Bank.

On Monday, ICTSI announced that Royal Capital was offering cash to the holders of its outstanding $450 million 5.5% senior guaranteed perpetual capital securities as part of its strategy to manage the profile of its existing financings.

The tender offer will end on July 14 at 5:00 p.m., Central European summer time. Results of the tender offer will be announced on or about July 15, ICTSI said. Settlement or payment of the tender consideration will take place the following day. Morrow Sodali Ltd. was appointed as tender and information agent for the tender offer.

Shares in ICTSI on Wednesday closed 2.44% lower at P100 apiece. — Arjay L. Balinbin

Metrobank to issue $500 million in unsecured 5.5-year dollar debt

METROPOLITAN Bank & Trust Co. (Metrobank) has raised $500 million via its offer of senior unsecured fixed-rate notes to finance its short-term borrowings.

In a filing with the local bourse on Wednesday, Metrobank said the Regulation-S only 5.5-year notes were priced at a coupon rate of 2.125% payable semi-annually.

Metrobank said the papers were priced at US Treasury spreads of T+200 basis points (bps) after an initial price guidance of T+235 bps area.

The bank said the order book was five times oversubscribed, with most allocation predominantly to Asia (81%) and the remaining to Europe, the Middle East and Africa (19%).

“This bond issuance will further enhance our business strength and optimize our capital structure especially in this current market environment,” Metrobank President Fabian S. Dee was quoted as saying in the filing.

Sought for details, the bank said the offer period was launched and closed on July 7, supported by robust investor demand.

“The target issuance date is July 15, while listing date follows on July 16 in SGX-ST (Singapore Exchange Securities Trading),” Metrobank said in a text message.

Proceeds from the offer will be used to tap longer-term offshore funding, to diversify the bank’s funding sources, and to finance maturing short-term debt obligations

The offer marked Metrobank’s first senior note issue in the international capital markets.

UBS AG Hong Kong Branch and First Metro Investment Corp. served as joint global coordinators and joint bookrunners for the transaction. Meanwhile, Mitsubishi UFJ Financial Group and SMBC Nikko Securities, Inc. acted as joint lead managers.

“The successful 5.5-year dollar-denominated issuance will allow us to diversify our funding sources and shore up our financial position as we prepare for a bounce back and recovery,” Metrobank Head of Financial Markets Sector Fernand Antonio A. Tansingco was quoted as saying.

Metrobank’s shares ended trading at P37.10 apiece on Wednesday, down by 90 centavos or by 2.37% from its previous close. — L.W.T. Noble

Which countries test the most for COVID-19?

Which countries test the most for COVID-19?

How PSEi member stocks performed — July 8, 2020

Here’s a quick glance at how PSEi stocks fared on Wednesday, July 8, 2020.

PSEi logs gains on last-minute bargain hunting

By Denise A. Valdez, Reporter

BARGAIN HUNTERS lifted the main index at Wednesday’s close after moving sideways during the session due to sustained coronavirus disease 2019 (COVID-19) fears.

The bellwether Philippine Stock Exchange index (PSEi) picked up 18.10 points or 0.28% to close at 6,285.50. The broader all shares index likewise climbed 5.92 points or 0.16% to 3,683.75.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said the higher close of the PSEi at the bell came amid last minute bargain hunting.

The index moved sideways for most part of the trading day, moving between a low of 6,227.74 and a high of 6,287.74, before closing a little lower from its peak to 6,285.5.

“The downside in today’s trading… was still brought by lingering COVID-19 worries,” Mr. Tantiangco said in a text message on Wednesday. “Investor sentiment was dampened by the intensified increase in local coronavirus cases in these past days and the WHO’s (World Health Organization’s) warning that global coronavirus related deaths could rise again.”

The Department of Health continued reporting new COVID-19 cases by the thousands on Tuesday, adding 1,540 cases to push the country’s case tally to 47,873. Of this, 34,178 cases are active, 12,386 are recoveries, and 1,309 are deaths.

“One of the primary risks to our economy is still the pandemic so developments like these weigh on the outlook,” Mr. Tantiangco said.

