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DoF supports further opening of economy

The House of Representatives is seeking to ease economic restrictions of the 1987 Constitution for ratification at a plebiscite that will coincide with the 2022 national elections. — PHILIPPINE STAR/MICHAEL VARCAS

FINANCE Secretary Carlos G. Dominguez III said he is open to amending the restrictive economic provisions of the 1987 Constitution, as House lawmakers are set to begin deliberations on Charter change today (Jan. 13).

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua wants to further open up the Philippine economy, but urges Congress to focus on the urgent passage of priority bills meant to attract more foreign investments.

“I’m for really opening up the economy in all areas possible, with the exceptions of land ownership [because] the issue of land ownership is so emotional… so let’s do something doable,” Mr. Dominguez said during a virtual meeting of the Management Association of the Philippines (MAP) on Tuesday.

Among the sectors that should be further opened to foreign investors are the retail trade and construction industries, he said.

“There are many areas that need to be opened. Opening up the economy challenges the local production and they respond positively if there is good support. This is why I think we should look at the Constitution and open as much as possible,” Mr. Dominguez said.

The House Committee on Constitutional Amendments is set to open deliberations on the proposed Resolution of Both Houses (RBH) No. 2, which seeks to amend economic provisions of the 33-year-old Constitution in a bid to attract more foreign investments.

Asked for his position on Charter change, Mr. Chua said lawmakers should first prioritize pending bills such as amendments to the Public Service Act (PSA), Retail Trade Liberalization Act (RTL), and Foreign Investment Act (FIA).

“We have to prioritize the PSA, RTL and FIA amendments as these are urgently needed to help attract more investments and create jobs,” Mr. Chua said via Viber on Monday.

Budget Assistant Secretary Rolando U. Toledo said in a Viber message that the economic team is pushing for the urgent passage of the three bills.

“These bills will help promote a more sustainable and resilient external sector, whilst increasing the inflow of foreign investments and generating more jobs for the Filipino people,” Mr. Toledo added.

The three bills have been approved on third and final reading at the House of Representatives.

Their counterpart measures in the Senate, however, are still in various levels of deliberations: with the bills amending the PSA and FIA still at the committee level while the proposed changes to the RTL are at the second reading.

POST-ELECTION ‘CHA-CHA’ URGED
Meanwhile, the Makati Business Club (MBC) said pursuing charter change at this time would be “highly divisive” amid national efforts to address the effects of the pandemic.

“We believe that introducing any Charter change fifteen months before presidential elections will only raise fears that other constitutional changes, some of which may be highly controversial, may be introduced and passed,” the business group said in a statement on Tuesday.

The House of Representatives is seeking to ease economic restrictions of the charter for ratification at a plebiscite that will coincide with the 2022 national elections. Congressmen want to insert provisions in the Constitution that will later allow them to pass a law relaxing foreign ownership limits in certain Philippine industries.

MBC is instead asking all major presidential and congressional candidates to commit to relaxing these restrictive economic provisions in the Constitution when they start their new term.

“(Candidates should) commit to initiate steps for the adoption of such provisions within the first 12 months of their term,” MBC said.

The Philippine Chamber of Commerce and Industry had earlier asked lawmakers to prioritize the passage of pending economic bills, warning against changes to the Constitution that could weaken it by making it easier for “ordinary legislation” to amend.

But American and European business groups in the Philippines supported the changes to improve the country’s competitiveness in attracting foreign investors and spur an economic rebound.

Albay Rep. Jose Maria Clemente S. Salceda said the country would earn as much as $7 billion in foreign direct investments each year if ownership restrictions in the Constitution are lifted. — Beatrice M. Laforga and Jenina P. Ibañez

Tourism revenues plunge as foreign visitors stay away

TOURISM REVENUES last year plunged 83% to P81.4 billion after pandemic-related travel restrictions kept foreign visitors away.

In a report released on Tuesday, the Department of Tourism said revenues slumped from the P482.16 billion recorded in 2019 after the number of foreign visitor arrivals plummeted almost 84% to 1.3 million.

Tourism Secretary Bernadette T. Romulo-Puyat said domestic travel will still be the focus for industry revival this year.

She said the local governments still decide on the reopening of tourist destinations, but the department recommended stronger and unified contact tracing among local governments.

“To standardize travel protocols and encourage movement, there is a need to harmonize the different LGU (local government unit) requirements. To ensure good traveler experience, protocols for each tourism activity should be developed,” Ms. Romulo-Puyat said.

Areas that have reopened tourist destinations include Manila, Boracay, Palawan, Cebu, Bohol, Baguio, and Ilocos Norte.

