More than 16,000 FIlipino and foreign sailors from cruise ships anchored at Manila Bay have been cleared of the coronavirus, according to the Bureau of Immigration.
Of the 16,287 seafarers, 11,189 were Filipinos and 5,098 were foreigners, Seaport Operations chief Alnazib Decampong said in a report.
The sailors have left 42 vessels between April 16 and June 15 after being quarantined and tested for the virus. About 2,300 more were awaiting repatriation, Mr. Decampong said.
Meanwhile, an inter-agency task force made up of Cabinet secretaries has agreed to bring home the bodies of 301 Filipinos from Saudi Arabia, about half of whom died after getting the coronavirus, presidential spokesman Harry L. Roque said at a briefing on Friday.
Labor Secretary Silvestre H. Bello III earlier said that of 301 victims, 145 died of the virus, while the rest died of natural causes. The Philippines would send two cargo planes to fetch the bodies, he added.
The coronavirus has sickened 6,114 overseas Filipinos as of June 25, 2,086 of whom were being treated in various hospitals overseas, according to the Foreign Affairs department. It said 3,775 patients have recovered and 253 died. — Vann Marlo M. VillegasandCharmaine A. Tadalan
The government has paid 99% of wage subsidies for small businesses amid a coronavirus pandemic, with less than 100,000 beneficiaries given until June 28 to claim their payouts, according to the Department of Finance (DoF).
About 41,000 workers for the first tranche and 57,000 under the second one have yet to claim their cash aid and the cutoff date was extended from June 10 to the end of the month, the agency said in a statement on Friday.
“We are calling on these employees who were already notified to claim their subsidies from MLhullier Kwarta Padala to pick them up on or before June 28,” DoF said.
Unclaimed wage subsidies will go back to the state and used in the fight against COVId-19, Finance Assistant Secretary Antonio G. Lambino II said in the statement.
The government has released P45.6 billion in cash aid to about 3.1 million workers of small businesses that registered for the program.
The government allotted P51 billion for the program, which gave workers affected by the lockdown as much as P8,000 pesos a month for two months.
The Social Security System and Bureau of Internal Revenue were the main enforcers of the program.
Meanwhile, SSS wants to fast-track the release of retirement and death benefits by revising the list of required documents.
Basic requirements include the application form, a photo and signature card, savings account and a valid ID.
SSS offers death benefits to members’ dependents either in the form of monthly pension or a lump sum. The amount is based on the member’s paid contributions, years of service and number of dependents. — Beatrice M. Laforga
A Philippine senator critical of President Rodrigo R. Duterte has asked a trial court to reconsider its decision denying her plea to let her attend Senate online sessions.
Senator Leila M. de Lima on June 1 sought permission to participate in virtual sessions while being detained in a police jail. The court rejected her request on June 17.
“The last word of the Supreme Court on the matter is that so long as the detained legislator is able to perform legislative functions within his or her place of detention, there is nothing in the law that prevents him or her from doing so,” she said in her motion for reconsideration dated June 22.
Ms. de Lima, a staunch critic of Mr. Duterte’s deadly drug war, has been in jail on drug trafficking charges since February 2017.
Former senator and action star Ramon Revilla, Sr., who pushed changes to the Family Code to benefit children out of wedlock, passed away on Friday due to heart failure, his son said. He was 93.
“My father is gone,” a tearful Senator Ramon B. Revilla, Jr. said in a short video streamed live on his Facebook page in Filipino.
The elder Mr. Revilla was rushed to the hospital on May 31 due to difficulty in breathing.
He later underwent an angiogram procedure on June 10 and was on his way to recovery. “Daddy is going through a rough time,” his son said in a post on Thursday.
Mr. Revilla was born Jose Acuña Bautista in Imus, Cavite on March 8, 1927. He was a multi-awarded actor known for his fantasy roles involving amulets.
In 1992, he won a seat in the Senate and held the post until 2004. He was known for the Revilla bill, which amended the Family Code for the benefit of illegitimate children.
