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Gov’t seeks P540B advance from BSP

Benjamin Diokno, governor of the Bangko Sentral ng Pilipinas, said the National Government is seeking another provisional advance of P540 billion. Photo taken on Feb. 5. — GERIC CRUZ/BLOOMBERG

THE National Government (NG) is asking the Bangko Sentral ng Pilipinas (BSP) for P540 billion in additional financial assistance to help plug the widening budget deficit due to the coronavirus disease 2019 (COVID-19) pandemic.

“The NG has requested for a fresh provisional advance of P540 billion to be settled on or before 29 December 2020, at zero interest,” Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said in a Viber message to reporters.

Mr. Diokno said the NG’s request will be formally submitted to the Monetary Board “soon.”

The debt plan comes immediately after the Bureau of the Treasury repaid the P300 billion it borrowed from the central bank in March through a repurchase agreement of government securities. A pandemic relief law signed earlier this month also temporarily raised the cap on advances the central bank can provide the government, while lengthening the repayment period to as long as two years.

Republic Act (RA) 11494 or the Bayanihan to Recover as One Act allowed the BSP to lend 30% of its average revenue, an increase from the 20% limit under RA 7653 or The New Central Bank Act. This would allow the BSP to lend up to P850 billion from the previous cap of P540 billion.

If the new request is approved, direct provisional advances from the central bank to the NG will reach P840 billion, only P10 billion short of the P850-billion limit.

The fresh financial assistance from the BSP would boost the country’s coffers in its fight against the pandemic, according to UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion.

“We’re in a crisis, and all possible ways to survive this crisis needs to be explored. Of course, it has to be within the rules,” Mr. Asuncion said in a text message.

The economy is facing its steepest contraction in over three decades, as the pandemic drags on. The Health department on Wednesday reported 2,426 new coronavirus infections, bringing the tally to 311,694.

The government expects this year’s budget deficit to reach up to 9.6% of gross domestic product (GDP).

In a note on Tuesday, Hongkong and Shanghai Banking Corp. analyst Noelan Arbis warned that increased additional direct provisional advances could erode the BSP’s credibility as an independent institution from fiscal authorities “if it is repeated beyond the current crisis.”

“For now, the fact that the additional amount is only accessible to the government within the next two years provides a somewhat credible exit strategy,” Mr. Arbis said. — Luz Wendy T. Noble with Bloomberg

PHL stock market seen improving in 4th quarter

By Denise A. Valdez, Senior Reporter

PHILIPPINE SHARES are expected to return to the 6,000 level in the fourth quarter, but will continue moving within a tight range unless the third-quarter gross domestic product (GDP) results surprise the market.

As 2020 heads to its last three months, investors are seen to remain cautious but optimistic towards the Philippine Stock Exchange index (PSEi), barring unforeseen events.

“Range trading would likely continue unless we see any surprises in third-quarter GDP and corporate earnings,” Alvin Joseph A. Arogo, vice-president and head of equity research division at Philippine National Bank (PNB), said in an e-mail.

The statistics agency will release third-quarter GDP results on Nov. 10.

“We believe that the market will find it challenging to consistently rally above our 6,700 bull case fair value estimate mainly due to the persistent net foreign outflow,” he added.

The local bourse has recorded 153 days of net foreign selling out of the past 183 trading days of 2020. All 20 trading days of the month of April recorded net foreign selling.

“At this level, the index will trade at a 2020 and 2021 price-to-earnings (P/E) of 22.3x and 16.8x, which are at a 31.2% premium and a slight 1.2% discount to the past 15-year average of 17.0x, respectively,” Mr. Arogo said.

PNB is setting a 5,600 base case fair value estimate as a key support level for the PSEi.

Similarly, First Metro Investment Corp. (FMIC) is expecting the index to move “upward and back to above 6,000” in the fourth quarter, said Cristina S. Ulang, FMIC head of research.

“There’s solid upside once the vaccine is implemented, the virus infection curve is flattened and economic indicators return to the path of recovery,” Ms. Ulang said in an e-mail.

Among the factors investors will consider are improvements in manufacturing data and remittances, the softening of interest rates and the signing of legislation addressing bank bad debts.

“Local and foreign funds won’t miss the signs of a recovery and will load up ahead,” Ms. Ulang said.

