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Here’s why your old PCs are slowing down your business

In the latest study commissioned by Microsoft and Intel among SMEs across the Asia Pacific region, more than a third of SMBs (36%) still own PCs that are more than four years running and 31% that owns an old PC has an outdated Windows OS.

The survey findings equally resonate exposure of organizations to cybersecurity, data protection vulnerabilities and IT threats. Just in the last year alone, 62% of SMBs surveyed said they had experienced a security breach. To top it off, majority of SMBs (86%) lacked an organization-wide mobility strategy.

The study indicates that elevating business growth, increasing profitability and improving workforce productivity are the enterprises’ top priorities. In terms of tech strategy, businesses aim to achieve these business goals through Cloud, AI, Mobility and PC.

“Technology can be a real enabler for businesses, both small and large, and SMBs should continue to recognize the value that IT investment can bring to their present and future growth,” said Belinda Widgery, Channel & Device Marketing Lead, Microsoft Asia.

“SMBs employ over half of the workforce in the Asia Pacific, significantly contributing to the region’s economic growth. Employees in this region, most of whom are young and mobile, are digital natives and appreciate modern work environments and tools that allow them to work smarter and more effectively. We want to work alongside SMBs in Asia to help them realize their ambitions and succeed in this competitive marketplace,” added Widgery.

Narrowing the adoption gap

According to the study, the continued delay in SMBs’ adoption of newer technological infrastructure across business functions, was due to factors such as perceived app incompatibility, high costs associated with acquiring, maintaining new IT hardware and software. Slightly more than half of SMBs surveyed (54%) said growing enterprises are not actively replacing their PCs or adopting newer tech infrastructures across their business functions.

It was also revealed that a PC older than 4 years old is also 2.7 times more likely to undergo repairs, resulting in productivity loss. 85% of larger SMEs, with more than 500 employees, have PCs that are older than four years, compared to 60% in enterprises with less than 100 employees.

One way to narrow the technology adoption is with cloud adoption and improved PC security.

More than half (54%) of SMBs said they are aware of PC-as-a-Service offerings, with 40% planning to adopt them within the next year. Key motivators for this include having the option to acquire the latest technology faster (57%) and reducing IT support workload across their business functions (55%).

Windows-as-a-Service was also cited as another way SMBs can refresh their older PCs as it provides security patches and regular OS updates for optimized use. Concerns over app compatibility is addressed with Windows 10, the most app-compatible version of Windows-to-date with best practices including app telemetry, ISV partnerships for diagnostic data and troubleshooting as well as looping feedback cycles.

With the upcoming Windows 7 End of Support, SMBs have to make their shift towards newer PCs and operating systems as users will no longer receive security updates or support for PCs running on Windows 7. This includes new security updates, non-security hotfixes, free or paid assisted support options, and online technical content updates.

Microsoft has announced beginning of 2019 that after January 14, 2020, security updates or support for Windows 7 will cease as it channels its resources to supporting newer technologies.

With only a few months left to the end of support deadline, Filipino entrepreneurs and IT decision-makers are highly encouraged to consider an upgrade from Windows 7 to Windows 10, and plan to purchase new PCs to run the new OS.  It is recommended that Windows 10 is installed on newer devices, as some Windows 7 devices are not compatible with the new OS or could experience reduced feature availability. Those with compatible or newer PCs on the other hand will just need to get the full version of Windows 10 to upgrade their existing devices.

This innovation of technology demonstrates how an SMB can transform many of its processes to integrate workflow automation, save time, reduce costs and focus on critical business innovation.

The Villar Group taps MultiSys to embrace digital transformation

Engaged to multiple large-scale businesses, the Villar Group partners with Multisys Technologies Corporation, a leading software solutions company, to deliver game-changing solutions that will benefit its consumers.

“With the rapid advancement of new technology, the world has changed the way it operates. It is either you embrace change or get left behind, Engaging with MultiSys will fast-track our digital transformation and simplify our business processes,” said Paolo A. Villar, representing the Villar Group.

