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PHL economy to contract by 2% this year — Moody’s

MOODY’S Investors Service now expects the country’s gross domestic product (GDP) to contract by as much as 2% this year, as the coronavirus outbreak continues to wreak havoc on the economy.

“The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and financial market turmoil are creating a severe and extensive economic and financial shock,” Moody’s said in a credit opinion sent to reporters on May 12.

If realized, the -2% GDP would be the country’s first full-year economic contraction since 1998.

Moody’s had previously forecast 2.5% economic growth in April, much lower compared to the 6.2% baseline forecast it gave last year.

“As the ECQ (enhanced community quarantine) will encompass much of the second quarter, we expect high-frequency data to continue to deteriorate despite the implementation of countercyclical policy stimulus, including handouts to vulnerable, low-income households,” Moody’s said.

In an e-mail, Christian de Guzman, senior vice-president at the Sovereign Risk Group of Moody’s, said the forecast was downgraded mainly due to the severity of the impact of the ECQ and a change in the assumed strength of recovery as some precautionary measures may be maintained.

He noted that the expected 4% decline in its G20 global growth this year “led to a more pessimistic outlook for both remittances and exports.”

GDP contracted by 0.2% in the first quarter, its first contraction since the three percent decline in the fourth quarter of 1998 during the Asian financial crisis.

After a six percent growth in 2019, the government now expects -1% or flat GDP growth this year.

“Given that we now expect the ECQ to last through most, if not all, of the second quarter, we are looking at an even larger contraction through the middle of the year,” Mr. De Guzman said.

The Philippine government on Tuesday announced the extension of a lockdown of Metro Manila, Laguna province and Cebu City until end-May, although some restrictions will be eased.

“Some of the key risks include the containment of the coronavirus outbreak itself, not just in the Philippines but also globally; an inability to contain the outbreak could lead to an even more prolonged imposition of measures that will weigh on economic activity,” he said.

Despite the headwinds, Mr. De Guzman noted that the country has the fiscal space to cushion the blow of the economic fallout of the pandemic.

Meanwhile, Moody’s has upgraded its 2021 growth forecast for the Philippines to 6.4% from a previous forecast of six percent, under assumptions of normalization of economic conditions.

“The removal of restrictions on movement will benefit consumption, allow people to return to work and alleviate the disruptions to the government’s infrastructure program,” Mr. De Guzman said, noting that they also do not see industries such as travel and tourism to go back to their pre-outbreak levels of activity by 2021.

Meanwhile, Moody’s has maintained its “Baa2” rating for the country, which is a notch above minimum investment grade. It has likewise kept the country’s outlook at “stable.”

In its credit opinion, Moody’s said the country’s credit strengths lie in its sustained growth fueled by favorable demographics, moderate government debt levels, as well as its stable and resilient banking system.

“Moody’s expects the Philippines’ real GDP growth to remain robust relative to peers and that its fiscal metrics will continue to strengthen as the government continues to make progress on its socioeconomic reform agenda, particularly on tax reform,” it said.

“However, the global coronavirus outbreak threatens the Philippines through a number of channels, including trade, supply chain linkages, investment, remittances and tourism, while stringent containment measures will also sharply curtail domestic demand. In addition, the combination of lower revenue resulting from weaker economic growth and higher spending to mitigate its impact will lead to wider government deficits and higher debt.” — Luz Wendy T. Noble

Salcedo opens an online exhibition

WHILE museums and art galleries remain closed, and gatherings for art events are still prohibited, enjoying — and purchasing — art continues online.

Salcedo Auctions launched its first online gallery with the exhibition titled A/NEW: Recent Works by Allain Hablo, Rodin Fernandez, and Von Ng on its official website (salcedoauctions.com). It held an online vernissage for the online gallery and exhibit on Zoom on May 9, with the two of the three featured artists, the Salcedo Auction staff, guests (some of whom deactivated their video), and the press present.

A/NEW features 12 acrylic on canvas works from abstract artist Allain Hablo’s Kintsugi series; eight geometric wood sculptures by architect and visual artist Rodin Fernandez; and six acrylic on canvas works by expatriate artist Von Ng.

Allain Hablo entered the art scene as a finalist at the Shell National Student Arts Competition in 1991. For the Salcedo exhibit, Mr. Hablo’s 12 works reflect the Japanese art of kintsugi in which broken pottery is repaired with lacquer and a precious metal. The artist uses earth and amethyst hues accented with gold mimicking a lighting flash.

