How PSEi member stocks performed — August 20, 2020
Here’s a quick glance at how PSEi stocks fared on Thursday, August 20, 2020.
Peso drops on renewed US-China tensions
THE peso weakened on Thursday as the market preferred the safe-haven greenback amid renewed tensions between Washington and Beijing.
The local unit finished trading at P48.68 versus the dollar on Thursday, depreciating by 10.5 centavos from its P48.575 close on Wednesday, data from the Bankers Association of the Philippines showed.
Still, the peso was stronger by three centavos from its P48.765-per-dollar finish on Aug. 14. Markets are closed on Friday for Ninoy Aquino Day.
The peso opened Thursday’s session at P48.61 per dollar, which was also its intraday best. Meanwhile, its weakest showing was at P48.71 against the greenback.
Dollars traded slipped to $788.66 million from the $794.5 million logged on Wednesday.
The local unit declined versus the dollar after renewed trade tensions between the world’s two biggest economies, a trader said.
“The peso weakened from safe-haven demand amid escalating geopolitical tensions between the US and China after US President Donald J. Trump suspended the review of their first-phase trade deal,” the trader said in an e-mail.
White House Chief of Staff Mark Meadows told reporters on Tuesday aboard Air Force One that the US and China have yet to set a schedule for a new trade talk, but have remained discussing the implementation of a Phase 1 deal, Reuters reported.
Mr. Meadows said a mandated review is part of their trade pact with Beijing and that US Trade Representative Robert Lighthizer continues to speak with his Beijing counterparts regarding their commitments.
Mr. Trump earlier postponed the scheduled Aug. 15 review of Washington’s trade pact with China as he was frustrated over Beijing’s policies to arrest the spread of the virus.
Remarks from the US Federal Reserve on the continued impact of the coronavirus disease 2019 (COVID-19) to the US economy also affected market sentiment yesterday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
“The peso closed weaker after the Fed’s latest signals that the coronavirus would weigh heavily on the economy and the economic recovery would depend on the virus containment,” Mr. Ricafort said in a text message.
The minutes of the Federal Open Market Committee’s July meeting said the situation shows “substantial improvement” will depend on “broad and sustained” reopening of the economy, Reuters reported.
“Noting the increase in uncertainty about the economic outlook over the inter-meeting period, several participants suggested that additional accommodation could be required to promote economic recovery…,” the minutes said. — L.W.T. Noble with Reuters
Stocks decline on profit taking ahead of holiday
By Revin Mikhael D. Ochave
LOCAL SHARES ended in negative territory on Thursday as investors took profits ahead of the long weekend and sought to digest the newly passed Bayanihan II economic stimulus package.
The bellwether Philippine Stock Exchange index (PSEi) fell 36.72 points or 0.6% to 6,005.40 while the broader all-shares index went down 18.30 points or 0.51% to 3,573.06.
Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said in a mobile phone message that Thursday’s trading was due to positive investor sentiment on the passage of the economic stimulus bill dubbed Bayanihan to Recover as One Act or Bayanihan II that aims to help the economy recover from the effects of the coronavirus disease 2019 (COVID-19) pandemic.
“The market had a swing-around, reverting back to the 6,000 level at its closing. Most of the day the market has breached below its 6,000 level, with an intraday low at 5,962.64,” Mr. Tan said.
The Congress Bicameral Conference Committee approved on Wednesday the final version of the Bayanihan II bill. Some P140 billion in funding has been approved for the stimulus package while P25 billion will serve as standby funds.
Meanwhile, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the market’s close on Thursday was affected by the US Federal Reserve’s tepid economic outlook for the rest of the year and their call for more fiscal assistance amid the COVID-19 pandemic.
“The Federal Reserve pointed at an uneven recovery, tempering optimism over a second-half economic rebound and appearing to back off from a readiness to clarify its rate guidance, as minutes from their July meeting showed,” Mr. Limlingan said in a mobile phone message.
Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan echoed Mr. Limlingan, adding investors chose to take profits before the holiday.
All sectoral indices ended in negative territory on Thursday. Mining and oil shrank 137.65 points or 2.36% to 5,682.91; financials retreated 15.07 points or 1.31% to 1,130.94; property declined 20.58 points or 0.7% to 2,884.63; services fell 9.93 points or 0.68% to 1,450.27; industrials dropped 27.18 points or 0.34% to 7,792.26; and holding firms dipped 14.13 points or 0.22% to 6,247.05.
