Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 8607

Peso may decline on weaker remittances

THE PESO may depreciate versus the greenback this week as the market awaits the release of remittance data expected to show a further decline due to the fallout from the coronavirus pandemic.

The local unit finished at P49.485 per dollar on Friday, depreciating by 7.5 centavos from its P49.41 close on Thursday, data from the Bankers Association of the Philippines showed.

It however strengthened by 6.5 centavos from its July 3 close of P49.55 per dollar.

“The peso was strong for the fourth strong week. Eventually, it’s driven by the sharp slump in import,” a trader said in a phone call.

Preliminary data from the Philippine Statistics Authority showed merchandise exports in May fell 35.6% year on year to $3.99 billion. Meanwhile, merchandise imports declined 40.6% to $5.85 billion.

With this, the country’s trade deficit narrowed to $1.87 billion from the $3.65 billion shortfall in May 2019. Year to date, the trade gap shrank to $9.84 billion from the $17.79 billion seen in the first five months of 2019.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso’s day-on-day depreciation on Friday was on the back of safe haven demand after declines in the US stock market.

“The peso was weaker after the upward correction in the dollar after profit-taking in the US/global stock markets amid the latest spike in COVID-19 (coronavirus disease 2019) cases,” Mr. Ricafort said in a text message.

For this week, the trader said market sentiment on the peso will depend on the upcoming release of latest remittances data.

“March [cash] remittances is down by 4.7% and expectation is a decline much wider than that,” the trader said.

Data from the Bangko Sentral ng Pilipinas (BSP) showed cash remittances in March decreased 4.7% to $2.397 billion because of the COVID-19 outbreak and escalating tensions among global oil producers as demand slumped.

The BSP expects cash remittances to decline by 5% this year due to the worsening fallout from the pandemic, down from the 3% growth estimate it gave last year.

Meanwhile, Mr. Ricafort said major catalysts this week will be the latest data on COVID-19 infections as well as “any further government moves to ease restrictions on businesses and the economy.”

Both Mr. Ricafort and the trader expect the peso to move within the P49.30 to P40.70 levels against the dollar this week. — L.W.T. Noble

Shares to drop as local coronavirus cases increase

PHILIPPINE SHARES are expected to maintain their downtrend this week with the massive increase in local coronavirus disease 2019 (COVID-19) cases every day.

The benchmark Philippine Stock Exchange index (PSEi) closed flat on Friday with a 4.8-point or 0.07% improvement to 6,197.38. On a weekly basis, the index was down 2.75%.

Value turnover for the week was also down by 22.8% to an average of P6.55 billion. Foreign investors became net sellers, with outflows reaching an average of P1.14 billion from an average net foreign buying of P1.08 billion the prior week.

Online brokerage 2TradeAsia.com attributed the weak performance of the market to dampened investor sentiment, which it said was due to “higher coronavirus infections and the signing of Anti-Terrorism Bill into law.”

The Department of Health has been reporting thousands of new COVID-19 cases every day since July 3, pushing the total tally to 54,222 as of Saturday, of which 38,813 are active cases.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said this weighed down on investor sentiment amid hopes that the Philippine economy is on its path to recovery. Investors are also worried another lockdown might be on the way if the local outbreak keeps worsening.

“The local market is seen to have a downward bias as local coronavirus cases climb at an intensified scale, in turn weighing on the economic recovery investors have earlier hoped for,” he said in a text message.

Mr. Tantiangco also said events in the past week that ended with ABS-CBN Corp. not being granted by Congress a new franchise is causing worries about the business climate in the Philippines.

“[T]he denial of ABS-CBN’s franchise renewal is seen to raise concerns over political risks which in turn could spill over to the rest of the market especially to the heavily regulated ones,” he said.

Another factor that might affect investor sentiment is the impending release of second-quarter corporate earnings, which are expected to be worse than results in the first quarter.

2TradeAsia.com said the weighted average earnings per share in the first quarter already fell by 24%, and it may contract by at least 30% in the second quarter, if not post negative results.

“[T]he story for second quarter reporting will have to dwell on cost-cutting methods, and assurances that the 2021/22 comeback will be worth investors’ stretched patience,” it said in a market note.

Lastly, Mr. Tantiangco said the tension between the United States and China continues to be a threat to the local market, especially after US President Donald Trump said the US-China relationship is “severely damaged” by the pandemic.