The government will be revisiting its National Tourism Development Plan 2016-2022, changing the targets as the country focuses on domestic tourism in the short term. The plan originally targeted 12 million foreign arrivals and 89.2 million domestic travelers by 2022.

For international tourism, the government is willing to partner with neighboring countries for potential travel bubbles, Ms. Romulo-Puyat said.

“International travel bubbles demand the strict enforcement of health and safety protocols at the destination countries. The proper infrastructure needs to be established and certified by both governments.”

The Philippines may only see a significant rise in foreign tourist arrivals starting late 2021 or early 2022 as uncertainty over the pandemic continues, Fitch Ratings said in October, noting that the country’s low dependence on inbound tourism should limit overall economic impact.

Inbound tourism expenditure accounted for 3% of Philippine gross domestic product (GDP) in 2019, while domestic tourism expenditure accounted for 16%. The tourism sector employed 5.7 million people that year.

Global financial industry association Institute of International Finance (IIF) said recovery would depend on the availability of the vaccine. The government is in talks with several vaccine manufacturers for 148 million COVID-19 vaccine doses to inoculate 50-70 million Filipinos this year.

The Philippine Travel Agencies Association expects some recovery as tourism corridors open by the first quarter of 2021, expecting more travel through the Holy Week and the summer.

But industry group Tourism Congress of the Philippines said recovery would depend on public reassurance of health safety as well as reasonable costs and ease of travel. — Jenina P. Ibañez

Airline revenues for first half to be ‘close to catastrophic’

By Arjay L. Balinbin, Senior Reporter

REVENUES of airlines in the first half of the year are expected to be “close to catastrophic,” aviation think tank Center for Asia Pacific Aviation (CAPA) said, as trunk routes will not be commercially viable.

“The revenue profile for airlines in this first half of 2021 looks something close to catastrophic, given that they’ve been holding their breath for so many months already,” CAPA said in an analysis posted on its official website on Jan. 11.

Some airline companies may see improvements in the second half of 2021, especially “towards the end of the year, but with only modest acceleration after the end of the first half,” it added.

The Philippines has so far banned the entry of residents from 28 countries, including the United Kingdom, United States, Japan, Germany, and Canada, where the more infectious variant of the coronavirus disease 2019 (COVID-19) has been detected.

The Presidential Palace announced on Tuesday that the travel ban will be expanded to residents from five more countries — China, Luxembourg, Oman, Pakistan, and Jamaica — starting Wednesday (Jan. 13) until Jan. 15.

CAPA Founder and Chairman Emeritus Peter Harbison was quoted as saying in the analysis that the current condition is best suited to low-cost carrier business models.

“They’re usually best positioned to benefit from the recovery process after a major shock. And the recovery will be led by domestic and international short haul leisure markets,” Mr. Harbison said.

He also said that trunk routes “will not be commercially viable.”

CAPA expects business travel to be at “as much as 50% of previous levels” in the second half of 2021.

Mr. Harbison also described the impact of the vaccine rollout on international aviation this year as “just a slideshow.”

“The rollout of vaccines will take many months, and we have already seen significant delays and clear indications of difficulties in the supply chain,” the aviation think tank noted.

“Vaccination priority is going to be given to categories who actually have, in most cases, lower travel propensity. The younger, healthier people will not receive vaccinations till later in 2021 — that’s if they receive them at all in 2021,” it added.

Mr. Harbison believes that “government subsidies are going to be needed to maintain core international truck routes, at least in the short term, because they’re going to be largely unviable at least until well into 2022.”

Low-cost carriers Cebu Pacific and Philippines AirAsia have both launched a “piso sale” offering to boost domestic travel.

Philippines AirAsia on Monday said it started seeing positive signs in domestic tourism.

In November last year, the Finance department said it was informed by the flag carrier, Philippine Airlines (PAL), of its plans to seek court protection from its creditors.

The airline sector is really “under severe stress,” Lance Y. Gokongwei, president and chief executive officer of Cebu Pacific’s listed operator Cebu Air, Inc., said recently.

PAL Holdings, Inc., the listed operator of PAL, saw its net loss hit P28.85 billion as of the third quarter of 2020, or more than three times the P8.49-billion loss recorded in the same period in 2019.

Cebu Air swung to a net loss of P14.69 billion during the January to September period, from the P6.77-billion profit it generated in the same period in 2019.