The measure, signed in February 2004, allowed an illegitimate child to use the surname of his father, with his consent.
Mr. Revilla fathered at least 72 children with at least 16 different women, according to ABS-CBN News. — Charmaine A. Tadalan
Challenging times give birth to expertise, agility and speed. This is why Dentsu Aegis Network made the big move to introduce Dentsu One Manila this month. Dentsu One Manila is a creative and digital-led agency designed to answer the changing needs of clients during the markets’ move toward normalcy. Formerly known as ASPAC, Dentsu One Manila offers business solutions and provides integrated marketing services that meet market needs especially during the post pandemic times.
Merlee Jayme, Global Co-President of dentsumcgarrybowen, who is also the Chairmom for the country’s Creative Line of Business will oversee the business and creative growth of the agency along with sister agency Dentsu Jayme Syfu.
Dentsu One Manila will be led by Chief Strategy Officer and acting Managing Director EzAbero. He is joined by Jerry Hizon as Chief Creative Officer. Rey Leuterio as Executive Planning and Business Development Director completes the management team. Leading the Japanese accounts are Masako Okamura as Executive Creative Director and Yuki Koga as Regional Account Director.
Dentsu One Manila also has a Content, Activations and Design division called DOJO. Offering different skill sets and capabilities, DOJO is headed by Joey Ong as Managing Director and Executive Creative Director and Rissa De Guzman as the General Manager.
Dentsu Jayme Syfu’s former Strategic Planning Director, Abero has more than 12 years of strategic planning experience across multinational and independent agencies. He played a key role in boosting the agency’s portfolio through significant pitch wins for the Coca-Cola Sparkling business, SariMonde and Nestle Cerelac’s local and regional campaigns.
In 2018, Abero moved to Ho Chi Minh City to lead Leo Burnett Vietnam’s planning team. His team successfully worked on the agency’s biggest accounts: Samsung Digital & Corporate and Friesland Campina.
Chief Creative Officer Hizon on the other hand, held the role of Dentsu Jayme Syfu ECD since 2016. His 25-year advertising career includes winning various international and local awards for clients like Belo Essentials, Uber Philippines, Jollibee, Unilever, PLDT SME Nation, BPI, Adidas and Gabriela, making him consistently among Adobo Magazine’s top-ranked ECDs of the Philippines.
His training in DDB Amsterdam as an Exchange Creative gave him a strong digital background.
Just last year, he was part of a Global Creative Workshop for the Tokyo 2020 Olympics, held in Los Angeles, California.
Jayme shares how they have worked through the years. “Ez, Jerry and I have been powerful partners. Their thinking and creative work bear strong business results. Their agile work process helps solve business problems efficiently and effectively. The change in leadership from the top aligns with the global vision of providing idea-led, data-driven and tech-enabled creativity in our line of business.”
“I am thrilled for this new chapter of the agency and I am confident that Ez and Jerry will drive the innovation agenda ingrained in the Dentsu brand, fueled by their proven strategic and creative strengths.”, says JC Catibog, CEO of Dentsu Aegis Network Philippines
Overseeing the agency’s transformation, Managing Partner Alex Syfu feels that “Ez and Jerry’s work disciplines coupled with their strategic and creative capabilities will help them drive Dentsu One Manila’s business growth and creativity”.
The COVID-19 pandemic and the resulting global lockdown has forced people to work from home (WFH) more often.
Already, experts are saying that telecommuting is here to stay. “Nobody in the future is going to take a job where they are measured by whether or not they show up at a certain time at the office and then check out again at 5:30 or 6 p.m.,” said Lars Wittig, country manager of IWG Philippines, Vietnam, and Cambodia, during the Asia Future-of-Work Forum 2020 held on June 25.
Investors, too, are basing their investment decisions “on how considerate companies are to their employees and clients during the coronavirus pandemic,” and favoring companies that allow employees to work from home.
But what does working from home look like? This photo essay is a glimpse into the increasingly necessary WFH culture. Subjects were requested to complete the statement: “The most important part of my home-office setup is _______, because _______.”
