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First Gen unit fined for ‘distorted’ supply pricing

THE Energy Regulatory Commission (ERC) has imposed a P1-million fine on a power generation unit of Lopez-led First Gen Corp. for supposedly offering its supply at an “anti-competitive” price.

The listed energy company apprised the stock exchange on Monday that its wholly owned subsidiary Prime Meridian PowerGen Corp. (PMPC) was served with a notice of violation of Section 45 or the anti-competitive behavior clause of Republic Act No. 9136, also known as the Electric Power Industry Reform Act.

On Aug. 16, 2017, the second unit of PMPC’s 97-megawatt (MW) Avion natural gas power plant in Batangas City deviated from its usual offer price, raising it to P32 per kilowatt-hour (kWh) at one interval from the average price of P5.35/kWh for previous intervals.

Avion had done so to prevent its final 1-MW block of registered capacity from getting dispatched, as it refrained from offering less than the 50.3-MW real-time dispatch schedule it was given in two separate intervals that day. The Wholesale Electricity Spot Market (WESM) rules state that a generating plant cannot shy away from its real-time dispatch schedule by more than -3%, or by 1 MW, whichever is higher.

“By trying to withhold its 1-MW capacity, Avion not only undermined the competition in the market, but also distorted the market price by setting the price at a level that was not reflective of the marginal cost of satisfying the demand in the market,” the ERC said in a 10-page decision signed on July 10.

According to the power generator, due to high ambient temperature during two dispatch intervals, the second plant unit’s maximum generation was at 49.08 MW and 48.85 MW, which do not fall within the prescribed limit set by WESM.

The ERC said that Avion cannot justify its action by claiming its compliance with the market rules, pointing out that it could have dispatched supply within the allowable limit without raising its price, based on the plant’s data.

Its alleged intent not to be dispatched, the ERC noted, goes against the kind of competition it seeks to harness via the spot market. “This particular behavior caused a distortion in the market price which Avion profited from,” it added.

Moreover, the regulator said the supply offer is deemed a market manipulation when Avion allegedly made it appear that it had produced to the extent of its plant’s registered capacity, “when in fact, it has not.”

“PMPC is in the process of reviewing the decision,” First Gen said.

On Monday, shares in First Gen fell 5.01% to close at P23.70 each. — Adam J. Ang

Online learning, permanent work-from-home schemes garner strong interest

Online learning, permanent work-from-home schemes garner strong interest

How PSEi member stocks performed — July 13, 2020

Here’s a quick glance at how PSEi stocks fared on Monday, July 13, 2020.

Peso strengthens on positive sentiment

THE PESO appreciated against the greenback on Monday, supported by positive market sentiment after progress in the clinical trial of an anti-viral drug for patients of the coronavirus disease 2019 (COVID-19).

The local unit closed at P49.45 versus the dollar on Monday, gaining 3.5 centavos from its P49.485 finish on Friday, data from the Bankers Association of the Philippines showed.

The peso opened the session at P49.455 per dollar, which was also its weakest showing for the day. Meanwhile, its intraday best was at P49.375.

Dollars traded slipped to $667.15 million from the $684.9 million on Friday.

A trader said the peso’s strength came after news of progress in an anti-viral drug for COVID-19.

“The peso appreciated after the clinical trials on the antiviral drug remdesivir indicated reduced risk of death from the COVID-19 pandemic,” the trader said in an e-mail.

South Korean health authorities said one in three seriously-ill COVID-19 patients showed signs of recovery after being administered with the antiviral drug of Gilead Sciences, Inc. Earlier, remdesivir also shorted hospital recovery for a US clinical trial.

Authorities said more research was needed to shed light on whether improvement was attributable to the drug or to factors such as patients’ immunity and other therapies.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the peso’s climb to market sentiment on the upcoming retail Treasury bond (RTB) offer.

“Upcoming RTB issuance also partly supported sentiment on the peso as this may entail some foreign buyers,” he said in a text message.

The Bureau of the Treasury said the government is looking to raise at least P30 billion through the five-year RTBs which will be offered on July 16 to Aug. 7.