In the past three quarters, the PSEi has been very volatile due to foreign selling, which is approaching $2 billion and has not abated, Ms. Ulang said.

More specifically, PNB’s Mr. Arogo said the coronavirus pandemic resulted in a 31.9% quarter-on-quarter drop for the PSEi during the first quarter. It recovered by 16.7% in the second quarter due to bargain hunters. Come third quarter, investors generally booked some of these profits, he said.

“At the start of the year, we had a positive view on the market as we assumed then that there would be earnings growth, which was backed by our view at that time of a robust macro environment,” Mr. Arogo said.

“However, although news about (the coronavirus pandemic) appeared earlier, it was only in March that it became clear that the virus would create a ‘black swan’ event (highly unlikely but massive impact on business and society),” he added.

But FMIC’s Ms. Ulang noted the market’s resilience, as the PSEi was still able to hit 6,500 in mid-May.

The PSEi closed at 5,864.23 on Wednesday, up 22.63 points or 0.38% from the previous day. Net foreign selling was sustained for the 14th straight day at P585.58 million.

NG’s outstanding debt hits P9.6 T as of end-Aug.

THE National Government’s (NG) outstanding debt reached P9.615 trillion as of end-August, as it continues to borrow to fund the fight against the coronavirus disease 2019 (COVID-19).

In a report released on Wednesday, the Bureau of the Treasury (BTr) said outstanding debt rose 5% to P9.615 trillion from P9.16 trillion as of end-July. This is also a fifth more than the P7.93 trillion logged in August 2019.

The higher NG debt is attributed to the net issuance of domestic securities, as the government sought to raise more funds for its pandemic response.

Two-thirds of the debt were sourced domestically, while the rest came from external sources.

Outstanding domestic debt jumped 7.3% to P6.71 trillion from end-July’s P6.25 trillion, and 27% up from P5.27 trillion in the same month a year ago. This was due to an increase in the issuance of local government securities to P6.4 trillion, 7.7% higher from July and 21.6% up from August 2019.

The National Government’s external debt reached P2.9 trillion as of end-August, slipping 0.2% from July due to the stronger peso. Year on year, it rose 8.8%.

“For August, the decline in external debt was attributed to the P37.36-billion net effect of local currency appreciation. Meanwhile, net availment of external loans added P27.07 billion, alongside the P4.64-billion effect of appreciation on third-currency denominated external loans,” the Treasury said.

Meanwhile, total guaranteed obligations of the National Government as of end-August stood at P447 billion, 2.6% lower month on month.

“The lower level of guarantees was due to the net redemption of both local and external guarantees amounting to P8.59 billion and P0.42 billion, respectively. Local currency appreciation further reduced the value of external guarantees by P2.85 billion, offsetting the effect of third-currency appreciation amounting to P0.03 billion,” the BTr said.

The Development Budget Coordination Council (DBCC) projected outstanding debt to balloon to a record P10.16 trillion or 53.9% of gross domestic product (GDP) by end-2020.

The government plans to borrow P3 trillion this year to plug its budget deficit, seen to hit 9.6% of GDP.

Debt watchers flag risks from consumer, SME loans

A customer walks through the Venice Grand Canal Mall operated by Megaworld Corp. in Taguig City, on June 22. — VEEJAY VILLAFRANCA/BLOOMBERG

By Luz Wendy T. Noble, Reporter

THE asset quality of local banks is expected to deteriorate in the coming months, as the consumers and small businesses struggle during the economic slowdown, global debt watchers said.

“The Philippine banking sector’s asset quality is likely to deteriorate amid the economic slowdown, weighing on profitability. Consumers and businesses will feel the pain from a weak economy, rising unemployment, and declining remittances from overseas…. We expect the consumer and SME (small and medium enterprises) loan portfolios to contribute to higher NPLs (nonperforming loans) in the coming quarters,” S&P Global Ratings said in a report.

In a separate note, Fitch Ratings noted the Philippines saw rapid loan growth in the last decade “which will now put the quality of lending over the period to the test, especially in the more vulnerable consumer and SME segments.”

Gross NPLs in the local banking industry climbed by 32.1% to P290.1 billion in July, data from the Bangko Sentral ng Pilipinas (BSP) showed, bringing the gross bad loan ratio to a six-year high of 2.67% as of end-July.

The country’s jobless rate was at 10% in July, equivalent to 4.571 million unemployed Filipinos.

Remittances are also taking a beating as more Filipino workers are repatriated. Year-to-date remittance inflows fell by 2.4% to $16.802 billion in the first seven months of 2019.

“Support measures from the government and the central bank should reduce the risk of defaults. Forbearance on loans will provide a breather, especially for rural and thrift banks that typically lend to weaker quality borrowers,” S&P said.

The central bank has been encouraging lenders to support small businesses through regulatory relief measures — this includes allowing MSME (micro-, small-, and medium-sized enterprise) loans as alternative reserve compliance and reducing the credit risk weight for borrowings disbursed to the sector.

“We expect large conglomerates, which account for the bulk of the banking sector’s loans, to weather the challenging operating conditions because of their strong business profiles, diversified revenue streams, solid liquidity buffers, and moderate leverage,” S&P said.

However, S&P warned a deeper recession could mean bigger damage for Philippine banks.

“A longer or deeper economic slowdown in the Philippines than our current forecasts could set off a sharper deterioration in the banking sector’s asset quality due to potentially higher large corporate defaults,” it said.

S&P expects the economy to shrink by 9.5% this year, much steeper than the 4.5% to 6.6% contraction estimate by the government.

HIGH CREDIT COSTS
Most banks in emerging markets in the Asia Pacific (APAC) have seen an increase in credit costs as of end-June, with the Philippines seeing the steepest rise, according to Fitch.

“This partly reflects the severe economic impact the pandemic has had in the country,” Fitch said.

In July, banks’ provision for credit losses surged by 59% to P321.85 billion from the P202.22 billion they have set aside in the same month of 2019.

Fitch pointed out Philippine banks opted to have general provisioning rather than specific provisioning for loans that are already underperforming.

“The rise in general provisioning is a reflection of banks preparing themselves for tougher times ahead,” Dan Martin, Regional Credit Officer for APAC at Fitch Ratings, said in an e-mailed reply to questions.

Mr. Martin said there is also the possibility that these expected credit losses will not materialize in case of a strong recovery and the reversal of expected credit losses would even bolster banks’ profitability.

“Equally, if banks have underestimated the future deterioration in asset quality, they’ll continue to face elevated credit costs in coming quarters,” he said.

Inflation likely settled at 1.8-2.6% in Sept. — BSP

A vendor wearing a protective mask arranges vegetables at a stall at Quiapo Market in Manila, July 27, 2020. — GERIC CRUZ/BLOOMBERG

HEADLINE INFLATION in September likely settled between 1.8% and 2.6% due to the lower prices of basic goods and the continued appreciation of the peso, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Wednesday.

The BSP point inflation projection for the month is at 2.2%, he said in a Viber message to reporters.

“Lower rice and oil prices as well as Meralco (Manila Electric Co.) power rates, along with the continued appreciation of the peso are expected to be the primary sources of downward price pressures for the month,” Mr. Diokno said.

Meralco earlier said September electricity rates dropped by P0.0623 per kilowatt-hour (kWh) to P8.4288/kWh from the rates in August. September rates were at its lowest in three years amid lower generation charge as supply contracts were relaxed due to the pandemic.

Meanwhile, total year-to-date price adjustments for domestic oil products as of Sept. 29 stood at a net decrease of P4.42 per liter for gasoline, P10.71 per liter for diesel, and P14.39 per liter for kerosene, according to the Department of Energy.

Rice products also saw lower prices, with average farmgate palay prices down by 2.2% week on week to P17.64 per kilogram in the first week of September. Average wholesale price of regular-milled rice also slipped 0.7% to P34.99 while its retail price inched down by 0.5% to P37.91.

The peso has been playing around the P48-per-dollar level in recent weeks. On Wednesday, it ended trading at P48.495 against the greenback, appreciating by 0.5 centavo from its P48.50-per-dollar finish on Tuesday.

On the other hand, Mr. Diokno said a partially offsetting factor could come from higher prices of liquefied petroleum gas (LPG).

The consumer price index rose by 2.4% in August, easing from the 2.4% increase in July but still quicker compared with the 1.7% pace seen a year ago. This brings the year-to-date average inflation to 2.5%, well within the 2-4% target set by the BSP for this year.

The Philippine Statistics Authority is set to report the September inflation data on Oct. 6. — Luz Wendy T. Noble

SEC orders shutdown of Forsage ‘gullibility’ scheme

THE Securities and Exchange Commission (SEC) has ordered the closure of Forsage and Forsage Philippines for activities involving the illegal solicitation of investments.

In a statement Wednesday, the corporate regulator said it issued a cease-and-desist order to Forsage on Sept. 17, ordering it to stop selling securities to the public in the form of investment contracts.

The company was also prohibited from using funds from its depository banks to preserve the assets it took from investors.

The SEC first issued a warning to the public against engaging with Forsage in June, noting it received several complaints about the group’s investment activities. At the onset, the SEC said Forsage was not a registered business with the commission.

It found through its investigation that Forsage invites investors to take part in a crowdfunding platform that uses blockchain technology. Through selling commission programs, the group promises passive income to investors.

However, the SEC said Forsage’s income relies on the membership fees it collects from investors, which makes it unsustainable. Its activities are also unauthorized, as the selling of securities is regulated by the SEC.

“Forsage is not registered…, nor has it been issued a secondary license to operate as a broker dealer of securities or issuer of any securities or of mutual funds,” the SEC said.

Despite the warning of the SEC in June, the company continued to operate, hence the decision of the regulator to issue a cease-and-desist order.

“[T]he investment practices of Forsage, if not restrained, will operate as a fraud on investors or to the investing public as it utilizes a ‘Ponzi scheme’,” the SEC said.

“It is not an investment strategy but a gullibility scheme, which works only as long as there is an ever increasing number of new investors joining the scheme,” it added.

Forsage is the latest in the SEC’s list of unauthorized investment operators ordered to shut down this year. The others are Fast Track Worldwide, Inc.; JOCALS688 Beauty and Wellness Products Trading, Inc.; Building Our Success Stories Network, Inc.; CROWD1 Asia Pacific, Inc.; Lion City Finance Group, Inc.; and Payasian Pte. Ltd. Corp. — Denise A. Valdez

MWSS to water firms: Extend grace period for bills payment

Regulator says order gives customers ample time to pay water bills that fell due from Aug. 4 to 18. — PHILSTAR/MICHAEL VARCAS

By Revin Mikhael D. Ochave, Reporter

THE regulatory office of the Metropolitan Waterworks and Sewerage System (MWSS) has directed Maynilad Water Services, Inc. and Manila Water Co., Inc. to provide customers with a grace period and a three-month installment mode for the payment of bills that fall during the stricter lockdown periods.

In a statement on Wednesday, MWSS Chief Regulator Patrick Lester N. Ty ordered the water concessionaires to provide customers with a 30-day grace period to pay their bills during the enhanced community quarantine (ECQ) and modified enhanced community quarantine (MECQ) periods.

Mr. Ty also told the water providers to implement a three-month installment payment method after the grace period for all cooperatives; micro, small, and medium enterprises (MSMEs), and domestic customers.

He added that the order is in accordance with the intentions of Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II).

A provision under Bayanihan II mandates all utility companies providing electricity, water, and telecommunications services, among others, to provide a minimum 30-day grace period for the payment of bills that fall during the ECQ or MECQ periods.

“The said directives will provide customers ample time to update payments for water bills that fell due within August 4 to August 18, or the MECQ period, without incurring interests, penalties and other charges,” Mr. Ty said.

Sought for comment, representatives of the two water concessionaires said that they would fully comply with the MWSS directive.

“We will comply with the guidelines, as we have always done,” Maynilad Head of Corporate Communications Jennifer C. Rufo said in a mobile phone message.

Meanwhile, Manila Water Corporate Strategic Affairs Head Nestor Jeric T. Sevilla said in a mobile phone message that the company would abide with the directive in accordance with Bayanihan II.

Mr. Sevilla said that Manila Water had also postponed disconnection activities, adding that it had been practicing extended payment terms for customers.

“All bills during the ECQ since March were given initially six months to settle their bills until September 30. The 30-day grace period especially for those MECQ bills covering August 4 to 18 will provide them further relief,” Mr. Sevilla said.

“Before any current bill gets disconnected, there is already a 60-day window for customers to pay their bills,” he added.

Meanwhile, MWSS’ Mr. Ty assured that the regulatory office would do everything to lessen the financial burden on consumers resulting from the coronavirus disease 2019 (COVID-19) pandemic.

Pandemic prompts “paced” construction of PetroWind project

PetroEnergy Resources Corp. has “paced” the construction of its latest wind project in Aklan because of the global coronavirus pandemic, the Yuchengco-led listed company said, though it is committed to meet its target commercial run.

PetroWind Energy Inc., a joint venture of the company’s renewables arm PetroGreen Energy Corp., Thai firm BCPG Wind Cooperatief U.A., and EEI Power Corp., is developing the second 14-megawatt unit of its existing Nabas wind power facility.

“Actual development of the project had to be paced due to the Covid-19 (coronavirus disease 2019) pandemic, but when resumed, it is expected to generate additional employment during construction, add to the LGUs (local government units) tax and royalty base, and stimulate business from local suppliers,” said Paul Elmer C. Morala, assistant vice president for power operations of PetroGreen.

The Department of Energy on May 13 issued PetroWind with a certificate of commerciality for the project. PetroGreen wants it to go online over the next two years, in time for the completion of improvements in the Cebu-Negros-Panay interconnection project of the National Grid Corporation of the Philippines.

PetroGreen also holds a portfolio of geothermal and solar power facilities. In its stockholders’ meeting in August, PetroEnergy said its green projects were “not seriously affected” by the pandemic.

Besides renewables, PetroEnergy is also engaged in petroleum development.

In the first semester, the company saw around 19.6% decline in attributable profits to P161.30 million due to the slump in its oil revenues. Its total revenues stood at P1.08 billion, or 3.6% lower from a year ago.

Its electricity sales between January and June were slightly lower by 2.6% to P912.08 million, mainly brought by the repricing of its geothermal plant’s electricity price. Depressed crude oil prices dragged down its petroleum revenues by 6.1% to P171.12 million in the period.

Meanwhile, PetroWind was named among the Top Community Care Companies in the 2020 Asia Corporate Excellence and Sustainability Awards (ACES) in Kuala Lumpur.

PetroEnergy said ACES described PetroWind as among Asian companies that “have enriched the communities through various outreach initiatives and which epitomize the mission and values of an organization that…demonstrate exemplary active citizenship in promoting the wellbeing of society at large.”

Shares in PetroEnergy were unchanged at P3.11 each on Wednesday. — Adam J. Ang

Bulacan airport’s franchise bill set for Senate plenary discussion

THE bill granting a 50-year franchise to the San Miguel Aerocity, Inc. has been endorsed for plenary deliberation in the Senate on Tuesday.

The Senate Committee on Public Service adopted House Bill No. 7507, allowing the San Miguel Aerocity to construct, develop, establish, operate, and maintain the Bulacan airport and “airport city.”

The new airport is expected to decongest the Ninoy Aquino International Airport (NAIA), Senator Grace S. Poe-Llamanzares said in her sponsorship speech, Tuesday evening.

“The only option for NAIA is to find another site, the route two of the world’s mammoth, modern and newest airports — Istanbul and Beijing — has taken. Or reclaim the sea beside it, as what Hong Kong is doing,”

The proposed P1.5-trillion Bulacan airport and airport city are expected to accommodate 100 million passengers annually. San Miguel Aerocity will also build an expressway that will link it to North Luzon Expressway and a rail link through Metro Rail Transit-7.

Ms. Llamanzares also raised its importance in terms of helping the tourism industry and other related sectors to recover from the coronavirus pandemic that locked down the country.

“The employment and tourism-generating capacity of this airport are far-reaching at a time when we are badly hit by the pandemic,” she said.

The 50-year franchise is inclusive of a 10-year maximum period for the design, planning and construction of the airport and airport city. It will also exempt the grantee from direct and indirect taxes during the 10-year construction period.

The franchise may also be revoked should San Miguel Aerocity fail to start construction within one year or start operation within one year after securing a permit from the Civil Aviation Authority of the Philippines.

Other conditions for revocation are the failure to start operating within 12 years from the enactment and the failure to continuously operate for two years.

The grantee will also be entitled to a revenue share worth 12% of the internal rate of return (IRR) annually, upon determination by a competent authority that San Miguel Aerocity has recovered the investment cost. Amount in excess of the 12% IRR will be remitted to the government.

Further, the grantee is mandated to report annually to Congress and may be penalized with a fine of P1 million per day for every day it fails to submit a report.

Also on Tuesday evening, Ms. Llamanzanres recommended the 25-year franchises for the Cruz Telephone Co., International Communications Corp., Tandag Electric and Telephone Co., Inc.  FBS Radio Network, Inc. Century Communications Marketing Center, Inc., Caceres Broadcasting Corp., Negros Broadcasting and Publishing Corp., Philippine Collective Media Corp., Davao Light and Power Co., Inc., and the Metro Manila Turf Club. — Charmaine A. Tadalan

San Miguel secures regulatory nod for P20-B preferred shares offering

SAN MIGUEL CORP. has obtained regulatory approval to issue P20-billion preferred shares under a shelf registration program.

In a statement on Wednesday, the Securities and Exchange Commission said it accepted the registration statement of San Miguel to offer up to 533.33 million preferred shares in a three-year period.

From the allocation, San Miguel will initially offer 133.33 million Series 2 preferred shares, which will have an oversubscription option of 133.33 million shares, priced at a maximum of P75 each.

The offer is expected to generate P19.89 billion in net proceeds, which the company will use to support infrastructure projects such as the P734-billion Bulacan airport and the P62.7-billion Metro Rail Transit Line 7. It will also be used for general corporate purposes.

San Miguel filed its application for the shelf registration of up to P40-billion preferred shares in August, where P20-billion shares make up the first tranche.

It tapped BDO Capital & Investment Corp., BPI Capital Corp., China Bank Capital Corp., Philippine Commercial Capital Inc., PNB Capital and Investment Corp., RCBC Capital Corp., and SB Capital Investment Corp. as joint issue managers, lead underwriters, and bookrunners for the offering.

In the first semester of 2020, the company booked an attributable net loss of P7.59 billion, reversing its attributable net income of P13.23 billion the same period last year, due to the impact of the coronavirus pandemic to its fuel and beer businesses.

San Miguel shares closed at P98.90 apiece on Wednesday, up 30 centavos or 0.30% from the last session. — Denise A. Valdez

Yields on term deposits inch up ahead of inflation data, BSP meet

YIELDS ON term deposits auctioned off by the Bangko Sentral ng Pilipinas (BSP) mostly rose on Wednesday, with the market expecting a slightly faster increase in commodity prices.

Tenders for the BSP’s term deposit facility (TDF) amounted to P645.18 billion on Wednesday, higher than the P390 billion on the auction block. It also went beyond last week’s P575.31 billion worth of bids for a P390-billion offering.

Broken down, the seven-day papers attracted bids worth P251.53 billion, above the P180-billion offering but less than the P262.56 billion in tenders logged on Sept. 23.

Accepted rates for the tenor ranged from 1.82% to 1.86%, a slimmer margin compared with the 1.8% to 1.87% recorded in the previous auction. With this, the average rate for the paper stood at 1.8377%, increasing by 0.31 basis point (bp) from the 1.8346% seen a week ago.

Meanwhile, the 14-day papers were met with bids totaling P297.14 billion, well beyond the P200 billion on offer as well as the P253.87 billion in tenders last week versus the P190 billion on the auction block.

Banks asked for yields within the 1.82% to 1.87% range, a thinner band than the 1.8015% to 1.87% logged a week ago. This brought the average rate of the 14-day papers to 1.8485%, decreasing by 0.35 bp from the 1.852% recorded last week.

On the other hand, demand for the one-month deposits totaled P96.51 billion, surpassing the P50 billion on the auction block and the P58.88 billion in tenders seen for the P30-billion offer last week.

Yields on the 28-day term deposits ranged from 1.82% to 1.85%, narrower than the 1.818% to 1.8522% margin seen at last week’s auction. This caused the tenor’s average rate to settle at 1.8426%, rising by 0.1 bp from the 1.8416% seen last week.