2TradeAsia.com is putting resistance for the market at 6,400 to 6,580 and support at 6,050.

Mr. Tantiangco sees the PSEi’s trading range from 6,100 to 6,350, with a possible testing of the former. — Denise A. Valdez

Metro Manila lags in list of smart and sustainable cities

Metro Manila lags in list of smart and sustainable cities

How PSEi member stocks performed — July 10, 2020

Here’s a quick glance at how PSEi stocks fared on Friday, July 10, 2020.

Local government units told to implement targeted lockdowns

THE government has asked local officials to enforce targeted lockdowns in villages with surging coronavirus infections as part of efforts to contain the pandemic.

Cabinet Secretary Karlo Alexei B. Nograles told DZBB radio on Sunday an inter-agency task force made up of Cabinet secretaries met with Metro Manila mayors at the weekend to discuss strict quarantine measures.

“We need localized community quarantine,” he said in Filipino. “We told the mayors that it’s not enough to impose a two-, three- or five-day quarantine. It has to be 14 days.”

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

The President extended the strict lockdown twice for the island and thrice for Manila, the capital and nearby cities.

The lockdown in most areas including Metro Manila has been eased, with many businesses allowed to reopen with reduced capacity.

Almost all industries except for leisure have reopened. Mass gatherings remained banned.

Mr. Duterte was expected to announce new lockdown classifications this week before various levels of lockdown lapse on July 15.

Most of the country is under a modified general community quarantine. Some areas including the capital region are under a general community quarantine, while others such as Cebu City reverted to an enhanced community quarantine after a surge in COVID-19 (coronavirus disease 2019) cases.

Coronavirus cases have hit more than 50,000 as the lockdown in many provinces and cities were eased.

The targeted lockdowns would ensure that the economy was not unnecessarily affected by a wider quarantine.

The targeted strategy is similar to the one adopted by Beijing, which managed to avoid a second wave of infections in China.

The Chinese capital did not repeat the strict nationwide lockdown it imposed when the virus first spread from Wuhan City earlier this year. Instead, it shut down a limited number of residences and increased mass testing, screening more than half of the capital’s 21 million people.

This approach seemed to have paid off, with reported cases falling to single digits each day by the start of July and zero in some days.

The Asian Development Bank (ADB) expects the Philippine economy to shrink by as much as 3.8% this year.

Developing Asia was projected to grow at its slowest pace in nearly six decades as the fallout from the global pandemic worsens.

Economic managers have projected a 2-3.4% contraction this year.

The economy shrank by 0.2% in the first quarter after the crisis brought economic activities to a near standstill. Contraction in the second quarter was expected to have worsened.

ADB cited flat household consumption, weak imports and exports and a plunge in investment. Only government spending rose during the first quarter.

ADB kept its 6.5% growth forecast for the Philippines next year, “supported by public infrastructure spending and anticipated recovery in consumer and business confidence.”

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

Calabarzon is under a modified general lockdown except for Cavite and Rizal. Localized lockdowns at the village, municipal, and even within companies could be enforced so the economy won’t get hit in case a spike in infections happens in some areas, he said on June 30. — Gillian M. Cotez

UN ruling vs China in sea squabble is ‘nonnegotiable’

A 2016 ruling by a United Nations (UN) tribunal rejecting China’s claim to more than 80% of the South China Sea is nonnegotiable, according to the Philippines’ top diplomat.

“Compliance in good faith with the award would be consistent with the obligations of the Philippines and China under international law,” Foreign Affairs Secretary Teodoro L. Locsin, Jr. said in a statement on Sunday.

“The Philippines, as a law-abiding, peace-loving and responsible member of the international community, reaffirms on this occasion its adherence to the award and its enforcement without any possibility of compromise or change,” he said. “The award is non-negotiable.”

The Department of Foreign Affairs issued the statement on the fourth anniversary of the decision favoring the Philippines in the arbitration case filed by the government of then President Benigno S.C. Aquino III.

The tribunal ruled that China’s claim of historic rights to resources within the sea falling within the ‘nine-dash line’ was illegal. “Claims to historic rights, or other sovereign rights or jurisdiction that exceed the geographic and substantive limits of maritime entitlements under UNCLOS, are without legal effect,” Mr. Locsin said in the statement.

The court said the Philippines could declare certain sea areas part of its exclusive economic zone because these areas do not overlap with any entitlement claimed by China.