Ten years after taking over his father’s Architectural Design Studio, Honrado “Rodin” Fernandez, Jr. experimented with old materials and tools for his sculptures. For this exhibit, Mr. Fernandez crafted cubes made from narra, acacia, and mahogany. The wood he worked on, he said, were pieces that were just lying around his house.

“In this series, I have set physical limits for myself. Starting with cubes that may look identical on the outside, but are actually made from different varieties of wood and cut from different parts of the tree, each cube has its own unique set of grains similar to the human fingerprint,” Mr. Hernandez wrote in his artist’s statement.

In the exhibit, visitors can get a 360 degree view of each wood cubes by clicking on the media button on the upper right corner.

Currently based in Beijing, Von Ng studied Architecture and Industrial Design but shifted to pursuing abstract art. For this exhibit, he showcases six post-apocalyptic inspired abstracts.

“Growing up, I was always into science fiction. I was always drawn to that certain aesthetic. When I did art, it always had something to do with that aesthetic… I was also drawn into what [the image] looks like when it has decayed,” Mr. Ng said during the online vernissage. “That’s what I wanted to capture.”

“In more recent years, my fascination with the aesthetic of post-apocalyptic imagery has had a strong impact on my work,” Mr. Ng wrote in his artist’s statement. “This tension and interplay informs my work and my art-making process, as the narratives of hope from destruction, order from chaos, and rebirth from the wreckage play out on the canvas.”

THE VIRTUAL GALLERY
Similar to the online viewing rooms of recent international art fairs, Salcedo Auction’s online gallery can be navigated through a virtual space where the artworks are displayed. Visitors may select a work and zoom in for a detailed view. Instructions for navigation are found at the bottom of the gallery space. On the upper right corner is an information bar with the artwork’s price. It also includes an inquiry button.

“You’ve seen a lot of people mentioning viewing rooms that would be the default venue for seeing art nowadays. We did a bit of exploring to find a [platform] that was not just aesthetically delightful but was easy to navigate,” Salcedo Auctions director Richie Lerma said.

“We will continue to utilize it even when [quarantine] restrictions are lifted,” Mr. Lerma added. “When we are allowed to have our physical space operating and gathering people, we will certainly do that. But, at the same time, for those who are unable to [go] or are not comfortable [going out] just yet, we have our virtual space as well.”

The online exhibition runs until May 22.

Meanwhile, Salcedo Auctions’ subsidiary Gavel&Block will hold an online auction on May 23, 2 p.m., on its official website. A portion of the proceeds from the A/NEW exhibit and the Gavel&Block online auction will go to feeding programs of the hunger relief organization Rise Against Hunger (RAH) Philippines.

For more information, visit salcedoauctions.com or contact 0917-825-7449, 0917-107-5581. — Michelle Anne P. Soliman

WFH during the ECQ: LPC’s Lylah Fronda-Ledonio and Phillip Añonuevo

WITH enhanced community quarantine (ECQ) in Metro Manila nearing the 60-day mark, Leechiu Property Consultants (LPC) executive directors for commercial leasing Lylah Fronda-Ledonio and Phillip Añonuevo now have their work-from-home (WFH) routines down pat.

Ms. Fronda-Ledonio starts her day by preparing breakfast for herself and her husband at 8 a.m., squeezing in a YouTube workout before beginning work at around 9:30 a.m.

“I think I have shorter hours now compared to before. Unlike now, I used to have several consultations from my team, which eats up a lot of my time. With this WFH, consultations became fewer. I can focus on my tasks and finish on time,” she said in an e-mailed reply to BusinessWorld questions.

Mr. Añonuevo, who usually had to meet clients and colleagues face-to-face, initially thought his productivity would go down as a result of the WFH set-up.

“I find that I can do the same amount of work while at home and to some extent more work can be done since I don’t have to go through two hours of traffic every day. What hampers productivity is our inability to meet with clients and show them buildings and properties, which is an essential part of the type of work that we do,” he said.

While the WFH set-up has blurred the lines between office and home life, Mr. Añonuevo avoids making calls or sending work-related messages after office hours. “I usually stop calling clients at around 5:30 p.m. except for some who are used to chatting in the evening. I message colleagues up until about 8 p.m. I don’t message them often at this time knowing that they have their families and need their personal time too. It’s the same as when we weren’t in quarantine,” he said.