Vires, AG&P step up plans for LNG vessel, says DoE

Energy department ‘constrained to cancel’ project led by Dennis Uy

By Angelica Y. Yang

THE Energy department has identified Vires Energy Corp. and Atlantic Gulf and Pacific Co. (AG&P) as potential investors in a floating facility for imported gas, as the country prepares for the depletion of its sole supplier of the energy resource.

“Yesterday, we had a pre-application conference with Vires Energy, which plans to bring in an FSRU (floating storage and regasification unit) and also with AG&P, which has… an initial agreement with San Miguel (Corp.). They also intend to bring an FSRU,” Department of Energy (DoE) Assistant Secretary Leonido J. Pulido III told participants of a Senate hearing on Tuesday.

The DoE official made the statement in response to questions from Senator Risa Hontiveros-Baraquel, one of the lawmakers who attended the hearing on Senate Bill No. 1819, which seeks to pass the Midstream Natural Gas Industry Development Act.

Vires is a firm owned by Cagayan de Oro-based listed company A Brown Co., Inc. AG&P, which operates globally, is a Filipino company with manufacturing plants in Batangas.

An FSRU contains an onboard regasification plant, which can turn liquefied natural gas (LNG) back to gas. Natural gas is usually liquefied for ease of transport.

The DoE had earlier issued a permit to construct to Lopez-led First Gen Corp., as well as a notice to proceed to Texas-based Excelerate Energy L.P.

During the hearing, Mr. Pulido also gave an update on the planned $2-billion import terminal led by Tanglawan Philippine LNG, Inc.

“We were constrained to cancel their notice to proceed as, in fact, they essentially withdrew their plans as they were not able to reach financial close,” Mr. Pulido said. “They are no longer pursuing their project.”

He added that the withdrawal was caused by a “commercial issue.” Tanglawan is controlled by Phoenix Petroleum Philippines, Inc., the oil company owned by Davao City businessman Dennis A. Uy.

Tuesday’s hearing was the second day lawmakers heard energy stakeholders’ comments on SB 1819, which aims to regulate the midstream natural gas industry. The industry covers various operations such as aggregation, supply, importation, receipt, unloading, loading, processing, storage, regasification, transmission and transportation of natural gas in original or liquefied form.

The measure was introduced as the reserves in the offshore Malampaya gas-to-power project face imminent depletion in the coming years.

Last week, the DoE said that it expected the private sector to take the lead in building the country’s LNG infrastructure, which included constructing terminals to receive imported fuel.

The department said this in response to Senator Sherwin T. Gatchalian’s previous statement that the government must find ways to encourage private companies to build LNG hubs.

In 2019, the Malampaya project under Service Contract 38 supplied 3,200 megawatts of electricity, accounting for 21.1% of the country’s gross power generation. The DoE projects that its resources will be gone by 2027.

Cebu Landmasters reports 12.5% higher reservation sales

LISTED property developer Cebu Landmasters, Inc. (CLI) posted 12.5% increase in its reservation sales for 2020 to P14.25 billion despite the coronavirus disease 2019 (COVID-19) pandemic.

In a regulatory filing on Tuesday, CLI said the amount is equivalent to 5,300 sold units nationwide and is higher than the P12.67 billion in reservation sales recorded in 2019.

“Despite the many challenges posed by the pandemic in 2020, our sales figures indicate strong revenue streams ahead and an upward growth trajectory. We found many opportunities amidst the crisis that contributed to our performance,” Jose Franco B. Soberano, CLI executive vice-president and chief operating officer, said in the statement.

The company revealed that 69% of its sales for 2020 came from its economic brand, Casa Mira, followed by its mid-market Garden Series at 19%, and high-end Premier Masters at 10%.

For 2020, CLI said it had launched nine new projects worth P11.4 billion, equivalent to 4,300 units, and has already sold 70.6% of the new inventory by yearend.

Among provinces, Cebu accounted for 46% of the company’s sales, while the remaining 54% came from other areas in the Visayas and Mindanao such as Iloilo, Davao, Cagayan de Oro, Bacolod, Dumaguete, and Bohol.

Moving forward, the company has 8,000 units in 15 residential projects, worth P17 billion, which are scheduled in 2021. The projects will be located in Cebu, Ormoc, Bacolod, Iloilo, Cagayan de Oro, and Davao.

According to CLI, the 15 new projects scheduled for this year will use properties in its current land bank and plans have already been drawn up for their respective developments.

“We will launch the projects as soon as external factors allow and hope to further contribute to the shared goal of economic recovery,” Mr. Soberano said.

Further, he said the company sees more opportunities in 2021, helped by low-interest rates and as local and global economies continue their recovery from the pandemic.

