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BSP sees inflation at 1.9% to 2.7% in June

THE CENTRAL BANK sees inflation to be benign until 2022. — REUTERS

HEADLINE INFLATION likely settled within the 1.9% to 2.7% range in June amid upside risks from higher prices of oil and rice, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.

“Higher gasoline, diesel, and kerosene prices as well as the uptick in the price of rice due to supply bottlenecks contributed to positive price pressures during the month,” BSP Governor Benjamin E. Diokno told reporters in a Viber message, citing the June inflation estimate range of the BSP Department of Economic Research.

Global oil prices have risen in recent weeks as prospects of recovery improve based on economic data so far. The decision by major oil producers to extend record oil cuts to July from the initially planned May to June period also pushed oil prices higher.

In the Philippines, the imposition of the additional 10% tariff on imported crude oil contributed to the rise in pump prices in June. The imposition of the additional tariff, which aimed to generate funds for the government’s pandemic response, ended on June 25 with the lapse of Republic Act No. 11469 or the Bayanihan to Heal as One Act.

Headline inflation in May jumped 2.1% as food and transport prices dropped due to the lockdown. This is slower than the 2.2% in April and the 3.2% in the same month of 2019.

For the first five months of 2020, average inflation stood at 2.5%, which was within the 2-4% target set by the BSP.

Mr. Diokno said downside risks to inflation in June include the slightly lower liquefied petroleum gas (LGP) prices and electricity rates in areas serviced by Manila Electric Co. (Meralco).

Meralco earlier this month said overall rates for June dropped by P0.0216 per kilowatt-hour (kWh) to P8.7252/kWh from the P8.7468/kWh recorded in May. This means that households’ electricity consumption of 200 kWh, 300 kWh, 400 kWh, and 500 kWh could expect a bill reduction by P4, P6, P9, and P11, respectively.

“Looking ahead, the BSP will continue to monitor evolving economic and financial conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” Mr. Diokno said.

On Monday, Mr. Diokno said the central bank sees inflation to be benign until 2022. It slightly raised its average inflation forecast for 2020 and 2021 to 2.3% and 2.6% from 2.3% and 2.5%, respectively.

This “benign inflation environment” supported the Monetary Board’s dovish stance seen through its latest delivery of another 50-basis-point (bp) cut on Thursday to help soften risks to economic growth and boost market confidence during the crisis. This lowered down reverse repurchase, lending, and deposit rates to record lows of 2.25%, 2.75%, and 1.75%, respectively.

The Philippine Statistics Authority will report the June inflation data on July 7. — Luz Wendy T. Noble

Lucio Tan firm sets P7-billion capex, takes ‘guarded’ outlook

By Denise A. Valdez, Reporter

LUCIO C. TAN’s LT Group, Inc. is maintaining a P7-billion budget for capital expenditures (capex) this year while keeping a “guarded outlook” due to challenges posed by the coronavirus disease 2019 (COVID-19) pandemic.

In the company’s annual stockholders’ meeting held virtually Tuesday, LT Group President and Chief Operating Officer Michael G. Tan said the company expects the economic decline of the Philippines to weigh on all its business units.

LT Group is formed by Philippine National Bank (PNB); Tanduay Distillers, Inc.; Asia Brewery, Inc.; Eton Properties Philippines, Inc.; PMFTC, Inc.; Fortune Tobacco Corp.; and Victorias Milling Co., Inc.

“The government estimates that the economy will contract by 2% in 2020, but some economists expect a higher deceleration of 10–20%. With purchasing power affected, demand for consumer goods is expected to be weak, and will affect the sales volumes of the products of PMFTC, Tanduay and Asia Brewery,” Mr. Tan said.

“Eton will also be affected as some tenants may end their lease contracts. PNB will have to grapple with non-performing loans and slower demand for loans,” he added.

“With the COVID-19 pandemic, we have a guarded outlook for 2020.”

LT Group posted a 41% earnings hike to P6.21 billion in the first quarter due to higher tobacco prices and rental rates. The tobacco business contributed P4.99 billion, PNB added P761 million, Tanduay accounted for P199 million, Eton added P168 million, Asia Brewery pitched in P74 million, and Victorias Milling contributed P91 million.

