COA upholds previous decision vs GSIS for ‘unnecessary’ antibiotics purchase

August 2, 2019 | 6:18 pm

THE Commission on Audit (COA) has rebuked Government Service Insurance System (GSIS) officials for procuring “unnecessary and irregular” Oseltamivir capsules worth P25.13 million in 2006, saying that procurement of medicine is not in the GSIS’ purview.

Former GSIS chairperson Winston F. Garcia and several board members have been found liable for the irregularity.

The audit commission was reacting to a 2015 petition by several GSIS officials for review of a 2012 Notice of Disallowance.

“It must be emphasized that the fund of GSIS is a social insurance fund, which shall be used to finance the benefits administered by the GSIS. The procurement of medicines for the treatment of afflicted GSIS members is not a benefit that is being administered by GSIS,” stated the COA decision dated July 4.

The GSIS procured 476,300 capsules of the anti-viral medication, also known as Tamiflu, for the use of its members during the height of the Avian Influenza scare in the country.

According to the COA report, GSIS and United Laboratories, Inc. (UNILAB) entered into a memorandum of agreement to ensure that the former “will have ready access to the supply of Oseltamivir capsules in case of Avian Influenza outbreak in the country.”

However, the auditors reported in 2007 and in 2010 that the purchased capsules were only distributed to GSIS officers and employees on 2009, long after the Avian Flu scare in 2006, and only 109,880 or the 476,300 capsules procured were distributed.

In addition to that, the state auditors said that the GSIS cannot justify its procurement as there was no national emergency declared then.

“There was no national emergency declared by the President as to the outbreak of Avian Influenza in the country. Thus, there was no urgent necessity for the procurement of Oseltamivir capsules,” the decision read.

It added, “GSIS, being a social institution, does not have the required skills and expertise to determine the existence of Avian Influenza, and treatment of the patient afflicted with said flu can only be done in the hospital according to the World Health Organization.”

In the initial findings, then GSIS chairperson Winston F. Garcia and board members Bernardino R. Abes, Jesse H.T. Andres, Daniel C. Gutierrez, Esperanza S. Ocampo, Reynaldo P. Palmiery, Raymundo A. Lapating, and Jesus I. Santos were found liable for the unnecessary procurement.

In COA’s modified notice, Mr. Lapating and Ms. Ocampo were excluded from liability for having no participation in approving the deal.

The case will be referred to the Office of the Ombudsman for investigation and filing of appropriate charges if warranted. — Vince Angelo C. Ferreras

CHR points out inadequate supply of anti-HIV drugs

August 2, 2019 | 6:18 pm

THE Commission on Human Rights(CHR) on Friday called out the government for the reported inadequate supply of medications for the treatment of people living with human immunodeficiency virus (PLHIV).

“[T]here are reports regarding inadequate supply of antiretroviral (ARV) drugs, which are crucial for the treatment of PLHIVs. To truly provide proper medication and treatment, it is exigent to guarantee the sufficient and steady supply of ARVs. With the increasing surge of patients, it is imperative for the DoH to accurately forecast the demand and immediately address the gaps in the supply chain,” CHR Spokesperson Jacqueline Ann C. De Guia said in a statement on Friday.

ARV drugs can delay or halt the onset of AIDS (Acquired Immune Deficiency Syndrome) after a person is infected with HIV.

She said proactive measures to educate the public on the transmission of the virus and how to avoid the infection at the onset are also “equally important.”

Ms. De Guia also welcomed the signing of the Implementing Rules and Regulations (IRR) of Republic Act No. 11166 or the Philippine HIV and AIDS Policy Act.

“With the IRR, we can now look forward to the expedient and proper execution of the said law, which is a concrete step in the efforts to curb the growing Human Immunodeficiency Virus (HIV) epidemic in the country,” she said.

The CHR is hopeful that the signing of the IRR will pave the way for the elimination of discrimination towards PLHIV.

“Through a human rights approach, we can better safeguard the dignity of PLHIV while helping ensure that fewer people will get infected,” Ms. De Guia noted.

A 2017 report by the Joint United Nations Program on HIV/AIDS noted that the Philippines has the fastest growing HIV epidemic in the Asia and Pacific region.

Approximately 93,400 Filipinos will be living with HIV by the end of the year, according to the Department of Health.

“Hence, the efficient and urgent roll-out of these policies cannot be overemphasized,” Ms. De Guia said.

“[T]he new law ensures application of human rights principles to address stigma and discrimination. Given that about 30% of new cases affect the youth, it also enables minors 15 years of age to get tested even without [parental] consent. The law also ascertains that ‘no HIV/AIDS patient shall be denied or deprived of public health insurance and private life insurance coverage on the basis of a person’s HIV status.‘ In addition, the Insurance Commission made sure that there will be medical coverage [given] to people living with HIV by health maintenance organizations under their recently released Circular Letter No. 2019-30,” she explained. — Arjay L. Balinbin

BIR’s first semester collections fall short of goal

August 2, 2019 | 6:16 pm

THE Department of Finance (DoF) said the Bureau of Internal Revenue (BIR) fell “a little short” of its target revenue collection for the first half amid slow economic growth.

The BIR collected P1.07 trillion in taxes from January to June, which is 95% of the target for the period, Finance Secretary Carlos G. Dominguez III said on Thursday.

“You have to remember, the growth in the economy was a little short of our target. So normally, because it’s short, the BIR collections are also expected to be short. But given the conditions, they actually did quite well,” Mr. Dominguez said on the sidelines of the BIR’s 115^th anniversary celebration on Thursday.

The economy grew 5.6% in the first quarter, its worst performance in four years. The first-quarter outcome was lower than the 6.3% in the preceding quarter and 6.5% in the same period in 2018.

The government operated on a re-enacted 2018 budget from the start of the year until April 15, when President Rodrigo R. Duterte signed the latest general appropriations into law, but vetoed P95.3 billion in appropriations that he said were not in accordance with his administration’s priorities, slashing this year’s national budget to about P3.662 trillion.

The tax bureau, which makes up about three-fourths of total government revenues, set a P2.33-trillion collection goal for 2019.

In its medium-term program, the Development Budget Coordination Committee (DBCC) set a P2.576-trillion revenue target for the BIR next year.

Asked if he is confident about reaching the 2020 collection goal, BIR Commissioner Caesar R. Dulay told reporters in an ambush interview at the same event: “Of course, sasabayan lang namin ‘yung ekonomiya.” — BML

Sugar output inches lower as crop year nears end

August 2, 2019 | 6:16 pm

RAW SUGAR production dropped by 0.27% year-on-year as of the first week of July, the Sugar Regulatory Administration (SRA) reported, with the crop year nearing its end.

As of July 7, raw sugar output reached 2.072 million metric tons (MMT), down from the 2.078 MMT logged as of July 8 last year but higher than the 2.071-MMT target, a preliminary report from the SRA showed.

This is equivalent to 41.447 million 50-kilo bags, compared with 41.560 million bags a year earlier.

The crop year for sugar starts in September and ends in August.

Demand for raw sugar declined 18.11% to 1.777 MMT for the crop year thus far from 2.17 MMT in the same period last year.

Meanwhile, total sugarcane milled decreased 8.59% year-on-year to 21.745 MMT.

Likewise, refined sugar output also fell 11.8% year-on-year to 797,117.60 MT.

The prevailing retail price of raw sugar was at P45 per kilo, down from P55 per kilo last year. For refined sugar, the retail price was at P50 a kilo, also lower than last year’s P64 per kilo. — VMPG

Globe posts flat earnings in Q2

August 2, 2019 | 6:16 pm

By Denise A. Valdez, Reporter

GLOBE Telecom, Inc. reported flat earnings in the second quarter as ramped-up infrastructure spending dampened the growth in revenues.

The Ayala-led telecommunications giant posted an attributable net income of P5.32 billion in the April to June period, 0.5% higher from the P5.29 billion it recorded in the same period last year.

Year-to-date, Globe’s attributable net income was 20.8% higher at P12.05 billion on the back of the company’s strong performance in the first quarter.

Cnsolidated service revenues of Globe stood at P36.9 billion in the April to June period, 12% up from a year ago due to the continuous growth of its mobile, broadband and corporate data businesses.

Revenues from its mobile segment grew 4% year-on-year in the second quarter to P27.65 billion, which Globe attributed to the performance of its prepaid brands.

Globe’s total mobile subscribers stood at 92.94 million as of end June. Of this, Globe Prepaid and TM subscribers accounted for 90.31 million, while Globe Postpaid added 2.63 million.

Revenues from home broadband also rose 20.8% to P5.35 billion in the second quarter, on the back of a 21% growth in its subscriber base to 1.8 million as of end June.

Corporate data revenues likewise rose 12% to P3.19 billion, driven by the “increase in circuit count, high usage on both internet and domestic services, and the strong take-up of various data connectivity solutions, as well as managed and cloud-based services.”

Fixed line voice revenues of the company however fell 8% to P684 million.

Year-to-date, the total revenues of Globe ended at P81.52 billion, up 9.5% from in the same period last year. This was driven largely by the 45% increase in mobile data revenues to P34.04 billion, which offset the 17% decline in mobile voice to P12.32 billion and 24% drop in mobile SMS to P8.28 billion.

But expenses also increased 6% to P63.2 billion as the company boosted spending on its network infrastructure to support the growing number of its subscriber base.

Globe said capital spending hit P19 billion in the first half of the year, 75% of which went to data-related requirements.

“We are pleased with the Company’s robust performance and that we are on track with our strategic objectives for this year,” Ernest L. Cu, president and chief executive officer of Globe, said in a statement.

“We will continue to invest in our 4G (fourth generation) and LTE (long-term evolution) network to enhance the customer experience and reinforce our competitive advantage moving forward,” he added.

Robinsons Retail earnings fall 33% in 2nd quarter

August 2, 2019 | 6:15 pm

By Denise A. Valdez, Reporter

EARNINGS of Robinsons Retail Holdings, Inc. (RRHI) dropped in the second quarter despite higher sales due to the impact of a new accounting standard.

The Gokongwei-led retail firm said in a disclosure to the stock exchange Friday its net income attributable to equity holders of the parent stood at P946 million for the April to June period, falling 32.9% from P1.41 billion in the same period last year.

Year-to-date, the attributable net income also slid 32.4% to P1.773 billion from P2.622 in the same period last year.

“In (the second quarter), the company reflected the year-to-date impact of adopting the new accounting standard on leases (PFRS 16) effective January 1, 2019. A right-of-use asset is recognized and amortized over the lease term while interest expense is incurred on the lease liability,” RRHI said.

“The shift to PFRS 16 reduced our net income attributable to parent company to P1.8 billion in the first half of 2019, lower by P481 million or 21.3% versus pre-PFRS 16,” it added.

Interest expenses in the six-month period soared to P1.2 billion from P55 million in the same period last year due to non-cash interest expenses on lease liability.

But RRHI noted the adjustments from adopting the new accounting standard are non-cash and have no effect on the company’s cashflow.

RRHI’S core net income — which excludes interest from bonds, equitized net earnings from the 40% stake in Robinsons Bank, unrealized forex gains/losses and non-recurring expenses-declined 30.3% to P927 million in the three-month period.

Excluding the impact of adopting the new accounting standard, RRHI’s core net income went down 2.2% to P2.2 billion.

The company, which operates Robinsons Department Store and Ministop, recorded a 26.5% jump in net sales to P39.861 billion during the second quarter, bringing first half net sales by 27.7% to P77.211 billion.

RRHI attributed the rise in revenues for the six-month period to a 3.9% same-store sales growth (SSSG), on top of additional sales coming from newly-opened stores and the consolidation of Rustan Supercenters, Inc., which was acquired in November.

SSSG is the growth measure of the company’s existing stores, which investors look at to trust that the growth of RRHI is not driven only by opening new stores.

The company said its supermarket business has now become its biggest growth driver, as this segment now accounts for 54% of total revenues from 46% in the same period last year.

RRHI added the performance of its SSSG in the six-month period is largely due to the 11.2% SSSG from its drugstore segment, followed by 4.3% from supermarkets, 3.6% from do-it-yourself (DIY) stores, 3.6% from specialty stores and 2.3% from conveniences stores.

The whole group’s SSSG was at 3.7% in the second quarter. It is targeting a 2-4% SSSG by the end of 2019.

RRHI noted Rustan Supercenters was able to swing to positive operating income in the second quarter (pre-PFRS 16) from losses that dragged the company’s earnings in the first quarter.

It attributed the improvement to “gains in gross profit brought about by the alignment of trading terms, reduction in operating and corporate expenses and alignment in the depreciation policy.”

RRHI owned a total of 1,920 stores at the end of June, spread among 255 supermarkets, 49 department stores, 211 DIY stores, 518 convenience stores, 510 drugstores and 377 specialty stores. This does not include franchised stores of The Generics Pharmacy.

Among the company’s brands include Robinson’s Supermarket, Robinson’s Department Store, Handyman Do It Best, True Value, Toys R Us, Ministop, Daiso Japan, Costa Coffee, Savers Appliances and South Star Drug.

RRHI has so far spent P1.5 billion from its capital expenditure allocation of P3.5-5 billion for the full year.

Roxas Holdings widens net loss in Q3

August 2, 2019 | 6:15 pm

ROXAS Holdings, Inc. (RHI) widened its net loss by 271% in the third quarter ending June, as unfavorable weather conditions depleted the supply of cane, affecting the sugar industry as a whole.

In a disclosure, the listed sugar and ethanol manufacturer reported a P287.58-million attributable net loss during April to June period, versus a net loss of P77.364 million recorded in the same period last year.

RHI swung to a P650.009 million net loss for the nine-month period, from a P2.114 million net income in the same period in 2018. The company’s fiscal year ends on Sept. 30.

Revenues during the third quarter were also 12% down to P1.506 billion.

“The sugar industry is currently faced with lower output and increasing production costs while sugar prices have remained low,” Pedro E. Roxas, chairman of RHI, said in a statement.

He noted that changing weather conditions have led to lower supply of cane for production, which triggered competition that led to higher cane prices. The threat of sugar importation has also put pressure on local sugar prices.

RHI President and Chief Executive Officer Hubert D. Tubio said these challenges also resulted in a shortage of bagasse, a dry pulpy residue collected after the sugar cane extraction. This is used as fuel for machines like electricity generators.

“RHI produced a significantly lower volume of refined sugar from 2.2 million LKg bags last crop year to 1.1 million LKg bags this crop year,” he said, adding that the company has already implemented actions to prevent the same problem to happen in the next crop year. One Lkg is equal to one 50-kilogram bag of sugar.

Mr. Tubio also noted that the company’s ethanol unit booked lower margins due to high feedstock costs at P12,500 per metric ton, as production increased during the period.

RHI Vice President and Chief Finance Officer Celso T. Dimarucut said the company is “now focused on reducing inventories, and collecting receivables to generate funds for capital expenditures and payment of maturing obligations.”

RHI, which is described as the largest integrated sugar business in the country, manages sugar miller Central Azucarera de la Carlota, Inc., ethanol producers Roxol Bioenergy Corp. and San Carlos Bioenergy; and RHI Agri-business Development Corp.

Shares in RHI went up 4.55% or 0.1 centavos to close at P2.30 apiece in the stock exchange on Friday. — Vincent Mariel P. Galang

PhilWeb trims Q2 losses as e-bingo business grows

August 2, 2019 | 6:15 pm

PhilWeb Corp. posted slimmer losses in the second quarter as revenues improved thanks to its foray into electronic bingo (e-bingo).

The listed gaming firm reported an P11.69 million net loss attributable to equity holders of the parent company in the three-month period, narrower by 28.9% from P16.44 million loss in the same period last year.

Its attributable net loss for the six months ending June was also cut by half to P22.29 million from P45.31 million in the same period last year.

The improvement was driven by a 15% rise in revenues to P125.4 million in the second quarter, driven by an increase in the number of its operating sites.

Six-month revenues likewise grew 25% to P246.1 million from P196.5 million in the same period last year.

“We are pleased that our venture into e-bingo is immediately reaping dividends for the company, and we look at continuing to aggressively expand our two-fold footprint in the electronic gaming sector in the months to come,” PhilWeb Chairman Gregorio Ma. Araneta III said in a statement.

The company said it has been operating 68 electronic casino outlets and co-managing a network of 22 electronic bingo outlets as of end June, which was the main driver of the company’s improved revenues.

The co-managed bingo outlets are from its P292-million share purchase agreement with the Palmary Corp. signed in June. A cooperation agreement was inked between the two companies at the same time, which allowed PhilWeb to expand its e-bingo business from its six outlets to merge with Palmary’s 16.

The company’s cost and expenses increased 4.2% in the second quarter to P135.8 million, and by 5.8% to P266 million in the first half, as it underwent expansion of the number of its operating locations.

“This shows that we are well on track regarding our commitment to getting PhilWeb back to its former profitability levels, during which times we were able to pay out high dividends to stockholders and generate significant share price increases as well,” Mr. Araneta added. — Denise A. Valdez

ABS-CBN keeps nationwide ratings lead in July

August 2, 2019 | 6:14 pm

ABS-CBN Corp. maintained nationwide ratings lead in the month of July as rival GMA Network, Inc. claimed dominance in Urban Luzon and Mega Manila, citing different measurement reports.

The Lopez-led media group said in a statement Friday it recorded a 45% national television ratings last month to beat GMA which had 32%, based on data from Kantar Media.

GMA, on the other hand, said Nielsen TV Audience Measurement found it to record the highest total day people audience share in Urban Luzon at 34% against ABS-CBN’s 31.4%, and in Mega Manila at 35.4% versus its competition’s 28.9%.

ABS-CBN said Kantar surveys 2,610 urban and rural households. GMA said Nielsen is the ratings service provider subscribed to by six local television networks.

In terms of location-based ratings, ABS-CBN challenged GMA using data from Kantar, saying it led Metro Manila with 41% ratings against GMA’s 26%, and Mega Manila with 36% versus GMA’s 32%.

ABS-CBN also claimed the lead in rural areas, saying its ratings in Total Luzon was 40% in July versus GMA’s 34%; in Total Visayas at 53% to beat GMA’s 25% and in Total Mindanao 52% against GMA’s 29%.

For time slot-based ratings, GMA said, citing Nielsen, that it led the afternoon block with 36.3% audience share against ABS-CBN’s 33.3%, and the evening block with 35% share to beat ABS-CBN’s 31.7%.

But ABS-CBN, citing Kantar’s report, said it dominated time slot-based ratings across-the-board, with 39% in the morning block against GMA’s 30%, 44% in the noontime block versus GMA’s 34%, 47% in the afternoon block to beat GMA’s 33% and 47% in the primetime block over GMA’s 31%. — Denise A. Valdez

Peso sinks on renewed US-China tensions

August 2, 2019 | 6:14 pm

THE PESO dropped further against the dollar on Friday as the market’s risk appetite waned following escalating trade tensions between China and the United States.

The local unit ended the week at P51.43 versus the greenback, down 23 centavos from its P51.20-per-dollar finish on Thursday.

The peso traded weaker the whole day, opening the session at P51.32 per dollar. It slipped to as low as P51.48, while its intraday high stood at P51.27 against the US currency.

Trading volume climbed to $1.268 billion from the $984.36 million the changed hands the previous day.

“The peso weakened after US President Donald Trump imposed new 10% tariffs on $300 billion worth of Chinese goods effective Sept. 1, 2019,” a trader said in an email.

Mr. Trump announced on Twitter he will impose another round of tariffs on Chinese goods, virtually taxing all of China’s imports to the US.

“We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to…buy agricultural product from the US in large quantities but did not do so,” Mr. Trump said in a series of tweets, noting that trade negotiations will still push through.

Mr. Trump met with his Chinese counterpart Xi Jinping on the sidelines of G20 summit in Osaka, Japan in late June wherein both countries agreed to resume trade talks.

The new round of tariffs comes after the world’s two biggest economies met in Shanghai earlier this week, which yielded no result.

In response, China’s spokesperson at the foreign ministry Hua Chunying said Beijing would take retaliatory actions if Washington is committed to slap more tariffs, Reuters reported.

“(The renewed trade tensions) triggered a risk off sentiment in the market. There was already risk off sentiment throughout the day, but it just added more fuel to the flame,” another trader said. — K.A.N. Vidal

Milestone Ayala North Exchange is the new gateway to Makati CBD

August 2, 2019 | 3:00 am

Ayala Land, Inc. (ALI) marked yet another milestone as it officially opened the Ayala North Exchange — the newest gateway to the Makati central business district. Ayala North Exchange is a signature mixed-use development seen to revitalize and strengthen Makati’s position as the premier business capital of the Philippines.