“COVID-19 realigned spending priorities and stressed the importance of homeownership as a means of securing the future,” Mr. Soberano said.

On Tuesday, CLI shares at the stock exchange rose 2.19% or 11 centavos to close at P5.14 apiece. — Revin Mikhael D. Ochave

Auto parts workers call for manufacturing incentives

A CAR parts labor group is urging the government to introduce new incentives for automotive companies manufacturing locally to complement import safeguards designed to protect the local industry.

The Philippine Metalworkers Alliance (PMA), along with its associate Sentro ng mga Nagkakaisa at Progresibong Manggagawa, said that the import duties set this month “should only be the start.”

PMA had successfully petitioned the Trade department to slap duties on imported cars after it flagged a link between a recent surge in imports and a decline in local employment.

The labor group in a statement on Tuesday said that the government incentives program offering fiscal support to car companies that locally produce 200,000 units of high-volume car models for six years should be “earnestly implemented.”

Car firms Toyota Motor Philippines Corp. and Mitsubishi Motors Philippines Corp. are participating in the Comprehensive Automotive Resurgence Strategy (CARS), but Toyota has been asking for a compliance extension after it said the pandemic impeded its ability to meet the required production volume.

PMA added that there should be new incentives for car companies that have been manufacturing in the Philippines for a long period.

The labor groups have been pushing back against the car industry group’s criticism of the import duties. The Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI), after a pandemic-driven 41.6% sales drop as of November, said that duties would impede the sector’s recovery and risk employment downsizing.

But the workers groups said that the safeguard protects Philippine workers amid a drive to boost local manufacturing instead of import dependence.

The CARS program, they said, was designed to improve local industry performance.

“(The program is) along the lines of the extremely generous tax incentives being provided by many countries all over the world, including those that would supposedly be affected by the safeguard measures.” — Jenina P. Ibañez

NLEX Corp. reports ‘light traffic’ despite spike in figures

NLEX CORP. on Tuesday said the traffic flow at its toll plazas has improved after it carried out some measures to help control the congestion.

In an e-mailed statement, the tollway company reported that its average daily traffic had reached 323,000 from Dec. 18, 2020 to Jan. 4, 2021, or higher by 3,000 versus the traffic volume it saw in the first two weeks of December.

“We are delighted that even with the recent spike in traffic figures, we have not seen our toll plazas getting jampacked,” NLEX Corp. President and General Manager J. Luigi L. Bautista was quoted as saying.

Mr. Bautista attributed the improvement to the ongoing refinements the company is employing.

To recall, the Valenzuela City government suspended the business permit of the tollway company on Dec. 7 over the heavy traffic caused by the implementation of its cashless toll payment system.

Valenzuela City Mayor Rex T. Gatchalian lifted the suspension on Dec. 16 after both parties agreed to keep the toll barriers up on all lanes for vehicles with RFID stickers.

The tollway company said it is currently “working on some upgrades involving radio-frequency identification (RFID) antennas and account management systems.”

It added that it has already carried out some “enhancements in the RFID system for faster reading, repositioning of RFID installation sites, and relocation of cash and reloading lanes at the right side of the toll plazas for better traffic flow.”

Metro Pacific Tollways Corp.’s (MPTC) tollways, including NLEX, Subic-Clark-Tarlac Expressway, Cavite Expressway, and Cavite-Laguna Expressway, have so far installed a total of 2,076,252 RFID stickers as of Jan. 10, the tollway firm said.

MPTC is a unit of Metro Pacific Investments Corp., which is one of the three Philippine units of Hong Kong-based First Pacific Co. Ltd. The two others are PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains interest in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

An ‘Uneasy Peace’: Online exhibit visits UP Diliman during quarantine

ONE of the biggest areas of the metro, the University of the Philippines (UP) Diliman campus, was rendered silent by the pandemic. The coronavirus disease 2019 (COVID-19) lockdown closed schools and colleges, and forced students and their teachers to go online — which itself is another can of worms.

Dr. Eloisa May Hernandez, an Art History Professor at the university’s Department of Art Studies, and UP Diliman resident, captured this silence through her iPhone camera during walks she took at the beginning of the lockdowns imposed almost a year ago. The photos are now in an online exhibit with vMeme Contemporary Art Gallery titledUneasy Peace.” The exhibit runs until Jan. 24.

The exhibit is composed of  photographs of landmarks in the UP Diliman campus, shown completely empty, unimaginable then when memories flash of cars, jeepneys, students, teachers, vendors, and visitors filled the place. The sense of stillness in a place once so busy might bring a sense of relief, but then one remembers the reason why the streets have been emptied.