The partnership is also a natural progression for both companies, with each one expanding its footprint with the help of the other. As the Villar Group grows its businesses, MultiSys streamlines its business process through technology, giving the company an edge in the industry.

“We’re all hands on deck with the Villar Group considering we have a wide range of solutions covering various industries. We are eager to be their technology arm and to be able to service the Villar group and many Filipinos who will experience convenience through digital advancement,” said MultiSys President and CEO Dave Almirol Jr.

Primepay partners with Bayad Center and MultiSys for bills payment

Primepay, Inc. (Primepay), a wholly-owned subsidiary of Prime Asset Ventures, Inc. (PAVI), announces collaboration with Multisys Technologies Corporation (MultiSys) and CIS Bayad Center, Inc. (Bayad Center). Headed by Manuel Paolo A. Villar, Primepay is in the works to simplify their operations and payment transactions through the AllEasy application software (AllEasy).

AllEasy pursues to make big leaps with its business expansions by introducing more digital advancement within operations and to better serve its customers. Through systems integration of MultiSys, Primepay will be able to connect with Bayad Center’s payment platform to ease finances and payments. “This will enable seamless transactions allowing the business to thrive not only on ground but also technologically. We embrace
technology openly to usher an easier digital lifestyle to consumers”, said Manuel Paolo Villar.

Aside from payment integrations, system development is ongoing with the leading software solutions company in the Philippines, MultiSys. Focused on advanced systems research and development, MultiSys is able to provide innovations and empower AllEasy to break new grounds industry-wide.

BCB Blockchain creates P15-M fund for local startups through incubator, academe partners

Last November 20, Singapore-based technology firm BCB Blockchain announced that they would be committing P15 million to supporting local incubators and accelerators under the Department of Science and Technology (DOST).

This announcement was made during the third National Technology Business Incubator Summit held at the Crowne Plaza, as part of Philippine Startup Week.

By signing the MOA with the Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEETRD) – DOST, BCB Blockchain hopes to demonstrate its dedication not only to collaborating with the government in support of local startups, but also to the usage of blockchain technology in creating smart city projects and applications.

Working with the academe

BCB Blockchain also signed partnerships with universities and tech incubators across the country such as QBO Innovation Hub, Batangas State University, Technological University of the Philippines – Visayas, and Mindanao State University. This is to reinforce their commitment to working with the academe in critical areas such as co-incubation of projects and research and development.

As part of this particular initiative, projects such as competitions and hackathons will be launched in 2020. Prizes include cash up to US$15,000 and opportunities to participate in incubation programs.

“By providing DOST, universities and TBIs the resources and technical knowledge that BCB Blockchain has, we expect them to deepen their competencies in the area of designing and developing applications and projects for smart cities,” said Douglas Gan, CEO of BCB Blockchain.

Poll cites price lift from fading base effect

NOVEMBER inflation — which the government will report on Dec. 5 — likely picked up on the back of fading base effects from last year’s successive multi-year highs, according to economists asked last week.

A number of the 16 analysts polled also cited upward inflationary pressure from the African Swine Fever (ASF) outbreak that spurred demand for pork substitutes like chicken, an increase in electricity rates and the seasonal consumption boost as Christmas approaches.

Analysts’ November inflation rate estimates

Last week’s poll yielded an estimate median of 1.2% for November, right below the midpoint of the 0.9-1.7% range given last Friday by the Bangko Sentral ng Pilipinas’ (BSP) Department of Economic Research.

Those estimates compare to October’s actual 0.8% — which marked the fifth straight month that inflation eased — and November 2018’s six percent that was a slowdown from the nine-year-high 6.7% recorded in September and sustained in October.

The overall rise in prices of widely used goods averaged 2.6% in the 10 months to October.

Easing inflation this year prompted the BSP last month to further trim its full-year 2019 inflation forecast to 2.4% from an already downgraded 2.5%, though still within its 2-4% inflation target range, compared to last year’s near-decade-high 5.2%.

The median of BusinessWorld’s poll for November would yield a 2.49% year-to-date average, while BSP’s estimate would result in a 2.46-2.54% range as of that month.