However, the PSEi still managed to close the session up due to bargain hunters. After two straight days of decline, prices of local shares fell enough to attract buyers into the bourse.

“Bargain hunters took the opportunity out of the decline which in turn was enough to lift the market into positive territory (on Wednesday),” Mr. Tantiangco said.

Other Asian markets were trading mixed when the local bourse closed. Japan’s Nikkei 225 and Topix indices were faring in red territory, while Hong Kong’s Hang Seng index and China’s CSI 300 index were recording gains.

At home, more sectoral indices landed in red territory at the close of trading. Mining and oil lost 63.94 points or 1.16% to 5,409.29; industrials gave up 78.40 points or 0.99% to 7,779.87; property shed 22.68 points or 0.73% to 3,047.60; and financials trimmed 4.89 points or 0.39% to 1,237.

On the other hand, holding firms gained 78 points or 1.19% to 6,596.82 and services climbed 9.55 points or 0.66% to 1,441.94.

Value turnover increased to P8.72 billion from the P7.60 billion seen the previous day. Some 2.39 billion issues switched hands.

Decliners outpaced advancers, 106 against 82, while 44 names ended unchanged.

Wednesday’s net foreign outflows went down to P376.29 million from the P2.51 billion on Tuesday.

Peso rebounds on lower oil prices

THE peso strengthened against the greenback on Wednesday as oil prices slipped on worries of oversupply.

The local unit finished trading at P49.47 per dollar, appreciating by seven centavos from its P49.54 close on Tuesday, data from the Bankers Association of the Philippines showed.

The peso opened the session at P49.54 against the dollar. Its weakest was at P49.63 while its intraday best was at P49.46 versus the greenback.

Dollars traded dropped to $760.73 million on Wednesday from the $1.092 billion seen on Tuesday.

The local currency gained on the back of lower oil prices, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“The peso exchange rate closed stronger after the slight decline in global oil prices,” Mr. Ricafort said in a text message.

Reuters reported that pump prices dipped early Wednesday after data showed a buildup in US crude stockpiles bolstered worries on oversupply.

Brent crude futures decreased 10 cents or by 0.2% to $42.98 a barrel by 0417 GMT. Meanwhile, US West Texas Intermediate (WTI) crude futures inched down 12 cents or by 0.3% to $40.50 per barrel.

Meanwhile, a trader said the stronger peso came after remarks from US Federal Reserve officials on the US economy’s recovery.

“The peso strengthened after Fed officials noted that US economic recovery is levelling off as more US states have rolled back their reopening plans,” the trader said in an email.

Reuters reported that Fed officials have expressed worries as the recent surge in infections could take its toll on improving job and consumer spending.

For today, Mr. Ricafort gave a forecast range of P49.35 to P49.55 per dollar while the trader expects the local unit to move within the P49.40 to P49.60 levels. — L.W.T. Noble with Reuters

More than 40,000 inmates freed during 15 weeks of lockdown

THE Philippine government freed more than 40,000 prisoners during a 15-week lockdown amid the threat of a coronavirus outbreak in one of the world’s most cramped prisons.

Data from the Supreme Court showed that 43,171 prisoners had been released from March 17 to July 3.

Courts in Metro Manila ordered the release of 8,909 inmates, followed by Southern Luzon courts with 7,443, and Central Luzon courts with 6,203.

With 215,000 prisoners nationwide, Philippine jails and prisons are overfilled more than five times their official capacity, making it the most overcrowded prison system in the world, according to the World Prison Brief (WPB), a database kept by the Institute for Crime & Justice Policy Research at the University of London.

The high court earlier released guidelines to decongest jails and prisons during the pandemic.

The Office of the Court Administrator also ordered judges to implement the rule allowing the release of prisoners who have served the minimum penalty or have no witnesses against them.

The high court also issued guidelines on the release of indigent inmates through reduced bail. It also allowed the conduct hearings through videoconferencing.

The Department of Justice also approved the rules easing the requirements for parole and executive clemency.

A group of political prisoners, who claimed to be vulnerable to infection asked the high tribunal in May to order their temporary release on humanitarian grounds. The court had yet to act on their plea.

As of 2017, the Philippines had 933 jails — seven national prisons and 926 city, district, municipal and provincial jails, which are not enough to contain inmates, three-quarters of whom are at the pre-trial stage, WPB said on its website.

Many jails in the Philippines fail to meet the minimum United Nations standards given inadequate food, poor nutrition and unsanitary conditions.

New York-based Human Rights Watch had urged the government of President Rodrigo R. Duterte to act fast and release some detainees to prevent a major health catastrophe.

A total of 301 inmates and prison employees at Bureau of Corrections facilities had been infected with the coronavirus as of June 18.

Of the total, 141 inmates and 38 prison staff were from the National Bilibid Prison in Muntinlupa City, while 82 inmates and seven workers were from the Correctional Institute for Women in Mandaluyong City.

Thirty-three workers from the facility’s national headquarters also got the virus. The numbers exclude cases in the country’s jails.

Justice Undersecretary Markk L. Perete earlier said 145 prisoners had recovered, while 16 died.

The local Commission on Human Rights has repeatedly flagged the worsening congestion in the country’s jails, more recently because of the high and sudden influx of arrested suspects in connection with Mr. Duterte’s war on drugs that has killed several thousands.

Also to blame are delays in the issuance of commitment orders, slow disposition of cases or protracted trials, small lock-up cells and the inability of detainees to post bail, it said.

Tens of thousands of inmates are often detained far longer without ever seeing a judge. About 75% of the country’s 215,000 prisoners are in the pretrial stage. — Vann Marlo M. Villegas

Philippines to join various trials for COVID-19 vaccines

THE Philippines will join various clinical trials for coronavirus vaccines worldwide to ensure it will get prioritized for supplies once a vaccine is found.

Participating in the trials would also speed up a drug’s registration with the local Food and Drug Administration, Jaime Montoya, executive director of the Philippine Council for Health Research and Development, told an online news briefing on Wednesday.

He said the Philippines would join the solidarity trials for vaccines led by the World Health Organization (WHO).

“We will join the solidarity trial for vaccines supervised by the WHO,” Mr. Montoya said.

Nina Gloriani, a professor from the University of the Philippines Manila College of Public Health, said the government had approved the collaboration for vaccine trials involving five drugs.

Three of these were being developed by the Chinese Academy of Science Guangzhou Institute of Biomedicine and Health; Sinopharm: Wuhan Institute and Beijing Biologicals Institute; and SINOVAC Biotech Ltd.

The other two were being developed by Adimmune Corp. and Academia Sinica in Taiwan, she said.

Out of about 20 vaccines under clinical trial, eight have better results than others, including the other two from China considered for clinical trial in the country, Ms Gloriani said. More than 100 were in the preclinical evaluation stage, she added.

Meanwhile, DoH (Department of Health) warned hospitals that reject patients showing mild or no coronavirus symptoms.

Health Undersecretary Maria Rosario S. Vergeire said hospitals must treat these patients first before referring them to temporary treatment facilities.

The call was more directed at private hospitals, where some patients had only been admitted because their personal physicians were from these hospitals, she said.

Of the more than 46,000 COVID-19 (coronavirus disease 2019) cases as of July 6, 93.7% or 30,787 were mild, while 5.5% or 1,813 did not show symptoms, according to DoH data. — Vann Marlo M. Villegas

Two more groups ask SC to stop anti-terror law’s enforcement

TWO MORE lawsuits have been filed at the Supreme Court (SC) questioning the legality of an expanded law against terror.

Former government lawyer Government Corporate Counsel Rudolf Philip A. Jurado filed the fifth petition, while the Ateneo de Manila University Human Rights Center filed the sixth suit.

Both asked the high court to stop the government from enforcing the law that President Rodrigo R. Duterte signed last week and void some of its provisions.

Critics have said the Anti-Terrorism Act arms the state to stifle dissent and violate human rights.

Also named respondents in Mr. Jurado’s lawsuit were the Senate and House of Representatives.

He said the House of Representatives did not provide printed copies of the bill to its members three days before its passage. Lawmakers had also failed to observe the rule of having the second and third readings three days apart, he added.

“Its members were ignorant of the bill’s contents (or, at the very least, the legal effects of its provisions that are not easily discernible at first instance), when they voted for its passage,” according to a copy of Mr. Jurado’s pleading.

Mr. Duterte defended the law against critics in a televised public address aired in the early hours of Wednesday, saying people who were not terrorists had nothing to be afraid of.

“Don’t be afraid if you don’t plan to destroy the government or bomb the church and public utilities,” he said in Filipino.

Meanwhile, Mr. Jurado said the House had gravely abused its discretion when it assumed that Mr. Duterte’s certification of the measure was enough to disregard the procedure.

The Ateneo Human Rights Center said the law’s definition of terrorism covered “consitutionally protected rights to free speech, press and assembly.”

“The overly broad definition of terrorism also clearly creates a chilling effect on free speech resulting in prior restraint,” it added.

The court on Tuesday gave the government 10 days to answer the four lawsuits that it had consolidated.

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

It also created a council made up of Cabinet officials who can perform acts reserved for courts, such as ordering the arrest of suspected terrorists.

The law also allows the government to keep a suspect in jail without an arrest warrant for 14 days from three days now. — Vann Marlo M. Villegas and Gillian M. Cortez

Nationwide round-up

Senate scraps special session, to tackle COVID crisis measure when Congress reopens

THE SENATE will no longer hold special sessions to tackle the measure extending emergency powers granted to President Rodrigo R. Duterte to address the coronavirus crisis, and will just address the bill when Congress reopens on July 27. Senate President Vicente C. Sotto III said conducting a special session would have “no big effect” at this point since Congress will start its second regular session on the 27th. The President’s spokesperson has previously said the executive branch will call for a special session. “Ang mangyayare (What will happen on July 27), we will approve it on third reading and then we will call for a bicam dahil iba ang version ng House (because it is different from the House version),” Mr. Sotto said in an online briefing Wednesday. The amendments proposed by the Department of Finance will be taken up during the bicameral conference, he added. The proposed Bayanihan 2 law sets a P140-billion standby fund for sectors affected by the coronavirus disease 2019. The programs include emergency subsidies to low income households, cash-for-work programs, and capital infusion to government financial institutions, among others. — Charmaine A. Tadalan

Senators say franchise renewal should not be tied to ‘personal issues’ Senators on Wednesday said personal issues of government officials should not be a factor in deciding on the renewal of franchises for private companies. Senate President Vicente C. Sotto III on Wednesday said the government should not meddle in the way a company runs its business, or in content in the case of broadcast media companies. “Ang gobyerno hindi dapat nakikialam sa laman ng editorial (The government should not meddle in the editorial content),” he said in an online briefing. “Hindi lang sa news hindi dapat nakikialam ang gobyerno, (Not only in news but) Government should be out of business. Government should not meddle with business,” he added. The Senate leader’s remarks were made ahead of the House of Representatives’ committee vote on whether or not to renew the ABS-CBN Corp. franchise. Mr. Sotto also said it is unlikely that the “bias” of the media network will be an issue when the Senate tackles the ABS-CBN franchise. Senator Ma. Lourdes Nancy S. Binay, for her part, said the deliberation should focus on matters that would benefit the public more, especially now that the country is battling a pandemic. “I guess kasama ‘yun sa pwedeng talakayin pero para nga sa akin ang masmahalaga sa atin, ‘yung access to information lalo na may pinagdadaanan tayong crisis (I guess that can be considered but for me there are more important things, such as giving access especially now that we’re dealing with a crisis),” she said in a separate briefing. — Charmaine A. Tadalan

DepEd to launch own TV channel for alternative classes

AN EDUCATION channel will be launched by the government as part of the alternative modes of learning for primary and secondary level students as face-to-face sessions in school will be restricted to avoid potential coronavirus transmissions. “We will be able to let DepEd (Department of Education) have its own official channel,” Philippine Communications Operations Office Undersecretary George A. Apacible said on Wednesday during the launch of Oplan Brigada Eskwela. DepEd will also prepare instructional materials that will be delivered through radio and online. Mr. Apacible said DepEd “will look for teachers that will look good and sound good for TV,” and have the skills to create educational videos based on the school curriculum. A Youtube channel will also be set up where the videos will be uploaded. The school year 2020-2021 will open on August 24.— Gillian M. Cortez