“The title was contributed by my colleague and confidante, Prof. Eileen Legaspi-Ramirez. It reflects the anxiety that is evident in the emptiness of the campus during the lockdown,” said Ms. Hernandez in an e-mail to BusinessWorld. “It is also the irony behind these peaceful photographs that I also wish to convey. Beneath the ‘peacefulness’ that one sees in these images, there is the tension that the pandemic has brought upon us.”

It could be said that the deserted campus can stand for many places that have once seen life. “I would not strictly say that UP Diliman per se is illustrative of the community quarantine experience. To a certain extent, there is still a little ‘freedom’’ that we campus residents enjoy since it is not a highly populated space. But of course, being a part of a region under lockdown at that time, the UP Diliman community invariably was subjected to community quarantine as many other places/regions.” Would the same unease have been captured, had Ms. Hernandez worked and lived somewhere else? “Absolutely not. To begin with, UP Diliman campus, even pre-pandemic has always been a tranquil space even on days when teeming with students. The avenues flanked by the acacia trees, the sprawling verdant spaces bestow a sense of peace to many. Photographing the campus devoid of people only heightened this peacefulness. It allowed me to capture the mise-en-scène of the pandemic.”

Ms. Hernandez used a phone camera as her primary instrument. It’s telling in this decade that almost everybody has a smartphone, and this tool is always, always within reach. “In a sense, everybody now has the capability to create art or even news, as we’ve seen for example, in the case of the Tarlac shooting,” she said. “As a photographer, I use the most available tool for my artistic expression. Also, during my walks, I wanted as much as possible to take photographs as naturally as possible, just like anyone is compelled to take photographs with one’s phone in a very spontaneous manner. I also did it deliberately, I really wanted to show members of the UP community — students, professors, alumni, staff — what the campus was like during ECQ,” she said, referring to the Enhanced Community Quarantine, the strictest lockdown level.

The photos had been posted first on her social media account, which, exhibit notes by Jaime Oscar Salazar observe, is “a gesture that this exhibition, being an online one, seeks to repeat and encourage.” Ms. Hernadez said, “Most, if not all that we see in social media are from phones, images that are deliberately set up or spontaneously taken, which feed visual media. The modes of production, circulation and reception of art has certainly changed because of the emergence of the digital technology.”

The photos are expected to evoke deep feelings, especially among people familiar with the campus. “Whether a viewer is a campus dweller or already familiar with the campus or totally unaware that there is such an environment inside UP campus, I hope that these photographs will evoke a sense of peace for these viewers. During these times, where our lives are ‘simplified,’ we return to the concept of simplicity and nature. The subject of my photographs, in its unpretentious simplicity provides us with solace and relief. I also want to bring this peace that UP campus offers to those many other people confined in their homes,” she said. She added, “The exhibit is also for my freshie students who have not yet been able to physically see and experience the campus. I wanted to let them experience it, albeit digitally. It gives them something to look forward to.”

“Remote teaching/learning is very difficult for both the professors and the students,” she said, as she discussed how the pandemic has changed her life, as both a resident and worker within the university. “No one was ready for this. As one distance educator mentioned, this is not remote learning, this is emergency learning. I miss face to face teaching, I miss seeing and hearing from my students in real time. I miss the kind of interaction and discussion that face-to-face learning offers. As a resident, I definitely miss the ‘circulation’ of people on campus.”

Ms. Hernandez’ works started taking shape almost a year ago. Mr. Salazar, in his exhibit notes, said, “The lockdown has earned the dubious distinction of being among the lengthiest in the world, and without the benefits that its accompaniment by broad and robust testing, contact-tracing, and case-isolation efforts would have produced.” The restrictions may have loosened relatively since early last year, but life definitely moves at a slower pace; a slowness attributed less to peace but tension; as if everyday is a preparation for battle. While she notes that the Academic Oval has since reopened as a green public space, Ms. Hernandez said, “It is definitely frustrating and infuriating that, on the level of national governance, nothing much has changed. I see these photographs as faithful reminders of an entirely different context that was uncertain, terrifying even, at that time.”

“Uneasy Peace” is presented by vMeme Contemporary Art Gallery. Certain photographs in the exhibition are to be reproduced in calendars and other merchandise. The proceeds from the sale of such merchandise will be donated to the Art Relief Mobile Kitchen. — Joseph L. Garcia

RCBC receives fresh summons for Bangladesh Bank heist case

RIZAL COMMERCIAL Banking Corp. said it received summons for a new case filed by Bangladesh Bank on the 2016 heist. — RCBC.COM

RIZAL COMMERCIAL Banking Corp. (RCBC) received new summons for a case filed against the lender over the $81-million Bangladesh Bank heist in 2016.