The offer will be the second for the year following the P310.8 billion raised from RTBs in February.

For Tuesday, the trader expects the peso to move within the P49.40 to P49.60 levels versus the dollar, while Mr. Ricafort gave a forecast range of P49.35 to P49.55. — L.W.T. Noble with Reuters

Stocks decline as market looks for fresh leads

By Denise A. Valdez, Reporter

THE LOCAL bellwether posted losses on Monday as investors waited for a stronger catalyst other than the growing number of coronavirus disease 2019 (COVID-19) cases in the country.

The benchmark Philippine Stock Exchange index (PSEi) shed 24.81 points or 0.4% to close at 6,172.57, while the broader all shares index trimmed 18.85 points or 0.51% to end at 3,633.75.

“The market skipped out on most of the region’s upward move today, as investors chose to stay on the sidelines in advance of the second-quarter earnings reports scheduled to come out in the coming weeks,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message on Monday.

Most Asian markets were posting gains when the PSE ended trading on Monday. Japan’s Nikkei 225 and Topix indices closed 2.22% and 2.46% higher, respectively, and South Korea’s Kospi index climbed 1.67%.

“Here at the PSE, the main index remains a laggard and continues to move in the opposite direction. A spike in COVID-19 fatalities over the weekend has stomped out any optimism that investors might have,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.

The Department of Health has been reporting thousands of new COVID-19 cases daily for the past 10 days. Total confirmed cases ballooned to 56,259 as of Sunday, while the death toll reached 1,534, based on data reported early Monday. A total of 38,679 are active COVID-19 cases.

Mr. Mangun said the growing number of cases will continue worrying investors until the situation in Cebu City improves. The urbanized area in the Visayas is the only region in the Philippines still under a strict lockdown because of its 6,113 cases — the highest in a single city.

Sectoral indices were divided equally among gainers and losers at the end of Monday’s trading. Mining and oil rose 67.43 points or 1.26% to 5,401.49; services increased 8.35 points or 0.58% to 1,443.82; and industrials climbed 28.35 points or 0.37% to 7,689.89.

On the other hand, financials dropped 12.05 points or 0.98% to 1,209.69; property fell 23.98 points or 0.8% to 2,957.21; and holding firms slipped 46.06 points or 0.7% to 6,483.20 at the end of session.

Value turnover stood at P4.64 billion with 907.56 million issues switching hands, down from Friday’s value turnover of P5.17 billion with 2.26 billion issues.

Decliners outnumbered advancers, 136 against 69, while 34 names ended unchanged at the session’s close.

Net foreign selling went down to P849.32 million on Monday from P1.41 billion in the previous session.

“The PSEi continues to stay above the 6,100 support area, and we may have to see if this holds this week,” Mr. Pangan said.

Hotspots face strict lockdown as COVID-19 cases top 57,000

By Vann Marlo M. Villegas, Reporter

SOME AREAS of the country might revert to a stricter lockdown this week after coronavirus infections topped 57,000 on Monday, while Manila and nearby cities would probably remain under a general lockdown, the government said on Monday.

Metro Manila mayors wanted the capital region to be kept under a general community quarantine, Carlito G. Galvez, Jr., chief enforcer of anti-COVID-19 measures, said at an online news briefing.

“We met with Metro Manila mayors twice and they are really recommending that we maintain the quarantine,” he said in Filipino.

Mr. Galvez said the mayors’ “hybrid” recommendation sought to balance economic activities and stricter health protocols in the capital region. He added that an inter-agency task force made up of Cabinet officials would discuss the proposals at its next meeting.

President Rodrigo Duterte would announce his decision on the various lockdown levels nationwide on Wednesday, Mr. Galvez said.

He said the government would use a targeted approach to the lockdown and won’t use a sweeping strict quarantine for the entire metro to protect the economy.

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

He extended the so-called enhanced community quarantine for the island twice and thrice for Metro Manila. The lockdown in the capital region has since been eased, with many businesses allowed to reopen with a skeletal workforce. Mass gatherings remained banned.

