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Stocks rise as investors hope for eased lockdown

By Revin Mikhael D. Ochave, Reporter

PHILIPPINE shares ended in positive territory on Monday as investors were optimistic on the development of coronavirus disease 2019 (COVID-19) vaccines and the lifting of local quarantine measures at the end of the month.

The benchmark Philippine Stock Exchange index (PSEi) rose 8.83 points or 0.12% to close at 7,178.62 while the broader all-shares index improved 34.87 points or 0.82% to end at 4,254.26.

AAA Southeast Equities, Inc. Research Head Christopher John Mangun said the market ended with “minor gains” as investors pocketed profits before the market’s close.

“Investors remain optimistic that the economy is going to get a massive boost once quarantine restrictions are lifted at the end of November,” Mr. Mangun said in an e-mail.

“We saw a wave of selling right before the close as investors rushed to take profits from the extended rally. Bank stocks continue to lead the market’s rally with the financial index ending with a substantial 3.33% gain,” he added.

Timson Securities, Inc. trader Darren T. Pangan said the local market ended higher as investors reacted positively to news on the progress made on COVID-19 vaccine candidates despite rising cases in other areas of the country.

Companies developing COVID-19 vaccines include Pfizer, Moderna, AstraZeneca, and Sinovac, among others.

The Department of Health recently reported that areas outside of Metro Manila, such as Cavite, Davao City, Laguna, and Quezon Province recorded the highest number of new COVID-19 cases.

On Monday, majority of the sectoral indices ended in positive territory except for property, which fell 62.93 points or 1.73% to 3,556.78; and services, which dropped 0.4 points or 0.02% to 1,557.37.

Meanwhile, financials jumped 47.62 points or 3.33% to 1,477.57; mining and oil climbed 227.44 points or 2.77% to 8,416.86; industrials went up 44.56 points or 0.48% to 9,314.49; and holding firms edged up 19.17 points or 0.25% to close Monday’s session at 7,424.29.

Some 10.30 billion issues valued at P11.93 billion switched hands on Monday against 32.04 billion issues equivalent to P10.94 billion on Friday.

Advancers outpaced decliners, 147 against 77, while 45 names ended unchanged. Foreigners turned sellers, logging a net outflow of P351.89 million yesterday versus the net buying worth P211.34 million logged on Friday.

AAA’s Mr. Mangun said the main index is expected to decline further in the following days as profit-taking continues.

Meanwhile, Timson’s Mr. Pangan said the nearest support for the index is pegged at 7,000 while immediate resistance may be placed at 7,600.

Peso rises on BSP decision, vaccine hopes

THE PESO strengthened versus the dollar on Monday after the central bank’s decision to cut rates and on the continued progress in vaccine candidates against the coronavirus disease 2019 (COVID-19).

The local unit closed at P48.205 against the dollar on Monday, rising by 2.5 centavos from its P48.23 finish on Friday, data from the Bankers Association of the Philippines showed.

The peso opened Monday’s session at P48.23 per dollar, which was also its weakest showing for the day. Meanwhile, its intraday best was logged at P48.165 against the greenback.

Dollars traded declined to $425.4 million on Monday from $660.6 million on Friday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso rose after the Bangko Sentral ng Pilipinas (BSP) slashed key interest rates anew last week.

“The peso was stronger after the surprise BSP rate cut that further lowers borrowing costs and the resulting latest gains in the local stock market to the highest in almost nine months,” Mr. Ricafort said in a text message.

Meanwhile, a trader said lower interest rates will spur consumer spending to drive economic growth.

The BSP Monetary Board on Thursday trimmed the rates on the BSP’s overnight reverse repurchase, lending, and deposit facilities by 25 basis points (bp) to 2%, 2.5%, and 1.5%, respectively.

The latest easing move followed a “prudent pause” by the central bank since its June meeting. The central bank has already cumulatively lowered interest rates by 200 bps.

Mr. Ricafort added that demand for the peso strengthened as developments in possible COVID-19 vaccines improved investment sentiment.

“The peso was also stronger with additional developments on possible vaccines for COVID-19, resulting to improved market risk appetite,” he said.

For today, Mr. Ricafort sees the peso moving from P48.16 to P48.26 versus the dollar, while the trader expects it to range from P48.15 to 48.25. — KKTJ with Reuters

US government turns over $18M worth of missiles vs terrorists

By Charmaine A. Tadalan, Reporter

THE UNITED States government on Monday turned over almost a billion pesos worth of precision-guided missiles and munitions to the Philippine military to help it fight terrorists linked to Islamic State in the country’s south.