Risa Barcelona, Creative, MAD Market
The most important part of my home-office setup is my laptop because it has my whole life in it (it is literally my work’s bloodline, lol), and Eggs because he can easily de-stress me, no effort!
Frances Barsana, Business Development Manager, Kickstart Ventures
The most important part of my home-office setup is the designated space because it allows me to focus my energy during working hours and differentiate when I am needed to attend to home matters.
Pia Bernal, Community Manager, Kickstart Ventures
The most important part of my home-office setup is my second and larger screen because it helps you to multitask and work faster: the ability to open multiple tabs! You especially feel the benefit of a dual monitor setup when composing an email and you need to view other emails in your inbox as reference.
Christian San Jose, Founder and CEO, 8020
The most important part of my home-office setup is my chair (and its footrest), because that’s where I spend most of my time. The chair has to be right in the middle of comfort and sturdiness: It can’t be too comfortable as I don’t want to fall asleep while working. 😅
Sally Ponce-Enrile, Chairperson, JoJoCare
The most important part of my home setup is its location. It is up in my attic adjacent to my indoor garden/art studio. I get both the privacy I need as well as a relaxing ambience so I can focus on my work without anyone distracting me. I call it my “happy place.”
Dorelene Dimaunahan, founder of DMD3D Enterprises and CAD Concepts and faculty member of DLSU, ADMU, UA&P, and CCA
The most important parts of my home-office setup are my piano nook and my green screen room. My piano nook is where my creativity works best. In the middle of a long day at work, I find time to play a piece or two, just to break the ice. As for the green screen room, this is where I usually stay when I need more concentration or where I do my hosting and writing projects.
Victor Jeffery, Editor of Enrich magazine and CEO of Skittles-Brooke Media
The most important part of my home-office setup is creating the right environment to work in — that gives me the freedom of working in a relaxed atmosphere, and at the same time, allows me to adhere to my professional office style way of operating, because otherwise, I know that my normally strong focus could become too easily distracted.
Melissa Profeta, Brand Strategist, Digital Dynasty
The most important part of my home-office setup is I being able to easily get whatever I need right away. If I need a hug for a quick break, I can easily walk up to my baby’s crib before going back to work. If I need major references for work, I can just pick out my go-to book from my mini-library.
Emily Brown, Executive, Telum Media
The most important part of my home-office setup is my charger station, as I’m always on the phone and my laptop. I’ve got to be contactable at all times. Also, snacks to distract my cat whenever she bites my screen and charger!
When Eduardo “Danding” Murphy Cojuangco, Jr. passed away this June a few days after his 85th birthday, he left an indelible mark in the history of the Philippines. As one of the country’s most renowned businessmen and politicians, Mr. Cojuangco has lived a life of accomplishments.
He was most known for his hand at building the largest food and beverage corporation in the Philippines and Southeast Asia, San Miguel Corporation, as its chairman and chief executive officer (CEO). In that aspect, he has created not only the most recognizable brand name in Philippine food and beer, but also diversified into interests like energy and infrastructure. As a result, San Miguel Corp. has become the country’s largest company by revenue.
Mr. Cojuangco also served as a luminary of Philippine politics, having had a role as an ambassador for the Philippines and governor and congressman of his home province of Tarlac.
His long list of accomplishments also includes being the founder and first president of Cocolife, currently the biggest Filipino-owned stock life insurance in the country.
“It is with deep sadness that we learned of Ambassador Eduardo “Danding” M. Cojuangco, Jr.’s passing. His immeasurable contributions in politics, business, sports, and our nation will forever be valued,” Cocolife Chairman Justice Bienvenido L. Reyes, on hearing of his passing, said.
“The Cocolife Board of Directors and its employees mourn the loss of a brilliant and determined man, an incredible visionary and philanthropist, a devoted father and leader whose visions and dedication touched the lives of many Filipinos. His memory and legacy will forever be an inspiration. He will always be remembered with the highest esteem and gratefulness of all his remarkable deeds. With our profoundest sympathy and respect.”
