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PEZA approves new projects worth P14.6 billion

By Jenina P. Ibañez, Reporter

The Philippine Economic Zone Authority (PEZA) approved P14.6 billion worth of new investment projects on its Nov. 4 board meeting.

The 34 projects are expected to create 3,893 jobs, PEZA said in a press release on Friday.

Combined with the 33 projects approved by the board in October, projects for the past two months include 21 export enterprises. The board also approved projects of 15 information technology (IT) firms, seven facilities, four logistics companies, and two utilities firms.

PEZA approved 11 projects from economic zones and IT center developers.

PEZA investments fell by more than a quarter to P72.6 billion in the 10 months through October, with the number of projects dropping by 45% to 248. Employment fell by 2.4% to 1.53 million jobs in the first nine months.

The bulk of the projects are in Luzon, with 54 set to be located in the region. Meanwhile, 12 will be in Visayas and one will be in Mindanao.

PEZA Director General Charito B. Plaza said the competition from Southeast Asian neighbors in attracting investors transferring from China remains “tough,” noting the country’s underdeveloped infrastructure and logistics.

But she also said that PEZA attracts investments though its one-stop shop.

The United States Department of State 2020 investment climate assessment said that PEZA is known for its regulatory transparency and no-red tape policy.

The report however said that foreign direct investments (FDI) in the country still remains relatively low compared with Association of Southeast Asian Nations (ASEAN) member-countries’ figures, after ranking fifth out of the ten economies for total FDI in 2019.

“We must do our best to fully industrialize the country and attain our goal of making the Philippines an investment haven in Asia,” Ms. Plaza said.

As of Oct. 10, 87% or 2,629 companies in PEZA economic zones have been operating as the lockdown continues, Ms. Plaza said in an online event last week.

Suspicious transactions continue to rise

Suspicious transaction reports (STRs) edged up in the first eight months of the year fueled by the rise of phishing schemes and increased payments related to child pornography, the central bank chief said.

Bangko Sentral ng Pilipinas (BSP) Governor and Anti-Money Laundering Council (AMLC) Chairman Benjamin E. Diokno said an AMLC study found the number of STRs climbed 57% year on year in the first eight months of 2020.

“Of the total number, only 29%, however, occurred during the lockdown period,” he said in an online briefing on Friday.

STRS are filed by financial institutions whenever there are transactions suspected of money laundering or fraud.

Nearly half (49%) of the STR filings during the period were related to skimming and phishing, with an estimated value of P2.7 billion.

Meanwhile, 13% of STRs were transactions related to online sexual exploitation of children, with an estimated value of P84.5 million.

Transactions involving money mules or pass-through account with an estimated value of P406.9 million made up 9% of the STRs during the period.

“AMLC underscores the need for covered persons to remain cautious as money launderers and other criminals may be abusing digital platforms, which have been largely adopted due to the pandemic,” Mr. Diokno said

Based on the report, STRs linked to electronic banking transactions surged 1,680% for inward fund transfers and by 5,158% for outward fund transfers.

Cash-in and cash-out transactions done through electronic cash cards that were filed as STRs also significantly jumped 580% and 197%, respectively.

STRs submitted by electronic money issuers as well as pawnshops and money service businesses also climbed 688% and 51%, respectively.

“Proper know-your-customer/customer due diligence procedures must always be conducted. Clients’ risk ratings must be periodically assessed in view of irregular and questionable financial transactions,” Mr. Diokno said.

The AMLC study found that there has been a rising trend of fraudsters pretending to be affiliated with government units in order to solicit donations related to the coronavirus pandemic. There were also incidents of online shopping fraud schemes involving Bitcoin.

“Electronic money issuers, money service businesses, and other online fund transfer service providers are advised to be vigilant amid a surge in STRs related to online activities,” Mr. Diokno said. — Luz Wendy T. Noble

Stockholders approve Cebu Air’s stock rights offering

Cebu Air, Inc. has obtained approval from stockholders for its plan to issue convertible preferred shares and bonds, as the operator of Cebu Pacific seeks to raise $500 million (about P24.13 billion) to survive the coronavirus pandemic.