DESCRIBE YOUR HOME OFFICE. WHAT ARE THE THINGS YOU WISH YOUR HOME OFFICE HAD RIGHT NOW TO MAKE THINGS BETTER/MORE COMFORTABLE?
Ms. Fronda-Ledonio: Although we have several rooms in the house, I prefer working in our living room… I like [having] the TV on so I can watch the news while I work. I have two small tables. The big table is for my laptop, and the smaller table is for the remote controls for the TV, cable, ceiling fan, diffuser, and portable speaker. I wish I had a big printer beside me — also, another screen to review and compare several documents.

Mr. Añonuevo: I use one of the rooms in our house as my home office. I usually conduct business using my mobile phone and do not need a lot of space. Nonetheless, I use my personal table as my workstation. I have all that I need to work efficiently.

WHAT’S YOUR WORK-FROM-HOME ATTIRE?
Ms. Fronda-Ledonio: It depends. Sometimes, I wear shorts and a simple shirt, with light make-up and earrings. Other times I wear my comfy pajamas the whole day. For video calls, I just change my top to look more presentable.

Mr. Añonuevo: I wear casual attire at home which includes a collared shirt, especially when video calls are needed.

HOW DO YOU GET YOURSELF INTO “WORK MODE” WHILE AT HOME?
Ms. Fronda-Ledonio: Shifting to work mode is not a big issue for me since I am used to bringing my work home. I am actually enjoying it. I love it that I am working and get to cuddle my fur babies.

Mr. Añonuevo: I can shift to work mode immediately after messaging a colleague to inquire about the status of an engagement. Shifting to work mode is not a big issue for me since I like my work. One thing that I noticed is that because of the gravity of our situation, the delineation of work and personal life seems to have gone [away]. I always try to maintain a positive attitude despite the current situation but I do not deny that we are in survival mode.

ANY INTERESTING EXPERIENCES WHILE WORKING FROM HOME?
Ms. Fronda-Ledonio: I have three super active dogs, and all are Jack Russell terriers. For our internal calls, my colleagues are used to the barking of my furbabies. One time, I forgot to mute my phone while giving instructions to our helper to mince some onion and garlic for dinner.

Mr. Añonuevo: My kids would sometimes hear me talking to my colleagues. Sometimes, I would wish that they would take interest in my work, and corporate real estate, and remember these times when they are choosing their careers.

WHAT’S THE MOST IMPORTANT LESSON YOU LEARNED WHILE WORKING FROM HOME? HOW WOULD YOU APPLY THESE WHEN THINGS GET BACK TO NORMAL?
Ms. Fronda-Ledonio: Though it’s comfortable working from home for me, I do get worried for my other colleagues who could be either living alone in a condo or may need something but are unable to go out so I check on them once in a while, or I send food to their homes. After this lockdown, I’d like to continue looking more after my colleagues.

These times we are in made me see that there is so much to be grateful for: our families both from work and at home; the quietness of working from home while being with my family and furbabies and having a simple meal with my hubby; connecting with my LPC family remotely and knowing they are ok; these are everything that I am most grateful for.

Mr. Añonuevo: I found it very important to be organized and to declutter my desk and files. One can achieve finishing tasks on time with focus. With this work ethic, the day actually goes by quickly.

WHAT WILL YOU MISS THE MOST WHEN YOU GO BACK TO THE OFFICE AFTER THE ECQ ENDS?
Ms. Fronda-Ledonio: I will miss the comfort of my home, my rest time in the afternoon, watching Korean dramas and other series on Netflix and Amazon Prime, my daily cooking adventures and, of course, cuddle time with my furbabies 24/7.

Mr. Añonuevo: I will miss not having to go through two hours of traffic to get to the office every day. I will miss the quality time spent with family of course. But I long to go back to normal work life. — Cathy Rose A. Garcia

Telco revenue to be flat this year — Fitch Ratings

By Arjay L. Balinbin, Reporter

THE revenue of Philippine telecommunications companies will “remain relatively flat” this year as the coronavirus pandemic continues to disrupt economic activities, Fitch Ratings said in a report released on Tuesday.

“Fitch forecasts industry revenue will remain relatively flat in 2020 from a 7% increase in 2019, below our previous estimate of mid-to-high single digits, amid the pandemic,” the global debt watcher said in a non-rating action commentary e-mailed to reporters.

It noted that telecom revenue rose at a “slower pace” of 5% in the first quarter this year from the 9% revenue growth during the same period last year, “despite incorporating only two weeks of the enhanced community quarantine (ECQ) measures since mid-March 2020.”