“This transfer underscores our strong and enduring commitment to our critical alliance,” White House National Security Adviser Robert C. O’Brien said during ceremonies streamed live on the Department of Foreign Affairs (DFA) Facebook page.

In a separate teleconference, Mr. O’Brien reaffirmed the US stance to maintain order in the Indo-Pacific region.

“One issue that was common to both countries was a commitment to a free and open Indo-Pacific, a commitment to sovereignty of the countries here in Indo-Pacific,” he said at a teleconference from Manila.

Mr. O’Brien said there is a consensus among US republicans and democrats on the US stand against China’s aggression in the region.

“We have long-term commitments here, whether we’re led by a democrat or republican president,” he added.

Mr. O’Brien said there’s a bipartisan consensus on China’s unfair trade practices and its attempt to coerce its neighbors and other areas including Taiwan.

Earlier in the day, he said the missiles and munitions would help the Armed Forces of the Philippines protect Philippine lives in Mindanao and end suffering imposed by the IS-East Asia.

The US government donated precision-guided missiles and munitions, including 100 TOW-2A missiles, 12 ITAS, and 24 MK-82s worth $18 million or about P868 million.

Mr. O’Brien met with his Philippine counterpart Hermogenes C. Esperon, Jr. and Foreign Affairs Secretary Teodoro L. Locsin, Jr.

Mr. O’Brien also welcomed Manila’s decision to defer a plan to end a visiting forces agreement (VFA) — a military pact on the deployment of troops for war games — with the US.

“We look forward to the VFA continuing to facilitate our closer cooperation in combatting terrorism,” he said.

President Rodrigo R. Duterte on Nov. 11 deferred the termination of the defense pact for six more months.

Mr. Duterte in February said he was ending the two-decade visiting forces agreement (VFA) after the US Embassy canceled the visa of Senator Ronald M. dela Rosa, his former police chief who led his deadly war on drugs.

Mr. Duterte pushed for the cancellation of the VFA initially because of the visa issue but later said he had always wanted the Philippines to lose its dependence on the US.

He suspended the termination for six months in June, citing heightened tensions in the region and saying it was a distraction to countries’ anti-coronavirus efforts.

The agreement provides for the legal framework on the temporary presence of US troops in the Philippines.

‘JUST WRONG’
The VFA, which allows the US to shield its servicemen from prosecution in the Philippines, has been a thorny issue for Filipino patriots who see it as a lopsided deal. The US has used the VFA at least twice to keep accused soldiers under its jurisdiction.

He said the US in July aligned its official position on the 2016 United Nations arbitral ruling on the South China Sea. The tribunal had favored the Philippines and rejected China’s historical nine-dash line claims to more than 80% of the waterway.

The resources in the disputed waters “belong to the Philippine people,” Mr. O’Brien said.  “They don’t belong to some other country, that just because they may be big, and they may be bigger than the Philippines,” he added, alluding to China.

“That’s just wrong, and that’s why Secretary Pompeo said in February: ‘Any armed attack on the Philippine Armed Forces, aircraft or public vessels in the South China Sea will trigger our mutual defense obligations,’” Mr. O’Brien said.

US Secretary of State Mike Pompeo in February 2019 said any attacks on Philippine aircraft or ships in the South China Sea would trigger a response from the US under the Mutual Defense Treaty.

His comments sought to reassure the Philippines amid China’s island-building activities in the South China Sea.

Three American aircraft carriers were patrolling the Indo-Pacific waters for the first time in nearly three years, a massive show of naval force in a region roiled by spiking tensions between the US and China, the Associated Press reported on June 12.

The patrol of the three warships, accompanied by Navy cruisers, destroyers, fighter jets and other aircraft came as the US escalated criticism of China’s response to the coronavirus pandemic, its moves to impose greater control over Hong Kong and its island-building activities in the waterway.

During Monday’s teleconference, Mr. O’Brien criticized China’s role in the spread of the coronavirus, which has sickened 59 million and killed 1.4 million people worldwide. The virus strain was first reported in China’s Wuhan City in Hubei province.

“It’s just a series of unfair and difficult conduct on behalf of the Chinese, so it’s the bipartisan consensus in America that we have to stand up to China,” he said.