In a meeting with stockholders on Friday, the Gokongwei-led company said stockholders representing 87.36% of its total outstanding capital stock approved its previously disclosed fundraising plans.

Specifically, the stockholders gave the go-signal to increas the company’s authorized capital stock to P1.75 billion from P1.34 billion at present, from which it will create a new class of convertible preferred shares.

These shares will be offered for sale through a stock rights offering, which should generate about $250 million (about P12.07 billion) for the company. The underlying common shares of the convertible preferred shares will then be listed at the Philippine Stock Exchange (PSE).

The stockholders also greenlit the issuance of convertible bonds, warrants, bonds with detachable warrants and other similar securities, whose underlying common shares will likewise be listed on the PSE.

The measures are part of Cebu Pacific’s “Business Transformation Fundraising Plan,” which the company crafted to strengthen its balance sheet amid the crisis.

When the company first announced this plan in October, Cebu Air said it has been struggling to cope as passenger traffic plunged due to travel restrictions.

As of end-September, Cebu Pacific’s net loss has reached P14.69 billion, reversing last year’s profits of P6.77 billion. Revenues slumped 70% to P19.34 billion, as air passenger traffic dropped 72% to 4.7 million.

In a separate statement, Cebu Pacific said on Friday it is adding self-service features to its online booking portal to allow travelers to manage their information more easily.

“We have been enhancing our contactless experience and accelerating our digital initiatives because these provide quicker and safer options for our passengers. Our customers remain at the heart of our business, so you can expect more enhancements from us that further support and enable a self-service journey for everyone,” Candice Jennifer A. Iyog, Cebu Pacific vice-president for marketing and customer experience, said in the statement.

Shares in the company closed at P49.70 each on Friday, up 15 centavos or 0.30% from the last session. — Denise A. Valdez

Mega Global invests P1B in Batangas facility

Sardines manufacturer Mega Global Corp. is investing in a P1 billion manufacturing plant in Batangas to meet a spike in demand for canned goods.

The company set a February 2022 target for full operations of the Santo Tomas, Batangas facility, which will create 1,000 jobs, Mega Global said in a press release on Friday.

The company’s production capacity is expected to increase by up to 50% from the current 300 metric tons per year in its Zamboanga-based operations. The facility’s sardines line is set to be completed by August 2021.

The plant will have a zero-waste fish meal facility, cold storage, and a warehouse.

Mega Global is also working on securing international certifications for the facility in order to allow it to export to Europe and the Middle East.

“We are very grateful for the opportunity to invest more in our expansion and diversification plans in 2020 and to help drive economic growth in the coming years,” Mega Global’s President and Chief Executive Officer William Tiu-Lim said.

“This plant will also allow us to support local businesses as we plan to source our raw materials and manpower from suppliers within Luzon as part of DTI’s Buy Local, Go Lokal initiative.”

Mega Global also announced its corporate social responsibility program that aims to serve meals to 100,000 poor Filipino families by year end. Donations can be made through the Tiu Lim Foundation or through online platforms. – Jenina P. Ibañez

Smart to build 2,000 cell sites next year

Smart Communications, Inc., the wireless subsidiary of PLDT, Inc., said it targets to put up 2,000 new cell sites next year to support its network expansion.

In a statement Friday, the telco operator said it is ramping up its tower build-out to reach areas that have been affected by the recent typhoons Rolly and Ulysses.

It will be building new cell sites in Metro Manila, Albay, Aurora, Batangas, Bulacan, Cagayan, Camarines Sur, Cavite, Isabela, Laguna, Masbate, Quezon, Rizal and Sorsogon.

“Our accelerated network expansion efforts will help us reach even the unserved and underserved areas in the country,” PLDT Chief Revenue Officer and Smart President and CEO Alfredo S. Panlilio said in the statement.