“We expect leverage metrics to be stretched over the next 18 months, as operational cash flows lag behind investment outlays,” it added.

Fitch Ratings also noted PLDT Inc. is expecting a “softer” momentum in the second quarter while Globe Telecom, Inc. “has a more pessimistic outlook of a low double-digit sequential quarterly decline, with the shift of mobile traffic to home broadband services and weak economic conditions affecting mobile spending.”

PLDT Chairman, President and Chief Executive Officer Manuel V. Pangilinan said in a recent briefing that the telecommunications company’s revenue for the second quarter was likely to “show a decline of low to middle single digits” compared with the first-quarter revenue this year.

PLDT’s first-quarter total revenues went up 7% to P43.65 billion, of which service revenues increased 8% to P41.8 billion and non-service revenues inched up 1.3% to P1.85 billion.

The company’s net income decreased 12% to P5.91 billion because of losses on its investment in Germany-based Internet company Rocket Internet and ramped-up investment in its digital arm Voyager Innovations, Inc.

But compared with the first quarter last year, it is likely that the second quarter will show growth, Mr. Pangilinan said.

“The first half of this year will also be ahead of the first half of last year in terms of revenue,” he added.

For its part, Globe’s consolidated service revenues rose 2% to P36.9 billion from P36 billion, citing the “limited impact” of the pandemic on its operations.

Globe’s first-quarter net income declined 2% to P6.6 billion from P6.73 billion in the same period last year due to sustained increase in depreciation charges and a bigger share in affiliates’ losses.

Fitch Ratings said the payment extensions offered by telcos to their post-paid customers, including enterprise segments, were “likely to increase cash-collection cycles.”

It also noted that PLDT benefits from wider service diversification and a more entrenched fixed-line position compared with Globe.

PLDT expects its capital spending for this year to be reduced by 24% to P63 billion from the planned P83 billion as movement and travel restrictions under the ECQ hamper its network rollout.

Citing the same reason, Globe, which had initially budgeted P63 billion for this year, said its capital expenditure guidance for the next quarter would likely be lower by at least P2 billion from the P10.7 billion it had spent in the first quarter.

“We believe a spill-over of deferred capex (capital expenditures) into 2021 would raise leverage further, particularly in the absence of resurgence in EBITDA (earnings before interest, taxes, depreciation and amortization),” Fitch Ratings said.

It said both Globe and PLDT had initially planned “another record year of capex investments” in 2020, in line with their capex push ahead of the launch of a third mobile-network operator, Dito Telecommunity Corp.

“Fitch expects average FFO (funds from operations) net leverage to rise to around 3.0x in 2020-2021, underscoring our negative outlook on the Philippine telecom sector,” the ratings agency added.

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

Cirtek turns to China and Taiwan for expansion

CIRTEK Holdings Philippines Corp. (Cirtek) is exploring opportunities in China and Taiwan as part of diversifying its supply chain amid challenges brought by the coronavirus disease 2019 (COVID-19) pandemic.

In a statement on Tuesday, the listed electronics manufacturer said its manufacturing capacity is currently limited to 60% due to local restrictions brought by efforts to mitigate the spread of the virus.

Even when the quarantine is lifted, it said its capacity is expected to rise only to 70% as social distancing measures will still be observed.

To still sustain the increasing demand for its products, Cirtek has resorted to tapping contract manufacturers in China that have resumed operations since its quarantine measures were lifted in March.

“As part of Cirtek’s business continuity and expansion plans, it is in talks with an additional contract manufacturing partner in China as well as qualifying a new Taiwan facility in response to supply chain diversification and business resiliency plans moving forward,” it said.

Cirtek has remained operational while parts of the country were put under an enhanced community quarantine since mid-March as it was exempted for being export-oriented.

The company is engaged in manufacturing various technology products used in communications, consumer electronics, power devices, computing, automotive and industrial sectors, which are exported across Europe, United States and Asia.

Aside from expansion to China and Taiwan, Cirtek also said it was looking to play a key role in the rollout of fifth generation (5G) technology in the United States, as its wholly-owned subsidiary Quintel USA, Inc. launched a new generation of antennas for the advanced network.

The product is the 12-port dual diplexed antennas, which Cirtek said would help telco operators in the US in introducing 5G services across the country.

“From an equipment maker’s perspective, large innovations can be achieved in terms of spectrum efficiency and densification in pushing the network envelope through specialized techniques and these are what Quintel’s new product (is) all about,” Quintel President Michael Stephen Liu was quoted in the statement as saying.

Cirtek posted profits of $4.46 million last year, slightly higher than the $4.41 million it saw in 2018. Its shares in the stock exchange gained P1.12 or 15.01% to P8.58 apiece yesterday.— Denise A. Valdez

Kominers’ Conundrums: Poker with zero privacy

By Scott Duke Kominers, Bloomberg Opinion

LAST week’s puzzle was completely hidden, so this week I’m putting everything on the table — the poker table, that is:

Daffy and Donald decide to play a game of five-card draw poker. They hate randomness, so they play with all 52 cards faceup. Daffy goes first, and gets to pick whichever five cards he wants; Donald chooses five cards from those that remain. Then Daffy can discard up to five of his cards and pick replacements from the cards left in the deck; after that, Donald does the same. (Both see which cards the other chooses and discards, and discarded cards are removed from the game.)

The goal is to have the best poker hand at the end. Since Daffy goes first, Donald wins if the hands tie.

Who wins, and what’s their winning strategy? And what happens if Daffy and Donald play the same game but add in two “wild” cards, which can represent any card of any suit?

The poker hands are ranked as follows:

And for the purposes of this puzzle, the scoring just uses hand-quality ranks, rather than hand-and-suit ranks. That means if Daffy and Donald both get royal flushes, it’s a tie — resulting in a win for Donald. (Otherwise, the game would be boring because Daffy could just grab the royal flush of spades and guarantee his victory every time.) Similarly, once the wild cards are added to the mix, there’s no special bonus for “five of a kind.”

LAST WEEK’S CONUNDRUM
When you’ve got a role to fill, NICOLAS CAGE is always the answer. The puzzle came with essentially no instructions, but astute readers spotted a number of hyperlinks on individual letters throughout the column. (“Notice anything”; “Work your way”; “solve the mystery”…) Each link pointed to a video clip from an iconic Cage film, queued to one of Cage’s sublime lines. Meanwhile, if you kept track of which letters were linked and wrote them out in sequence, they spelled “NAME OF ACTOR,” indicating that the answer to the puzzle was indeed the star’s name.

Most solvers would probably declare victory there — myself included, if I were figuring out the puzzle instead of writing it. But one of the fun things about these sorts of mysterious brainteasers is that they often have many layers. Especially clued-in readers might have noticed a few other hints pointing to Cage, such as my apology for being “cagey” about the puzzle format, plus the fact that the part of the column with the single-letter links was bracketed on both sides by Cage-related links that didn’t quite fit the format, such as a trailer for the movie National Treasure.

And there was a deeper layer still: If you look again at the words with links, you’ll notice that the linked letter isn’t always in the same place — it’s the first letter in “Notice,” the second letter in “way,” and so forth. If you write out the names of characters Cage was playing in the linked scenes (using last names when possible for consistency) and look at the same letter positions as in the clue words, you’ll see NICOLAS CAGE spelled out.*

That next-level clue uses a puzzle feature called “indexing,” whereby the puzzle gives numbers that point to specific letters in clues. The trick with indexing is to figure out which numbers are the indexes (in this case, letter positions in the linked words), and what’s being indexed (in this case, character names).

Marc Del Mar and Tan Yi Jun — literally within seconds of each other — were the first to figure out this Exotic puzzle; there were 80 other solvers — including Derek Byrne, Jean Cunningham, Rauan Khassan, Stephanie Lo, Stirling Newberry, Jonathan Schachter, and Iolanthe Stronger — plus over 700 who solved a much simpler variant posted to Instagram. Special shout-out to Andre De Janon, whose solution e-mail was written using the same encoding format as the puzzle itself.

THE BONUS ROUND
Try to solve the Mission’s mysterious boarded-up window puzzle (https://www.sfgate.com/sf-culture/slideshow/Boarded-Games-How-one-mission-turned-shuttered-201949.php); or Smithsonian Magazine’s new crosswords (https://www.smithsonianmag.com/games/smithsonian-magazine-weekly-crossword-180973849/). Last week we transformed the game Magic: The Gathering into Uno (https://www.reddit.com/r/BadMtgCombos/comments/bpmc8g/turn_mtg_into_uno_with_one_simple_29card_trick/); this week, why not make it into an all-purpose computer (https://www.youtube.com/watch?v=pdmODVYPDLA)? Read up on Frank Ramsey, “The Man Who Thought Too Fast” (https://www.newyorker.com/magazine/2020/05/04/the-man-who-thought-too-fast); take virtual tours of seven spectacular libraries (https://www.atlasobscura.com/articles/7-libraries-you-can-visit-from-home); or explore the World’s most Bohemian Geography (https://www.youtube.com/watch?v=XeU7xLhiVj8). Play hide-and-seek with a virtual cat(https://twitter.com/impending/status/1257339236140883970); ogle Animal Crossing’s best virtual hats(https://www.gameinformer.com/2020/04/29/a-growing-list-of-the-best-fan-designs-in-animal-crossing-new-horizons). And inquiring minds want to know: If black holes trap light, then why are they bright (https://www.quantamagazine.org/why-are-black-holes-so-bright-20200422/)?

In addition to solutions, please send paradoxes, paraphernalia and/or your favorite puzzles to skpuzzles@bloomberg.net.

*Did you know that “NICOLAS CAGE” and “NAME OF ACTOR” have the same number of letters? More fun facts courtesy of Conundrums!

Gov’t fully awards bonds

THE GOVERNMENT made a full award of the reissued seven-year Treasury bonds (T-bonds) it auctioned off on Tuesday amid lower rates and strong demand as investors eye longer tenors as they seek higher yields.

The Bureau of the Treasury (BTr) yesterday raised P30 billion as planned via the reissued seven-year T-bonds as the offer was more than three times oversubscribed, with total bids hitting P99.109 billion.

The BTr also opened its tap facility to offer another P15 billion via the same tenor.

The average rate for the seven-year papers plummeted by 178.6 basis points to 2.946% yesterday from the 4.732% seen when the tenor was last awarded on Jan. 21.

National Treasurer Rosalia V. de Leon said the auction was met with strong demand as investors started eyeing longer tenors for higher yields.

“Search for yields so appetite now stretched to longer than one year with low inflation,” Ms. De Leon told reporters in a Viber message on Tuesday.

Government data showed headline inflation eased to 2.2% in April from 2.5% in March and the three percent seen in April 2019.

This brought the year-to-date average to 2.6%, well within the central bank’s 2-4% target and higher than the revised 2% forecast for this year.

Easing inflation was largely attributed to falling oil prices in the global market that drove down domestic pump prices and transport costs, which offset the uptick in food prices.

Ms. De Leon added that liquidity in the market remains strong as investors continue to flock to safe-haven assets given uncertainties here and overseas.

Robinsons Bank Corp. peso debt trader Kevin S. Palma said “despite all the uncertainties surrounding the global health pandemic, [there have been] improved liquidity conditions onshore due to recent monetary adjustments by the BSP (Bangko Sentral ng Pilipinas) continued to fuel demand for both the GS (government securities) primary and secondary markets.”

The BSP Monetary Board has delivered a total of 125 bps in reductions to benchmark rates so far this year to help cushion the blow of coronavirus disease 2019 pandemic on the economy.

The latest reduction was a 50-bp off-cycle cut on April 16 which followed the 50-bp cut in March and the 25-bp cut in February.

This brought key policy rates to record lows of 2.75% for the overnight reverse repurchase facility and 3.25% and 2.25% for the overnight lending and deposit facilities, respectively.

Meanwhile, the BTr made accepted P4 billion in bids for one-year papers via the tap facility on Monday, out of the programmed P10 billion.

This was on top of the P22 billion it raised earlier that day from the auction of Treasury bills (T-bills).

The government is planning to borrow P170 billion from the local market this month: P110 billion via its weekly T-bill auctions and the remaining P60 billion via T-bonds to be offered fortnightly.

The state borrows to plug its budget deficit expected to hit P1 trillion this year or equivalent to 5.3% of gross domestic product. — Beatrice M. Laforga

SEC warns of more easy money groups, penalties during pandemic

THE Securities and Exchange Commission (SEC) is warning the public against more groups operating investment schemes without authorization from the government.

The country’s corporate regulator issued new advisories against four groups that offer get-rich-quick opportunities to the public. These are the Bayanihan Program of Billy Ford Andrada; My Gold Rev/My Gold Rev Philippines; Friend$hip/Friend$hip Philippines; and World of Captcha (WOC).

The SEC said all four of them are not registered with the commission and do not have the secondary license required to solicit investments.

For engaging in investment schemes without clearance from the government, the SEC said they have violated the Securities Regulation Code and may be punished with a fine of up to P5 million, imprisonment of up to 21 years, or both.

The names of salesmen, brokers, dealers and agents behind the groups will also be reported to the Bureau of Internal Revenue for appropriate penalties.

“Everyone is reminded that aside from the strict penalties imposed by the commission…, the Bayanihan to Heal as One Act (Republic Act No. 11469) also punishes those participating in cyber incidents that make use or take advantage of the current COVID-19 crisis situation to prey on the public through scams, phishing, fraudulent e-mails, or other similar acts,” the SEC said.

Bayanihan Program gets investors by enticing the public to put down a minimum of P2,000 in exchange of a 50% return on investment, with bonuses such as a 5% direct referral bonus and a 15% direct commission.

My Gold Rev operates by offering passive income through investment packages worth $20-100,000 in exchange of total returns ranging from 260% to 450%.

Friend$hip masks itself as an online referral business operating from the United States and entices the public to pay a subscription fee of $7.99 (about P385) to get $1 for every successful referral.

WOC runs a captcha typing business where investors may participate by buying plans priced P200-1,000 and earn through captcha typing and referral bonuses.

The SEC said these groups operate investments schemes that are considered as selling securities and should therefore be registered with the commission.

“The public is advised not to invest or stop investing in any investment scheme being offered by (the groups identified) and to exercise caution in dealing with any individuals or group of persons soliciting investments for and on behalf of (them),” it said. — Denise A. Valdez

Delayed Friends reunion holding out for live audience over remote event

LOS ANGELES — Fans may have to wait until the fall for the Friends reunion special as HBO Max executives are holding out hopes of filming it before a live audience rather than shooting the much-anticipated get together remotely with stars under quarantine.

Robert Greenblatt, chairman of WarnerMedia Entertainment, which is launching the HBO Max streaming service on May 27, said on Monday he thought it was worth waiting until the one-off unscripted show could be filmed in a traditional way.

The reunion, dreamed of by fans for years, was supposed to have helped launch HBO Max, but the coronavirus epidemic shut down production across Hollywood before it could be filmed.

“We are holding out to be able to get this special done hopefully by the end of the summer. We do think there’s a value to having a raucous live audience experience these six great friends coming back together,” Greenblatt told Hollywood outlet Variety in an interview. “We didn’t want to just do it suddenly on a web call, or six squares and people shooting from their kitchens and bedrooms,” Greenblatt added.

Shows such as Saturday Night Live and a reunion of Parks and Recreation have put together episodes by recording stars in their homes.

Friends, starring Jennifer Aniston, Lisa Kudrow, Courteney Cox, David Schwimmer, Matt LeBlanc and Matthew Perry, ended in 2004 after 10 years, but it remains one of the most popular shows in re-runs.

“If this (coronavirus) goes on indefinitely, we may go the virtual route,” Greenblatt said. “But at the moment we are trying to look to the future and get this thing done in a more conventional way.

“If we launch it in the fall, I think it will be something that will have the audience looking forward to,” he added. — Reuters

Bank lending expands faster in March on rise in production loans

OUTSTANDING LOANS disbursed by universal and commercial banks rose by 12.9% in March, faster than the downward-revised 12% pace in February, according to data from the Bangko Sentral ng Pilipinas (BSP).

Inclusive of reverse repurchase agreements, lending rose by 14%, quicker than the upward-revised 11.3% logged in the prior month.

Data showed the rise in production loans, which made up 87.6% of the total credit, continued to be the main driver of growth. Lending to the sector grew quicker at a pace of 12% from the 9.4% seen in February.

The sustained increase in production loans is attributable to an increase in credit for real estate activities (21.8%); information and communication (20.8%); financial and insurance activities (17.2%); wholesale and retail trade, repair of motor vehicles and motorcycles (6.8%); and electricity, gas, steam and air-conditioning supply (7.7%).

Other sectors also saw rise in loans except for manufacturing (-0.4%) and mining and quarrying (-5.3%), the BSP said.

On the other hand, growth of loans disbursed for households eased to 22.9% from the upward-revised 37.7% logged in February. This was mainly due to the slower expansion in credit card and motor vehicle loans during the month.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed the pickup in lending to the market’s reaction after the easing moves done by the central bank since 2019.

“Since last year, we know that the BSP has been on an easing stance. RRP (reverse repurchase rate) cuts were made including other liquidity measures such as the RRR reduction. The market has been responding and liquidity in the market has been ample and growing,” Mr. Asuncion said in an e-mail.