Being an agriculturist, as a proud native of the landlocked Tarlac, Mr. Cojuangco was a big advocate of expanding the coconut industry, seeing its potential for export into the world market.
“Mr. Cojuangco, being an agriculturist himself, saw the need to develop and integrate the coconut industry to have a greater presence in the world market and thereby bring about better export earnings for the country and eventual improvement in the lives of the people involved in the industry through social benefits,” Cocolife Director Carolina Diangco said.
Ms. Diangco further noted that as a CEO, leader, and mentor, Mr. Cojuangco was fair and generous to his fellows. One of the legacies he helped create at Cocolife was a culture of continuous improvement, as employees were given the opportunity to prove themselves and fulfill their potential alongside good benefits.
“He treated everyone as fairly as he could and was not selfish to train people so they could achieve their full potentials. He regarded a friend as member of the family,” Ms. Diangco recalled.
She continued, “Mr. Cojuangco was a good businessman and loyal. As big as his name in business is his sincere and compassionate heart. One story I distinctly remember is when he came to one of his offices one day and as he entered the elevator, he noticed how young the operator was. In that short ride, he told him that he was too young to be working. The young boy became one of his scholars the very next day.”
‘From a business perspective, my first impressions of the Ambassador, generated second-hand from the world of politics, were confirmed. Here was a man who could lead but who did so with a heart. The rule, as I remember it, was clear and direct: we are partners: together, we generate the profits that would make everybody, particularly, our clients and employees, happy,” discerns Cocolife Director Ret. Justice Arturo Brion.
Acting as the first president, Mr. Cojuangco was instrumental in turning Cocolife into one of the top industry players from a small, unknown insurance company. “We call him the man with the “Midas touch”, Ms. Diangco added.
Today, Cocolife boasts of over four decades of experience and expertise and a steadily expanding network of fully-computerized area and branch offices nationwide. It has carved a strong niche in Group Insurance and has become one of the leading Healthcare program providers nationwide. The company offers a full suite of insurance and investment products through its various business units and subsidiaries.
Cocolife President and CEO Atty. Jose Martin Loon left this as a message to Mr. Cojuangco’s legacy, “Mr. Cojuangco will be remembered for his immense contribution to Philippine business, sports, and politics. He will be remembered well by the generations to come. Cocolife will continue to honor the legacy of its first president and founder by serving the country and Cocolife with integrity, competence and compassion.”
Traditional jeepneys to be checked for ‘road worthiness’ before allowed back on the road
JEEPNEYS WILL first be checked for road worthiness before being granted a permit to resume services, according to Palace Spokesperson Harry L. Roque. In a briefing Thursday, he said the Land Transportation Franchising and Regulatory Board is looking at allowing traditional public utility jeepneys to return on the road soon “if there is really a shortage of transportation service.” Buses and modern electric jeepneys have been deployed since last week after the strict lockdown rules, which included a ban on all public transport were lifted. Meanwhile, Interior and Local Government Secretary Eduardo M. Año said it is too early to tell if quarantine restrictions in Metro Manila will be further eased by July 1. “It is too early to say or to conclude kasi kailangan aralin lahat ng mga data (because we need to study all the data),” he said. — Gillian M. Cortez
Police to deploy 150 special force commandos in Cebu City for quarantine enforcement
AT LEAST 150 Special Action Force (SAF) commandos, the elite unit of the police, will be deployed in Cebu City to help enforce strict quarantine rules to contain the spread of the coronavirus disease 2019 (COVID-19) in what is now considered the new epicenter of the outbreak. The city, as of June 24, had the highest number of COVID-19 cases in the country at 5,088, with 1,344 admitted in hospital and 1,342 in isolation facilities, based on Department of Health data. Lt. Gen. Guillermo T. Eleazar, the police deputy chief for operations, said the SAF troopers are tasked to help implement health safety protocols such as restricted movement of residents, wearing of face mask, and physical distancing. “Mobility assets of SAF will also be deployed in Cebu City that include multi-purpose armored vehicles similar to what we used in the implementation of ECQ (enhanced community quarantine in Metro Manila,” Mr. Eleazar said in a statement. He noted that the deployment of SAF commandos was effective in Metro Manila, especially in areas with a high number of COVID-19 cases and placed on total lockdown. “SAF commanders are known to be strict in enforcing the quarantine rules which subsequently compelled hardheaded resident to stay in their houses,” he said. Earlier this week, around 100 police officers from neighboring regions were temporarily assigned to Cebu City. — Emmanuel Tupas/PHILSTAR
THE PARAÑAQUE City Government has launched several online services under its business permits and licensing office (BPLO) to improve the ease of doing business as well as minimize physical interactions amid the coronavirus threat. “The primary purpose of this on-line government services is to reduce the waiting hours in any request or transaction as a precautionary health measure to limit face-to-face interactions,” Mayor Edwin L. Olivarez said in a statement.