The TDF is one of the central bank’s tools to gather excess liquidity in the financial system and to better guide market interest rates.

“The TDF auction results show continued ample liquidity in the financial system,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.

BSP Governor Benjamin E. Diokno has said the liquidity infusion from the central bank’s monetary policy measures reached P1.5 trillion, equivalent to about 7.6% of the gross domestic product.

The uptick in the TDF yields came ahead of the release of the September inflation data, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“The markets are expecting slightly faster inflation after a full month of GCQ (general community quarantine) in Metro Manila, leading to some pickup in demand as well as prices of goods and services,” Mr. Ricafort said in a text message.

The Philippine Statistics Authority (PSA) is set to report the September inflation data on Oct. 6.

Inflation stood at 2.4% in August, easing from the 2.7% pace in July faster than the 1.7% logged in August 2019. The PSA said inflation eased mainly on the back of a slower increase in food prices.

This brought the year-to-date inflation average to 2.5%, within the BSP’s 2-4% target and slower than the 2.6% forecast for the year. — Luz Wendy T. Noble

Over a cup of hope

PEOPLE say that coffee makes the world move, waking people up when they need to get out of bed. But sometimes one needs more than a shot of caffeine, one needs a bit of hope. And the opening of the new Nespresso boutique at the Podium may provide just that in a world that has effectively frozen.

Nespresso is the single-serve coffee subsidiary of Nestle. While the machines have been around since 1986, and have been found in hotels and restaurants since the early 2000s, they hit Filipino homes only in 2017, through Novateur Coffee Concepts Inc. It has since opened a boutique in Rockwell (operational again after the lockdown loosened), and opened a second one in the Ortigas Center’s Podium just last week.

The new boutique, at 58 sqm., features the work of Universal Design Studio, an award-winning architecture and interior design firm founded by Edward Barber and Jay Osgerby. The store highlights tabletops made from used coffee grounds and 100% sourced wood from reforestation programs. In partnership with Negrense Volunteers for Change (NVC), the store also showcases some wall tiles that demonstrate how Nespresso pods can be upcycled and transformed into high-value art pieces.

Patrick Pesengco, Managing Director of Novateur Coffee Concepts, pointed out how the  aluminum pods of Nespresso prove to be a symbol of the brand’s commitment to sustainability — even before it became an urgent trend. Single-serve coffee capsules, especially those made of plastic, are blamed for increasing plastic pollution. “From day one, [Nespresso’s pods were] made of aluminum, which costs much more,” Mr. Pesengco said during a webinar on Sept. 22, which showed the shop’s interiors. Aluminum can be melted and smelted again and again. As part of its program, Nespresso collects the used pods (either through in-store containers or through home or office pickups), and they have found a smelting partner who transforms the pods into ingots. According to Mr. Pesengco, the old pods have been transformed into automotive parts, among other things. Meanwhile, the coffee grounds can be, and some of them have been, distributed as fertilizer to local organic farms.

Despite the pandemic and doubts for the survival of many retailers, Mr. Pesengco sailed on to open a second coffee shop. “We were really having second thoughts during COVID [whether or not to open]. But we realized that we want to be hopeful. We Filipinos, we’re very hopeful and optimistic. We believe that the future would be better.  We opened this boutique because we believe that at the very least, it’s a small role that we want to play. Aside from hiring our coffee specialists, we do have a lot of allied partners. The logistics, the delivery. It’s just a symbol of hope within our company.”

Speaking about the space at The Podium, he noted that a lot of their neighboring stores have not opened yet. “Hopefully, other tenants, other retailers, would see that [with] Nespresso’s opening. ‘Maybe we have a chance to open as well’,” said Mr. Pesengco. He added, “Of course, we computed our finances, we’re not martyrs. We might not be able to get the returns that we wanted, but [it’s] enough to justify opening.”

In these times, a mundane cup of coffee (even if it’s an espresso that has somehow come to you in a pod) has become more special, a point Mr. Pesengco acknowledges. “For us, at Nespresso, it’s more than just coffee. It’s the start to your day, to make them realize that this day will come, and do well, whatever they face within the day.”

The Nespresso Boutique at The Podium is located at Level 2. For opening hours, visit www.nespresso.ph . — Joseph L. Garcia

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