Located along the northern portion of Ayala Avenue, Ayala North Exchange is a twin tower, mixed-use development with a combined gross leasable area of approximately 96,000 square meters.

The two office towers stand above a three-level retail podium with approximately 8,000 square meters of restaurants and shopping spaces. Located in one office tower is the Seda Residences Makati, the first serviced apartment and the 10th property in the Philippines under the Seda Hotels brand.

Ayala North Exchange is a mixed-used development with offices, a retail podium and serviced apartments by Seda.

The development also features a 2,600-square-meter civic space connected to Makati’s elevated walkway for increased connectivity and pedestrian mobility.

The Ayala North Exchange is one of the latest additions to the portfolio of AyalaLand Offices, the country’s leader in the office real estate sector with over 1.1 million square meters of leasable space in key cities nationwide. AyalaLand Offices offers a comprehensive line of prime office real estate solutions found in strategic sites with large populations or central business districts.

“We take into account the varying needs of our clientele, among whom are leading multinational corporations and BPOs, and develop our properties according to global standards complemented by amenities and reliable facilities management,” said Ayala Land Offices Head Carol Mills.

Office properties form a significant part of ALI’s growth strategy as the company recently announced plans to take part in Real Estate Investment Trust (REIT) with prime commercial office assets in Makati.

PHL factory gain strongest in 6 months

August 2, 2019 | 12:33 am

BUSINESS for manufacturers marked July with the strongest improvement in six months — though still described as “moderate” — on the back of sales and job growth, according to results of the latest survey IHS Markit conducted for Nikkei, Inc., keeping the country in third place behind Myanmar and Vietnam among seven tracked Southeast Asian economies.

The IHS Markit Philippines Manufacturing Purchasing Managers’ Index (PMI) logged 52.1 in July compared to June’s 51.3 and the year-ago 50.9, marking the strongest improvement in six months or the 52.3 recorded in January.

A PMI reading above 50 indicates improvement in business conditions from the preceding month, while a score below that point signals deterioration.

The manufacturing PMI consists of five sub-indices, with new orders having the heaviest weight at 30%, followed by output with 25%, employment with 20%, suppliers’ delivery times with 15% and stocks of purchases with 10%.

“New order growth was up notably in July, easing some worries in recent months that the manufacturing environment was facing a slowdown,” IHS Markit Economist David Owen said in a press statement.

“Output… increased at a solid rate, albeit one that was weaker-than-average for the Filipino goods-producing sector.”

The press release noted that manufacturers faced higher demand, reflecting customers’ higher spending power. Noting that household consumption contributes about 70% to national output, the Philippine government cut personal income tax rates in January last year — while increasing or adding levies on several goods and services — in hopes of spurring spending.

According to the statement, “the increase in demand was largely domestic,” as new export orders marked the second successive monthly reduction. “A number of firms reported a lack of orders from foreign clients, although the overall rate of decline was slightly softer than in June,” the press release read.

Production “increased solidly,” though at a “softer” pace than in June.

Employment increased, marking the first rise in jobs since February. “Companies often expanded their work forces to meet higher output requirements, whereas others saw employment reduced due to resignations and decreased hiring…” the statement read.

Selling prices rose at the softest rate in over two years, with only three percent of respondents reporting an uptick.

Input cost inflation was also “soft” despite picking up “marginally” from June, as a stronger peso helped ease input costs.

“Despite the sudden uplift in demand, price pressures appeared unaffected. Input prices rose at only a modest pace, with an improvement in the exchange rate with the US dollar helping to ease the impact of higher raw material prices. This fed through into the softest increase in selling prices at manufacturers since June 2017. Overall, this should help to maintain strong sales growth if demand conditions remain elevated,” Mr. Owen said.

In the face of strong output and sales growth, manufacturers remained bullish on future prospects.

Regionwide, the Philippines remained third behind Myanmar (52.9 from 53 in June) and Vietnam (52.6 from 52.5) for the second straight month, but was still stronger than Southeast Asia’s 49.5 reading in July that was down from the preceding month’s 49.7.

Mr. Owen noted that the region’s “rate of deterioration was the steepest in two years, driven by lower output and employment.”

“Firms were led to reduce production levels on the back of only marginal increases in new orders in recent months.” — BML