In 2019, the BSP slashed rates by a total of 75 basis points (bps) before opting for a pause. By yearend, the overnight reverse repurchase rate was at four percent while lending and deposit rates were at 4.5% and 3.5%, respectively.

Meanwhile, reserve requirement ratios (RRR) were slashed by a total of 400 bps last year, which reduced the RRR of big banks as well as thrift and rural banks to 14%, four percent, and three percent as of end-2019.

BSP Governor Benjamin E. Diokno has said monetary policy tends to work with a lag of about three to nine months.

For this year, the BSP has been aggressive as it seeks to curtail the impact of the virus on the economy. It has cut rates by a total of 125 bps thus far which reduced overnight reverse repurchase, deposit and lending rates to record lows of 2.75%, 3.25% and 2.25%, respectively.

The BSP has likewise reduced RRR of universal and commercial banks by another 200 bps to 12%.

In the coming months, the lockdown measures may dent lending growth, according to Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“Bank loans could start to slow down in April and May 2020 and could even potentially contract in Q2 2020 together with the broader economy, depending on how long the lockdown would last,” Mr. Ricafort said. — L.W.T. Noble

SMC’s Holcim bid withdrawn after PCC rejection

THE Philippine Competition Commission (PCC) said San Miguel Corp. (SMC) withdrew its acquisition of Holcim Philippines, Inc. after the agency rejected the parties’ proposals for voluntary commitments drafted in response to concerns from the merger.

SMC on Monday said it would not proceed with the $2.15 billion transaction after its agreements lapsed on May 10 before getting PCC approval. Antitrust body said that the parties have the prerogative to extend the deadline, which it said was internally agreed on by the transacting parties.

PCC in a statement on Tuesday said that SMC’s decision came after the commission’s rejection of their proposals, and “after the parties had requested several extensions to file their required comment to the Statement of Concerns (SoC) submitted by the PCC’s Mergers and Acquisitions Office (MAO) to the Commission.”

The commission had earlier pointed out that the merger could potentially cause a monopoly, increased market power, or collusion, lessening competition in the market for grey cement in four key areas in the country.

PCC rejected the voluntary commitments, finding them insufficient in addressing competition concerns.

PCC said the parties have yet to file their comments in response to the competition concerns. The commission also has yet to receive a formal notice from the parties on withdrawing their transaction from review.

“The PCC is cognizant of the changes in market conditions during these extraordinary times, and as such, supports the promotion of business and their respective re-calibration of decisions in response to these conditions,” the commission said. — Jenina P. Ibañez

Seinfeld star Jerry Stiller, 92

NEW YORK — Jerry Stiller, who played two of American television’s most cantankerous fathers on the sitcoms Seinfeld and The King of Queens, has died aged 92, his son Ben Stiller said on Twitter on Monday.

“I’m sad to say that my father, Jerry Stiller, passed away from natural causes,” wrote Ben, a Hollywood comedian who appeared with his father in Zoolander and other movies.

“He was a great dad and grandfather, and the most dedicated husband to Anne for about 62 years. He will be greatly missed. Love you Dad,” he added.

Jerry Stiller was part of a 1960s comedy team with wife Anne Meara. But he was in his mid-60s when he got what would become his signature acting role — Frank Costanza, father of ne’er-do-well George Costanza (played by Jason Alexander) on Seinfeld, a tense, bombastic man always on the verge of apoplexy.

In 1993, Stiller had thought his entertainment career was nearing an end when he got a phone call from Larry David, co-creator of Seinfeld, about joining the cast led by comedian Jerry Seinfeld.

The show, one of the most highly regarded in US TV history, was in its fourth season at the time but Stiller said he had never watched a minute of it and had to ask, “Who’s Seinfeld?”

Stiller was in only 26 of the 172 Seinfeld episodes but each appearance was memorable, whether he was screaming “serenity now!” in a tense situation, trying on a bra for men, or explaining the odd rituals of Festivus, the Dec. 23 holiday he established as an alternative to Christmas.

Jerry Seinfeld on Monday paid tribute by posting a photo of himself holding The Last Two People in the World, a 1967 comedy album from Stiller and his wife.

Seinfeld ended its nine-year run in 1998 and that same year Stiller moved into another sitcom dad role on The King of Queens. As Arthur Spooner, he played another blowhard oddball — although not quite as eruptive as Frank Costanza — living in the basement of the home of his daughter (played by Leah Remini) and her husband (Kevin James) through the show’s nine seasons. — Reuters

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