The Department of Health (DoH) reported 836 new coronavirus infections on Monday afternoon, bringing the total to 57,006. The death toll rose to 1,599 after 65 more patients died, while recoveries increased by 4,325 to 20,371, it said in a bulletin.

Of the new cases, 749 were reported in the past three days, while 87 were reported late. The agency said 89 duplicates had been removed from the tally.

Health Undersecretary Maria Rosario S. Vergeire told an online news briefing on Monday afternoon 978,884 tests have been conducted on 908,779 people. She added that 71,103 people have tested positive or an infection rate of 7.8%.

“This is higher than the World Health Organization benchmark of less than 5%,” she said. It takes 8 days for infections to double, she added.

The agency failed to report new cases on Sunday due to “significant volume of data,” announcing new numbers instead on Monday morning.

Ms. Vergeire told a separate morning briefing “robust surveillance has led to an increased number of reconciled data on recoveries.” She also traced the increase to better coordination with local governments.

“We expect more COVID-19 recoveries that we can add to our official count,” she said.

Meanwhile, St. Luke’s Medical Center said its hospitals in Quezon City and Bonifacio Global City had reached the full capacity of allocated COVID-19 (coronavirus disease 2019) intensive care unit beds.

“We request the public to consider bringing critically ill COVID-19 suspects to alternative hospitals so they will receive immediate and utmost care,” it said on its Facebook page.

Both hospitals would still admit non-coronavirus patients for treatment, including out-patient procedures, it said.

The Chinese General Hospital and Medical Center earlier said its ward for coronavirus patients had been running at full capacity.

The coronavirus has sickened 13.1 million and killed about 572,000 people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization. About 7.6 million people have gotten well, it said.

Health agency says home quarantine OK

THE Health department on Monday said it wasn’t advising against home quarantine for coronavirus patients showing mild or no symptoms as long as safeguards are in place.

Health Undersecretary Maria Rosario S. Vergeire noted that home quarantine helps to avoid burdening government facilities, noting that 12,684 suspect and probable patients were under home quarantine.

People being isolated at their homes should have their own rooms and bathrooms, otherwise they should stay at temporary monitoring and treatment facilities, she said at an online news briefing.

Ms. Vergeire corrected Cabinet Secretary Karlos Alexei B. Nograles, who told DZBB radio on Sunday home quarantine was being discouraged to contain the virus.

She said some local governments have brought these patients to temporary treatment and monitoring facilities. “But with adequate monitoring, we ensure that quarantine standards are strictly implemented,” she said in mixed English and Filipino.

Ms. Vergeire said only a quarter of the more than 70,000 facilities managed by local governments were occupied, while more than a third of the more than 3,000 National Government facilities were occupied.

“If they can’t comply, they should stop home quarantine and stay instead at temporary treatment and monitoring facilities,” she said.

Gov’t says 1M people tested for COVID-19

THE government is on track to boost its coronavirus testing capacity, having tested about a million people, it said on Monday.

The country now has 85 laboratories that can test 25,000 virus samples daily, Vince B. Dizon, deputy chief enforcer of anti-COVID-19 efforts, told an online news briefing.

He said expanded testing guidelines would be released soon.

Meanwhile, Baguio City Mayor Benjamin B. Magalong has been appointed “contact-tracing czar.”

He promised changes to how the government is tracing people who may have had contact with those who have the coronavirus.

Mr. Magalong said he would train people on the proper way to trace contacts, including interview skills and a contact-tracing e-system.

The government is seeking to hire 50,000 contact tracers this month on top of the 30,000 now.

Meanwhile, Speaker Alan Peter S. Cayetano urged the government to fast-track the expanded testing for tourism frontliners as the country prepares to reboot the sector.

A poll by the Department of Tourism on May 15 to 24 showed that 77% of Filipnos were willing to travel to local destinations once restrictions are lifted.

“An aggressive and sustained COVID-19 testing of our tourism frontliners is necessary to facilitate faster recovery in the tourism industry and ensure a safe working environment,” Mr. Cayetano said in a statement.