The company has already obtained nearly 1,500 permits to build its pipeline of cell sites across the identified areas. Other places covered are Abra, Benguet, Ilocos Sur, Mountain Province, Nueva Ecija, Palawan, Pampanga, Pangasinan, Tarlac, Zambales, Aklan, Antique, Bohol, Cebu, Iloilo, Leyte, Negros Occidental, Northern Samar, Southern Leyte, Agusan del Norte, Agusan del Sur, North Cotabato, Davao del Sur, Davao Oriental, Lanao Del Norte, Lanao del Sur, Maguindanao, Misamis Oriental, South Cotabato, Sultan Kudarat, Zamboanga Sibugay and Zamboanga del Norte.

Smart said it has also engaged six tower companies to build an initial 180 to 200 common towers. These will be shared with other telco operators, in line with the common tower policy of the government.

The PLDT Group has allocated P432 billion in capital investments from 2011 through September this year, which has expanded the reach of Smart’s mobile networks to 96% of the Philippine population. Capital expenditures for 2020 are expected to reach P70 billion by yearend.

In the first three quarters of the year, PLDT generated an attributable net income of P19.69 billion, 23% higher than last year. PLDT shares at the stock exchange added P7 or 0.51% to P1,377 each on Friday.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

Philippines property may be key to equity market recovery

Real estate stocks in the Philippines are among the top winners of the global value rotation and look poised to become a key part of the country’s post-pandemic stock-market recovery.

A gauge of Philippine property stocks has jumped 15% so far in November, on track for its biggest monthly gain in more than a decade, according to data compiled by Bloomberg. That’s four percentage points more than the rise in the Philippines Stock Exchange PSEi Index, a benchmark the property shares are now set to beat for three months straight.

The sector is in pole position to benefit from the country’s unexpected rate cut Thursday, as the central bank seeks to kickstart growth after the economy contracted more than expected in the third quarter.

The real estate equity resurgence has already helped Philippine stocks claw back losses of as much as 41% at the PSEi’s bottom in March to just an 10% drop for the year as of Thursday.

Southeast Asian stocks have been among the biggest beneficiaries of the recent global shift to cheaper, cyclical names as the development of a COVID-19 vaccine and a burgeoning recovery in China stokes optimism about the global economy next year. Equity markets in the region such as Thailand and Singapore have led gains across Asia.

Industrials, real estate and financial stocks make up more than 80% of the PSEi, and the cyclical exposures of those sectors will be key to the outlook for the market, Nomura Holdings Inc. analysts including Abigail Chiw said in a note Wednesday.

“We expect the conglomerates and property sectors to lead the recovery, having come from a very low base this year,” they wrote. For real estate shares, “we expect sequential earnings recovery to be led by residentials on catch-up construction of ongoing projects, followed by malls on pent-up demand and later by hotels as COVID-19 fears subside.”

An unexpected jump in remittances from overseas Filipino workers in September may also help contribute to an increase in spending on real estate.

The Nomura analysts forecast conglomerates and property stocks will post earnings-per-share growth next year of more than 50%. That should help push the PSEi toward their 7,600 target, they said — about 9% higher than the near-7,000 level it traded at Thursday.

Still, the recovery isn’t without risks, the analysts said. A fragile labor market and limited fiscal measures could both constrain private consumption, according to the note.

“A stronger-than-expected earnings-per-share recovery could potentially propel the PSEi higher to 8,300, while downside risks of weaker-than-expected macroeconomic drivers could drag it lower to 6,600,” the analysts wrote. – Bloomberg

SMC to add more RFID installation sites

San Miguel Corp. (SMC) is adding more installation sites for the radio-frequency identification (RFID) stickers used at its toll roads, as it anticipates a larger spike in demand ahead of the Dec. 1 deadline for the full implementation of cashless toll payments.