“Some of the high base effects also started to wear off in November. Inflation likely has bottomed out and may edge up higher in December,” Jiaxin Lu, economist at Continuum Economics, said in an e-mail.

Alex Holmes, Asia economist at Capital Economics, signaled in an e-mail that inflation could pick up further, noting that “[b]ase effects from the spikes in food and fuel prices last year are set to fade over the coming months.”

Analysts also cited the impact of ASF — whose first outbreak in the country this year was confirmed in early September — on prices of substitutes for pork products.

“We did notice a drop in pork prices while substitutes such as beef, dressed chicken and select fish items were pricier as consumers switched to these other forms of protein,” ING-NV Senior Economist Nicholas Antonio T. Mapa said.

“Upside risk to the relatively low inflation include the impact of African Swine Fever as global meat production slows down, causing some uptick in the prices of pork and alternative meat products,” GlobalSource Partners economist Romeo L. Bernardo said.

Other analysts also cited higher electricity tariffs, as the Manila Electric Co. (Meralco) — the country’s biggest power distributor — jacked up the overall rate by P0.4717 per kilowatt-hour due to higher generation charges in the October supply month. “In addition to fading base effects, also a roughly five percent month-on-month increase in Meralco electricity costs over the month [could have spurred inflation],” ANZ Research economist Mustafa Arif said.

For UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion, “[t]he Christmas fever may have already seeped through consumption… as evidenced by the recent successes of online sales initiated by online retail firms like Lazada and Shopee, and it is anticipated that the next online sale, as the Christmas season nears, will eventually rake in more sales and revenues.” — Luz Wendy T. Noble

Senate resolution calls for probe on flagship projects, China funding

A RESOLUTION filed in the Senate calls for an inquiry on the implementation of infrastructure projects under the “Build, Build, Build” program and its reliance on official development assistance (ODA), particularly from China.

In Senate Resolution No. 221, Senator Sherwin T. Gatchalian noted that “the government’s flagship infrastructure program has been hounded by several issues, including delays in project implementation, onerous terms of the loans secured from China, as well as concerns about increased reliance on ODA loans with China.”

Citing National Economic and Development Authority (NEDA) data, the resolution noted that 59 of the 75 flagship projects on the old list were to be funded by ODA, of which 19 — accounting for a fourth or P515 billion — were to come from China.

“Chinese ODA tends to lean towards export promotion rather than welfare and economic growth, and prescribes no less than 50% of total procurement for such loans to be done in China or performed by Chinese companies employing Chinese workers,” the resolution read, arguing further that “Chinese ODA loans deprive ordinary Filipino workers of the opportunity to work and partake of the benefits of the loan that Filipino taxpayers will be paying for.”

Saying she had yet to read the resolution, NEDA Undersecretary Rosemarie G. Edillon said by phone on Sunday: “Of course, we will cooperate (with the inquiry).”

The government has revised its list of flagship projects, increasing the number to 100 from 75 and including more to be funded by public-private partnerships (PPP) — a mode initially relegated by the current administration to local projects, saying that projects under this framework took longer to move from conceptualization to construction.

Twenty-two projects worth P167.95 billion will be funded by the national budget; 49 projects costing P2.31 trillion will be ODA-funded while the 29 others will be PPPs that will cost the government P1.77 trillion. — Charmaine A. Tadalan

House, Senate start reconciling budget versions

LEADERS of the Senate finance and House of Representatives appropriations committees start meeting today to harmonize their versions of the proposed P4.1-trillion national budget for 2020 in a bid to ensure enactment before the year ends — and prevent a repeat of the delayed approval that has taken a toll on 2019’s overall economic growth.

Lawmakers hope to submit the harmonized budget to President Rodrigo R. Duterte before they take their Dec. 21, 2019-Jan. 19, 2020 break, for signing into law before this year ends.

A copy of a Senate committee report, which Albay-2nd District Rep. Jose Ma. Clemente S. Salceda showed reporters, showed that the chambers’ versions differed largely in appropriations for the Department of Transportation (DoTr), Department of Health (DoH) and the Department of Public Works and Highways (DPWH).

Under House Bill No. 4228, or the proposed General Appropriations Act (GAA) for Fiscal Year 2020, the DoTr got P146.04 billion, about P26 billion more than the P120.32 billion earmarked by the Senate.

The House also gave the DPWH P529.75 billion, while the Senate gave it P536.58 billion.

Senator Panfilo M. Lacson had pointed out a P45-billion DPWH lump-sum appropriation, while Senate President Pro Tempore Ralph G. Recto moved to reduce DoTr’s budget due to the agency’s underspending.

The Senate and House proposals also differed in DoH funding, appropriating P100.49 billion and P88.92 billion, respectively.

Senator Juan Edgardo M. Angara, finance committee chairman, explained during the period of amendments last week that the increase in the DoH budget was intended to fund vaccination of children and improvement of the Research Institute for Tropical Medicine, among others.

The first meeting of the bicameral conference committee last Friday saw the exchange of each chamber’s proposed amendments. Mr. Angara and his counterpart, Davao City-3rd District Rep. Isidro T. Ungab, will first discuss amendments between themselves. “What happens is, usually, pag may amendments na they don’t agree with, we’ll have to discuss it with the senator or the congressman who made the amendment,” Mr. Angara told reporters last Friday.

The proposed 2020 spending plan hurdled the House on Sept. 20 and then bagged final approval in the Senate on Nov. 27.

The P3.662-trillion 2019 GAA was signed into law on April 15, which left the government operating under a reenacted budget for nearly four months. This stemmed from an impasse on the budget system between the House and the Department of Budget and Management, and later with the Senate on irregular allocations after the budget had already been ratified.

The reenacted budget and the ban on new public works 45 days ahead of the May 13 elections meant planned new infrastructure were left unfunded for much of last semester. That, in turn, made economic growth slow to 5.8% as of September from 6.2% in 2018’s first three quarters. — Charmaine A. Tadalan

Analysts’ November inflation rate estimates

NOVEMBER inflation — which the government will report on Dec. 5 — likely picked up on the back of fading base effects from last year’s successive multi-year highs, according to economists asked last week. full story.

Analysts’ November inflation rate estimates

Organic rice production named a Mindanao priority program

DAVAO CITY — Organic rice production and exports have been designated a priority program for the southern island next year, the Mindanao Development Authority (MinDA) said.

MinDA’s Technical Working Group on Organic Rice Certification has been staging roadshows on International Organic Standards, with the fourth leg held in the town of Molave, Zamboanga del Sur last week.

Participants included over 200 organic farmers from Lanao del Norte, Misamis Occidental, Zamboanga del Norte, and Zamboanga del Sur.

“These are the projects that we will be intensifying next year as this is also related to poverty reduction. Increasing farmers’ income will also go down to poverty reduction,” Undersecretary Janet M. Lopoz, MinDA executive director, said at the Habi at Kape forum last week.

Olie B. Dagala, MinDA Investment Promotions, International Relations, and Area Concerns director, said the development of the high-value organic rice is also intended to cushion the impact of the Rice Tariffication Law, or Republic Act 11203, which removes restrictions on the volume of imported rice and instead uses tariffs to regulate entry.

“After the rice tariff law, we have been monitoring whether farmers will abandon their farms or convert them,” Mr. Dagala said.

He said organic rice is a niche market with higher margins and export potential.

Currently, he said, organic farms are still small-scale. — Maya M. Padillo

What it takes to become big in Japan

JAPAN is a place of many contradictions. It is simultaneously old and young; frighteningly modern and comfortingly aware and compassionate of its past. Its people hold on to who they are, and yet openly takes influences from the West. Several fashion designers call it home, and the easiest names to recall from that region are Rei Kawakubo and Issey Miyake. When it comes to large-scale production meanwhile, Muji and Uniqlo are successful global exports. The Japanese seem to have it all in their own set of islands, and the thought of making it there makes penetrating the Japanese market a worthy, but also daunting prospect. BusinessWorld talked to two stakeholders in the competitive Japanese fashion market to help Filipino designers understand what makes Japanese customers tick, and the steps they’ll have to take in order to make it in Japan.