He urged the Tourism department to work with a government task force and its private sector partners to quicken coronavirus testing for workers in key tourist spots.

“Our tourism sector needs to adapt, innovate and manage the changing requirements of local tourists as we transition to a new normal phase,” he said.

The House of Representatives earlier approved a bill seeking to set up testing centers in tourist destinations to boost the industry and create jobs.

The measure proposes to allot P10 billion on mass testing for 2020 and 2021. — Gillian M. Cortez and Patricia S. Gajitos

Regional Updates (07/13/20)

Iloilo addresses ‘quarantine fatigue’ among frontliners as province prepares for lifting of ban on returning residents

THE ILOILO Provincial Health Office is rolling out a program that will help medical frontliners deal with “quarantine fatigue” as residents stranded in other parts of the country may be allowed to start returning again by July 16. “We will have a refresher for our frontliners at the Rural Health Units on basic things like wearing of PPE (personal protective equipment), something that they already know, except that since we have been on quarantine for three months, quarantine fatigue will set in,” Gov. Arthur R. Defensor, Jr. said in a briefing Monday. The two-week suspension on returning residents, who need to be processed and placed on quarantine, was able to give the province’s facilities some respite, Mr. Defensor said. At the same time, local governments have been able to prepare additional facilities to house returnees. The governor said they are just waiting now for the decision of the national task force handling the coronavirus response on whether the ban in Iloilo, along with the rest of Western Visayas Region, will be lifted after July 15. The region recorded 552 cases as of July 12, of which 410 are either returning overseas workers or locally stranded residents. Of the total, 363 are active cases while 178 patients have recovered and 11 died. Aside from Iloilo, Western Visayas is composed of the provinces of Aklan, Antique, Capiz, Guimaras, and Negros Occidental, including the independent cities of Iloilo and Bacolod.

3rd typhoon for the year expected to weaken by Wednesday


TROPICAL DEPRESSION Carina, the third typhoon to hit the country this year, brought heavy rains to northern parts of Luzon Monday, but is expected to weaken by Wednesday. Weather bureau PAGASA, in its 5 p.m. Monday update, said landfall was possible at the northeastern part of mainland Luzon or Batanes and Babuyan Islands. Storm signal number 1 was up in Batanes, Babuyan Islands, and the northeastern towns of Cagayan. The typhoon was located 165 kilometers east of Aparri as of 4 p.m. Monday, with maximum winds of 45 kilometers per hour and gustiness of up to 55 km/h.

Nationwide round-up

CSC eases rules on recruitment of public health professionals, social workers

THE CIVIL Service Commission (CSC) has eased the recruitment rules for medical professionals as well as social workers as the country grapples with the coronavirus disease 2019 (COVID-19) outbreak. In a statement on Monday, CSC Chairperson Alicia dela Rosa-Bala said, “To ensure uninterrupted delivery of crucial services to fight the COVID-19 pandemic, the Civil Service Commission has revised rules to ensure faster filling up of vacant positions resulting from promotion of those involved in providing essential services in this time of state of national health emergency.” Based on Resolution No. 2000659 issued July 8, health professionals and social workers will be exempted from the CSC’s rule that vacancies due to promotion will not be filled up unless a promotional appointment was made by the CSC. The rule covers hiring “for first and second level positions, including second level executive/managerial positions in the career service, and those appointed to the non-career service who are non-presidential appointees during State of Calamity.” The CSC also said health professionals and social workers holding administrative and other positions in the government may be reassigned or designated additional duties to healthcare and other government facilities during the coronavirus crisis, with their consent.