Decliners bested advancers, 131 to 64, while 46 names ended unchanged. Trading value was at P4.05 billion on Thursday with 1.50 billion shares changing hands, against Wednesday’s P5.47-billion worth of 1.36 billion shares.
Foreigners remained as sellers, logging a net outflow of P357.30 million which was less than the P850.23 million the previous day.
“Next week, we may have to confirm if the market has formed a base above the 6,000 support area. Otherwise, 5,600 would be the next support, while 6,200 remains the immediate resistance level,” Timson’s Mr. Pangan said.
Bicameral panel approves Bayanihan II of up to P165B
THE Bicameral Conference Committee has harmonized the Bayanihan II legislation, paving the way for both chambers to ratify the government’s economic recovery plan by next week at the latest.
The “Bayanihan to Recover as One Act” provides for P140 billion in funding to various hard-hit sectors and P25-billion in standby appropriations, bringing the total to P165 billion.
“We stuck to the P140 billion for the regular appropriations, then there’s a standby appropriations of P25 billion if the funds become available, meaning if magkaroon ng (they find) savings or additional revenue sources,” Senate Finance Committee Chairman Juan Edgardo M. Angara said at an online briefing Thursday.
Senate President Vicente C. Sotto III said in a phone message that he expects the bill to be ratified also on Thursday. House Majority Leader Ferdinand Martin G. Romualdez said in a separate message the chamber will ratify the bill “immediately next week.”
The measure grants President Rodrigo R. Duterte special powers to redirect funding from the 2019 and 2020 budgets to the government’s coronavirus disease 2019 (COVID-19) containment effort and related aid and stimulus programs.
The bill will continue to provide P5,000-8,000 worth cash assistance, only this time it will focus on hard-hit sectors unable to benefit from the first Bayanihan law.
“It’s more of a support program for impacted sectors and cash-for-work for those who were under extended lockdown and affected workers, dahil maraming nagsabing hindi nakatanggap sa Bayanihan I (Many have said they received nothing under Bayanihan I). Sila ‘yung bibigyan priority (We’ll give them priority),” he said.
The panel also allocated P4.5 billion for isolation and quarantine facilities as well as dormitories for frontliners; P5 billion for contact tracing and P3 billion for personal protective equipment.
It will also provide P8.9 billion in additional funding for the education sector, P13 billion for displaced workers and P9.5 billion for the transportation industry.
Some P10 billion worth of funding was also set for the procurement of vaccines approved by the World Health Organization. Mr. Angara said this will allow the government to begin the procurement process ahead of the completion of the drugs’ phase 4 trials.
He noted, however, that distribution of the vaccine will not go ahead unless the vaccine passes all trials.
Among the contentious items settled was the P10 billion in funding for the tourism industry, which Senate Bill No. 1564 allocated to the Department of Tourism for assistance to hard-hit businesses. House Bill No. 6953, meanwhile, proposed to use the same amount for tourism infrastructure.
Senate Minority Leader Franklin M. Drilon, a member of the panel, said the Senate contingent had offered to compromise by allocating P1 billion to the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) and retain the remaining funds for enterprise aid.
Eventually, he said it was agreed that P1 billion be allocated to tourism infrastructure, provided that projects are handled by the Department of Public Works and Highways, instead of TIEZA. A total of P3 billion will assist displaced workers, through the labor department, and P6 billion worth of soft loans for micro, small and medium enterprises.
The panel also agreed that provisions in Bayanihan II specific to banking institutions, which were included in the House bill, will be legislated separately with a commitment from the Senate that the matter will be tackled immediately.
“Sa amin, hindi man lang na-take up ‘yan (In the Senate, it was not even taken up)… You’re going to pass a law that will affect the banking system, at the very least, we should hear,” Mr. Angara said.
“Sen. Grace said she’s willing to help hearings ASAP to at least prioritize,” he added. Senator Grace S. Poe-Llamanzares chairs the banks and financial intermediaries committee.
He is referring to the Government Financial Institution Strategic Unified Initiatives to Distressed Enterprises for Economic Recovery bill, which was approved at the House committee level. The bill creates an entity called the Accelerating Recovery to Intensify Solidarity and Equity, Inc. which will help companies address solvency issues.
Meanwhile, the Financial Institutions Strategic Transfer bill will allow transfer of bad loans to asset management companies. This legislation is similar to the Special Purpose Vehicle Act, signed in 2002, in the wake of the 1997 Asian financial crisis. — Charmaine A. Tadalan
Pandemic fund releases hit P376.57 billion as of Aug. 10
THE GOVERNMENT has released P376.57 billion for its coronavirus disease 2019 (COVID-19) containment effort as of Aug. 10, according to the Department of Budget and Management (DBM).
Tallying allotment releases, the DBM said pandemic-related spending rose by P1.7 billion from the P374.89 billion that had been spent at the end of June. In terms of notices of cash allocation, the authority the DBM issues to agencies to use the cash allocated to them, the total is P360.1 billion.
Implementing agencies of the government’s cash aid programs received most of the funds, led by the Department of Social Welfare and Development (DSWD), which handled the P200-billion social amelioration program, and the Department of Finance (DoF), which oversaw the P50-billion wage subsidy program and funds given to local governments.
The DBM has released allotments to the two agencies worth P201 billion and P88 billion, respectively. The Departments of Health, Labor, Education and Agriculture also received P49 billion, P12.6 billion, P11 billion, and P11.4 billion, respectively.
Other agencies that received funds for COVID-19 were the Departments of the Interior and Local Government (DILG), National Defense (DND), Foreign Affairs (DFA), Justice (DoJ), Trade and Industry (DTI), Science and Technology (DoST), Public Works and Highways (DPWH), as well as the Office of the Presidential Adviser on the Peace Process (OPAPP) and the Philippine General Hospital (PGH).
Finance Secretary Carlos G. Dominguez III said Thursday said it is important for the government to “prudently” spend on its pandemic response and stimulus plan to conserve resources in case of a prolonged crisis.
“Because this is likely going to be a drawn-out series of battles, we should be judicious in our use of fiscal and financial resources. There is no knock-out punch for COVID-19 and its economic fallout. We are therefore conserving our fiscal stamina for a full, 12-round fight. Our capacity to fight can and will outlast this health challenge,” Mr. Dominguez said in a video address during the 29th North Luzon Area Business Conference of the Philippine Chamber of Commerce and Industry (PCCI).
He said given its strong fiscal position before the pandemic, the government has “sufficient means” to raise funds and ramp up spending.
“We cannot fight a pandemic with a weak economy; nor can we restore economic vigor without solving the public health crisis. We need a healthy people and a strong economy,” he said.
He said maintaining investment-grade credit ratings allows the government access to financing at lower rates and longer repayment periods.
As of Aug. 5, the foreign funding raised by the government has totaled $8.131 billion in the form of loans, bonds and grants.
“Even as the virus continues to circulate, we are setting the foundations for a strong recovery. Pragmatism guides us as we put together an effective bounce back plan that we can afford and can fully execute,” Mr. Dominguez added. — Beatrice M. Laforga
PCCI asks government to make healthcare investment more enticing
THE Philippine Chamber of Commerce and Industry (PCCI) called on the government to create a business environment that will attract investment in the healthcare system.
It proposed developing new sunrise industries in health infrastructure, the digital economy, essentials manufacturing, and research after the pandemic, PCCI President Benedicto V. Yujuico said in an online business conference Thursday.
“With the continuing increase in the number of COVID-19 cases, our health infrastructure gaps are being highlighted,” he said.
“It is therefore imperative for our government to provide an environment, including incentives for research and development, that will attract (the) private sector to invest in the healthcare system.”
Mr. Yujuico added that the country must transition to a digital economy to adapt to the changes in the business environment.
He said strengthening the business environment involves accelerating the automation and integration of government transactions for permits and licenses.
The PCCI continues to back economic stimulus measures, as well as the bill proposing to immediately cut the corporate income tax to 25%.
The country’s largest business organization also supports infrastructure development, including airport and railway projects in North and Central Luzon.
Mr. Yujuico added that the government must build supply chains, and repurpose businesses to address current concerns.
“The Philippines’ 110 million population represents a huge domestic market and can be a good platform for the development of a Filipino-led global value chain,” he said. — Jenina P. Ibañez
PHL livestock output declines in second quarter
LIVESTOCK production by volume fell in the second quarter with declines nearly across the board, with the exception of the chicken egg industry, according to the Philippine Statistics Authority (PSA).
The PSA said hog production on a live-weight basis fell 5.2% year on year to 550,017 metric tons (MT) in the second quarter.