RCBC said in a filing with the local bourse on Tuesday that it received a notice from the Regional Trial Court of Makati regarding the case filed against it by Bangladesh Bank.

“The case was filed before the Supreme Court of the State of New York in May [27,] 2020,” the bank said in a filing.

This followed the decision of the Federal Court of New York to dismiss a lawsuit filed by Bangladesh Bank on the 2016 incident.

The dismissed case was filed by Bangladesh Bank to seek compensation for the $81 million it allegedly lost to North Korean hackers who sent multiple remittance orders out of the central bank’s account with the Federal Reserve Bank of New York.

These funds were allegedly remitted to accounts in RCBC and were also said to have been channeled into local casinos through gambling.

“The complaint in the state court is for: conversion/theft/misappropriation; aiding and abetting the same; conspiracy to commit the same; fraud (against RCBC); aiding and abetting and conspiracy to commit fraud; conspiracy to commit trespass against chattels; unjust enrichment; and return of money received,” RCBC said.

The bank said respondents for the case include Maia Santos Deguito, who is the former manager of RCBC’s Jupiter branch where the $81 million from the account of Bangladesh Bank was transacted under fictitious names.

Former RCBC President and Chief Executive Officer (CEO) and incumbent House of Investments President and CEO Lorenzo V. Tan is also included in the summons, together with other former bank employees and officials such as Ismael S. Reyes, Angela Ruth S. Torres, Raul Victor B. Tan, Nestor O. Pineda, and Brigitte R. Capina.

Other defendants are Bloomberry Resorts & Hotels, Inc. as well as its unit, Solaire Resorts & Casino. Also included are Eastern Hawaii Leisure Co. Ltd. and Midas Hotel & Casino.

Philrem Service Corp. and its owners, Salud Bautista and Michael Bautista, are also included in the summons. Centurytex Trading and William So Go, which were the names used for the accounts where some funds from Bangladesh Bank were transferred, are also defendants.

RCBC’s net profit slumped 52% to P893 million in the third quarter from P1.851 billion the previous year. This caused its nine-month income to decline 11% to P4 billion from P4.513 billion as it set aside higher loan provisions.

The bank’s shares closed at P18 apiece on Tuesday, down by 50 centavos or by 2.7% from its previous finish. — L.W.T. Noble

Cirtek receives PRS A grade from PhilRatings

CIRTEK Holdings Philippines Corp. has been assigned a PRS A mark by local debt watcher Philippine Rating Services Corp. (PhilRatings) in relation to its commercial papers of up to P2 billion.

In a statement on Tuesday, PhilRatings said it gave Cirtek an issuer credit rating of PRS A (corp.) for the company’s three-year shelf registration for commercial papers. The rating includes a stable outlook for the company, which means it is seen to remain unchanged for the next 12 months.

Companies with PRS A (corp.) rating mean they have above average ability to meet their respective financial commitments relative to other local corporates. However, the rating also means the company is somewhat more susceptible to adverse changes in economic conditions. Cirtek plans to raise up to P2 billion through the issuance of commercial papers to refinance debt and fund working capital requirements.

The local debt watcher said Cirtek received the rating due to its manageable liquidity and capitalization levels, track record, strong management team and customer base, better profit margins despite lower revenues, and on the electronics industry’s competitive and cyclical nature.

“The company’s capitalization level also remained manageable, with its debt to equity ratio stable at 1.1x as of end-2019 and remaining roughly unchanged as of end-September 2020,” PhilRatings said.

“Cirtek is seen to attain a much more conservative capital structure in the future, on account of its planned equity raising activities and the continuous payment of existing debt,” it added.

PhilRatings noted that as of September 2020, Cirtek’s consolidated revenues dropped 14.4% year on year to $59.5 million, primarily caused by lower revenue contribution of the company’s subsidiary Quintel, at $16.5 million.

The local debt watcher added that the net income of Cirtek for the nine-month period declined 1.7% year on year to $3.6 million, while the company’s net profit margin increased to 6.1% from January to September 2020.

“As of end-September 2020, Cirtek’s liquidity position remained satisfactory, with its current ratio and acid test ratio at 1.1x and 0.5x, respectively,” PhilRatings said.

Cirtek is a global technology company that focuses on wireless communication and has business interests in the manufacture and sales of semiconductor packages and other technology products.