ONLINE RECRUITMENT
In the same resolution, the CSC released guidelines to government agencies on the use of virtual modes for interviewing job candidates and other job application concerns. “In recruiting and selecting candidates, agencies shall adopt internal guidelines that will allow online recruitment and selection processes such as online competency assessments, video conferencing for interviews and selection board deliberations.” — Gillian M. Cortez

8th petition vs Anti-Terrorism Act filed

MULTI-SECTORAL organization Sanlakas on Monday asked the Supreme Court to strike down a provision of the new law that expanded terror crimes in the country, the eighth petition filed against the Anti-Terrorism Act. In a nine-page petition, Sanlakas said the court should declare void Section 4 of the law for the vague definition of crimes that are considered terror acts. Sanlakas said “advocacy, protest, dissent, stoppage of work, and industrial or mass actions are the forms and vehicles of free speech and expression utilized by the people,” but these can now be considered as terror acts if linked to acts that “cause death or serious physical harm to a person, to endanger a persons life, or to create a serious risk to public safety” and purpose.” The group said, “This creates the dangerous situation where the very acts protected and guaranteed by the 1987 Constitution can actually be, as applied on the ground, interpreted or assumed — due to the vagueness of the subjective feature — by the police and military operatives to be the crime of terrorism,” the petition read. The organization also said the crime of terrorism will become highly dependent on law enforcers or military officers, as authorized by the Anti-Terrorism Council. — Vann Marlo M. Villegas

OSG, Sandiganbayan, several courts closed as employees test positive for coronavirus

THE OFFICE of the Solicitor General (OSG), anti-graft court Sandiganbayan, and several local courts within Metro Manila have been temporarily closed after employees tested positive for coronavirus infection. In a statement Monday, the OSG said contact tracing and disinfection procedures are underway after one employee tested positive.”(N)o documents will be received or sent out until further notice,” it said. The Sandiganbayan will also be indefinitely closed after two workers tested positive and in consideration of its office’s location. In a memorandum dated July 12, Presiding Justice Amparo M. Cabotaje-Tang said the decision to physically close starting July 13 was made during an emergency meeting, considering the increasing number of coronavirus cases, especially in Quezon City. “The step is necessary to enable the Sandiganbayan to conduct an immediate and thorough disinfection of its entire building and to conduct contact tracing/monitoring of the health of the Court’s employees,” Ms. Tang said. The anti-graft court’s justices, officials, and employees will continue to perform their work/functions under alternative work arrangements. “The public may contact the Court through its hotline and e-mail addresses as published in the Sandiganbayan website,” she said.

LOCAL COURTS
Meanwhile, Manila Metropolitan Trial Court (MeTC) Executive Judge Carissa Anne O. Manook-Frondozo ordered a lockdown on Branch 30 located at the Manila City Hall from July 13 to 24. The MeTC Manila Office of the Clerk of Court located at Parkview Plaza Building is also on lockdown from July 13 to July 22. One employee of each office tested positive. Branch 30 is allowed to conduct hearings through video conference and accept pleadings online while the clerk of court’s office will accept applications for bail and queries on urgent matters through e-mail or by telephone. Muntinlupa Regional Trial Court Branch 205 will also be closed from July 13 to 15. — Vann Marlo M. Villegas and Patricia S. Gajitos

Mines bureau adopts WFH, 75% workforce at offices

ALL OFFICES of the Mines and Geosciences Bureau (MGB) have been directed to adopt a work-from-home option while maintaining a maximum 75% workforce, who may be provided with shuttle service, until July 31. MGB Acting Director Wilfredo G. Moncano, in a memorandum order, said employees who are required to report physically may be provided with transport, including point-to-point service. “However, once the public transportation is fully operational, the use of government service vehicles as shuttle services shall automatically be lifted,” he said. In the same order, employees are also advised to conduct field work only in areas where public transportation is in operation and health safety standards are followed. Further, “incurred reasonable expenses” of MGB employees during WFH arrangements may be defrayed by the agency in accordance to its accounting and auditing rules. “The alternative work arrangements shall be adopted only for the duration of the State of National Emergency or until lifted by the President,” Mr. Moncano said. — Revin Mikhael D. Ochave