Central Luzon was the top hog producer, accounting for 19% or 104,431 MT, followed by CALABARZON (Cavite, Laguna, Batangas, Rizal, and Quezon) at 16% or 87,897 MT, and Northern Mindanao at 9.2% or 50,847 MT.
As of July 1, the hog population rose 7.6% year on year to 11.74 million head.
Backyard raisers accounted for 66.5% or 7.80 million head while commercial farms had 33.5% or 3.94 million.
The average farmgate price of hog fell 3.4% year on year to P106.08 per kilogram.
Chicken production by live weight fell 7.8% year on year to 439,996 MT.
Central Luzon was the top chicken producer, accounting for 35.2% or 155,052 MT, followed by CALABARZON at 18.7% or 82,443 MT, and Northern Mindanao at 9% or 39,811 MT.
As of July 1, total chicken inventory fell 2.7% year on year to 186.47 million birds.
The average farmgate price of broiler chicken from commercial farms fell 9.5% year on year to P67.45 per kilogram.
Chicken egg production rose 4.9% year on year to 148,453 MT.
CALABARZON was the top chicken egg producer, accounting for 31.2% or 46,327 MT, followed by Central Luzon at 19.3% or 28,587 MT, and Northern Mindanao at 9.3% or 13,838 MT.
The average farmgate of chicken eggs rose 19.5% year on year to P5.56 per piece.
Cattle production by live weight fell 29.5% year on year to 45,995 MT.
Northern Mindanao was the top cattle producer, accounting for 18.4% or 8,473 MT, followed by CALABARZON at 17.8% or 8,173 MT, and the Ilocos Region at 11.7% or 5,402 MT.
The cattle inventory rose 1.4% year on year to 2.60 million head.
Backyard raisers accounted for 94% of total output at 2.44 million head while commercial farms raised 6% or 155,521 head.
The average farmgate price of cattle rose 8.4% year on year to P120.73 per kilogram. — Revin Mikhael D. Ochave
PHL-UK trade talks identify aerospace, electronics as priorities
THE PHILIPPINES and the UK plan to strengthen their economic partnership to increase investments in key sectors like aerospace and electronics.
The two countries, represented by the Trade department and British Ambassador to the Philippines Daniel Pruce, on Aug. 19 held their first economic dialogue since the start of the lockdowns declared to contain the pandemic, the Department of Trade and Industry (DTI) said in a statement Thursday.
“Both countries reaffirm their commitment through a Joint Partnership Statement that will boost bilateral trade and investment (and) encourage increased investments in key sectors such as aerospace, electronics, automotive and pharmaceuticals; pursue innovation and industrial collaboration,” the DTI said.
The DTI also said that the partnership will support the development of micro, small, and medium-sized enterprises and support the use of the UK Prosperity Fund in areas like health, education, low-carbon energy, infrastructure, finance, business environment, intellectual property, and digital economy.
“Engaging the UK bilaterally is strategically important at this crucial time as they implement their independent trade regime and as we ramp up international cooperation towards recovery from the effects of the pandemic. This dialogue is the perfect avenue for us to lay the building blocks for a stronger and closer economic relationship in the future,” Trade Undersecretary Ceferino S. Rodolfo said.
British Chamber of Commerce of the Philippines Executive Director Chris Nelson said in a phone interview that the chamber supports the partnership.
He said he also backs economic stimulus measures that can help attract investments after the pandemic, including bills like the Retail Trade Liberalization Act and the Public Service Act.
“While they’re doing these discussions… we have to be aware of the current economic challenges facing the Philippines,” he said.
“We have to be cognizant of the current situation that we’re in. I don’t know if that was discussed, but obviously we and many other chambers feel that we need a stimulus plan.” — Jenina P. Ibañez
DA reorganizes hog industry data compilation
A JOINT COMMITTEE has been established to consolidate hog industry data in order to better manage emerging animal diseases such as the African Swine Fever (ASF), according to the Department of Agriculture (DA).
Agriculture Secretary William D. Dar signed a special order that created the committee, which will harmonize hog production data, after reported discrepancies between data from the private sector and those generated by the government.
“The creation of the joint committee is a result of a collaborative effort between our private sector stakeholders and DA officials. I am optimistic that by working together to supply updated data, it will transform into responsive policies and decisions that will help the swine industry,” Mr. Dar said.
The joint committee will be composed of representatives from the DA, the Pork Producers Federation of the Philippines (ProPork), National Federation of Hog Farmers, Inc., and San Miguel Foods, Inc., among others.