Certain actions within the Philippines’ exclusive zone violated its sovereign rights and were unlawful, the court said. It added that China’s island-building activities in the disputed waterway had caused severe environmental harm in violation of international conventions.

President Rodrigo R. Duterte has sought closer trade and investment ties with China since he took office in 2016, including potential joint explorations for oil and gas in the South China Sea. — CAT

78,800 migrant workers brought home, DFA says

THE Department of Foreign Affairs (DFA) has brought home more than 78,800 Filipino workers from overseas amid a coronavirus pandemic that has sickened 12.9 million and killed about 570,000 people worldwide.

“This week, DFA facilitated the return of 10,369 overseas Filipinos from various regions around the world,” it said in a statement on Saturday evening.

This brings the total beneficiaries to 78,809 since it started the repatriation program in February. Of the total, 37,166 were seafarers, while the remaining 41,634 were land-based workers.

The agency said it continues to facilitate more flights from the Middle East, which is home to more than two million Filipino migrant workers.

DFA said it had facilitated the repatriation of 6,681 Filipinos from the United Arab Emirates, Saudi Arabia, Qatar, Bahrain and Kuwait in the past week.

The Middle East and Africa region posted the biggest number of Filipinos infected with the coronavirus — 6,379 cases as of July 11. Of the total, 3,832 have recovered, 2,221 were being treated and 326 died.

Among those who came home were 1,628 Filipino workers stranded in Hong Kong, the Maldives, Myanmar, South Korea and Sri Lanka, and 1,204 seamen from Italy, the Netherlands, Norway and Turkey.

DFA also mounted five chartered flights to bring home 1,323 Filipinos from Japan, Pakistan, Qatar and Saudi Arabia, it said.

The agency said 8,804 migrant Filipinos have gotten the coronavirus — 2,944 were being treated, 5,266 have recovered and 594 died. — Charmaine A. Tadalan

Regional Updates (07/12/20)

Baguio to launch cashless payment system for public transport

BAGUIO CITY is launching on Monday, July 13, a cashless payment system for public transportation, including jeepneys, taxis, and UV Express, through a partnership with SquidPay Technology Inc. In a statement Sunday, Mayor Benjamin B. Magalong said the city “is on the right track in pursuing cashless fare payment systems considering the alarming increase in the number of transport workers infected by the coronavirus disease 2019 (COVID-19).” He added, “Although most of those affected are in the railway business, the public utility vehicle sector remains at risk for using direct payment scheme that does not inhibit physical interaction,” referring to the MRT-3 in Metro Manila where over 200 of its personnel recently tested positive for COVID-19. SquidPay has already conducted seminars with members of transport groups in preparation for the cashless system that was first presented on June 24. The city government said the system does not charge a fee per transaction, but vehicle owners need to shell out a refundable deposit for the payment machine. Commuters will have to pay an initial P100 for the card, which includes a P45 fare value. The company will set up booths in terminals, barangay centers, and other strategic areas for card reloading. Mr. Magalong said aside from being “aligned with the new normal measures now being implemented in view of the continuing COVID threat,” adopting the contactless system is part of the city’s “Smart City and digital transformation programs being pursued even before the health crisis.”

Davao City modifies national motorcycle back-riding policy; rules relationship insignificant with health protocols

DAVAO CITY has modified the national policy on motorcycle back-riding, allowing a passenger to ride pillion regardless of relationship to the driver as long as health safety requirements are observed. In an order released Friday, Mayor Sara Duterte-Carpio directed the local police and traffic management enforcers to observe “maximum tolerance” on the riders’ relationship saying “the relationship between the driver and the passenger is inconsequential given that these will be the same requirements that will be required for other individuals unrelated to each other.” The requirements include both riders wearing a face mask and crash helmet, and the use of a barrier “that covers the neck and does not extend beyond the top of the head of the driver.” The memo includes a photo of a sample wearable barrier that “is similar to a backpack.” Before the release of the memorandum order, Ms. Carpio, a known motorcycle enthusiast, already noted that the barrier required by the national government would make driving difficult. “We have seen that the sample barrier they presented makes it difficult for the driver,” she said over the local government-run radio. The mayor said the backpack-type barrier “is a better option” and with approval from health authorities.