But Mr. Tan said the first quarter results only started seeing the impact of the pandemic in the latter part of March; the full impact is to be reflected in the coming months, especially in the second quarter.

“We cannot fully predict what the impact will be, as we adjust to the various permutations of [lockdowns] in the different parts of the country. (But) 2019 showed the good foundation of our company which we hope will help us weather this storm,” he told BusinessWorld after the stockholders’ meeting.

“Total capex for the group’s subsidiaries was P7 billion in 2019. Capex for this year should be around the same amount as there are no expansion plans in the pipeline,” Mr. Tan added.

LT Group is maintaining a debt-to-equity ratio of 3.86:1 with the bank and 0.16:1 without the bank as of end-March.

Shares in LT Group at the stock exchange ended at P8 each on Tuesday, up 10 centavos or 1.27% from the previous day.

NTC wants Sky Cable shut, demands refund

By Arjay L. Balinbin and Genshen L. Espedido, Reporters

THE NATIONAL Telecommunications Commission (NTC) on Tuesday issued a cease-and-desist order against the direct broadcast satellite service of the Sky Cable Corp., a subsidiary of the embattled ABS-CBN Corp.

The NTC said in its order that the legislative franchise granted to Sky Cable had expired on May 4.

“Sky Cable no longer has a valid reason and subsisting congressional franchise to install, operate and maintain a direct broadcast satellite service,” it added.

NTC argued that the provisional authority it had issued to Sky Cable to operate and maintain a direct broadcast satellite in 251 cities and municipalities throughout the country was based on the company’s valid franchise.

The commission cited in its order Act No. 3846, which states that “no person, firm, company, association, or corporation shall construct, install, establish, or operate a radio transmitting station, or a radio receiving station used for commercial purposes, or a radio broadcasting station, without having first obtained a franchise therefor from the Congress of the Philippines.”

It also gave Sky Cable 10 days from the receipt of the order to explain why the frequencies assigned to it “should not be recalled for lack of the necessary congressional franchise as required by law.”

The company was also directed to “refund to all its subscribers those amounts representing unconsumed prepaid loads, deposits on subscriber equipment and devices, deposit or advance payment in monthly charges for postpaid subscribers, if any, charges collected from new applicants for the direct broadcast satellite service, and other charges collected.”

Also on Tuesday, the NTC released a separate order against ABS-CBN, directing it to immediately stop operating digital TV transmission in Metro Manila using Channel 43.

It argued that the order it had issued on May 5 “necessarily includes” the digital terrestrial television service in Metro Manila.

The NTC on Monday committed to the House of Representatives that it would order ABS-CBN to stop airing programs through digital television receivers or digiboxes.

ABS-CBN Chief Executive Officer and President Carlo Joaquin Tadeo L. Katigbak said that the network was willing to submit to the judgment of the NTC.

On May 5, the NTC ordered ABC-CBN, whose franchise had expired on May 4, to halt its broadcast operations.

In a statement , Sky Cable said its 1.5 million subscribers will be deprived of access to the channels it carries starting on Tuesday night.

PROTECTION OF ‘WORKERS’ RIGHTS SOUGHT
Separately on Tuesday, a labor group urged lawmakers to include provisions to protect workers’ rights in the bill granting ABS-CBN a new franchise.

“Hindi lamang po kaming humihingi ng simpleng pag-renew ng prangkisa ng ABS-CBN. Ang amin pong mungkahi bilang representate ng mga manggagawa ay ang pag-apruba ng mas magandang version na clearly ay pro-worker,” Sentro ng mga Nagkakaisa at Progresibong Manggagawa Campaign Manager Benjamin Miguel Alvero III said.

(We’re not just asking for a simple franchise renewal for ABS-CBN. Our call as workers’ representative is the approval of a better version that is pro-worker.)

He made the statement during the joint hearing of the House committees on Legislative Franchises, and Good Government and Public Accountability.

Mr. Alvero suggested that the bill should include the worker’s rights to self-organization, collective bargaining and negotiations, decent compensation and benefits, humane work conditions, and to be included in the system of profit-sharing.

“Tignan po natin itong pro-worker provisions bilang stepping stone upang ma-guarantee, masigurado na protektado ang mga manggagwa sa buong industriya ng broadcast,” he added.

(Let’s look at these pro-worker provisions as a stepping stone to guarantee and ensure the protection of workers in the entire broadcast industry.)

Mark Nepomuceno, former head of ABS-CBN corporate services group, said there are 4,340 regular employees under the network while there are 9,151 independent contractors and suppliers. This does not include employees under the network’s subsidiaries.

Asked by Kabayan Party-List Rep. Ron P. Salo why there are fewer regular employees in the network compared with independent contractors, Mr. Nepocumeno said it is “due to the nature of the industry.”

“I agree that the number of regular employees, compared to the project employees plus independent contractors will be a smaller percentage. What that exact percentage po, your honor, when we reconcile the numbers, we can arrive at that,” he said.

Labor and Employment Undersecretary Ana C. Dione said that while ABS-CBN is compliant with labor standards, Congress should also take note that there are 67 pending labor cases in the judiciary against the network since 1986. “With respect to the inspection after our findings, then we say yes they complied. We also note that there are pending cases, not in the Department of Labor but in other agencies. Kailangan po kasi tingnan nang whole kasi ‘pag sinabing (We need to look at it as a whole because if we say) compliant totally, I think that’s not a totally correct term,” she said.

Baguio Rep. Mark O. Go said that these cases should have been immediately resolved. “I think what should have been done here is we should have an immediate resolution of these cases. And as stated by Mr. Katigbak, they are willing to comply,” he said, referring to ABS-CBN’s top official. The two panels were discussing whether the media network violated labor laws to aid their decision in granting a new franchise. The committees will convene again on Wednesday.

JG Summit plans to offer dollar-denominated notes

JG SUMMIT Holdings, Inc. is looking to issue dollar-denominated bonds through an offshore subsidiary and has tapped several banks to arrange the offering.

In a disclosure to the exchange Tuesday, the Gokongwei-led holding firm said its wholly owned subsidiary JGSH Philippines, Ltd. is planning to issue US dollar-denominated fixed-rate notes with a benchmark issue size.

It has mandated UBS, Credit Suisse and Standard Chartered Bank as joint bookrunners and joint lead managers for the proposed unrated Regulation S offering.

A Regulation S offering means the securities will be executed in countries outside the United States. This method can be used to issue equity or debt securities to raise capital.

The planned amount of JGSH Philippines’ offering as well as the proposed use of proceeds were not disclosed as of Tuesday.

JG Summit will act as guarantor of the notes. Its board of directors has authorized its management to “determine the extent of its participation as a guarantor as well as to finalize the terms and conditions of such guarantee.”

For the first quarter, JG Summit reported a 71% profit drop to P1.9 billion due to the impact of the coronavirus disease 2019 (COVID-19) pandemic to its business units.

It has reduced its capital expenditure allocation for this year by 30% to P58 billion to help manage cash flow and control liquidity. This means deferring some projects and pre-delivery payments that were originally slated for 2020.

Shares in JG Summit at the stock exchange were up P2.35 or 3.76% to P64.85 each on Tuesday. — Denise A. Valdez

Vitarich turns profitable, earns P93M

VITARICH CORP. turned profitable in the first quarter as the feed, farm and food company reported a net income of P93.1 million, reversing losses of P172.7 million in the same period last year.

In a disclosure to the stock exchange on Tuesday, the company registered revenues of P2.34 billion, up 25.8%. It posted a net income before tax amounting to P132.99 million, a turnaround from a pre-tax loss of P173.37 million a year ago.

Vitarich Chief Executive Officer and President Ricardo Manuel M. Sarmiento said the first quarter performance provided a cushion for the company against the effects of the coronavirus disease 2019 (COVID-19) pandemic.

“We continued our lifetime professional partnership with business partners providing the necessary support in these difficult times. Our feeds sales stepped up by fulfilling requirements of customers whose previous supplier had to scale down or close. New sales channels for our products are being developed,” he said in the disclosure.

