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Global Ferronickel income up 47% on higher ore prices

GLOBAL FERRONICKEL Holdings Inc. (FNI) posted a 46.6% higher net income attributable to equity holders to P354.24 million in the second quarter, due to higher nickel ore prices and lower operating expenses.

In a disclosure to the stock exchange Friday, the miner and nickel ore exporter said its revenues for the quarter fell 11.7% to P1.51 billion after company operations were temporarily suspended in April due to the coronavirus disease 2019 (COVID-19) pandemic.

For a six-month period, the company posted 85.6% higher net income to P196.69 million against P105.99 million in the same period last year, while revenues fell 12.9% to P1.55 billion. Meanwhile, FNI’s operating expenses during the second quarter fell 19.3% to P389.43 million.

For the first half, its operating expenses declined by 13.3% to P577.62 million.

“While the operating expenses decreased as a result of the temporary suspension of operations, the group incurred added costs in putting up health-related measures to safeguard the well-being of its employees and host and neighboring communities,” the disclosure said.

FNI said the average realized ore price for the first half rose to $24.38 per wet metric ton (WMT), compared with $18.82 per WMT last year. A total of 23 vessels carried 1.26 million WMT of ore, of which 52% were low-grade ore and 48% were medium-grade ore.

“This shipment is less than the previous year’s tally of 33 vessels with a total volume of 1.81 million WMT and a product mix of 39% low-grade ore and 61% medium-grade ore,” the disclosure said.

FNI President Dante R. Bravo said the company had regained its momentum and is expected to meet its adjusted shipment target of 5 million WMT for the year despite the pandemic.

“We continue to adhere strictly to all government-mandated health and safety guidelines and remain committed to assisting our community in this time of crisis,” Mr. Bravo said.

FNI said since the start of the pandemic, it has spent almost P20 million as assistance to households in the town of Claver in Surigao del Norte and nearby areas.

On Friday, shares in FNI rose 2.73% or P0.03 to close at P1.13 each. — Revin Mikhael D. Ochave

Del Monte to list P13-B bonds

Del Monte Pacific, Ltd. (DMPL) on Friday said its Philippine unit is working to offer as much as P12.5 billion worth of bonds.

The company told the stock exchange that Del Monte Philippines, Inc. (DMPI) has filed with the Securities and Exchange Commission (SEC) an application to register its maiden public bond issuance of up to P5 billion, which has an oversubscription option of up to P7.5 billion.

The proposed offer may have a three and/or five-year tenor series.

The Singaporean and Philippine dual-listed firm said it would disclose the bonds’ prices “in due course.”

“The proceeds of the offering will be used to refinance existing loans and fund other corporate purposes,” DMPL said.

The food conglomerate has tapped BDO Capital & Investment Corporation, China Bank Capital Corp., First Metro Investment Corp., and RCBC Capital Corp. as its joint lead underwriters, joint issue managers, and joint bookrunners.

It is advised by Exchange Equity Partners Group Corp. for the upcoming issuance. Shares in DMPL increased by 2.36% to close at P4.78 apiece on Friday. — Adam J. Ang

SSI Group to launch new virtual shop

Specialty retailer SSI Group, Inc. is setting up a new online marketplace where a range of products from luxury fashion brands to food items will be offered.

The e-commerce site, which will go online in September, adds to its 10 existing virtual trading platforms.

“This e-commerce site will be unique in that it will carry a wide variety of brands from luxury, to casual and fast fashion, home, personal care products and food on one premium marketplace,” SSI President Anthony T. Huang said in a stock exchange disclosure on Friday.

The retail group said its e-commerce business, touted as the most diverse among domestic specialty retailers, showed “significant” growth in the first six months of the year with sales soaring by 375%.

SSI shed P467 million in the first semester as sales from shuttered stores declined by almost a half during the lockdown months.

Since reopening some physical stores on June 1, it saw “steady” weekly sales growth. For instance, American fast-casual Shake Shack and SaladStop! chains, which reopened ahead of the other company brands, have received high demand from both delivery and take out customers.

“I am optimistic with respect to the steady increases we have seen in brick and mortar sales and that we are ready to compete and operate under the ‘new normal’,” Mr. Huang said.

SSI is developing flexibility in operations mainly through the expansion of its e-commerce presence, along with safe shopping, executing strategic sale and promotional events, and adding customer channels.

Shares in SSI inched up 0.95% to close at P1.06 each on Friday. — Adam J. Ang

Apex Mining earns P193M on higher gold prices

MINING COMPANY Apex Mining Co., Inc. posted a P192.60 million second-quarter net income attributable to the parent firm’s equity holders largely due to higher gold prices and better gold production.

In a disclosure to the stock exchange on Friday, the company said its revenues for the quarter fell 24.2% to P825.11 million compared with P1.09 billion in the same period last year.

For the first half, Apex Mining’s net income rose 297.1% to P312.13 million while the company’s revenues declined 14.5% to P2.01 billion.

Due to lockdown protocols caused by the coronavirus disease 2019 (COVID-19) pandemic, Apex Mining said its milling throughput for the first half went down 14.1% to 314,528 tons versus 366,076 tons in 2019.

Despite the lower output, the ore grade rose to 3.53 grams per ton gold and 22.15 grams per ton silver.

Further, the company’s gold mill recovery rate improved to 86.63% from 84.37% in 2019, while silver mill recovery rate fell to 74.25% from 75.08%.

“These resulted in slightly better gold production output of 30,988 ounces this period from 30,412 ounces in 2019, but slightly lower silver output of 171,602 ounces from 174,659 ounces,” the disclosure said.

The company said that 23,008 ounces of gold priced at $1,634 per ounce and 125,635 ounces of silver at $17 per ounce were sold during the first half of the year.

Apex Mining President and Chief Executive Officer Luis R. Sarmiento said that if gold prices remain strong for the rest of the year, coupled by continued initiatives for production efficiency, the company will be able to sustain its current performance.

“We are proud of our Maco mine team for doing very well despite the difficulties brought about by the pandemic,” Mr. Sarmiento said.

Meanwhile, Apex Mining’s wholly owned subsidiary Itogon-Suyoc Resources, Inc. (ISRI) formally started commercial operations of its Sangilo mine in Itogon, Benguet.

“The exploration and resource validation work in Suyoc, the other mine of ISRI, in Mankayan, Benguet, continues,” the disclosure said.

“Developments are being awaited over the Sampaguita gas field offshore northwest of Palawan covered by Service Contract 72 where Monte Oro Resources & Energy, Inc. (MORE), another wholly-owned subsidiary, holds a 30% participating interest,” it added.

On Friday, Apex Mining shares rose 4.55% or P0.07 to close at P1.61 each. — Revin Mikhael D. Ochave

July dollar reserves rise to record

By Luz Wendy T. Noble, Reporter

The country’s dollar reserves rose to a fresh record as of end-July, backed by higher gold buffers amid a recent increase in world prices, the Philippine central bank said on Friday.

Gross international reserves (GIR) rose by 15% from a year earlier to $98 billion as of last month, data from the Bangko Sentral ng Pilipinas (BSP) showed. It also rose by 4.8% from May.

A strong reserve buffer protects financial markets from volatility and assures investors and debt watchers that the country can pay its debt even after the economy entered into a recession last quarter.

“The month-on-month increase in the GIR level reflected inflows mainly from the revaluation gains from the BSP’s gold holdings, the National Government’s foreign currency deposits with the BSP as well as BSP’s income from investments abroad,” the central bank said in a statement.

Foreign currency withdrawals made by the National Government to pay its foreign debt offset the growth in the dollar buffers.

At end-July reserve level was already more than the central bank’s $90-billion projection for this year.

It was equivalent to 8.9 months worth of imports of goods and payment of services and primary income. It was about 7.5 times the short-term external debt of the country based on original maturity and 4.9 times based on residual maturity.

The gold reserve component jumped by 57% year on year to $12.595 billion after having steadied at $8.02 billion since June last year.

Gains from investments abroad, which made up the bulk of the reserves, rose by a tenth to $80.72 billion but slid by $171 million from end-June.

Foreign currency deposits rose 5% to $2.76 billion from July 2019 and by $101 million from a month ago.

The significant increase in the gold reserves came “largely due to revaluation as world gold prices sharply increased to new record highs recently,” said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

He said the continued increase in the dollar reserves would continue to support the peso, which had strengthened to the P48 a dollar level.

The peso closed at P48.765 on Friday, appreciating by 7.5 centavos from Thursday and by 27.6 centavos from P49.041 on Aug. 7.

“Record high GIR could strengthen the country’s external position, which in turn, fundamentally supports the country’s favorable credit ratings seen recently,” Mr. Ricafort said.

The Philippines entered into a recession last quarter after the economy shrank by 16.5%.

Economic managers have said the country was unlikely to get a rating downgrade because it continues to have “strong macroeconomic fundamentals.”

Philippines to get $1.9B more in World Bank loans

The World Bank will lend $1.9 billion in fresh loans to the Philippines this year to support projects that will help the economy bounce back from a global coronavirus pandemic.

The bank’s project pipeline had been changed and the loan agreements were likely to be approved this year, the Department of Finance (DoF) said, citing a letter from the World Bank.

The lending program would be more than double the $750-million commitments made by the multilateral bank to the Philippines last year, the agency said.

The loan will fund government projects that seek to help poor families amid the global health crisis and boost remote learning for students, said Ndiame Diop, the World Bank country director for Brunei, Malaysia, the Philippines and Thailand.

He said it would also cover programs that seek to improve the country’s competitiveness, address supply chain issues and create jobs and livelihood.

“We are committed to support the Philippines’ infrastructure expansion program, which is indeed critical for a solid recovery,” DoF quoted Mr. Diop as saying in his letter.

He said the government must fast-track and streamline the process of approving the projects in the pipeline “given the emergency situation we are in.”

The bank said last month it planned to approve three projects worth $1 billion by September.

As of April, the bank has released $1.2 billion of loans to the Philippines — $500 million for the government’s COVID-19 response, $500 million for disaster risk management and $200 million for social protection.

As of Aug. 5, the government has obtained $8.131 billion of loans, global bonds and grants from foreign sources to fund its pandemic expenses.

It plans to borrow P3 trillion this year from local and external sources to fund its budget gap, which is expected to hit 9.6% of economic output as spending against the pandemic increases and revenue slumps.

The Philippines, which had been one of Asia’s fastest-growing economies before the pandemic, entered into a recession last quarter after the economy shrank by 16.5% amid lockdowns that are one of the strictest and longest in the world. — Beatrice M. Laforga

Groups slam plan for one-year debt holiday

By Luz Wendy T. Noble, Reporter

Industry groups on Friday opposed a congressional proposal for a one-year debt embargo, urging lawmakers to help cut the risks for the financial system.

“The Bankers Association of the Philippines (BAP) endorses a 30-day grace period extended to areas under a modified enhanced community quarantine and enhanced community quarantine,” BAP said in a statement.

The Management Association of the Philippines (MAP) also warned that a one-year debt moratorium under a measure that gives President Rodrigo R. Duterte special powers to fight the coronavirus poses risks to the local banking system.

“The moratorium will put at risk our banks’ ability to service the withdrawals of their clients and adversely affect public confidence in the banking system,” MAP President Francisco E. Lim said in a statement.

“It will also drastically lessen banks’ liquidity, curtailing their capacity to lend at a time when businesses badly need capital to help them recover from the pandemic,” he added.

The groups issued the statements after Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said the proposal could “significantly strain” the banking industry and lead to a bank run.

The House of Representatives version of the so-called Bayanihan 2 bil calls for the one-year debt holiday, while the Senate version grants a shorter 30-day grace period.

The umbrella organization of local financing companies said it agrees with the Senate version of the bill that seeks to give President Rodrigo R. Duterte special powers to deal with the pandemic. The Senate bill grants a shorter 30-day grace period.

Senator Juan Edgardo M. Angara on Thursday said lawmakers trying to reconcile the two versions were leaning toward a 90-day moratorium, although 45 and 60-day periods were also being discussed.

He said the final version of the bill won’t probably include the one-year debt holiday.

FinTechAlliance.ph Chairman Angelito M. Villanueva said a blanket 90-day moratorium is not needed since there are installment products with a three-month term.

“This will effectively double the term and materially increase the nonperforming loan risk,” he said in a text message. “If forced, the shortest period of 45 days would be best.”

Mr. Villanueva said the grace period should only be applied to interest on interest, penalties and charges.

“Similar to the implementing rules and regulations of Bayanihan I, accrued interest should still be applicable, collected at the end of the grace period, or to be paid even during the enhanced community quarantine and modified enhanced community quarantine period,” he said.

The Chamber of Thrift Banks said it a 30-day loan moratorium was more acceptable.

“If a loan payment moratorium is to be imposed, it should be kept short to minimize the risks,” CTB Executive Director Suzanne I. Felix said in an e-mailed reply to questions.

“Legislation and policy responses during this time of crisis should be calibrated to ensure financial stability and contain the economic and financial fallout of the COVID-19 event,” she added.

The banking industry’s capital adequacy ratio was at 12.73%, as of June higher than the central bank’s 10% minimum requirement. Gross bad loans rose to 2.53%, the highest in nearly six years.

SEC wants more independent directors in bourse

The corporate regulator has issued a circular increasing independent directors to a third of the board of exchanges and other organized markets.

The Securities and Exchange Commission (SEC) said there should be at least four directors representing the interests of issuers, investors and other market participants, with each sector having at least one representative on the board.

SEC Chairman Emilio A. Aquino signed the memorandum circular detailing the rules.

An independent director and sectoral representative must have at least three years of experience or working knowledge of capital markets.

They may be elected for up to 10 years, with a mandatory cooling off period of at least a year after the first five years.

The regulator said the rules were based on “best practices of major and comparable markets in many economies,” where independent directors account for a majority of the board of exchanges.

Present rules require exchanges to have at least three independent directors.

The Philippine Stock Exchange, Inc. has three independent directors on its 15-member board. — Arjay L. Balinbin

Coronavirus infections top 153,000

The Department of Health (DoH) reported 6,216 new coronavirus infections on Friday, bringing the total to 153,660.

The death toll rose to 2,442 after 16 more patients died, while recoveries increased by 1,038 to 71,405, it said in a bulletin.

There were 79,813 active cases, 91% of which were mild, 7.3% did not show symptoms, 0.6% were severe and 1% were critical.

Of the new cases, 3,848 were from Metro Manila, 302 from Laguna, 242 from Rizal, 240 from Cavite and 178 from Bulacan, the agency said.

Nine of the new deaths were from Metro Manila, four from Central Visayas, and one each came from Bicol, Zamboanga Peninsula and Calabarzon regions, it said.

More than 1.8 million people have been tested for the virus, DoH said.

Presidential spokesman Harry L. Roque on Thursday said the Philippines and Russia seek to run phase 3 clinical trials of the Sputnik V vaccine for COVID-19 from October to March. The Food and Drug Administration might approve it by April, he added.

The clinical trial will involve about 3,000 volunteer patients.

The Philippines will also start trials for the Japanese flu drug Avigan as treatment for the coronavirus on Aug. 17, DoH said on Wednesday.

Philippine General Hospital, Sta. Ana Hospital, Dr. Jose N. Rodriguez Memorial Hospital and Quirino Memorial and Medical Center will participate in the Avigan trial.

Meanwhile, scientists said the Philippines could set up a fill-finish facility to prepare and take advantage of the business once the coronavirus vaccine is ready for mass production.

The Philippines could boost its research, training and production line so it can participate at least in the packaging phase of the vaccine, Annabelle Villalobos, a chemist at Central Mindanao University, said at an online forum.

She said setting up a research arm would be crucial to developing the facility for technical support, while more workers should be trained.

Establishing a fill-finish line — formulating the licensed product, filling the licensed product into vials, freeze-drying the drug substance so it can be mixed wiith the licensed product, and testing — would not only prepare the country for the mass production of COVID-19 vaccine but also allow it to process other imported vaccines in the future, Homer Pantua, a researcher at Genentech, Inc. said at the same forum. — Vann Marlo M. Villegas and BML

DepEd defers class opening to Oct. 5

The Department of Education has moved the opening of classes to Oct. 5 from Aug. 24 amid a coronavirus pandemic.

In a statement, Education Secretary Leonor M. Briones said she endorsed the postponement to President Rodrigo R. Duterte after Metro Manila and nearby provinces reverted to a strict lockdown amid a fresh surge in coronavirus cases.

“We shall use the deferment to provide relief to the logistical limitations faced by the areas placed under a modified enhanced community quarantine and to fill in the remaining gaps of the school opening that we are currently addressing,” she said.

Ms. Briones said areas not under strict lockdown must continue their orientation, dry runs and delivery of learning resources.

There will still be no face-to-face sessions when classes start, Ms. Briones said at an online news briefing.

Senator Sherwin T. Gatchalian, who heads the basic education committee, said the postponement should be used to continue preparations for the basic education continuity plan. — Vann Marlo M. Villegas

House to probe PhilHealth

The House committee on public accounts will investigate the P14 billion advance payment made by the Philippine Health Insurance Corp. (PhilHealth) to hospitals for coronavirus treatment.

“We will examine those payments in detail for any sign of fraud and/or overpayment,” Party-list Rep. Michael T. Defensor, who heads the panel, said in a statement on Friday. “We have already asked PhilHealth to submit all supporting documents,”

He said the committee would start with the P1 billion out of the P14 billion, which had been liquidated.

PhilHealth in March enforced the so-called interim reimbursement mechanism that gave health facilities assistance amid a coronavirus pandemic.

An investigation by the Senate earlier showed the mechanism had been used to favor some facilities even if they did not have coronavirus patients.

PhilHealth this week said it had suspended the mechanism pending a review. — Charmaine A. Tadalan

Filipinos say quality of life worsened

More Filipinos found their quality of life got worse in the past 12 months, according to a poll by the Social Weather Station (SWS).

SWS said 79% of adult Filipinos said their living condition had worsened, 12% said it was the same, while 8% said it got better.

“The 79% proportion of Losers in July 2020 is the second highest proportion recorded by SWS,” it said in a statement. “It is next only to the record-high 83% in May 2020.” The net gainers score in July 2020 was -72, slightly better than -78 in May.

SWS said that the net gainers score was “catastrophic” in all areas and was lower among hungry families, those who received government subsidy and less educated.

“By area, the net gainers score is lowest in the Visayas at -75, followed by balance Luzon at -74, Metro Manila at -71 and Mindanao at -65,” SWS said.

The biggest improvement was in Mindanao after its score went up to -65 from -80 in May. — Charmaine A. Tadalan

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