MMDA trumpets faster travel time within Metro Manila

THE METROPOLITAN Manila Development Authority (MMDA) said travel time within the nation’s capital has become faster compared to before the lockdown period, citing that the limited buses allowed to resume operations are more compliant with road rules. MMDA General Manager Jose Arturo S. Garcia, in a radio interview over DZBB on Sunday, said the new transportation protocols being implemented in the current eased quarantine period has minimized traffic congestion. “Kung babyahe ko (If I were to travel) from Monumento to Cubao, it will take three hours or more, ngayon isang oras na eh. Ang travel time ng commuters natin, malaki ang improvement at magtutuloy tuloy pa yan (now, it’s just one hour. The travel time for commuters has improved greatly and that will continue),” he said. Monumento to Cubao via EDSA is about 13 kilometers. Aside from limiting the number of city buses given license to provide service, those operating are strictly monitored to stick to designated lanes and stop only at designated drop-off and pick-up points, he said. Mr. Garcia also noted that traffic flows better despite the continued suspension of the number coding scheme, which prohibits vehicles from being on the road once a week based on the last number of the plate. — Gillian M. Cortez

Nationwide round-up

Justice chief tells law enforcement agencies to beef up cybercrime units

THE GOVERNMENT should improve strategies in combating cybercrime, especially with the continuing quarantine restrictions due to the coronavirus outbreak, Justice Secretary Menardo I. Guevarra said. “It is expected that during these pandemic times, where direct personal interactions are reduced, more crimes will be committed in cyberspace,” he told reporters via Viber, “It is therefore imperative that law enforcement agencies beef up their cybercrime units, upgrade their technologies, and enhance their investigative capabilities.” Mr. Guevarra said the cybercrime focus should be on frauds, financial crimes, online exploitation of women and children, and human trafficking, among others. The Department of Justice (DoJ), in a statement Sunday, said the top three most prevalent crimes in the Philippines from March to June 2020 were phishing, online selling scam, and “proliferation of misinformation that tends to cause panic among the public.” In May, the DoJ also reported that cases of online sexual exploitation of children from March to May 2020, when strict lockdown was implemented, reached 279,166, more than triple the 76,561 cases reported last year. Justice Undersecretary Markk L. Perete said cases of phishing, online scams and fake news were more than the cases of sexual exploitation of children. — Vann Marlo M. Villegas

Comelec resumes case proceedings

THE COMMISSION on Elections (Comelec) will reopen this week for physical submission of pleadings and other court submissions under a skeletal workforce, and allow video conferencing for hearings. During the strict quarantine period, election-related complaints were only accepted through electronic filing. In Resolution No. 10673 promulgated on June 25, the Comelec approved the resumption of the following processes: filing of pleadings, comments, motions, briefs, or memoranda; setting of raffle of cases, hearings, preliminary conferences, and marking of exhibits; scheduling of inventory and recount of election contests; promulgation of resolutions; and payment of administrative fines. Hearings/investigations/inquiries, including preliminary conferences and marking of exhibits can be done through video conference except for cases on election offense. — Gillian M. Cortez

Lack of financial literacy hindering people in dealing with pandemic, Diokno says

MANY FILIPINOS are suffering from “apparent financial insecurity” stemming from the lack of financial literacy, which is hampering their ability to cope during a “once-in-a-lifetime pandemic,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

“Aside from lack of budget, lack of awareness and perceived high costs are often cited by respondents as key reasons for not opening an account, not saving, not using e-payments and not getting insurance,” Mr. Diokno said in an online speech delivered at the Financial Literacy Summit organized by The Global Financial Investors Saturday.

Mr. Diokno cited survey data which show Filipinos have little understanding of compound interest, the effect of inflation on buying power, and investment risk.

He also noted that research showed Filipinos scored low in daily money management and long-term financial planning despite having forward-looking attitudes.

“This limitation is highlighted in unexpected situations such as the pandemic, where, more than ever, preparedness for the proverbial rainy day is brought to the fore,” Mr. Diokno said.

World Bank data in 2017 indicate that only 34.6% of adult Filipinos have an account with a formal banking institution while the rest of the population rely on non-banks to obtain financial services.

The BSP hopes to bring this up to 70% by 2023.

Mr. Diokno said more than a third of Filipino adults struggle to meet their regular spending needs and resort to loans when emergencies arise.

“The most vulnerable sectors have no bank accounts where social assistance can be quickly channeled,” Mr. Diokno said.

