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TDF yields inch higher ahead of RTB offer

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) term deposits inched up on Wednesday ahead of the retail Treasury bond (RTB) offering and following the release of the quicker-than-expected June inflation data.

Tenders for the BSP’s term deposit facility (TDF) on Wednesday totaled P483.207 billion, almost double the P250 billion up for grabs. This is also higher than the P441.631 billion in bids logged on July 1 for the P210 billion auctioned off by the BSP.

The seven-day papers fetched tenders amounting to P211.7 billion, surpassing the P120 billion on the auction block but failing to surpass the P232.3 billion recorded last week.

Yields on the one-week deposits ranged from 1.75% to 1.7625%, a slimmer margin versus the 1.75% to 1.79% margin seen on July 1. This caused the average rate for the one-week papers to settle at 1.7538%, inching down from the 1.7573% a week ago.

For the 14-day papers, bids reached P172.245 billion, surpassing the P90 billion up for grabs and the P149.68 billion in bids seen on July 1 for the P70 billion offered by the BSP.

Lenders sought returns between 1.75% and 1.7644% for the two-week term deposits, a narrower margin compared to the 1.75% to 1.78% recorded last week. This caused the average rate for the 14-day papers to settle at 1.7548%, higher by 0.26 basis point (bp) from the 1.7522% recorded on July 1.

On the other hand, the 28-day deposits attracted bids amounting to P99.262 billion, higher than the P40 billion on offer but lower than the P232.3 billion in tenders seen last week against the P120 billion on the auction block.

Rates for the one-month papers ranged from 1.75% to 1.77%, a slimmer band versus the 1.75% to 1.79% logged on July 1. The average rate for the 28-day deposits stood at 1.7578%, rising by 0.16 bp from the 1.7562% seen a week ago.

The TDF is the central bank’s primary tool to mop up excess liquidity in the financial system to better guide market interest rates.

“The results of the auction reflect continued strong market interest for the BSP’s deposit facilities, with preference toward longer-tenor TDF, amid ample liquidity conditions in the financial system,” BSP Department of Economic Research Director Dennis D. Lapid said in a statement.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the slightly higher rates for term deposits came ahead of the government’s RTB offer next week as well as the faster-than-expected inflation data.

“BSP TDF auction yields were mostly slightly higher ahead of the RTB offering next week that could somewhat take away some of the excess peso liquidity,” he said in a text message.

“The higher-than-expected inflation data also caused the latest slight uptick in most TDF auction yields,” Mr. Ricafort added.

The Treasury will offer retail bonds starting July 16.

Meanwhile, the Philippine Statistics Authority on Tuesday reported that June inflation was at 2.5%, slower than the 2.7% logged a year ago but faster than the 2.1% in May amid higher fuel, food and transport prices. It was closer to the higher end of the 1.9-2.7% estimate by the BSP but was still within the 2-4% target for the year. — L.W.T. Noble

Dining Out/In (07/09/20)

Shake Shack’s chicken sandwich

THE Chick’n Shack, Shake Shack’s chicken sandwich, will be available at Shake Shack’s two Metro Manila locations, Central Square and Mega Fashion Hall, starting July 10. “The introduction of chicken marks a new era for Shake Shack, staying true to our core menu while continuing to innovate new items our guests have asked for,” said Shake Shack CEO Randy Garutti in a press release. “The Chick’n Shack also furthers Shake Shack’s commitment to serve fresh, simple, high-quality food at a great value through our mission to Stand For Something Good.” The Chick’n Shack is 100% all-natural and antibiotic-free chicken breast, slow-cooked in a creamy buttermilk marinade, hand-dipped into Shack-made batter, dredged through seasoned flour and crisp-fried. The Chick’n Shack is topped with pickles, crisp shredded lettuce and a tangy Shack-made buttermilk herb mayo made with chives, parsley and thyme. The Chick’n Shack is served on a potato roll. For some added heat, Louisiana hot sauce will also be available at the Shack.

Rustan’s East Café reopens

IF you’re craving for delicious Asian-inspired food, Rustan’s Makati’s East Café Asian Cuisine has reopened. Tucked inside Rustan’s, East Café now accepts orders for dine-in, takeout, and curbside pick-up, offering favorites such as Pinakbet with Bagnet, Spicy Tuna Maki, Grilled Salmon in Banana Leaf, Hainanese Chicken Rice set, Chicken Inasal Salad, Squid in Salted Egg and Tori Karaage. To ensure the safety of customers, the Makati branch will allow up to 30% capacity of the venue, with only 10 tables available for occupancy to practice safe social distancing. Making an advance table reservation via Viber Chat is recommended. For home dining, curbside and courier service pickups are also available at Rustan’s Makati. Orders can be placed via the East Café mobile hotline or through East Café’s online Google order form. An East Café employee will check the order’s availability and inform the client of the total bill as well as payment options. Simultaneous with the order preparation, East Café will coordinate with the client for the pickup schedule. East Café’s Viber mobile hotline is +63 917-838-6117. The Google order form can be found at https://forms.gle/YhC1HNfesTRvFZce9. East Café is located at the 2nd Floor of the Rustan’s Makati department store. For more information, visit www.rustans.com.

Marco Polo Ortigas marks anniversary

ON its sixth anniversary, Marco Polo Ortigas Manila is extending limited-time offers for future accommodations and restaurant dining. From July 8 to 13, guests may reserve accommodations at 50% savings off the listed Best Available Rates. Within this six-day reservation period, guests can book advanced stays for dates until Dec. 30. Available stay dates remain subject to the advice of the national government given prevailing conditions. Guests reserving this Anniversary Promotion may also enjoy a 20% discount on all available restaurants and in-room dining services during their stay. Depending on room availability, check-out time may be extended until 2 p.m. This offer applies to reservations on Superior, Deluxe, and Premier rooms only and may be booked via marcopolohotels.com or via (632) 7720-7777. Meanwhile, three of the hotel’s lead chefs are showcasing six signature dishes for a limited time (they are available until July 30). Cucina’s chef de cuisine Andrea Donazzan, Lung Hin’s executive Chinese chef Ken Leung, and Executive Pastry Chef Francisco Arizala come together to present their “spotlight creations.” Cucina’s Donazzan presents his creative interpretations of the Italian classics: Eggplant Parmigiana and Cannelloni with spinach, ricotta, and bechamel sauce. On the other hand, Lung Hin’s Leung offers Pan-fried lotus root cake with minced pork and shrimp, and Chilled Drunken Chicken in Shao Xing wine. Executive pastry chef Arizala’s special confections are Choco-nut Cake with Caramelized Tablea Crunch, and Mixed Berries Charlotte with White Chocolate Bavarian Cream. These signature dishes are available at P679++ and may be enjoyed for dine-in, takeaway, or pick-up. Advanced orders may be placed via (632) 7720-7777 or through Marco Polo Ortigas Manila’s official Facebook page (www.facebook.com/marcopoloortigasmanila). For more information about the Hotel’s promotions for its sixth anniversary, visit marcopolohotels.com or e-mail manila@marcopolohotels.com.

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

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