The US has finished presidential elections where Joseph R. Biden, Jr. defeated incumbent Donald Trump. He will be inaugurated as the 46th US president in January.

Coronavirus cases top 420,000; DoH warns vs crowding

THE DEPARTMENT of Health (DoH) reported 1,799 coronavirus infections on Monday, bringing the total to 420,614.

The death toll rose by 50 to 8,173, while recoveries increased by 135 to 386,604, it said in a bulletin.

There were 25,837 active cases, 83.5% of which were mild, 7.8% did not show symptoms, 5.5% were critical, 2.9% were severe and 0.26% were moderate.

Cavite reported the highest number of new cases at 154, Rizal at 114, Quezon City at 99, Bulacan at 76 and Laguna at 67.

DoH said three duplicates had been removed from the tally, while 16 cases previously tagged as recovered were reclassified as deaths. Seven laboratories failed to submit their data on Nov. 22, it added.

Meanwhile, the agency warned the public against going to crowded places during the holiday season to avoid infection.

Health Undersecretary Maria Rosario S. Vergeire said wearing a mask or face shield would not protect a person from the virus if he is in a crowded area. “The risk is there and it’s very high.”

She cited photos circulating online showing people flocking to Divisoria, a commercial center in Manila.

Ms. Vergeire also said local regulators had not approved a vaccine for the coronavirus, after reports that Senator Panfilo M. Lacson and Leyte Rep. Martin G. Romualdez had been vaccinated.

“There are no approved vaccines that we can use in our country against COVID-19 (coronavirus disease 2019),” she told an online news briefing.

She also warned vaccine manufacturers, distributors and suppliers against selling drugs or vaccines that are not registered with the local Food and Drug Administration. — Vann Marlo M. Villegas

Lawmaker seeks to double budget for power cooperatives

A SENATOR asked his fellow lawmakers on Monday to double the 2021 budget for the restoration of power facilities damaged by recent typhoons.

Senator Sherwin T. Gatchalian, who heads the energy committee, said the additional subsidy would help electric cooperatives restore their power lines and infrastructure.

In a statement, The lawmaker proposed another P550 million on top of the P200-million fund for electric cooperatives nationwide. The budget is managed by the National Electrification Administration (NEA).

Typhoon Vamco, locally named Ulyssess, killed at least 73 people and damaged P151.4 billion worth of power facilities, according to estimates by the agency.

Meanwhile, the Senate passed a resolution asking the Social Welfare department to fast-track the release of funds for those affected by the coronavirus pandemic and recent typhoons.

The Senate found that the agency had not released P75 billion from its 2020 budget and P6.7 billion under twin laws that provided subsidies to the poor amid the pandemic.

At Monday’s session, Senator Juan Miguel F. Zubiri said the funds would greatly ease the suffering of farmers who lost their crops to the typhoons.

The past three typhoons that hit Luzon island caused P10 billion worth of crop and fishery damage, according to the Agriculture department.

Also on Monday, Speaker Lord Allan Q. Velasco said the House probe of flooding in several parts of Luzon would seek “long-term solutions” and not just find fault.

“We hope to hear everyone’s side and get a clearer picture of the events that transpired when Typhoon Ulysses struck and caused widespread flooding in Luzon,” he said in a statement. “The aim here is to come up with solutions and legislation, if needed, to prevent the unnecessary loss of lives and properties during typhoons.”

The House agriculture committee has invited officials from the National Irrigation Administration and the local governments of Cagayan and Isabela for Tuesday’s hearing. — Angelica Y. Yang, Kyle Aristophere T. Atienza and Charmaine A. Tadalan

Nationwide round-up (11/23/20)

Gov’t may reconsider cap on health workers leaving for abroad

THE PHILIPPINE government may still expand the cap on the number of health workers allowed to leave for overseas jobs, currently set at 5,000 annually, according to a Labor official. “We are just making sure that our capacity in health institutions won’t be affected here while we still need to fight the pandemic,” Philippines Overseas Employment Administration (POEA) Administrator Bernard P. Olalia said in a briefing on Monday. The POEA will soon release the guidelines on health workers qualified for deployment following President Rodrigo R. Duterte’s approval of the recommendation to lift the ban imposed in mid-March. Palace Spokesperson Harry L. Roque, in a separate briefing, said the 5,000 limit will take effect January 1. Mr. Roque said the administration will continue to assess how it can balance the country’s need for healthcare workers with allowing medical personnel to seek opportunities abroad. — Gillian M. Cortez

Fight for justice not over for families of Maguindanao massacre victims

THE DEPARTMENT of Justice recommended the filing of charges against only eight out of the 48 suspects in the 2009 Maguindanao massacre case, the lawyer of the families’ victims said. Lawyer Nena A. Santos said they received the resolution dated August 28, 2019 only last month, where only eight were indicted for multiple murder over the killing of more than 50 people including 32 journalists. “We’re now on the 11th year and we are still here because there are still matters that has to be considered and there are matters that needs to be acted upon because the fight is not yet over,” Ms. Santos said in an online briefing. The complaint against the 40 suspects were dismissed for lack of probable cause as they may have attended some of the supposed meetings but they did not take part in the actual killings, according to prosecutors. Ms. Santos said they have filed a motion for reconsideration over the dismissal of the complaint against the 40. The prosecutors said six of the indicted were among those who attended the meetings and participated in the shooting of the victims. It also said that evidence against seven of them “remains uncontroverted” for failing to participate in the preliminary investigations. A police officer who led his men in blocking the convoy of the victims is among those indicted. The Maguindanao massacre, which took place on Nov. 23, 2009, is considered the worst election-related violence and journalist killing in the country. A Quezon City court in December last year convicted  former Maguindanao Mayor Datu Andal “Unsay” Ampatuan, Jr. and his brother Zaldy, who is a former governor of the Autonomous Region in Muslim Mindanao, and 26 other principal accused for 57 counts of murder. More than a dozen were convicted as accessories to the crime while 50 others were acquitted. They were ordered to pay P129.57 million in damages to the heirs of the victims. All of the accused were acquitted of one murder count of reasonable, over the death of photojournalist Reynaldo Momay whose body was not found at the crime scene. Only his denture and jacket were found and his name and signature were on the attendance sheet in the convoy. Ms. Santos said appeals for the first wave of convictions are now with the court of appeals. The Palace, meanwhile, renewed its pledge to help pursue justice for the victims. In a briefing on Monday, Palace Spokesperson Harry L. Roque said law enforcement agencies would not stop efforts to catch suspects who are still at large. — Vann Marlo M. Villegas and Gillian M. Cortez 

Bill addressing ‘spaghetti wires’ passes committee level

A CONSOLIDATED bill mandating the proper installation and maintenance of overhead wires for power, telecommunication, and cable passed committee level at the House of Representatives on Monday. The committees on information and communications technology and on energy approved a still unnumbered bill which consolidated House bill numbers 515, 646, and 4222. The measure seeks to prevent the installation of cable wires and electrical posts in a particular area without the proper inspection and approval of a city or municipal engineer. “The specific location shall be inspected by the engineering officials prior to, during and after the installation,” the bill stated. Entangled lines, referred to as spaghetti wires, for various utilities are common across the country, especially in urban areas. The measure proposes to create an inter-agency committee composed of representatives from related government agencies and the local engineer “to set and implement the standard height, volume and capacity of electric and cable wires, and posts in every location and distance.” The bill also mandates public utility companies to submit a plan and design for the installation of cable wires and electrical posts in a particular location, which will be subject to the city or municipal engineer’s approval.  Companies will also be required to conduct quarterly monitoring and maintenance of their wires and facilities. — Kyle Aristophere T. Atienza

House committee OKs bill for stricter issuance of PWD IDs

THE HOUSE of Representatives committee on persons with disabilities (PWDs) on Monday approved in principle a bill mandating the stricter issuance of identification cards for disabled persons. House bill No. 7277 seeks to enforce a rigorous enforcement and stricter requirements on the issuance of PWD IDs by amending Republic Act 7277 or the Magna Carta for Disabled Persons. “Among the recommendations of different agencies on the proposed measure, including the issuance of one type of PWD Identification Card instead of categorizing it into apparent and non-apparent disability as recommended by the Department of Health,” Negros Occidental 5th District Rep. Ma. Lourdes T. Arroyo, the committee’s chairperson said in a statement on Monday. Ms. Arroyo said there is an urgent need to upgrade and standardize the system in the issuance of PWD IDs in light of reports of abuse. “The lack of a standard and efficient system in acquiring PWD IDs enables those individuals who do not have a disability to take advantage of the benefits of the laws that are supposed to be granted only to legitimate persons with disabilities,” she said. — Kyle Aristophere T. Atienza

Regional Updates (11/23/20)

Agricultural damage from Typhoon Ulysses reaches P4.18 billion

CROP damage from rain and flooding during the onslaught of Typhoon Ulysses (international name: Vamco) is now at P4.18 billion, higher than the previous estimate of P4.03 billion, the Department of Agriculture (DA) said. In a bulletin on Monday afternoon, the DA said Ulysses has affected 106,619 farmers and 106,489 hectares of land. Around 174,383 metric tons (MT) of produce were lost. Regions that incurred losses include CAR (Cordillera Administrative Region), Ilocos, Cagayan Valley, Central Luzon, CALABARZON (Cavite, Laguna, Batangas, Rizal, and Quezon), Bicol, and Zamboanga Peninsula. “The increase in values is attributed to the updated reports from CAR, Ilocos Region, Cagayan Valley and Central Luzon,” the DA said. Rice accounted for 50% of the total agricultural damage, followed by high-value crops at 22%, fisheries at 17%, and other subsectors at 11%. Damage to rice amounted to P2.07 billion. Some 69,534 hectares of farmland were affected and 130,412 MT of production volume were lost. Losses to high-value crops reached P932.93 million with 12,870 hectares of land affected and 35,731 MT of volume loss. Corn damage was pegged at P402.18 million with 24,096 hectares of farmland damaged and 8,240 MT of produce lost. Other subsectors that reported damage include fisheries at P711.95 million, livestock at P52.16 million, and irrigation at P11.86 million. — Revin Mikhael D. Ochave 

Labor dep’t orders work stoppage on Skyway project for accident probe

CONSTRUCTION of the Skyway Extension project has been suspended while the Labor department conducts a probe on Saturday’s accident that killed one motorist and hurt four others. The work stoppage order was issued by the Department of Labor and Employment (DoLE) to EEI Corp. and its subcontractors. In a briefing on Monday, DoLE officials said the investigation will determine violations on occupational safety. In a separate briefing, Occupational Safety and Health Center Executive Director Noel C. Binag said the proponent and contractors involved in the Skyway Extension project “failed to identify hazards.” He said, “I believe they were not able to assess the situation on the ground that is why they were not able to anticipate the hazard.” The operator of the crane that toppled might also face charges for reckless imprudence, but DoLE said the project owner, contractors, and subcontractors will be held liable for other charges relating to occupational safety violations. The stoppage order covers the entire stretch of the project. Ramon S. Ang, president and chief operating officer of proponent San Miguel Corp., said on Sunday that the company and EEI Corp. will be implementing stricter safety measures as he assured support to the family of the fatality and those injured. — Gillian M. Cortez

Go on a ‘creative crawl’ in Baguio

TOURISM Secretary Bernadette Romulo-Puyat with National Artist for Film Kidlat Tahimik at the newly-refurbished Baguio Convention Center. — DENISON G. MANUEL VIA DOT

TOUR operators in Baguio are offering “creative crawl” packages that will take visitors to the mountain city’s arts and culture venues, including the BenCab Museum of National Artist for Visual Arts Benedicto Cabrera and Ili-Likha Artists Village of National Artist for Film Kidlat Tahimik. “Baguio is more than just its natural wonders, and we want more Filipinos to rediscover what UNESCO designated as a Creative City for Crafts and Folk Arts,” said Tourism Secretary Bernadette Romulo-Puyat, who visited the city last week for the ongoing Ibagiw 2020, a month-long festival highlighting the city’s culture and history. “Initiatives like Ibagiw will certainly help revive tourism in the region and jumpstart the local economy… Experiencing the Ibagiw 2020 festival ensures the bright future of Baguio’s creative economy while keeping its traditions and art forms alive,” she said in a statement on Monday. For the creative crawl, stops also include the following: Mirador Hill, a nine-hectare Jesuit property that provides views of Baguio and Benguet’s landscape; the Mandeko Kito Artisanal Market, an arts and crafts fair organized by the University of the Philippines Baguio featuring local talent in the Cordillera Region; the Museo Kordilyera; Pilak Silver Craft; and Tam-awan Village, among others. “The pandemic has brought on challenges for everyone, especially those working in the tourism industry. Creative crawls bring guests to places they may not have visited before, thus supporting more locals. This means no one gets left behind as we rebuild tourism,” Ms. Puyat said. For more information on the Ibagiw 2020, which will be on until Nov. 30, visit https://ibagiw.baguioartsandcrafts.org/.

For a list of accredited tour operators, Baguio City’s requirements for tourists, and other information, visit:  app.philippines.travel, https://hdf.baguio.gov.ph/, and http://visita.baguio.gov.ph/.

DPWH, PPP Center start gauging investor interest in road projects

THE Department of Public Works and Highways (DPWH) and the Public-Private Partnership Center (PPP Center) said Monday that they are gauging investor interest in three proposed big-ticket expressway projects — the Pacific Eastern Seaboard Expressway, the Metro Cebu Expressway, and the Davao-Digos Expressway.

In a statement, the DPWH said it partnered with the PPP Center to sound out the market virtually with contractors, financing institutions, and potential investors.

The department said the exercise will help the government “ascertain the level of interest of the private sector” in undertaking the three projects.

“We want to gather initial feedback from potential project sponsors, contractors/operators and financiers especially during this pandemic situation who are willing to help the government in making these high-impact projects a reality. These roads are vital in facilitating economic improvement not just in Luzon, but also in Visayas, and Mindanao,” Public Works Secretary Mark A. Villar said in the statement.

The Pacific Eastern Seaboard Expressway project, according to the PPP Center website, involves the construction of a 226.5-kilometer expressway, which will start from Atimonan, Quezon, “traversing and linking the Mauban Section and the Real Section of the Mauban-Tignoan Road, Famy-Real-Infanta Dinahican Port Road, Infanta, Quezon,” terminating in Dingalan, Aurora.

The 73.75-kilometer Metro Cebu Expressway project, according to the DPWH website, “will serve as another north-south backbone highway providing seamless traffic flow from Naga City (Cebu) up to Danao City,” traversing Cebu island’s central mountains.

The 60-kilometer Davao-Digos Expressway, the DPWH said, “will start at the Bukidnon-Davao National Highway in Davao City and will terminate at Digos-Sultan Kudarat Road.”

“The project will traverse the towns of Toril and Santa Cruz and will serve as an alternative route for the Davao-Cotabato National Highway,” it added. — Arjay L. Balinbin

HMO profits surge in first half to P4.53 billion

HEALTH MAINTENANCE organizations (HMOs) posted net profit growth of 203% in the first half to P4.53 billion due to cost-management measures as well as increased demand during the pandemic, the Insurance Commission (IC) said Monday.

“This may be explained by the 6.4% decrease in the industry’s total expenses against its increasing revenues,” Insurance Commissioner Dennis B. Funa said.

The industry total was compiled from the financial statements submitted by 22 HMOs, which seek to manage healthcare costs by referring clients to selected providers at agreed rates.

The industry reported revenue of P25.64 billion, up 6.7%.

The IC said more Filipinos signed up with HMOs as the coronavirus disease 2019 (COVID-19) outbreak amplified the need for health protection.

The insurance regulator said 10 companies reported profit declines of between 8.44% and 249.33%.

According to the IC, 84% of claims for medical benefits worth P231.36 million were paid out by HMOs during the public health emergency. It was citing a survey conducted between April 16 and May 8, which includes the weeks when the strictest lockdown rules were in force.

“The trends that we have seen from the unaudited reports submitted by the HMOs reveal that Filipinos are increasingly recognizing the value of availing of HMO products as part of health protection,” Mr. Funa said.

The industry’s assets grew 51.7% to P52.09 billion. Liabilities increased 50.2% to P40.85 billion.

“This is due to unearned membership fees, which constitute 60.74% of such liabilities. It can be presumed that this is due to the difficulties encountered by the HMO industry in collecting membership fees because of certain restrictions imposed by the national government in response to the COVID-19 pandemic,” Mr. Funa said. — Kathryn Kristina T. Jose

DTI trading arm’s funds accounted for as Senate probe looms

TRADE SECRETARY Ramon M. Lopez said his department’s trading arm has accounted for all funds allocated to it, ahead of a possible Senate investigation into its finances.

Senate Minority Leader Franklin M. Drilon said that he wants to investigate Philippine International Trading Corp. (PITC), where he said around P18 billion in taxpayer money is “parked.”

Mr. Lopez said in a briefing Monday that the agency, which is attached to the Department of Trade and Industry (DTI), observes strict procurement procedures and places its funding in escrow until the terms of its transactions are finalized. Budgets from failed auctions return to the Treasury, he added.

“In effect, wala talagang natitira na pera sa PITC dahil po all are accounted for,” he said. “Wala pong kontrobersya dito dahil tagabili lang ang PITC at nagma-manage ng bidding process (No money remains with the PITC and everything is accounted for. There is no controversy because the PITC is just the purchasing agent and manages the bidding process).”

He said some processes are delayed to the following year due to delays in evaluating technical specification evaluations, which he said happens at other agencies as well.

PITC has been assigned to import coronavirus disease 2019 (COVID-19) vaccines. The agency charges a commission of between 1% and 5% from procuring government agencies.

During budget hearings of the Armed Forces of the Philippines, senators found that the PITC owed the military at least P9.6 billion.

Mr. Drilon also referred to Commission on Audit reports saying that PITC owed P9.176 billion in balances of fund transfers from government agencies from 2009-2019 that have remained unutilized.

Mr. Lopez said that PITC should explain its funding status. As of 2019, unused funds were returned to the Treasury, while ongoing procurement will continue to be processed, he said.

Money that is not returned to the Treasury translates to PITC income, he said.

“Kalahati nito dini-dividend din sa government, at kalahati ay pangtustos sa operations ng PITC dahil ang PITC, walang natatanggap na budget from government. Self-sustaining siya. (Half of the income is returned to the government as dividends, and the rest sustain PITC operations. PITC receives no budget allocations as it is self-sustaining).” — Jenina P. Ibañez

ERC third-quarter approvals pick up as lockdown eases

THE Energy Regulatory Commission (ERC) said Monday that it issued 113 certificates of compliance (CoCs) to power projects rated at 4,213 megawatts (MW) in the three months to September.

The certificates were issued to generation companies (GenCos), qualified end-users and entities with self-generation facilities and represent a pickup in the pace of approvals from the second quarter, when the agency, hampered by quarantine restrictions, approved only 21 CoCs.

“More than ever, we need to ensure that there will be sufficient power to keep the hospitals running round the clock, and that the students and workers who are studying and working online will get continuous electricity,” ERC Chairperson and CEO Agnes VST Devanadera said in a statement.

In the year to date, the ERC approved 37,817 CoCs, indicating that the third-quarter pickup in approvals remains well behind the pace recorded before the pandemic.

The ERC added in its Third-Quarter Monitoring report that no GenCos breached the market share limitations within each grid as well as the national grid.

“Nonetheless, the ERC also found some GenCos that failed to file or renew their respective CoCs within the prescribed period and were issued a Show Cause Order,” it wrote.

Under the Electric Power Industry Reform Act, a new generation company is only allowed to operate after securing a CoC from the ERC, as well as health, safety and environmental clearances from various government agencies. — Angelica Y. Yang

Return to pre-pandemic debt could pose growth risk

DETERIORATING public finances across Asia will be difficult to reverse, with any attempts to return to pre-pandemic debt ratios posing a risk to growth, ANZ Research said.

“Governments can afford to maintain expansionary fiscal policies and some are doing so,” ANZ Research analysts said in a note.

“We further estimate that restoring public debt ratios to pre-pandemic levels is an exceptionally tall order. It will require governments to run primary surpluses on a scale that will severely hurt growth,” according to Sanjay Mathur, ANZ research chief economist for Southeast Asia and India, and economist Krystal Tan.

The Philippines’ fiscal position will likely continue to weaken in 2021, though its larger budget deficits and debt levels are unlikely to harm macroeconomic stability, they said.

“Based on this fiscal stance, the public debt ratios (in Asia are) likely to continue to rise in 2021. In Malaysia, the debt ratio will remain above 60% of GDP (gross domestic product) and in the Philippines, it will exceed its 50% threshold,” Mr. Mathur and Ms. Tan said.

The government expects the Philippine debt-to-GDP ratio to hit 53.9% and 58.3% this year and in 2021. These are still below the threshold of 70% deemed safe by the International Monetary Fund but are much higher than the record low of 39.6% in 2019.

The budget deficit is expected to grow to P1.815 trillion this year, equivalent to 9.6% of GDP, before receding to P1.749 trillion or 8.5% of GDP next year. The budget deficit in 2019 was P660.2 billion or 3.4% of GDP. — Luz Wendy T. Noble

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