Mr. Diokno also said only 18% have insurance while 3% have invested in financial instruments.

“Nearly half of adults (48%) have savings, but 68% of them keep savings at home,” he added.

During the pandemic, more Filipinos used digital payments. Mr. Diokno has said the volume of transactions on InstaPay and PesoNet surged 57% and 325%, respectively in April and May.

In 2018, volume and value of digital payments totaled 10% and 20% respectively, of all transactions, according to a report from Better-Than-Cash Alliance. This compares with 1% and 8% by volume and value in 2013.

The central bank hopes to have 50% of all payments by volume and value coursed through electronic means by 2023. Mr. Diokno has said the pandemic surge in such payments could help it hit the target earlier.

“As we shift to the new economy, fostering financial education within the family — from grandparents, parents and children — is essential for the well-being of citizens especially in times of crisis,” Mr. Diokno said. — Luz Wendy T. Noble

Senate bill seeking COVID-19 funding from privatization of gov’t assets

A MEASURE expediting the privatization of government assets to raise funds for the coronavirus crisis has been filed in the Senate.

Senate Bill No. 1519, the “COVID-19 Economic Lifeline Act,” calls for the sale and disposition of non-performing properties and assets owned by the government to augment public funds.

“There is a need for the National Government to find new ways to augment public funds in order to continue effectively fighting the COVID-19 pandemic and help countless Filipinos and businesses,” Senator Francis N. Tolentino said in the explanatory note of the bill.

The Department of Budget and Management has said that as of June 9, government spending to contain COVID-19 (coronavirus disease 2019) amounted to P355 billion, a large part of which consisted of the emergency cash subsidy for low-income households.

The government has also raised $7.63 billion in grants and loans from various international agencies as of July 1.

The Department of Finance (DoF) is also pushing for a P180-billion recovery plan for the proposed Bayanihan 2, which has standby funding of P140 billion, and a proposal to cut corporate income tax to 25% this year from 30%.

Mr. Tolentino’s bill creates the COVID-19 privatization commission, which will be led by the DoF, to oversee the sale of state-owned assets drawn from a priority list prepared by a separate office, the COVID-19 Privatization Commission Management Office.

Government properties under consideration also include those owned by government-owned or controlled corporations which are deemed unnecessary or inefficient.

The measure provides that proceeds from the sale be directly used to fund programs mitigating the impact of COVID-19. The Commission, meanwhile, will be allowed to retain up to 5% of the proceeds for its operations. — Charmaine A. Tadalan

Rural utilities told to review compliance with billing rules

RURAL POWER utilities were ordered to review their compliance with regulations governing billing during the lockdown, the industry association said.

In a statement Sunday, the Philippine Rural Electric Cooperatives Association (Philreca) said it is willing to assist the Energy Regulatory Commission (ERC) in resolving consumer complaints against some utilities over alleged billing irregularities.

“The soonest that we were made aware that there were complaints filed with the commission, we have prompted our member-electric cooperatives to make a reassessment of their compliance with advisories and other issuances from regulatory offices as well as to check if there are pending consumer concerns that remain unacted upon,” Philreca Executive Director Janeene D. Colingan said.

During a recent Senate energy hearing, ERC Chairperson Agnes VST Devanadera revealed that the agency has received more than 47,000 consumer complaints on billing issues.

Philreca said it asked the commission to provide details of the complaints to help it in “calling the attention of the concerned ECs (electric cooperatives) for clarification or action.”

The ERC released an advisory on July 7 ordering the refund of some bill components collected by power utilities during those months that their collections were suspended.

It specifically ordered the refund of the feed-in-tariff allowance (FiT-All), the collection of which was suspended in March and April, as well as collected universal charge-environmental charges in May.

Philreca said electric cooperatives had already printed and issued their bills when the order suspending FiT-All collection was released on April 15.

It said that the rural utilities were able to comply with the May suspension notice for the collection of the environmental charge starting in the June billing month.

“The timing of the release of the advisories makes it impossible to implement the order on the billing period being asked for by the commission. This only adds to the confusion of our member-consumer-owners,” Philreca claimed.

The association told the ERC that it is monitoring all 121 cooperatives for their observance of its advisories since the quarantine was imposed in mid-March. — Adam J. Ang

1...8,6068,6078,608...13,514Page 8,607 of 13,514
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube