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Term deposit rates slip

YIELDS ON the central bank’s term deposit facility (TDF) slipped after fresh signals from the central bank of a “prudent pause” in monetary easing.

Total tenders for the one-week term deposits offered by the Bangko Sentral ng Pilipinas (BSP) hit P231.351 billion on Wednesday, more than twice the P100-billion offering and also surpassing the P181.221 billion in bids seen last week for a P70-billion offer.

Returns sought by banks for the seven-day deposits ranged from 2.25% to 2.2625%, a slimmer band compared to the 2.25% to 2.29% logged on May 6. With this, the average rate settled at 2.2578%, slipping by 0.76 basis point (bps) from the 2.2654% fetched a week ago.

“The auction results are consistent with current ample liquidity in the financial system and market preference for safe, highly liquid assets,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement on Wednesday.

The TDF is the BSP’s primary tool to shore up excess liquidity in the financial system and to better guide market interest rates.

Offerings of term deposits with longer tenors of 14 and 28 days remain suspended. The BSP stopped offering term deposits at the onset of the enhanced community quarantine (ECQ) in Luzon in March to support the banking system.

Recent signals from BSP Governor Benjamin E. Diokno that the central bank will hold off on further easing may have caused the sustained drop in TDF yields, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“The 7-day BSP TDF auction yield was marginally lower week-on-week after BSP Governor Diokno signalled pause in monetary policy easing at the moment,” Mr. Ricafort said in an e-mail.

He added that term deposits continue to be among the investment options with higher interest returns for financial firms holding excess cash, as shown by the sustained surge in bids.

Mr. Diokno said earlier this week a prudent pause will allow the central bank to gauge how the series of policy moves already implemented by the Monetary Board have affected financial institutions.

The central bank has already cut benchmark rates by 125 bps this year following the 75 bps in reductions in 2019. This brought the key policy rate or the overnight reverse repurchase rate to a record low of 2.75% while overnight lending and deposit rates now stand at 3.25% and 2.25%.

The BSP also reduced the reserve requirement ratio of big banks by 200 bps to 12% effective last month. Mr. Diokno has been authorized to cut RRR by a total of 400 bps this year. The minimum liquidity ratio of stand-alone thrift and rural banks has also been slashed by 400 bps to 16% until yearend. — L.W.T. Noble

Swedish pop-up restaurant fights coronavirus one guest at a time

RANSÄTER, Sweden — A coronavirus-resistant restaurant in a meadow in Sweden with just one table and one chair has welcomed its first guest.

The pop-up restaurant named Bord for En — Table for One in English — has no waiters and the food is delivered to the table in a basket from the kitchen window via a pulley system.

Upon arrival, the guest is guided to the table by another rope that leads into the meadow. “Once the rope ends, there’s the chair and the table,” chef Rasmus Persson said, adding that the first basket to arrive at the table would carry a drink.

Persson, who founded the restaurant with his partner Linda Karlsson, said they had the idea when her parents came to visit in March and he prepared a table for them outside and served a meal through a window.

“I think one of the things many of us miss the most in these times is traveling,” Persson said. “Since we can’t geographically travel far I think at least by our minds we can travel and one of the best methods of having an inner travel, at least I think so, is by food and nature.”

Restaurants in Sweden have, unlike in many other countries, been allowed to stay open during the COVID-19 pandemic provided they observe social distancing guidelines.

The solo restaurant is fully booked through May while some slots are still available in June and July and they have weather protection for rainy days, Karlsson said. — Reuters

Pilipinas Shell reports losses as demand falls

PILIPINAS Shell Petroleum Corp. posted a P5.55-billion net loss in the first quarter as the coronavirus disease 2019 (COVID-19) pandemic led to a collapse in global oil prices, along with falling oil demand.

In a disclosure to the stock exchange, Wednesday, the local unit of Royal Dutch Shell reported a reversal of the P2.33-billion income it registered in the same quarter in 2019.

“Our first-quarter loss is disappointing given our robust overall performance last year and the strong marketing delivery from the start of 2020 up until mid-March,” Pilipinas Shell President and Chief Executive Officer Cesar G. Romero said in a statement.

“We have taken prompt action to reinforce the financial strength and resilience of our business, leveraging on the flexibility of our supply chain and prudent balance sheet management over the past years,” he added.

The listed oil company has doubled its operating expense savings target this year to P1 billion from P500 million in March, coming from various cash preservation initiatives.

Pilipinas Shell has cut its capital expenditure this year by 25% to over P1 billion, while its employees will no longer receive discretionary performance-related bonuses.

Its marketing volumes declined by 36% in the second half of March after the government imposed an enhanced community quarantine (ECQ) in Luzon. This is despite increasing them by 6% before the lockdown period.

Before ECQ, the total volumes of its retail business registered flat despite the Taal Volcano eruption in January. During the lockdown period, it went down over 50%.

Its non-fuels retailing delivery remained flat in the quarter, compared with a year ago, after partnering with delivery firms to transport non-fuels retail products to select areas during the quarantine period.

The increased premium penetration in lubricants by 8% also contributed to this, after a “strong” execution of its Women’s Month promotions and sales from its new range of products.

Its commercial business saw a 16% growth in volumes before the ECQ period, while premium fuel penetration also increased.

During the lockdown, these volumes went up 20% as operations of its base-load plant customers were restored, new customers in construction, manufacturing, and wholesale sectors were acquired, and as customers increased their inventories after the quarantine announcement.

The firm’s volume of lubricants grew by 7% from January to the first half of March, but it declined by over a half from the latter March period. However, it posted higher income in the quarter, driven by increases in both premium penetration and wallet share from customers.

Aviation fuel volumes recorded a 2% uptick in the quarter despite flight cancellations at the Ninoy Aquino International Airport during the volcano eruption and lockdown period. During the latter half of March, it saw aviation fuel volumes fall by 60%.

In the quarter, the company opened five new Shell Select shops, five Shell Helix Oil Change (SHOC)+, and nine co-locators.

Recently, Pilipinas Shell announced it would shut down its 10,000-barrel-per-day Tabangao refinery in Batangas for a month starting May 15, citing the decline in demand for fuel products and falling refining margins during the lockdown.

On Wednesday, shares in PSPC inched down 0.96% to close at P18.54 each. — Adam J. Ang

Lifetrack using medical imaging to accelerate COVID-19 detection

HEALTHTECH start-up Lifetrack Medical Systems is using medical imaging to help in accelerating the detection of potential coronavirus disease 2019 (COVID-19) cases, its chief operating officer Carl Nicholas Ng said.

Mr. Ng said Lifetrack seeks to address the lack of radiologists in the country by giving access to medical images from different hospitals, allowing them to make medical diagnoses remotely.

“In modern medicine, imaging or radiology is an incredibly important part of the diagnostic procedures. Where Lifetrack comes in, we’re replacing legacy radiology software, which basically requires the radiologist to be physically in the hospital,” Mr. Ng said in an April 29 interview.

Lifetrack recently partnered with the Antique local government, offering their technology for free to hospitals and clinics serving as COVID-19 triaging and referral centers.

“They are basically using CT scans to do preliminary screening of potential COVID-19 patients,” he said. He added that Lifetrack is also working with Living Hope Hospital in southern Leyte, among others.

Lifetrack also launched a secured, anonymized global COVID-19 image repository that can be used by radiologists and researchers to identify potential COVID-19 cases faster.

“I think now we have COVID positive or presumptive X-rays and CT scans in our repository so we’re working with different partners,” he said, noting Lifetrack has joined the International Consortium for COVID-19 Imaging AI (ICOVAI).

“So this is basically a consortium of health care providers, health care companies, including AI companies, that are trying to come together and figure out how we can use our technology to accelerate the identification of COVID cases,” Mr. Ng said.

Lifetrack has also partnered with FamilyDOC of Ayala Healthcare Holdings, Inc. and medical insurance company Maxicare HealthCare Corp. They also have customers in Davao, Nueva Vizcaya and Pampanga, as well as in Singapore, US, Brazil, UK, India and Nigeria.

Mr. Ng added that Lifetrack has developed its platforms to likewise include cardiology.

We’ve released some of this features but most of them will be part of a major upgrade which will be released probably end of 2nd quarter. — Charmaine A. Tadalan

How to still be a great place to work in a pandemic

IN its inaugural run, Great Place to Work Philippines awarded five companies that exemplified how to keep a company running efficiently and employees happy. And while the surveys conducted to choose the winners were done before the COVID-19 pandemic raged, the California-based consulting firm behind the award noted that the same companies named “Best Workplaces” nonetheless found ways to keep both employee morale and productivity high.

“Organization leaders had to find ways to keep the business going without compromising their employees’ health and safety. Within a couple of weeks under the Enhanced Community Quarantine (ECQ), we saw how companies set up home offices for their employees. They provided them the necessary tools and upskilled their people so they can continue with their jobs while working from the safety of their homes,” Antoinette Mendoza-Talosig, managing partner of Great Place to Work Philippines, told BusinessWorld in an e-mail on May 12.

The pandemic, she said, effectively changed the definition of a “workplace” from something that is confined to a building to a location dispersed across the islands.

The Great Place to Work Institute has been conducting employee surveys for more than three decades to define how a good company works. Among its criteria when determining if a company is a great place to work is credibility, respect, fairness, pride, and camaraderie.

The company publishes an annual list of great workplaces and its data is said to be used in Fortune’s annual Best Companies to Work For. Some of the workplaces that made it into the list are and Hilton hotels and Ultimate Software, among others.

In the Philippines, the list named outsourcing company Synchrony Services Philippines, logistics company DHL Express, hospitality giant Hilton, graphic design firm Canva Manila, and wholesale technology and supply chain distributor Ingram Micro.

These criteria may change as the pandemic has left organizations with “no choice but to operate remotely, having the need to adapt in no time,” saidh Ms. Mendoza-Talosig.

For the 2021 Best Workplaces list, she said the firm is “looking into the bold acts of leadership that organizations take in response to this crisis as they press on in their journey of building great places to work for all.”

“There are many heroic things that companies are doing and these will not go unrecognized. With this approach, Great Place to Work being the gold standard of recognition, will continue to inspire many to become great places to work for all — be it during ‘business as usual’ or with ‘the new normal,’” she said.

What won’t change though, is the importance of trust.

“What’s most important for supervisors and employers now is that this is the time to build trust. How do you make sure that your employees are really working and not watching Netflix all the time? You can’t. But what you can do is build a good relationship so that your team will want to root for you and work with you to ensure your success and the success of the organization. And we can only do this through trust. If you show your employees you trust them without having to look over their shoulders, your employees will reciprocate by giving you their very best,” Dr. Paulin Tay Straughan, a sociologist at the Singapore Management University, said in a recent Great Place to Work webinar.

For Ingram Micro, trust is a two-way street.

“What became clear was that our people trusted us, as a leadership and as an organization, and then we mirrored that trust onto them,” Sam White, director for human resources at Ingram Micro, said in a release.

Currently, the company’s Manila office has 90% of its workforce working remotely, something they did by delivering hardware and technology solutions to employees with internet connections.

“We’ve started determining the tips and tools of working in the ‘new normal’ — whether employees are working in the office, remotely, or from home — and how they could be more productive, healthy, and balanced in those types of environments,” Mr. White said. — Z.B. Chua

BSP warns on money laundering risks

FINANCIAL INSTITUTIONS under the watch of the Bangko Sentral ng Pilipinas (BSP) need to submit reports on transactions that were done with banks in North Korea and Iran due to risks of money laundering (ML) and terrorism financing (TF) schemes.

“For both DPRK (Democratic People’s Republic of Korea) and Iran), BSFIs (BSP-supervised financial institutions) should immediately submit a report to the Anti-Money Laundering Council on the actions taken as well as known information, such as name, date and nature of transaction, and amount involved, if any, regarding the designated individuals and entities…,” the central bank said in Circular Letter No. CL-2020-026 signed by BSP Deputy Governor Chuchi G. Fonacier on May 10.

The BSP said an updated assessment from global money laundering watchdog Financial Action Task Force (FATF) said both North Korea and Iran were found to have “significant strategic deficiencies” in countering ML and TF and in warding off proliferation financing (PF) regimes.

“At this time, we have no actual data on hand, but we expect that the transactions will be nil to minimal, especially for DPRK given the existing UN (United Nations) transactions,” Ms. Fonacier said in a text message yesterday.

The circular said the FATF’s findings on North Korea said the risks come from the country’s illicit activities related to their drive to develop weapons of mass destruction and its financing.

Following this, the FATF urged other countries to require financial institutions to be more watchful of their direct or indirect business dealings with North Korea as well as businesses acting on their behalf.

“BSFIs are likewise directed to terminate correspondent relationships with DPRK banks, where required by relevant UNSC (United Nations Security Council) Resolutions,” the circular added.

The central bank said BSFIs shall apply enhanced due diligence (EDD) measures and consider North Korea as a high-risk jurisdiction.

Meanwhile, the FATF has found that Iran has yet to address its strategic deficiencies, posing TF concerns to the international financial system. The watchdog said Iran will be considered a “high-risk jurisdiction” until the country addresses its deficiencies.

With this, the circular also directed BSFIs to apply EDD procedures and counter-measures when dealing with transactions with Iran.

“For Iran, there are valid trade and individual transactions, but also not significant, and these could be subjected to EDD,” Ms. Fonacier said via text

The Philippines is also under tighter watch from the FATF as it is under a 12-month observation period until October to implement tighter regulations on money laundering and counter-terrorism financing. — L.W.T. Noble

Businesses allowed to open under quarantine

MORE industries will be allowed to reopen under a modified lockdown in Metro Manila, including those that make alcoholic beverages, tobacco, electrical machinery, wood products and furniture, the presidential palace said on Wednesday. Read the full story.

Businesses allowed to open under quarantine

More businesses allowed to reopen in capital region

MORE industries will be allowed to reopen under a modified lockdown in Metro Manila, including those that make alcoholic beverages, tobacco, electrical machinery, wood products and furniture, the presidential palace said on Wednesday.

Also allowed to operate again are companies that make nonmetallic products, textiles, clothing, paper, rubber, plastics, coke and petroleum products, presidential spokesman Harry L. Roque said at a briefing.

Also allowed to reopen are factories that make non-metallic mineral products, computer, electronic and optical products, electrical equipment, machinery, motor vehicles, trailers and other transport equipment.

“These industries are now allowed,” Mr. Roque said in Filipino. “Since they are allowed in areas under a modified enhanced community quarantine, they are also allowed in areas under general community quarantine,” he added.

Meanwhile, office administration and other support services, financial services such as money exchange, insurance and non compulsory pension funds, management consulting such as legal and accounting services, architecture and engineering services, technical testing and analysis, advertising and market research must limit their workers to 50% on site and the other half at home.

The same applies to companies in computer programming, publishing and printing, film, music and TV production, photography, fashion, industrial, graphic and interior design, wholesale and retail trade of motor vehicles, motorcycles and bicycles, rental and leasing services except for real estate, and repair of motor vehicles, motorcycles and bicycles.

Malls and other businesses in areas under a modified lockdown such as Metro Manila may reopen with a 50% skeletal workforce. These include hardware stores; clothing and accessories, mall-based government frontline services, bookstores, baby care supplies stores, pet, food, and pet care supplies, information technology, communications, and electronic equipment, flower, jewelry, novelty, antique, perfume and toy shops.

The palace said wearing face masks, regular sanitation and hygiene practices would be required. Social distancing must also be observed. — Gillian M. Cortez

Businesses allowed to open under quarantine

How PSEi member stocks performed — May 13, 2020

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


Peso climbs to two-year high

THE PESO rose further against the greenback on Wednesday, notching its strongest finish since January 2018 amid positive market sentiment on the government’s move to scale up its fiscal stimulus during the pandemic.

The local unit finished trading at P50.26 against the greenback on Wednesday, gaining five centavos from its P50.31 per dollar, according to data from the Bankers Association of the Philippines.

The peso opened the session at P50.32 against the dollar which was also its weakest showing for the day. Meanwhile, its intraday best was its close of P50.26.

Dollars traded slipped to $390.5 million on Wednesday from the $391.85 million logged on Tuesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso’s close was its strongest in more than two years or since the P50.15-per-dollar finish last Jan. 8, 2018.

He said the peso rose on the back of new assumptions from the Development Budget Coordination Committee (DBCC) that include increased spending to cushion the impact of the virus outbreak on the economy.

“The peso closed stronger after the latest DBCC estimates showing higher budget deficit estimate of 8.1% that will increase stimulus spending to offset economic losses due to COVID-19 (coronavirus disease 2019) and the lockdown,” Mr. Ricafort said in a text message.

On Wednesday, the DBCC announced a revised projection of a 2-4% contraction in gross domestic product (GDP) this year, worse than the flat growth to -1% estimate from economic managers in April. This will follow the six percent growth notched in 2019.

Before the pandemic, the DBCC’s GDP growth target for this year and for 2021 was at 6.5% to 7.5%.

The DBCC expects recovery in 2021, expecting growth of 7.1% to 8.1%.

Meanwhile, a trader attributed the peso’s gains to US inflation data.

“The peso strengthened following the release of weaker-than-expected US inflation reports overnight,” the trader said in an e-mail.

For today, Mr. Ricafort gave a forecast range of P50.15 to P50.40 per dollar while the trader expects the peso to move within the P50.20 to P50.40 band. — L.W.T. Noble

Stocks drop as Metro Manila remains on lockdown

LOCAL SHARES retreated on Wednesday as investors assessed the economic impact of the government’s decision to keep the National Capital Region on lockdown for another two weeks.

The bellwether Philippine Stock Exchange index (PSEi) fell 25.42 points or 0.45% to close at 5,626.25 yesterday. The broader all shares index shed 15.26 points or 0.44% to 3,399.98.

“The market ended lower after investors priced in the economic impact of the government’s decision to still place major cities under lockdown measures until the end of the month,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message.

He noted the extension of the quarantine in these cities would mean a majority of the second quarter, or two out of three months, would account for the period when the economy is mostly asleep.

The government announced on Tuesday that Metro Manila, Laguna and Cebu City would remain under enhanced community quarantine (ECQ) until May 31, the third time it extended the ECQ from its original April 13 deadline.

This makes the Philippines one of the countries in the world with the longest lockdown emerging from the coronavirus disease 2019 (COVID-19) pandemic, Reuters noted in a report.

But compared to how it was two months ago, the government has relaxed the quarantine measures in other provinces to a general community quarantine (GCQ). It means these areas will be allowed to operate with a bigger — but still not 100% — workforce capacity.

“On a positive note, if the areas now placed under GCQ would turn out to be successful, then cities currently under modified ECQ may follow suit in the coming weeks,” Mr. Pangan said.

Five of six sectoral indices at the PSE closed lower on Wednesday. Mining and oil dropped 59.08 points or 1.28% to 4,548.88; financials lost 10.39 points or 0.88% to 1,162.77; services shaved off 10.28 points or 0.77% to 1,310.79; property trimmed 21.61 points or 0.76% to 2,818.09; and holding firms slid 10.50 points or 0.18% to 5,594.91.

Industrials was the only sub-sector that gained, closing the session up 9.69 points or 0.12% to 7,548.71.

Value turnover stood at P4.79 billion, down from P5.37 billion in the previous day. Some 422.90million issues switched hands.

Decliners outran advancers, 111 against 64, while 48 names ended unchanged.

Net foreign selling was trimmed to P394.37 million yesterday from P968.61 million on Tuesday.

“With the market still trading sideways, nearest support still sits at the 5,500 area, while closes resistance may be pegged at 6,000,” Mr. Pangan said.

Meanwhile, Wall Street’s three major averages closed around their session lows overnight. The Dow Jones Industrial Average fell 457.21 points or 1.89%, to 23,764.78; the S&P 500 lost 60.2 points or 2.05%, to 2,870.12; and the Nasdaq Composite dropped 189.79 points or 2.06% to 9,002.55. — Denise A. Valdez with Reuters

Agri dep’t seeking to tap P66B from stimulus funds

THE Department of Agriculture (DA) sought P66 billion worth of funding from Congress to bolster the rice supply, improve logistics, and provide emergency employment in response to the pandemic.

The DA said it is asking for P31 billion for the so-called Ahon Lahat, Pagkaing Sapat (ALPAS) Kontra sa COVID-19, a food-security initiative; P20 billion to improve logistics and food markets; and P15 billion for a cash-for-work program.

In a virtual hearing of the House committee on agriculture and food on Wednesday, Agriculture Secretary William D. Dar said that the “updated” ALPAS seeks to increase the rice buffer stock to 30 days from the current 15.

“The rice resiliency program with an earlier budget of P8.5 billion has been funded now by the national government and will be implemented during the wet season. So we are putting forward a program to continue with this rice resiliency for the dry season planting which is in October and November,” he said.

The Inter-Agency Task Force for the Management of Emerging Infectious Diseases recently approved P8.5 billion for the Rice Resiliency Project under the Plant, Plant, Plant program.

By the end of 2020, the DA’s rice resiliency project aims to boost palay production to 22.12 million metric tons (MT), which is equivalent to 13.51 million MT of rice after milling.

Mr. Dar assured the panel that the year-end rice inventory was good for about three months.

“We have enough rice, we are just finishing the dry season harvest and we are assuring the public that our outlook for rice for the year is positive… Hoping that we will continue to elevate our gain in terms of rice production and rice productivity,” he said.

Ngayon, nasa 87% (rice sufficiency) pa lang tayo. Ngayong nagpadagdag tayo ng budget na rice resiliency project for this season, that will bring us to 94% sa rice sufficiency. So meron pa tayong anim na porsyento. Kung tatanungin niyo na kung kaya natin maging 100%, technically yes (Right now, we are at 87% rice sufficiency. Now that we have the funding for rice resiliency this season, that will rise to 94%. That leaves us six percentage points away from 100% self-sufficiency, which is technically possible),” he added.

Mr. Dar said he is also open to review the Rice Tariffication Law or Republic Act 11203 once it hits two years from implementation.

Ako po ay, sabi ko palagi, pagbigyan natin ang batas. One year lang ang nakaraan. Ako after two years, pwedeng i-revisit. But as I have said, nasa power din ng House of Representatives na pwedeng i-revisit, ano pa yung i-strengthen (I have always said that the law must be given time to show results. It’s only been one year. We can revisit it after two years. But as I have said, the House has the power to revisit and even strengthen it),” he said.

The measure, enacted in February 2019, lifted the restrictions on rice imports but charged tariffs of 35% on Southeast Asian grain. The law effectively lowered rice prices for consumers but eroded farmer incomes.

He said that the P20-billion food logistics and markets component will ensure that farmers gain the ability to sell directly and benefit the most from their produce.

“We have to open up that concept of food markets where retail can also be done. We have to learn how food markets evolve in other countries so that we will get the best practices on how food markets are being managed and see to it that the farmers are getting the benefits. It should be a win-win for the producers, it should be a win-win for the consuming public,” he said.

The Cash for Work program can work alongside the Balik Probinsya, Balik Pag-Asa program which President Rodrigo R. Duterte established through Executive Order 114 to encourage urban residents and businesses to relocate to the provinces.

“We see to it that this would be also one mechanism for Balik Probinsya enrollees. Initial work can be provided for them so that they have enough cash to buy their basic requirements. We are ready if given the chance to start right away. We are realigning some of the budget of the department to now participate this early,” he said.

Mr. Dar also called on the Department of Budget and Management (DBM) to consider exempting the DA from National Budget Circular No. 580 which states that 35% of the budget of government agencies will no longer be released.

“If we want to sustain and elevate food production, food productivity, we should be exempted from setting aside 35% of the budget for COVID pandemic. You know, in fighting the COVID pandemic, we also have to fight with nutritious food and sustained (supply). The threat of hunger is as important as the threat of COVID-19,” he said.

Mr. Dar said he will be submitting a formal letter to the DBM regarding this matter.

Wala pa kaming formal na sulat na galing sa kanila (The DBM has not notified the DA officially). I will formally submit a letter seeking immediate exemption, hindi yung tingi-tingi na exempt (and not seek exemptions piecemeal),” he said. — Genshen L. Espedido