On Tuesday, shares in Cirtek at the Philippine Stock Exchange dropped 2.31% or 19 centavos to close at P8.05 per piece. — Revin Mikhael D. Ochave

Shakespeare and Cervantes

What similarities between the famous writers reveal about mysteries of authorship

WILLIAM SHAKESPEARE and Miguel de Cervantes, two of the most important writers of literature, are surrounded by a halo of mystery related to authorship.

In the case of Shakespeare, the question of whether he is the true author of his plays has circulated for some time. In the case of Cervantes, mysteries about authorship tend to concern who wrote the sequel to the first part of Don Quixote, one of the earliest modern novels.

Cervantes published the first part of Don Quixote in 1605. In 1614, an unofficial sequel by the pseudonymous Alonso Fernández de Avellaneda was published. In response, a year later, Cervantes published his sequel to Don Quixote, denouncing Avellaneda’s version in the prologue. Since then, Avellaneda’s identity has become the greatest mystery in Spanish literature.

Both Cervantes and Shakespeare lived and died at around the same time. Shakespeare was born into a wealthy, rural family and Cervantes had humbler origins, yet both had a passion for the theater and wrote plays.

In both cases, we hardly know anything about their childhoods and education (although it is known that neither went to university).

Great authors lend themselves to speculation. Shakespeare’s lack of education is one of the main arguments against the idea that he wrote his works, which have been attributed to 80 different authors. While Cervantes’ authorship tends not to be under the same scrutiny, questions about who exactly Alonso Fernández de Avellaneda was, remain.

Cervantes’ own educational background, however, suggests that it is possible to write to a high standard without academic training. If this could be true for the Spanish writer, why not for Shakespeare too?

A very large number of authors have also been proposed as candidates for the authorship of Avellaneda’s sequel to Don Quixote.

Social and cultural prejudices have been important in both cases. Shakespeare’s works show a detailed knowledge of the highest social classes, which is why it is thought that they should have been composed by some illustrious person of the time, such as Sir Francis Bacon.

However, Cervantes also had knowledge of the higher social classes and did not belong to them. Some researchers have even proposed that Avellaneda could have been Lope de Vega, the most prominent Spanish playwright at the time, since it is more attractive to imagine Cervantes confronted with a great author than with a mediocre person.

In both cases, figures who died well before both Shakespeare and Cervantes have been proposed as authors: Edward de Vere, 17th Earl of Oxford as the author of Shakespeare’s plays, and the Spanish writer Pedro Liñán de Riaza as Avellaneda, the unconvincing argument being that their works were left incomplete and were finished by other writers.

That said, it’s important to look at other plausible explanations. At the time of the publication of the first part of Don Quixote, there were no copyright laws protecting writers from continuations or plagiarism of works, which explains how Avellaneda’s version came to be.

Similar confusion has been caused in Shakespeare’s case. The Taming of the Shrew had an earlier anonymous version titled, The Taming of a Shrew, seemingly supporting theories that Shakespeare’s version was co-authored, or written by someone else entirely.

These days, however, following a theory put forward by Shakespearean scholar Peter Alexander in 1926, it is generally accepted that The Taming of A Shrew was simply an attempt to record the live production version of the play from memory.

In the case of Cervantes, I think I have cleared the mystery: we already know what Cervantes thought about Avellaneda’s identity, which should put an end to absurd speculation.

As one popular theory goes, Avellaneda’s sequel to Don Quixote should be read as an embittered response to Cervantes’ parody of two real people: Lope de Vega and Jerónimo de Pasamonte. Pasamonte was a soldier from the region of Aragon who took part — as did Cervantes — in the battle of Lepanto (1571). Cervantes is said to have behaved heroically in the battle since, despite being ill, he insisted on fighting and was wounded several times.

Shortly afterwards, in 1574, Pasamonte was taken prisoner and spent 18 years in captivity. Upon his release, he returned to Spain and finished his autobiography, Life and Works.

When writing about the capture in 1573 of La Goleta (where there was in fact no actual battle), Pasamonte claimed to have acted as heroically as Cervantes at the battle of Lepanto.

After seeing how Pasamonte had usurped his heroic deeds in his autobiography, Cervantes satirized it in the first part of Don Quixote. Cervantes turned Jerónimo de Pasamonte into Ginés de Pasamonte, a galley slave, who is presented as a liar, a cheat, a coward, and a thief, and is gravely insulted by characters Don Quixote and Sancho Panza.

The hypothesis that Pasamonte was Avellaneda, proposed by Martín de Riquer, an academic at the Royal Spanish Academy of the Language, is increasingly accepted.