“Our strategy of focusing on efficiency and quality has been working despite the challenging chicken market. Our shift towards hotel, restaurant and institutional clientele has been working well for us. Our profitability ratios increased,” he added.

He said that the company’s profits during the last quarter of 2019 was carried over in January this year, which amounted to P69.39 million, and P46.43 million in February.

In March, Vitarich’s income fell to P17.16 million due to the coronavirus disease 2019 pandemic, according to Mr. Sarmiento.

He said Vitarich had made precautionary measures at its place of business and operations had continued despite the pandemic.

“None of our employees have been diagnosed as COVID-19 positive as of date. Vitarich is adapting to the new normal, while keeping the core values of quality and excellence at heart,” Mr. Sarmiento said.

On Tuesday, shares in Vitarich rose 4.88% or P0.04 to close at P0.86 per piece. — Revin Mikhael D. Ochave

AGI earnings down 32% due to Taal eruption, pandemic

ALLIANCE Global Group, Inc. (AGI), the listed holding firm of tycoon Andrew L. Tan, posted a 32% drop in earnings for the first quarter due to business disruptions by the coronavirus disease 2019 (COVID-19) pandemic.

In a statement Tuesday, AGI said it booked an attributable net profit of P3 billion for the January to March period, down from P4.4 billion in the same period last year.

Its consolidated revenues decreased 7% to P38 billion as both the pandemic and the Taal Volcano eruption in January affected all its business units.

Megaworld Corp., the listed property developer of the group, posted a 9% decline in attributable earnings to P3.5 billion. The performance was attributed to delayed project completions in its residential segment and booking cancellations in its hotel segment.

Travellers International Hotel Group, Inc., the operator of Resorts World Manila, swung to a net loss of P1 billion from a net income of P244 million last year. The suspension of gaming operations in light of the COVID-19 pandemic and the eventual cancellation of large group activities pulled its gross revenues down 19% to P6.9 billion.

Listed Emperador, Inc., which manufactures brandy and whisky distributed to global markets, saw a 16% reduction in attributable earnings to P1.5 billion. The imposition of a liquor ban locally during the implementation of the lockdown resulted in a 3% slide in revenues to P10.7 billion.

AGI’s stake in Golden Arches Development Corp., more known as McDonald’s Philippines, generated 72% lower profits at P108 million. Several stores were temporarily closed during the period because of the Taal Volcano eruption in January and the quarantine in March.

“We started 2020 with twin challenges, and these are changing the way we live and do business today,” AGI Chief Executive Officer Kevin L. Tan said in the statement.

Despite the challenges, Mr. Tan said he believes AGI’s business model is “sound and sustainable” as its township developments are expected to remain relevant in the future and its entry into international markets for its spirits business helps reduce risks.

He added the company has taken digital transformation initiatives early on, which will help it adjust to the changing environment due to the pandemic.

“[W]e see a silver lining to this crisis. Our new learnings and our ability to adapt to emerging trends should make our organization better equipped and even stronger beyond this crisis,” Mr. Tan said.

AGI shares at the stock exchange gained 30 centavos or 4.62% to close at P6.80 each on Tuesday. — Denise A. Valdez

From Anton Dvorak to Gary Valenciano: PPO to hold online ‘pocket concerts’

WHEN you cannot go out of your house to attend a concert, the concert’s performers will come to your home. Virtually.

The Philippine Philharmonic Orchestra (PPO) will be holding “pocket concerts” starting this week in an attempt to uplift the minds and hearts of Filipinos during lockdown. The concerts will be viewable on the website of the Cultural Center of the Philippines (CCP).

Dubbed “Music for Healing: PPO in Quarantine,” the pocket concerts will consist of three performances: PPO by Your Bedside, PPO in Your Workplaces, and PPO in Your Living Room. Each one will run between 35 to 40 minutes and will feature 10 to 12 solo and ensemble performances by the orchestra members from their homes.

The performances, which feature a mix of classical pieces and popular music, are dedicated to the “sick who are recuperating either in the hospitals or in their homes, front liners who tirelessly take care of their sick countrymen, and the rest of the Filipinos staying in their homes living and coping with the new normal way of life in the pandemic stricken Philippine society,” according to a press statement from the CCP.

All three pocket concerts will be streamed simultaneously on July 3, 8 p.m., while new performances will subsequently be uploaded every Friday of July.

The first of the series, PPO by Your Bedside, will include Antonin Dvorak’s 4 Romantic Pieces op. 75 no. 1- Allegro Moderato to be performed by violinist Berny Payte, Ennio Morricone’s “Gabriel’s Oboe,” to be played by oboist Jappy Bautista, and Rodgers and Hammerstein’s song “You’ll Never Walk Alone,” to be performed by violinist Dino Decena and pianist Jascha Decena.

Leonard Cohen’s “Hallelujah” will be performed by viola player Joven Edward Aquisap, and Rico J. Puno’s “May Bukas Pa,” which will be played by cellist Roland Guerrero, will also be featured in the first pocket concert session.

The second concert, called PPO in Your Living Room, will feature Scott Joplin’s “The Entertainer” which will be played by contrabassist Aris Payte III, Consuelo Velazquez’s “Besame Mucho” will be played by trumpetist Melvin Miranda, Lucio San Pedro’s “Sa Ugoy ng Duyan” which will be performed by violinist Christian Tan and cellist Giancarlo Gonzales, and Louis Armstrong’s “What a Wonderful World,” to be performed by clarinetist Hernan Manalastas and contrabassist Abner Cruz, among others.

Finally, PPO in Your Workplaces will feature Gary Valenciano’s “Lead Me Lord,” to be performed by trombone player Ricson Poonin, and Johann Sebastian Bach’s Air on the G string, to be played by string ensemble players Jose Carlo Tuazon, Berny Dulce Payte, Joy Allan Dela Cruz, Giuseppe Diestro, and Aris Payte III, among other pieces including a repeat of some of the pieces performed in the other pocket concerts such as Dvorak’s 4 Romantic Pieces op. 75 no. 1 and Cohen’s “Hallelujah.”

The PPO pocket concerts will be streamed live on July 3, 8 p.m., on the CCP Website. Performances will then be uploaded every Friday of July. — Z.B. Chua

Megawide Construction to ‘triple’ precast technology capacity

By Adam J. Ang

MEGAWIDE Construction Corp. is expanding its precast technology capacity by three times to satiate demand from the external market.

The listed construction firm sees its precast technology, which creates concrete that is prepared, cast and cured off-site, as a “benchmark” for construction around this time of a pandemic.

“In the medium term, we will triple our precast capacity to accommodate demands from the external market,” Megawide Chairman Edgar. B Saavedra said in his address to the company’s annual shareholders’ meeting on Tuesday.

Megawide’s precast products, the official said, are a standard because of their “functionality and suitability” to social distancing protocols.

“We anticipate greater demand for precast technology to fast track infrastructure developments and address the country’s six million housing backlog, aside from the acceptability of precast in new normal protocols at construction sites,” Mr. Saavedra was quoted as saying in a separate statement.

Last year, external sales accounted for 40% of its precast business, lifting its construction segment revenues.

Resuming operations after the months-long lockdown, Mactan-Cebu International Airport (MCIA), the company’s joint venture airline with Indian developer GMR Group, rolled out contactless check-in, inquiries, and purchases.

It has set up a coronavirus disease 2019 (COVID-19) testing facility to help raise Cebu’s virus testing capacity.

The land port Parañaque Integrated Terminal Exchange (PITX), which reopened on June 8, is accepting bookings made via its mobile app. It will soon launch an automated ticketing booth.

When asked how it will conduct construction activities amid the public health crisis, Mr. Saavedra said the company is enforcing a 14-day quarantine policy.

“Typically what we do, we will quarantine those new workers, engineers, or staff that will come in, then we will have the quarantine for 14 days, before they can do the working,” he said. They must test negative for the virus, he added.

Megawide is eyeing to take on some of the government’s modified “Build, Build, Build” projects, including the Malolos-Clark Railway, North-South Commuter Line, and Metro Manila Subway projects.

Further, it plans to launch a mixed-use development and its proposed second runway at MCIA, as well as to pursue the second phase of PITX development by identifying key areas where it can put up similar land ports.

In the first three months of the year, Megawide netted an attributable income of P233 million, up 3% from P227 million it booked in the same months a year ago, on the back of the revenue growth of its construction and land port businesses.

Its total top line in the first quarter soared by 42% to P5.06 billion, with a 52% increase in construction earnings to P3.91 billion. Likewise, revenues from PITX surged to P287 million from just P20 million a year ago.

These have offset the 10% revenue decline of its airport operations to P803 million and 24% revenue drop in airport merchandising to P65 million, both of which were hit by the decline in passenger volume as local and international flights were banned due to pandemic-induced lockdowns.

Meanwhile, shareholders approved to increase the firm’s authorized capital stock by P54 million to P5.054 billion.

On Tuesday, shares in Megawide grew by 2.69% to close at P7.25 each.

Saving memories: Filipinas Heritage Library calls for submissions to its Philippine COVID Archive

IT IS a human imperative to document their lives, thus people through the centuries have turned to journals and diaries, writing about the momentous and the quotidian. These records offer future readers a window to the past, a way to understand that era. Arguably the most famous is The Diary of Anne Frank, which has for generations given readers a glimpse of life under Nazi Germany through the eyes of an adoloscent girl.

In the 21st century, taking pen to paper journals is considered quaint — most people record their lives through blogs and social media posts, both through words and pictures and videos. It is these records that the Filipinas Heritage Library is looking for to fill a special archive on the COVID-19 (coronavirus disease 2019) pandemic experience.

The Filipinas Heritage Library is “collating snapshots of our quarantined lives during this pandemic: the way we cope, live, fight, protect, and help ourselves, our communities, and our countrymen in facing this crisis,” it said in a call for contributions.

“Help us collect tangible evidence of the experience and memory of the Filipino that will later provide a different perspective to any research that will come out of this pandemic era for the generations to come,” it said.

Among the items it is looking for to include in the Philippine Covid Archive are photos, videos, audio, written documents, and website links about the Philippine pandemic experience.

The contributions will become part of the Library’s collection and will be made accessible to researchers of Philippine history and culture.

Selected contributions will also be posted on the Library’s Instagram page, and can become a part of “A Journal of the Plague Year: an Archive of CoVid19,” a collaboration of international curators on an global pandemic archive: https://covid-19archive.org/s/archive/page/welcome.

To learn more about this project or submit contributions, go to https://docs.google.com/forms/d/e/1FAIpQLSdPScdQu8C0hYqNr9804_VUTzZaGapMTo-Yqqs4aeB–_Ar4g/viewform. To learn more about Filipinas Heritage Library, visit https://www.filipinaslibrary.org.ph.

Phoenix zooming in on retail business

PHOENIX Petroleum Philippines, Inc. is setting its focus on expanding its retail business with high-growth and high-margin brands as it recovers from the impact of the global pandemic.

The listed independent fuel retailer on Tuesday said it needs to adapt to changes and disruptions in markets caused by the coronavirus disease 2019 (COVID-19) pandemic.

Phoenix is zooming in on retail, which it sees as “major force” driving the company, aiming to further expand the segment with “high growth, high margin consumer brands over time,” according to Phoenix President Henry R. Fadullon.

With the altered customer purchasing behavior post-pandemic, the company intends to complement its retail offers with digital initiatives, which in turn will multiply its footprint “exponentially,” Mr. Fadullon said.

In the first three months of the year, Phoenix shed P215 million as overall revenues fell due to the volatility of the global oil market.

This was despite its retail and liquefied petroleum gas (LPG) businesses’ strong performance, with volumes up 9% and 39%, respectively.

“We were not spared but we were able to navigate the downturn better because of our earlier investments in strategic, higher-margin areas such as retail and LPG,” Phoenix Chief Executive Officer Dennis A. Uy earlier said.

Higher-margin products like retail fuels, LPG, convenience retailing, and payments, make up 45% of the company’s domestic revenues this year.

Moving forward, FamilyMart, the company’s convenience store brand, widened its food offerings with for-sharing meals, frozen food, and options with longer shelf life, aside from bolstering its online presence through applications and deliveries.

As the government further eased quarantine policies, Phoenix’s over 650 fuel stations saw demand picking up with sales “nearing” the pre-quarantine levels. These outlets now allow contactless payments as part of safety protocols while operating amid the pandemic.

Moreover, the company said it expects that safety and health protocols will drive demand for “COVID-resilient” LPG products for home cooking.

Phoenix runs a total of 20,000 touchpoints comprised of service stations, LPG and lubricant retail outlets, FamilyMart stores, and Posible retailers, serving more than 1.2 million customers. — Adam J. Ang

Bacon triptych sells for $84.6 million in a boost for art market

ONE section of Francis Bacon’s Triptych Inspired by the Oresteia of Aeschylus. — WWW.FRANCIS-BACON.COM

FRANCIS BACON’S Triptych Inspired by the Oresteia of Aeschylus fetched $84.6 million at Sotheby’s on Monday, giving the high-end art market a boost after a months-long slump caused by the pandemic.

Estimated at $60 million to $80 million, the 1981 trio of paintings was the top offering at the marquee sales of contemporary, Impressionist and modern art sales. Sotheby’s guaranteed the work, consigned by the foundation of Norwegian businessman Hans Rasmus Astrup, who has displayed it at his private museum in Oslo since 1993. Proceeds from the sale will expand and diversify the museum collection, Sotheby’s said.

The global art market has been in a rut since March. Sotheby’s $326-million sales low estimate for the auctions is half of last year’s target. The sales are crucial in setting a new bar for investment-grade works, dealers said. Sotheby’s, Christie’s, and Phillips typically hold their marquee semi-annual sales in May and November. The May 2020 sales were postponed.

Sotheby’s auctioneer was in London, taking bids on screen from colleagues around the globe as clients participated online or by phone. Until now, the most expensive work sold online at Sotheby’s was Ivan Aivazovsky’s seascape, at 2.3 million pounds ($2.8 million) on June 2. The priciest item purchased by an online bidder was a pair of diamond earrings, at $6 million, in 2016.

On Monday, an online bidder doggedly competed for the Bacon work up to $73.1 million. It was sold to the client of Gregoire Billault, Sotheby’s head of contemporary art in New York. — Bloomberg

Gov’t fully awards 35-day securities

THE GOVERNMENT fully awarded the 35-day Treasury bills (T-bills) it auctioned off on Tuesday as its rate dropped on strong demand, driven by the surprise rate cut from the central bank.

The Bureau of the Treasury (BTr) on Tuesday raised P15 billion as planned via the 35-day T-bills out of bids worth P62.541 billion or more than four times the offer volume.

The 35-day papers were quoted at an average rate of 1.684%, dropping 41.7 basis points (bps) from the 2.101% logged during the June 16 auction.

National Treasurer Rosalia V. de Leon said the yield was a record low for the 35-day T-bills.

Ms. De Leon said they kept the award at the programmed level despite the strong demand since the tenor is “very short.”

She also attributed the decline in yields sought by banks to the Bangko Sentral ng Pilipinas’ (BSP) move to cut benchmark rates by 50 bps last week.

Rates now stand at record lows of 2.25%, 2.75 and 1.75% for BSP’s overnight reverse repurchase, lending and deposit facilities, respectively.

The central bank has slashed rates by 175 bps so far this year as it looks to cushion the economic impact of the coronavirus disease 2019 (COVID-19).

A bond trader shared the same view, noting the results of the auction were within market expectations.

“The move was quite expected due to market’s reaction on BSP policy move,” the trader said via Viber.

Moving forward, the trader said rates of government securities may drop further as market participants are expected to turn to debt papers with longer maturities in search of higher yields.

“We can expect that the yields will trend lower as dealers looking for yields may shift to longer-tenored bonds,” the trader said.

The government has set a P205-billion borrowing program for July and will offer P145 billion in T-bills via weekly auctions and P60 billion in Treasury bonds to be auctioned off every other week.

It borrows from local and foreign lenders to plug its budget deficit now seen to hit 8.4% of gross domestic product this year. — B.M. Laforga

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