8 Chinese on immigration blacklist barred entry

THE BUREAU of Immigration (BI) barred the entry of eight Chinese nationals found to have overstayed in their previous visit to the country. In a statement on Monday, Commissioner Jaime H. Morente said the eight were put on the blacklist after they were previously ordered to leave and meted with fines and penalties. “They did not leave before the lapse of their authorized stay without any valid reason or justification. And it took them several months after they arrived before they manifested their intent to depart and return to their country,” Mr. Morente said. The bureau said the eight arrived in the Philippines separately between November 2019 and January 2020, and were given the 30-day visa upon arrival (VUA) for certain foreign tourists, including Chinese. The BI suspended VUAs for Chinese in late January due to the coronavirus pandemic in China. The BI blacklisted and directed to leave 21 Chinese nationals who were granted with VUA for overstaying. — Vann Marlo M. Villegas

NGCP again appeals for public to avoid kite-flying, other activities near transmission lines

THE NATIONAL Grid Corporation of the Philippines (NGCP) again appealed for the public’s cooperation in protecting transmission lines as it noted that power interruptions during the lockdown period were due to kite flying and other activities near power facilities. In a statement on Monday, the private firm said it recorded 87 incidents of kites entangled in power lines during the strict quarantine period, as of May 29. It cited as an example its Las Piñas-Dasmariñas 230 kilo-volt line, which had to be shut down for eight hours on April 25 due to such incident. “While no customers were affected, the reliability of the grid was compromised at that time,” NGCP said. “These rising incidents of kite entanglements come at a period where electricity is crucial in the ongoing efforts to combat COVID-19 (coronavirus disease 2019). Breaching safety clearances not only threatens power transmission delivery for the entire grid but also endangers the lives of kite flyers,” it said. The company also appealed for the prohibition of grass burning activities, and “malicious” planting of vegetation below or within the transmission right of way corridor. — Adam J. Ang

BSP ready to ease further when needed, awaiting right conditions

THE central bank stands ready to ease monetary policy, but views current money supply as ample and is gauging when the financial system can absorb extra liquidity, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

The Monetary Board has slashed 200 basis points (bps) out of the 400 bps it is authorized to reduce this year to add liquidity into the financial system during the pandemic. This has lowered the reserve requirement ratio (RRR) for universal and commercial lenders to 12% while the RRR for thrift and rural banks have been maintained at 4% and 3%, respectively.

“RRR cut, if ever, will be for big banks. The RRR for thrift and rural banks are already low and they would benefit the most from (Monetary Board) policy that considers new lending to MSMEs (micro, small, and medium-sized enterprises) as in compliance with reserve requirements,” Mr. Diokno said in a text message to BusinessWorld Monday.

The central bank has allowed banks to include their lending to small businesses as well as large enterprises as an alternate means of reserve compliance during the pandemic.

So far, the BSP said P45 billion worth of loans to MSMEs has been used by banks, most of which rural lenders, to comply with reserve requirements.

Earlier this month, the Chamber of Thrift Banks said it is pushing for a further 100 basis-point reduction to the sector’s current reserve requirement of 4%, saying that a decrease signifies additional billions of pesos in liquidity that could be utilized to provide credit for embattled sectors.

Mr. Diokno said there is “ample liquidity” in the market currently.

He added the monetary authorities can afford to bring down the reserve requirement for big banks to 10% “if there’s a need for it.”

“We’re just pausing to make sure that the financial sector is able to digest all these monetary easing that we’ve done,” Mr. Diokno said in an interview with ABS-CBN News Channel early Monday.

The central bank has also brought down policy rates to record lows through 175-bps worth of easing this year. Its latest 50-bps rate cut in June trimmed the overnight reverse repurchase, lending, and deposit facilities to 2.25%, 2.75%, and 1.75%, respectively.

The uptick in the savings rate is an indication of improvement in liquidity, according to Security Bank Corp. Chief Economist Robert Dan J. Roces.

BSP data showed the savings growth rate inching up during the pandemic. Savings deposit growth was 13.4% in May from 11.9% in January.

“Money saved is money not spent, so a higher savings rate could also mean less consumption but high liquidity,” he said in a text message.