Senator Dela Rosa invited to reapply for US visa

SENATOR RONALD M. dela Rosa on Wednesday said the United States Embassy in Manila has invited him to reapply for a visa when it resumes operations amid the coronavirus pandemic. Mr. Dela Rosa said he received the call after President Rodrigo R. Duterte talked with American President Donald J. Trump on April 19. “After nag-usap si President Duterte at President Trump, tinawagan na ako ng US Embassy na asikasuhin ‘yung visa ko (After President Duterte and President Trump talked, the US Embassy called me to work on my visa),” he said in an interview over ABS-CBN News Channel. Mr. Dela Rosa confirmed in January that his US visa was cancelled, which came after the issuance of a US resolution blocking members of the Philippines government linked to the detention of Senator Leila M. De Lima. The visa cancellation triggered Mr. Duterte’s decision to abrogate the Philippines’ visiting forces agreement with the US. In early June, however, the President ordered the suspension of the termination notice. — Charmaine A. Tadalan

July power rates expected to be little changed

ELECTRICITY RATES for Metro Manila households in July are likely to be flat, according to Manila Electric Co. (Meralco).

Electricity charges for almost 7 million customers of the listed distribution utility fell in the previous two months due to its relaxed power supply agreements with generators.

“For now, the indications are that rates will be flattish after two consecutive months of reductions,” Lawrence S. Fernandez, Meralco’s head of utility economics, told BusinessWorld Wednesday.

Recently, the Energy Regulatory Commission (ERC) approved adjustments to the utility’s December 2019 contract rates with power suppliers, the amount of which may be back billed to its customers.

Mr. Fernandez said Meralco is still discussing with partner generation companies how to implement the adjustments, which may affect the power rates in the succeeding months.

Last month, the ERC approved four separate motions of reconsideration filed by Meralco and its partner power generators to alter their supply contracts. Three of these contracts are with power plant companies under San Miguel Corporation (SMC), while the other is with Ayala-led AC Energy Philippines, Inc.

Two of Meralco’s supply agreements with South Premier Power Corp. (SPPC) and one with San Miguel Energy Corp. were revised to adjust the applicable rate, which now considers the plant capacity factor and escalation provision in the computation. The rate in one of the contracts with SPPC was raised to P4.8525 per kilowatt-hour (kWh) from the previous P4.0459/kwh.

Meanwhile, the contract rate for AC Energy, which now takes into account the plant capacity factor, was also increased to P4.9873/kWh from P4.2366/kWh in the previously-approved PSA.

Consumer group Laban Konsyumer on Tuesday warned that Meralco’s supply contracts with the SMC-owned power plants will increase the generation component of electricity bills.

Victorio A. Dimagiba, the group’s president, urged the ERC to “take a direct hand” in monitoring possible back billing by the power generators and to consider the amount to be amortized to reduce its impact on consumers.

“We hope all these rate increases can be looked into, and we hope that they can be prevented for the time being. We cannot afford another pandemic in higher rate increases,” he added.

Meralco invoked the force majeure provision in its supply contracts for May and June, bringing down generation charges, as power demand was low.

A force majeure event is an uncontrollable event that makes it impossible for companies to fulfill their obligations.

In June, the utility billed customers P8.7252/kWh, against the previous month’s P8.7468/kWh. In May, it charged P8.7468/kWh, against April’s P8.9951/kWh rate.

Customers saved P0.2208/kWh last month from the reduced pass-through generation cost of P4.3413/kWh. Since April, total savings from the decreased generation cost hit P1.6 billion.

The July rate is expected to be announced Friday, Mr. Fernandez said.

Meralco is still facing mounting complaints about its computation of bills since the lockdown started. It promised to “double and triple” its efforts in explaining customers’ bills, which are now computed based on their actual consumption.

The power distributor has promised a refund for customers who fully settled their arrears during the quarantine months but who intend to pay them on an installment basis.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Adam J. Ang

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