Earlier this month, the Phx Fashion Conference was held with the cooperation of the Department of Trade and Industry (DTI) through its agency The Philippine Training Trade Center (PTTC) and Fashion Design Council of the Philippines. The conference, held at the PTTC, lasted from Nov. 11 to 14. On the third day, BusinessWorld had the opportunity to talk to Jason Coates, an award-winning Australian fashion director, editor and art director who has been in the fashion and publishing industry for over 20 years, based in Tokyo, Singapore and Dubai. He has styled for Elle, GQ, Oyster, Harper’s Bazaar as well as for international celebrities. Along with his partner, Hirohito Suzuki, a marketing and business administration expert specializing in the marketing of overseas luxury products to the Japanese market, the two have put up H3O.

H3O is a company with multibrand showrooms in both Paris and Tokyo, showcasing new brands that they expect will become a hit in their respective markets. Aside from offering those products as for retail, they also provide assistance for public relations, communications, and brand consultancy. The brands they handle include Hong Kong brand Chance, the swimwear and underwear arms of luxury brands Dsquared² and Moschino, and Brazilian brand Melissa.

“They’re looking for a consistent product, a product that is consistently well-made,” said Mr. Coates about Japanese fashion buyers and end-line consumers. “It’s consistently delivered on time. It’s consistently priced. It has a consistent look and branding. They don’t want something that is one way one season, then the next season it’s completely different.” He gives an example of designers coming up with something new one season, then completely revamping it from season to season. “They don’t want that. They want consistency, and something that they can depend on.”

At the same time, they pursue novelty. “Newness. Japan always wants newness. They always want to be the first, they always want to discover something new, something fresh. It’s that newness.” That could be an advantage for Filipino designers, but Mr. Coates says that the Japanese could be very loyal to their chosen brands, and that fashion buyers work with precise efficiency, keeping meticulous spreadsheets on what sells and what does not. The secret to untangling the contradiction between loyalty and novelty here may be introducing something new, creating enough enthusiasm for that — and then sticking to it. “They want it; they want it again,” Mr. Coates said. He then introduced us to a new word, “teiban,” which a Japanese dictionary defines as “standard, routine, regular, basic, staple.”

“It’s that reoccuring style, that piece that is your very own,” he said. “If it fits well, each season, you’ll buy another one.

“There’s that consistency that big brands really understand,” he said, using Prada as an example. “I think small brands really need to understand it too.”

JAPANESE FASHION WEEK ORGANIZATION
Also this month, BusinessWorld attended Parallel Culture Tokyo, a one-day shopping affair by The Japan Fashion Week Organization (JFWO) at BGC’s The Curve. The event was meant to introduce three new brands about to penetrate Manila, namely Name., Vital Material, and Flower Mountain.

Name. is a bit avant-garde, featuring deconstructed clothing and prints of old advertisements. Vital Material, meanwhile, is a luxury body and home fragrance brand, present in about 40 markets from Asia to Europe. Flower Mountain is a sneaker brand that combines lightness and art with the hardcore science and sport of mountain climbing. JFWO Director Kaoru Imajo, when asked to describe how the brands reflect the buying culture of Japan, said, “Japanese culture is really mixed. What is good about it is how each store… edits it.”

According to him, the Japanese also have an affection for brands that manufacture locally. “Ninety percent of Japanese brands manufacture their clothes in Japan,” he pointed out. By that he meant that the Japanese like brands that are based somewhere, and source their products from that specific place as well (no outsourcing).

BusinessWorld asked Mr. Imajo as well about strategies for Filipino designer labels to enter Japan. “It’s the same thing in all over the world. They (Japanese consumers) buy what’s really luxurious, or T-shirts. Price-wise, you have to think about which way you want to go: luxury or streetstyle.”

It was in that moment that the points of both Mr. Coates and Mr. Imajo reached a convergence. Days before BusinessWorld talked to Mr. Imajo, Mr. Coates said the same thing — which must make it true. “Pricing is really important,” said Mr. Coates. “The pricing will help position your brand.”

His insistence of pricing goes as well with the message of consistency. He cited as an example, a hypothetical designer who might start raking in the cash, the recognition: in short, success. “You start getting a big head. You start thinking that it’s all because of you, and how great you are.” The designer then makes decisions like raising prices and changing looks, alienating a loyal consumer base who have started building brand loyalty. “The whole floor falls out, because you don’t have those foundations anymore.”

Mr. Imajo meanwhile, shared the same sentiments about consistency: “If you go to this [designer], you will know what they make. The buyers have to select what their loyal customers are looking for, each season.”

Going back to Mr. Coates, he says, “It’s really, really important that you make sure that these foundations are very, very strong,” he said about pricing and consistency. “That would be my best advice for anyone, no matter where they come from.”

“These are the things they screw up the most.”

Mr. Coates went over a few cultural points, such as Japanese people not liking prints on the crotch area, or preferring smaller prints to large ones, or preferring a certain lightness. “We can talk for hours about how certain patterns work, or what certain colors look better,” he said. “There are all sorts of things, but that’s kind of next step. It’s so important that you get that kind of consistency, that understanding of where you want to be placed in the market.

A consumer might think that designers revolve around desire: and to a certain point, that’s true. Fashion, after all, is a reflection of our desires, and how we want to be seen, as opposed to who we really are. In the whirl of fantasy in fabric, we forget the details that make these dreams real: a designer’s ability to constantly deliver (consistency), and the consumer’s ability to buy (being in a certain pricing bracket). Said Mr. Coates,

“It sounds boring, but ultimately, it is a business.” — Joseph L. Garcia

PLDT eyes bigger capital expenditure for 2020

PLDT, Inc. said it will increase its capital expenditure (capex) for 2020 as it continues expanding its network infrastructure, particularly the fifth-generation (5G) network that will be launched “early next year.”

Asked if the 2020’s capex will be higher than this year’s P78.4 billion, PLDT Chairman, President and Chief Executive Officer Manuel V. Pangilinan told reporters on Saturday: “Yes… I was looking that way.”

However, Mr. Pangilinan declined to give the exact amount, since it has yet to be approved by the PLDT board. “Sa Tuesday pa i-approve ‘yun,” he said.

Mr. Pangilinan attended the signing ceremony between PLDT-Smart Communications, Inc. and Araneta Group, Inc. for the deployment of fiber-powered WiFi and 5G technology in the Araneta City, which covers the Gateway Mall, Smart Araneta Coliseum, New Frontier Theater, and Araneta Center bus terminal in Quezon City.

Asked which business segments the PLDT will be focusing on next year, Mr. Pangilinan said: “Both [fixed and wireless networks] actually.”

“There’s a big push for both… More investments in 4G and 5G [networks]. There will be more stations to be built in the wireless side. For the fixed, mainly the investments will be in the transport [network] of PLDT, the backbone, and completion of the fibering of the cell sites… So it’s really a big investment. Again, we are really, really making the infrastructure world-class,” he added.

Mr. Pangilinan also said that a significant amount of the capex will be used to fund PLDT’s continuing rollout of its 5G technology, although the product “may not be immediately” profitable.

“It will be a big, big part of capex for next year. It will be a substantial amount, not very substantial, but it is,” he said.

Mr. Pangilinan said PLDT’s 5G network “will be commercially launched early next year.”

The telco giant had allocated a record P78.4 billion in capex for this year, 34% higher than 2018’s figure, as it ramps up its network expansion.

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

Treasury bills seen fetching lower rates

RATES OF Treasury bills (T-bills) on offer today will likely decline following the central bank chief’s hints on a possible policy rate cut.

The Bureau of the Treasury (BTr) is looking to raise P20 billion via its T-bill offering on Monday, broken down into P8 billion in 91-day papers, P6 billion in 182-day notes, and another P6 billion in 364-day securities.

For Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort, the papers may fetch slightly lower rates as the market reacts to hints by Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno of a possible cut on benchmark interest rates if related data is favorable.

“Treasury bill auction yields could be steady to slightly lower this coming week after the latest signals from BSP Governor Diokno about a possible cut in local policy rates in the next monetary policy-setting meeting on Dec. 12, 2019 if supported by relatively low inflation data,” Mr. Ricafort said in a phone message on Saturday.

“T-bill auction yields could also be slightly lower after additional peso liquidity infused into the banking system/financial system after the series of RRR (reserve requirement ratio) cuts and matured government bonds worth about P197 billion more than a week ago (Nov. 22, 2019),” Mr. Ricafort added.

On Nov. 18, the BTr raised just P17.99 billion in T-bills out of its P20-billion program as it made a partial award of the 182-day papers while fully awarding the 91- and 364-day securities.

It raised P8 billion as planned via the three-month papers out of total bids worth P18.45 billion, at an average rate of 3.168%.

For the one-year bills, the government awarded P6 billion as programmed, with an average rate of 3.501%, down by 1.2 basis points (bps) from the previous auction’s 3.513%.

Meanwhile, the Treasury only awarded P3.99 billion in six-month papers out of the P6-billion plan, as the rates increased. With the partial award, the papers yielded an average rate of 3.249%, 5.1 bps lower than the 3.198% fetched during the auction last Nov. 4.

At the secondary market on Friday, yields on the three-month, six-month, and one-year T-bills stood at 3.178%, 3.371%, and 3.510%, respectively, based on the PHP Bloomberg Valuation Service Reference Rates.

Meanwhile, the Philippine Statistics Authority will report inflation data for November on Dec. 5, Thursday.

The overall rise in prices of widely used goods likely quickened in November, the central bank said on Friday, citing higher electricity and fuel costs.

In a statement, the BSP Department of Economic Research said November inflation likely fell between 0.9-1.7%.

The range is beyond the actual 0.8% print in October. However, it is slower than the 6% logged in November 2018.

“The increase in electricity rates as well as higher prices of gasoline, LPG (liquefied petroleum gas) and selected food items are seen as the primary sources of upward price pressures for the month,” the central bank said.

“Meanwhile, inflation could be tempered by lower domestic rice prices and the appreciation of the peso,” it added.

For Robinsons Bank Corp. peso debt trader Kevin S. Palma, T-bill rates will likely move sideways or decline by around 10 bps.

However, Mr. Palma said the auction may still face strong demand with abundant liquidity in the market ahead of the implementation of another reserve requirement ratio cut for the banks.

“Then you also have the news of changes in the deposit substitute, which should also inject liquidity in the system,” he added.

Starting the first reserve week of this month, the RRR for universal and commercial lenders will be at 14%, four percent for thrift banks, while the reserve ratio of nonbank financial institutions with quasi-banking functions be cut to 14%. Meanwhile, the RRR of rural banks will remain at three percent.

Meanwhile, last month, the central bank said its policy-making Monetary Board adopted the new definition for deposit substitutes under Section 95 of its charter that has been amended by Republic Act (RA) 11211 or the New Central Bank Act enacted in February.

With RA 11211, the same provision now defines that the phrase “obtaining funds from the public” means those that involve borrowing from at least 20 lenders at any one time that are individuals or companies which are not financial intermediaries.

“This means that borrowings from banks, quasi-banks and other financial intermediaries are no longer considered deposit substitutes which are subject to reserve requirements,” the BSP said a statement, citing as examples interbank borrowings, repurchase agreements with financial counter-parties, as well as bonds issued to financial intermediaries.”

The BSP last week said this move released about P28 billion in fresh liquidity into the financial system.

The Treasury has set a P220 billion borrowing program this quarter for the local market, broken down into P100 billion in T-bills and P120 billion via Treasury bonds.

The government is planning to raise P1.189 trillion this year from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — Beatrice M. Laforga