The services include an online appointment system and application process for business-related transactions.
Valenzuela, Makati courts temporarily closed due to probable COVID-19 cases
COURTS in the cities of Valenzuela and Makati have been temporarily closed starting Thursday pending test results of employees who are suspected to have been infected with coronavirus. Court hearings and raffling of cases through videoconferencing, and all other online transactions will continue in both cities. In a memorandum, Valenzuela City Executive Judge Maria Nena J. Santos ordered the closure of the Bulwagang Pangkatarungan while judges and court personnel are required to quarantine for 14 days starting June 25. In-court proceedings and other transactions will resume immediately if the test result of the person who had contact with a coronavirus-positive patient comes out negative. “However, if the result will turn out to be positive, the court will continue to stay in self-quarantine to complete required fourteen day period or until July 9, 2020,” the memo read. In Makati, all judges and personnel in all trial courts will also undergo a 14-day quarantine, or until July 8, after a court employee tested positive for the disease through rapid test while another employee is also a probable patient. — Vann Marlo M. Villegas
The government projects the Philippine economy to shrink by 2-3.4% this year, as the coronavirus pandemic continues. — REUTERS
THE Bangko Sentral ng Pilipinas (BSP) unexpectedly cut benchmark rates on Thursday, its fourth easing move this year, to help boost the economy amid dimmer global prospects.
The Monetary Board, at its policy meeting, slashed the rates on the BSP’s overnight reverse repurchase, lending and deposit facilities by 50 basis points (bps) to new record lows of 2.25%, 2.75 and 1.75%, respectively, effective Friday, June 26.
This brought cumulative reductions for this year so far to 175 bps as the central bank looks to prop up the economy amid the coronavirus pandemic.
“The Monetary Board observed that domestic economic activity has slowed with the enforcement of necessary protocols to slow the spread of the virus in the country,” BSP Governor Benjamin E. Diokno said in an online briefing yesterday.
“At the same time, the outlook for global growth has deteriorated further as considerable uncertainty still surrounds the extent of the health crisis. The Monetary Board noted that even as economies begin to reopen, the global recovery would likely be protracted and uneven. Hence, there remains a critical need for continuing measures to bolster economic activity and support financial conditions, especially the effective implementation of interventions to protect human health, boost agricultural productivity and build infrastructure,” he said.
Mr. Diokno said the Monetary Board decided to cut rates amid a “benign inflation environment” to help soften the impact of these global risks on Philippine economic growth and boost market confidence.
“Even as domestic liquidity dynamics and market function continue to improve owing to prior liquidity-enhancing measures, the Monetary Board believes that keeping an accommodative stance will further ease the cost of borrowing and ensure ample credit and liquidity in the financial system as the economy transitions toward recovery in the coming months,” the central bank chief said.
Only three out of 13 economists in a BusinessWorld poll last week predicted a rate cut at yesterday’s meeting, saying a 25-bp cut could be on the table.
Earlier this month, Mr. Diokno had said they are “happy” where benchmark rates are but noted the central bank will use its “full powers” if it sees a need for further easing based on economic data.