“For consumers facing uncertainties, the lower interest rates may not necessarily help in the near term and they will opt to save. But since borrowing costs are lower, this should become attractive over the longer term,” Mr. Roces added.

Domestic liquidity or M3 rose 16.6% year on year in May from 16.2% in April. Despite this, growth of outstanding loans growth issued by universal and commercial banks was 11.3% in May, against 12.7% in April. — Luz Wendy T. Noble

National ID, SIM card registration touted as anti-terrorism measures by AMLC

THE national ID and the registration of SIM cards will help add teeth to enforcement efforts against terrorism financing, the Anti-Money Laundering Council (AMLC) said.

“(A) key element in the execution of unlawful activities, such as terrorism financing, is anonymity,” AMLC Executive Director Mel Georgie B. Racela said in a message to BusinessWorld.

Mr. Racela said the national ID and a SIM card registration bill “may aid law enforcement agencies in tracking down criminals and curbing illicit activities, such as terrorism financing.”

The national ID rollout has been hampered by the lockdown. Acting Socio-economic Planning Secretary Karl Kendrick T. Chua put the target at five million households registered this year starting November, a month behind the original October schedule.

Current legislation calling for SIM card registration include House Bill 5793 and Senate Bill 25, which have been pending since 2019.

The AMLC is currently investigating cryptocurrency transactions by Islamic State-linked (IS) groups.

“We are still waiting for the details from our intel agencies,” Mr. Racela said.

An earlier study this year by think tank Philippine Institute for Peace, Violence, and Terrorism Research said IS-linked terror groups have engaged in their first transaction in cryptocurrencies.

Mr. Racela said 2018 research by AMLC recommended measures such as more stringent know-your customer procedures and tougher due-diligence standards for payment partners of virtual currency exchanges such as remittance centers and mobile payment systems.

Mr. Racela said international cooperation is vital in monitoring virtual currency transactions, particularly those that trade outside virtual currency exchanges that are registered with the Bangko Sentral ng Pilipinas (BSP).

“All jurisdictions should regulate rather than ban virtual currency exchanges so that they can fall under the regulatory framework and be the subject of information-sharing space among financial intelligence units,” Mr. Racela said.

The Financial Action Task Force (FATF), an international dirty-money watchdog, released guidance in 2019 recommending a risk-based approach to virtual assets and virtual asset service providers in order to aid countries in addressing the increasing use of the medium for money-laundering and terrorism financing.

“For the Philippines… ensuring adoption of the new rules will be important to improve international consistency in regulatory oversight of virtual assets and to help mitigate weaknesses in the financial crime risk management framework overall,” Matt Ekberg, senior policy advisor at the Institute of International Finance said in an e-mail Saturday.

Under the New Central Bank Act signed into law in 2019, the BSP’s supervision has been extended to include virtual currency exchanges which fall under money service businesses.

BSP TO CONDUCT SECTORAL RISK ASSESSMENT
In Circular Letter 2020-032, signed on July 6, BSP Governor Chuchi G. Fonacier said the bank will be conducting a third sectoral risk assessment on anti-money laundering and counter-terrorism financing in the banking industry.

The assessment will cover accounts and transactions from 2017 to 2019 in priority areas such as cash, cross-sector and cross-border transactions as well as other key emerging risks in compliance with the recommended actions in the 2019 Philippine Mutual Evaluation Report.

“This exercise will involve the use of both quantitative and qualitative data/information from existing reports as well as the responses to the anti-money laundering and counter-terrorism financing Template and Questionnaire, among others,” Ms. Fonacier said.

The Philippines is in an FATF observation originally scheduled to end in October but extended to February due to the pandemic.

The Philippines is facing the risk of a possible inclusion in a “gray list” of countries that are deemed to have loose measures against money laundering and counter-terrorism financing if it fails to strengthen and implement measures against dirty money.

Legislation meant to address these shortcomings include the Anti-Terrorism Act which was signed into law last week. It revises the Human Security Act of 2007. Amendments to the Anti-Money Laundering Act are pending at committee level in both the House of Representatives and the Senate. — Luz Wendy T. Noble

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