The creation of the committee was in response to a recommendation by the private sector to gain a better picture of the sow population and hog losses due to the ASF outbreak.
In a July 14 meeting, stakeholders noted the inconsistencies in the Philippine Statistics Authority and Bureau of Animal Industry data. — Revin Mikhael D. Ochave
Coronavirus cases top 178,000 with death toll nearing 3,000
THE Department of Health (DoH) reported 4,339 new coronavirus infections on Thursday, bringing the total to 178,022.
The death toll rose 2,883 after 88 more patients died, while recoveries increased by 727 to 114,114, it said in a bulletin.
There were 61,025 active cases, 91.3% of which were mild, 6.6% did not show symptoms, 0.9% were severe and 1.2% were critical, the agency said.
Out of the new cases, 3,213 were reported in the past 14 days, mostly from Metro Manila with 1,737 cases, it added. The other 223 came from Laguna, 155 from Cavite, 128 from Cebu and 109 from Rizal.
The new cases came from tests done by 100 out of 109 licensed laboratories.
Forty-two of the new reported deaths came from Central Visayas, 34 from Metro Manila, five from Western Visayas, four from the Calabarzon region and one each from Ilocos, Zamboanga Peninsula and the Cordillera Administrative region, DoH said.
It said it had tested more than 2 million people for the coronavirus.
Meanwhile, DoH dismissed a report by the Ateneo de Manila University’s Department of Economics that almost three million COVID-19 (coronavirus disease 2019) cases in the Philippines had not been reported.
Health Undersecretary Maria Rosario S. Vergeire said the agency would look at the Ateneo data released on Wednesday.
“They were basing their estimations with the case fatality rate if I am not mistaken,” she told an online news briefing. “We have referred it to our experts and epidemiologists.”
She questioned the research method of comparing cases in the Philippines with those of other countries in the region.
About 2.81 million people might have been infected with the coronavirus from April to June, but only 34,354 or 1.22% were detected and reported, according Jan Frederick Cruz, who wrote the study.
He also said Indonesia might have had 6.58 million cases, but it only detected 53,678 or 0.82%. Thailand might have had 89,357 cases, but only detected 1.7% or 1,520, and Malaysia might have had 158,237, but only detected 3.8% or 6,011.
While Indonesia may have more estimated cases, discounting the effect of population size “highlights the Philippines as the worst performer among the ASEAN-5 in controlling the spread of COVID-19,” Mr. Cruz said.
The Philippines has been under various levels of lockdown since mid-March, that are changed every 15 days if needed.
Meanwhile, DoH said people should observe health standards because a lockdown is not the only solution to contain the pandemic.
“We cannot remain to be in lockdown forever,” Ms. Vergeire said. “We have to balance health and economics.”
She added that the effects of the modified enhanced community quarantine in the capital region from Aug. 14 to 18 would be seen in the next few weeks.
Metro Manila went back to a general community quarantine on Wednesday despite a fresh surge in infections.
Also on Thursday, the palace said the government would keep the limit of 10 people for gatherings including religious meetings after a Manila bishop asked it to reconsider the decision.
Mr. Roque said religious meetings across the world became hotbeds for coronavirus outbreaks. “We can go online in the meantime and observe the 10-person limit, which is temporary,” he said. — Charmaine A. Tadalan and Gillian M. Cortez
Airline regulator seeks to expand passenger rights
THE AIRLINE regulator is considering expanding the rights of travelers especially during force majeure as part of a plan to change passengers’ bill of rights.
The revision would make it in keeping with the times, Civil Aeronautics Board Executive Director Carmelo L. Arcilla said.
“It may be time to revise the air passenger bill of rights to make it more relevant to current developments,” he said at an online briefing on Thursday. “We are looking for more support for passengers at any time, under any circumstances.”
Mr. Arcilla noted that under present rules, airlines have limited responsibility to passengers in case flights are canceled due to force majeure.
The agency, which regulates the economic aspect of air transportation, is seeking to expand the support that airlines must give to passengers.
Mr. Arcilla also said the outlook for the aviation sector remained bleak because of the coronavirus pandemic.
There have only been 800 international flights from Manila since June 1 compared with 47,224 flights a year earlier, he said.
The projected recovery was unlikely to come until after four years, Mr. Arcilla said, citing the International Civil Aviation Organization. — Arjay L. Balinbin