PROACTIVE
BSP Deputy Governor Francisco G. Dakila, Jr. on Thursday said the inflation outlook for the year was raised to 2.3% from the 2.2%, while the 2021 forecast was likewise hiked to 2.6% from 2.5%. Both forecasts are closer to the lower end of the BSP’s 2–4% target for the year.
“The main factor that led to the revision of the forecast is the increase in global oil prices, but this was partly offset by the weaker economic growth both domestically and globally, as well as the continued stability of the peso,” Mr. Dakila said.
Inflation settled at 2.1% in May, slower than the 2.2% in April and the 3.2% a year earlier. This brought the year-to-date inflation average to 2.5%.
The official said the BSP’s move to cut rates is a proactive stance given recent developments.
“For example, we continue to see very challenging global conditions, with many multilateral institutions reducing their forecast for global economic growth,” Mr. Dakila said.
The International Monetary Fund (IMF) said in its World Economic Outlook Update published on Wednesday that it sees the global economy shrinking by 4.9% this year, worse than the three percent contraction it estimated in April as the fallout from the virus looks worse than initially anticipated.
The IMF said it now projects a 3.6% contraction in the Philippines’ gross domestic product this year. This is a sharp reversal from the IMF’s baseline 6.3% growth forecast given last year and the 0.6% growth outlook given in April.
“The pace of recovery will depend on the speed at which we recover our confidence, especially consumer confidence, and lowering interest rates will encourage consumers to spend and also businesses to at least start…production activities again,” Mr. Dakila said.
Asked if the BSP is looking at “unconventional” policy moves like those implemented by other emerging economies, Mr. Dakila said the central bank continues to have enough elbow room, as proven by the latest 50-bp rate cut.
“Before we can do unconventional monetary operations, we can still make use of the policy space,” he said. “Our reserve requirements still continue to be one of the highest in the region. So there may be room to accelerate RRR (reserve requirement ratio) adjustments should the need arise.”
He said the BSP’s policy adjustments thus far have already freed up $1.6-trillion in liquidity.
The Monetary Board has authorized Mr. Diokno to cut banks’ RRR by up to 400 bps this year.
The BSP cut universal and commercial banks’ RRR by 200 bps in April to 12%. Meanwhile, the reserve ratios of thrift and rural lenders stand at four percent and three percent, respectively.
MORE EASING?
Analysts were mixed on the central bank’s future policy moves. The Monetary Board still has four policy reviews scheduled this year, with the next one set for Aug. 20.
“After the flurry of rate cuts and infusion of liquidity, today’s move may be the last from the BSP in 2020 with Mr. Diokno likely in favor of approximating positive real policy rates,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.
On the other hand, Alex Holmes, an economist at Capital Economics, said inflation will not be a barrier to further easing in the near term.
“[W]ith the pandemic weighing heavily on the economy, we doubt this will be the bank’s last move,” Mr. Holmes said in a note sent to reporters.
For his part, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the BSP eased further as it sought to “get ahead of the curve,” noting the move was “preventive rather than reactive.” — Luz Wendy T. Noble
The government set a P205-billion borrowing plan for the month of July. — REUTERS
By Beatrice M. Laforga,Reporter
THE government is seeking to borrow P205 billion from the domestic market in July, a fifth higher than the previous two months, the Bureau of the Treasury (BTr) said on Thursday.
In an advisory posted on Thursday, the BTr said it will borrow P145 billion in Treasury bills (T-bills) and P60 billion in Treasury bonds (T-bonds) next month.
The July borrowing plan is 21% higher than the P170-billion program set for both June and May.
Auctions for these government securities will be held every week for T-bills, while T-bonds will be offered fortnightly.
The BTr will offer P20 billion worth of 91-, 182- and 364-day T-bills every Monday — June 29, July 6, July 13, July 20 and July 27.
It will auction off P15 billion worth of 35-day papers every other Tuesday on June 30, July 14 and July 28.
For the long-term tenors, the BTr will raise P30 billion via seven-year T-bonds on July 7 and another P30 billion via 10-year notes on July 21.
National Treasurer Rosalia V. de Leon said they opted to offer longer tenors next month to “provide supply in the market.”
“Also, [the BTr is] yearning for yields with current low rates,” Ms. De Leon told reporters on Thursday via Viber.
Kevin Palma, peso sovereign debt trader of Robinsons Bank Corp., said strong demand on government securities will continue to persist next month “mainly due to continued efforts of the central bank to boost liquidity and stoke economic activity.”
With the bigger borrowing program, Mr. Palma said the government is taking advantage of the current cheap borrowing costs after rates plunged by around 70 basis points (bps) compared from the pre-lockdown levels.
“So I think it is prudent for the national government to take advantage of the relatively low-yield backdrop to build up on the coffers,” he said.
The Treasury raised a total of P223.71 billion in June via the sale of government debt papers — P151.3 billion in T-bills during weekly auctions and P75 billion in T-bonds which were offered fortnightly.
The total exceeded the P170-billion program set for the month but was slightly lower than the P246.3 billion raised in May,.
“Right now, COVID-19 dictates everything. If active cases continue to accelerate, then this may damp hopes of a quick economic recovery thus there might be a need for more stimulus. But if the spread of the virus wanes, then we may see some risk-on,” Mr. Palma added.
The government operates on a budget deficit where it spends more than the revenue it generates to fund programs, especially infrastructure projects, and stimulate economic growth.
It borrows from local and foreign sources to fund the budget deficit now seen to hit 8.4% of gross domestic product as state revenues plunge amid a severe economic downturn and spending increases on efforts to contain the coronavirus pandemic.
A billion dollars in foreign capital fled the Philippines in May, as the coronavirus crisis spooked investors. — REUTERS
By Luz Wendy T. Noble,Reporter
FOREIGN CAPITAL worth $1 billion exited the Philippines in May, the biggest net outflow in more than six years as the ongoing coronavirus crisis prompted investors to seek safer havens.
Bangko Sentral ng Pilipinas (BSP) data released on Thursday showed foreign portfolio investments — or “hot money” due to the ease by which these funds enter and exit an economy — yielded a net outflow for the third straight month of $1.006 billion.
The May figure is a third higher than the $749.84 million net outflow seen a year ago, and nearly double the $660.38 million in April. It is also the largest since the $1.844 billion net outflow posted in January 2014.
This pulled the five-month tally to a $3.073 billion net outflow, significantly wider than the $685.27 million recorded during the same period in 2019.
The BSP forecasts to end the year with a $2.4 billion net inflow of foreign portfolio investments, a more pessimistic outlook from the $8.2 billion net inflow projection given in November 2019.
Investor sentiment was likely dented by the ongoing coronavirus disease 2019 (COVID-19) pandemic and its impact on the global economic and financial system, the BSP said.
During the first five months of the year, the BSP said key events included the US-Iran geopolitical tensions, continued trade negotiations between Washington and Beijing, and the discussions on the country’s water concessionaire contracts.
In May, inflows amounted to $486.26 million, much lower than the $1.237 billion in the prior year and also down from the $627.02 million seen in April.
Meanwhile, outflows reached $1.492 billion, lower than the $1.987 billion in May 2019 but higher than the $1.287 billion in the previous month.
“The United Kingdom, the United States, Singapore, Hong Kong and Luxembourg were the top five investor countries for the month, with combined share to total at 88.1%,” the BSP said.
The central bank said 88.3% of registered investments in May went into the stock market, particularly shares in property companies, holding firms, banks, retailers, and telecommunications firms. Meanwhile, the rest or 11.8% were channeled into investments in government securities.
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the lockdown and weaker growth prospects took its toll on investor sentiment in May.
“Portfolio outflows were recorded in May with the country under a hard lockdown and growth prospects dimming. Expectations for a recession by Q2 may have spooked investors with foreign investors generally net sellers for most of the month,” Mr. Mapa said in an e-mail.
The country’s gross domestic product (GDP) already fell by 0.2% in the first quarter of the year and a deeper decline in Q2 put the Philippines under a technical recession, or two successive quarters of economic contraction. Due to the economic fallout from the virus outbreak and the resulting lockdown, the government projects GDP to contract by 2-3.4% this year before growing by 8-9% by 2021.
Moving forward, investor sentiment may have gotten a slight boost as some restrictions have been lifted, according to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.
“The worst in economic data may have already been seen at the height of the lockdowns in April to May…unless there would be a risk of a second wave of new COVID-19 infections as economies reopen until a vaccine is developed,” he said in a text message.
“We could see bouts of inflows during times of optimism over a quick economic recovery but sentiment appears to be very fragile, affected in large part by fears of a COVID-19 lockdown part two and a US-China trade war,” Mr. Mapa added.
The Murang Kuryente law allotted P208 billion of the net proceeds of the government’s share from the Malampaya Natural Gas Project to subsidize the two portions of the universal charges, as well as the anticipated shortfall or deficit incurred from paying these obligations.
By Adam J. Ang
THE Energy Regulatory Commission (ERC) has dismissed several petitions of the state-led Power Sector Assets and Liabilities Management Corp. (PSALM) on the collection of some universal charges from 2007 to 2018, relieving customers of an additional P0.25 per kilowatt-hour (kWh) charge in their electricity bills.
In an order dated June 23, the regulator said it junked eight petitions for the true-up adjustments of the National Power Corp.’s (Napocor) stranded debts (SD) and stranded contract cost (SCC), both of which form part of universal charges paid for by electricity customers, as these were deemed “moot and academic” following the enactment of Republic Act No. 11371, or the Murang Kuryente Act.
“The ERC’s dismissal of the PSALM’s petitions embodies the intent of the Murang Kuryente Act which is to lower the cost of electricity being charged to end-users,” ERC Chairperson and Chief Executive Officer Agnes VST Devanadera said in a statement on Thursday.
“With the dismissal of the subject PSALM petitions, electricity consumers will no longer be charged with an additional P0.2536/kWh which is supposed to be added to their electricity bills had the Murang Kuryente Act not been passed into law,” the official added.
The Murang Kuryente law, which was signed by President Rodrigo R. Duterte on Aug. 8, 2019, allotted P208 billion of the net proceeds of the government’s share from the Malampaya Natural Gas Project to subsidize the two portions of the universal charges, as well as the anticipated shortfall or deficit incurred from paying these obligations.
Last month, PSALM President Irene B. Garcia told legislators the government subsidy has yet to take into effect as it was not included in this year’s General Appropriations Act. Once it is included in the 2021 national budget, PSALM will no longer apply with the ERC for universal charge collections.
The Murang Kuryente law indicates that no new universal charges for SCC and SD shall be collected from all electricity end-users. The provision is also in the implementing rules and regulations (IRR) which became effective on May 5.
Ms. Garcia said PSALM is still receiving the P0.0428/kWh SD charges from customers, as the period for the collection is still in effect based on the agency’s previously approved applications with the ERC.
Meanwhile, it halted the collection of the SCC charges after the IRR became effective.
Stranded contract costs are “the excess of the contracted cost of electricity under eligible IPP (independent power producer) contracts over the actual selling price of the contracted energy output of such contracts,” according to the IRR.
Stranded debts are unpaid financial obligations of Napocor which have not been liquidated by the proceeds from the sales and privatization of its assets.
Meanwhile, the regulator said it came up with the P0.25 cut after considering pending cases on the collection of universal charges for SCC and SD.
“Our 25 cents calculation was arrived at after considering what cases are still pending with us for resolution on the UC SCC and SD,” ERC Spokesperson Floresinda B. Digal said in a Viber message.
“Had the ERC been hasty in approving those eight PSALM petitions, consumers may have suffered another rate increase,” Ms. Devanadera claimed.
After the government would complete the payment for these costs, the law states that any remainder from the fund must be used to finance energy resource development and exploitation programs of the Energy Development Board.