In a statement Friday, SMC President and Chief Operating Officer Ramon S. Ang said it is opening some 100 RFID installation sites, “soon as the expected bulk delivery of RFID stickers are received.”

These sites will accommodate walk-in customers and those that set an appointment through its online system.

SMC is also extending installation hours to 24 hours, seven days a week at the Skyway Runway Plaza, Old NAIAX toll plaza, C5 toll plaza and Nichols and Calamba toll plazas.

While toll roads will not allow vehicles without RFID stickers to enter starting Dec. 1, San Miguel said motorists may still buy the stickers past the deadline.

“Although vehicles without RFID will no longer be allowed to travel on tollways beginning December 1, we will still have RFID installation in various locations, as well as continuing programs for motorists to get stickers. We will also maintain installation sites at major entry plazas. You can still secure stickers at a more convenient time, even after the deadline,” Mr. Ang said.

SMC operates the South Luzon Expressway (SLEx), Southern Tagalog Arterial Road (STAR) Tollway, Metro Manila Skyway, NAIA Expressway (NAIAX) and Tarlac-Pangasinan-La Union Expressway (TPLEx).

“Traditionally, because most of our expressways-SLEx, STAR, Skyway, NAIAX-are in the south, the vast majority of our users are in the south. However, we have received so many inquiries, requests, and applications from non-regular users in the north, so we are increasing the number of installation sites there,” Mr. Ang said.

The government is implementing cashless toll payments at expressways to help mitigate the spread of coronavirus disease 2019 (COVID-19). The plan was supposed to be in full implementation last Nov. 2, but was moved later due to difficulties in providing sufficient RFID stickers to motorists. — Denise A. Valdez

SEC approves AC Energy’s name change

The Securities and Exchange Commission (SEC) has given the go-signal for AC Energy, Inc. to change its name to AC Energy and Infrastructure Corporation (ACEIC), the company told the Philippine Stock Exchange on Friday.

This development came months after the Ayala Corporation consolidated its energy, water, transport, and logistic entities, which were placed under AC Energy. The conglomerate previously announced that AC Energy would be renamed as ACEIC.

Ayala Corp. on Friday said it had received a certificate from the SEC approving the name change of its wholly-owned unit.

ACEIC is the holding company for the Ayala-led energy platform AC Energy Philippines (ACEN).

Last Thursday, ACEN president and chief executive officer Eric T. Francia said the firm needed around $2 billion to exceed its 2025 target of five gigawatts of installed energy capacity.

Shares of ACEN on Friday climbed by 11.96% to finish at P5.80 apiece. — Angelica Y. Yang

LRT-1 operator partners with Bayad Center

Light Rail Manila Corp. (LRMC) is teaming up with Bayad Center to accommodate bills payment transactions in one of the stations of Light Rail Transit Line 1 (LRT-1).

In a statement Friday, the LRT-1 operator said it has inked a partnership with the outsourced payment collection company to turn a ticket booth at the LRT-1 Balintawak station into a Bayad Center lane.

Through the designated bills payment facility, commuters may pay more than 300 types of bills such as utilities, telecommunications and cable, government contributions and loan payments, and airline ticketing.

Eventually, the two companies plan to put up Bayad Center lanes in LRT-1 stations at EDSA, Gil Puyat and Doroteo Jose, among others.

“We are glad to finally launch this initiative as it is in line with our goal to make the LRT-1 network a one-stop shop for our commuters’ needs-not just their need to travel through Metro Manila,” LRMC President and CEO Juan F. Alfonso said in the statement.

“As we add more and more payment touchpoints for the public, this ultimately helps by lessening one’s visit to several establishments for errands, minimizing the risk of virus contact… We look forward to scaling this up in all our train stations soon…” Bayad Center President and CEO Lawrence Y. Ferrer added.

LRMC is a consortium of Ayala Corp.’s AC Infrastructure Holdings Corp., Metro Pacific Investments Corp.’s (MPIC) Metro Pacific Light Rail Corp. and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.

MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group. — Denise A. Valdez

Uniqlo donates $1M for PHL typhoon relief efforts

Japanese global apparel retailer Uniqlo on Friday said it is donating $1 million (around P48 million) for efforts to help families affected by Typhoon Rolly and Typhoon Ulysses in the Philippines.

Uniqlo, through its parent company Fast Retailing, will donate $1 million to the SM Foundation of the SM Group. The SM Group is the management partner of Uniqlo in the Philippines.

“The donation will be used to provide emergency food supplies and rebuild flooded housing, as well as build preventative infrastructure in areas susceptible to flooding,” the company said in a statement.

Uniqlo Philippines will donate 300,000 Airism masks to affected areas through the SM Foundation. The masks will be donated to evacuees in typhoon-hit areas in Bicol Region, Bulacan, Cagayan, Isabela, Pampanga, and Rizal provinces, as well as Marikina City.

“Uniqlo hopes for the speedy recovery of these regions and that the families affected by these disasters can return to their normal lives as soon as possible,” the company said.

Uniqlo operates 60 stores throughout the Philippines.

PSEi surges to 7,100 level after surprise BSP rate cut

STOCKS ended higher on Friday after the central bank cut benchmark rates to new record lows, drawing positive reactions from investors.

The benchmark Philippine Stock Exchange index (PSEi) gained 172.17 points or 2.46% to close at 7,169.79 on Friday, while the broader all shares index gained 81.85 points or 2.22% to finish at 4,219.39.

“The PSEi had an exceptional day rallying by almost 2.5%, allowing it to end with a substantial gain for the week.
It may have been the surprise interest cut from the Bangko Sentral ng Pilipinas (BSP) that drew this extremely positive reaction,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in a mobile message on Friday.

He added that the week’s gains “marked three consecutive weeks of advances for the PSEi.”

The Monetary Board on Thursday slashed rates on the BSP’s overnight reverse repurchase, lending, and deposit facilities by 25 basis points (bps) to fresh record lows of 2%, 2.5%, and 1.5%, respectively.

Aside from the interest rate cut, the PSEi crossed the 7,100 mark as investors were hopeful that US lawmakers can pass a coronavirus stimulus package, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a separate mobile message.

US stocks also recorded gains: the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices inched up by 0.15 %; 4.03 % and 3.37 %, respectively. Asian stocks were mixed when the local bourse closed on Friday.

Back home, all PSEi indices recorded gains: mining and oil by 229.54 points or 2.88%; holding firms by 206.37 points or 2.86%; industrials by 155.13 points or 1.7%; property by 99.63 points or 2.83%; financials by 38.95 points or 2.8%; and services by 7.56 points or 0.48%.

Some 32.04 billion issues valued at P10.94 billion switched hands on Friday, higher than the previous day’s 11.78 billion issues valued at P11.12 billion.

Advancers led decliners, 159 against 66, with 45 names closing unchanged.

Foreigners turned buyers, with net inflows recorded at P211.34 million on Friday from net sales worth P1.09 billion in the previous session. — Angelica Y. Yang

Human beings live longer, can healthcare systems keep up?

Human beings live for an average of 72 years. In 1960, the year the United Nations began keeping global data, this number was 52.5 years. 

Gains in life expectancy at birth, according to the Organisation for Economic Co-operation and Development, can be attributed to a number of factors, including rising living standards, improved lifestyle and better education, as well as greater access to quality health services. 

These added years, however, also tax the world’s support systems. 

“How do you move from a break-and-fix system, where you break a bone and then go to the hospital, to a predictive and preventive type of system?,” asked Steve Sugino, president and representative director of Tokyo-based biotechnology company Amgen K.K. 

Healthcare costs are consumed at the very end of life, said Mr. Sugino, who stressed the importance of having broader access to preventive medicines such as generic statins for lipid control. 