As I have probed in my book, The Two Second Parts of Don Quixote, Pasamonte sought to take revenge on Cervantes, writing a sequel to Don Quixote with the intention of robbing Cervantes of his earnings from the second part. In order not to be linked to Cervantes’ galley slave, he then signed it under a pseudonym.

To get revenge on Avellaneda, Cervantes imitated his imitator and created a masterly scene, making the literary representation of Avellaneda (personified in a character known as Jerónimo) recognize his Don Quixote as the true one.

As attractive as speculation about Shakespeare and Cervantes’ authorship may be, looking closer at their lives shows just how irrelevant class, education, and conspiracy theories are in terms of explaining their genius. — Reuters

Alfonso Martín Jiménez is a Professor of Theory of Comparative Literature and Literature at the University of Valladolid.

Bitcoin’s slide dents momentum

WHILE LITTLE exists intrinsically to judge the fair value of a digitized currency, comparing Bitcoin to other high-momentum assets of the past shows how heated its rally has become — and why it’s vulnerable to swoons like Monday’s.

Last week, for example, Bitcoin managed to trade 179% above its average price over the past 200 days, three times as high as the Nasdaq 100 ever got during the heyday of the dot-com bubble. The digital coin was up 120% over the past 20 sessions, a rate of return that’s also three times the best gain the tech-heavy equities gauge ever saw.

“If we’re just to compare it apples to apples with other commodities, it feels like a huge bubble and you could say it’s crazy expensive,” said Mike Bailey, director of research at FBB Capital Partners. “I can’t get involved in something with those kinds of technicals.”

Bitcoin fell as much as 20% Monday, and was down 16% to $33,440 as of 4 p.m. in New York.

Bank of America strategists led by Michael Hartnett say Bitcoin’s rally is one thing, along with recent trends in the IPO and SPAC markets, that makes investor behavior look speculative at the moment.

The digital asset’s 900% advance since 2018 has been so swift that it dwarfs all other boom cycles in financial assets during the past 50 years, from gold’s rally in the late 1970s to the Nikkei 225’s surge in the 1980s to the Nasdaq 100’s run in the 1990s.

In fact, Bitcoin’s velocity is almost two times as intense as the next biggest episode of market froth — the spike in Chinese stocks during the 2000s.

It “blows the doors off prior bubbles,” the strategists wrote in a Friday note, asking whether Bitcoin is “the Mother-of-all-bubbles.”

Many worry the 300% rally last year that persisted into 2021 up until Monday is untethered from reason and fundamentals and is fueled by vast swathes of fiscal and monetary stimulus sloshing around at a time when global economies are still dealing with the fallout from the pandemic.

Up 38% this year through Friday, Bitcoin had its best start to a year since 2012, when it surged almost 60% over the first eight days. Scott Minerd, chief investment officer with Guggenheim Investments, who recently said the coin could be worth as much as $400,000, wrote in a tweet that it was “time to take some money off the table.”

It’s the type of thing many investors have been eyeing wearily in a market that’s been laden with speculative mania, with everything from the dizzying trends in the initial public offerings space to the resurgence in cryptocurrencies igniting worries a comeuppance could be due.

Bitcoin’s weekend action fueled those concerns. The digital asset slid as much as 26% over Sunday and Monday in the biggest two-day drop since March.

Still, Bitcoin’s fans argue its recent rally isn’t comparable to its other euphoric stretches, like the one in 2017 that ultimately resulted in a huge selloff the next year. Many argue the asset has matured with the recent entry of institutional investors who have taken a greater interest as the coin rallied to record after record. In addition, they say, it is increasingly seen as a legitimate hedge against dollar weakness and inflation risk.

“Here you’ve got both fear and greed driving that baby to the moon,” said Bryce Doty, portfolio manager at Sit Fixed Income Advisors. “That does qualify as frothy.”

Other technical signals also suggested a worrying trend. Bitcoin’s drop over the weekend triggered a sell signal according to the GTI Global Strength Indicator, which measures upward and downward movements of successive closing prices. The coin’s 20-day moving average has thus far provided a support level throughout its uptrend, though Bitcoin remains overbought, according to the GTI gauge.

Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, says there are good reasons for believing in Bitcoin but, to him, it’s a question of whether or not it constitutes a good place to allocate capital. His team isn’t currently apportioning money toward it, but if they did, they’d view it as a speculative bet rather than as a store of value.

“Bitcoin is in the early stages of its move,” he said. “Whether we are already in a bubble or whether we are in the process of forming one will only be known in hindsight, but we think it will be similar to previous bubbles we have seen in the past.” — Bloomberg