“We should move to the stage of secondary prevention of chronic diseases,” he said at a discussion on leading longer and healthier lives at the Future on Healthcare Asia conference. Secondary prevention is defined as “screening to identify diseases in the earliest stages, before the onset of signs and symptoms, through measures such as mammography and regular blood pressure testing.”

SILVER TSUNAMI

Asia is facing a silver tsunami. The United Nations says that by 2050, 1 in 6 people in the world will be over the age of 65, up from 1 in 11 in 2019. Globally, a person aged 65 years in 2015–2020 could expect to live, on average, an additional 17 years. 

Population aging has been fastest in East and Southeast Asia (where the percentage of the population aged 65 years or over almost doubled from 6% in 1990 to 11% in 2019), and Latin America and the Caribbean (where the percentage of the population aged 65 years or over rose from 5% in 1990 to 9% in 2019).

To live the life one chooses, and to be as functional for as long as possible, is often the exception rather than the rule, said The Economist Group editorial director Charles Goddard, at the same virtual event. Longer lifespans come with a greater risk of diseases like cancer and dementia, which, in turn, means pressure on support systems.

Japan, which has the oldest population in the world, has one of the most comprehensive social care systems for the elderly. Built around the aim of reducing the burden of care for families, its public, mandatory, long-term care insurance (LTCI) program covers both institutional and community-based caregiving. Those aged sixty-five and older are eligible for benefits based on physical and mental disability.

The Japanese government also has a health and productivity management program for enterprises, in which “enterprises focus on and strategically carry out efforts with regard to maintaining their employees’ health from a management perspective.” One-fourth of all companies in the Tokyo Stock Exchange are part of this program, said Inamura Takuma, Japan’s director of the Ministry of Economy, Trade and Industry’s Healthcare Industries Division.

“We have updated our healthcare system for aging but it’s not enough. We have to accelerate,” Mr. Takuma told the Future of Healthcare Asia panel on aging. He added that COVID-19 exposed many blind spots in the system. While Japan has “deep respect for the elderly” and “many private enterprises producing good products and services,” Mr. Takuma admitted that they have been slow in deploying digital technology. “It’s a good time to review,” he said.

Mr. Sugino added that everyone is thinking of aging from a policy point of view but that there’s not enough being done about it: “Asia is leading the world in terms of aging. There isn’t a playbook or precedent in Europe that we can emulate. This really has to come from Asia. Given the magnitude of the problem, no single entity is going to be able to tackle this.”

HEALTHY AGING

To create a more holistic approach to healthy aging, themes such as social security nets, health technologies, and immigration policies, have to be brought together. Primary care structures are important in Asia, where most healthcare systems are hospital-based.

“The triumph of longevity is wonderful for humanity and society but it also presents many challenges,” said Karen Eggleston, director of the Asia Health Policy Program at Shorenstein Asia-Pacific Research Center. “Demography tends to work more slowly than a financial crisis but it can creep up on you.” 

While population aging does not lead inevitably to macroeconomic decline, no one has a panacea for a whole-of-life approach to aging, said Ms. Eggleston. Questions such as what works in which context need to be answered on a per case basis. Japan’s mandatory annual health checkups, for instance, and Korea’s subsidized health checkups, may not be the solution for other nations. She added that behavioral change is difficult and no one policy will solve everything. 

Everyone has a responsibility to whole-of-life aging. Gary Khoo, director of the healthy aging division of Singapore’s Health Promotion Board, said that the government’s role is to keep people well and healthy, and to educate the elderly on life aspects that one needs to pay attention to as one ages, such as muscle loss and nutrition. 

“We also want to move upstream,” he said. “We should start to focus on this early. For instance, at age 30, we start to lose muscle mass but we don’t think about it because we’re still able to go out and see friends. Then as you get older, you start to wonder why it’s harder to get up from a chair. If you start [focusing on] well-being and nutrition early on, by the time you reach 65, you improve your quality of life.” — Patricia B. Mirasol

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