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Lockdown drives surge in new online businesses

A computer keyboard is seen in this picture illustration taken in Bordeaux, Southwestern France, Aug. 22, 2016. — REUTERS/REGIS DUVIGNAU

THE Trade department is seeing a surge in new business names being registered by online retailers as the lockdown forced many companies to shift to e-commerce.

Trade Assistant Secretary Mary Jean Pacheco said the number of business names under internet retail registered with the department stood at 68,000 as of August so far.

The government placed Luzon under an enhanced community quarantine starting mid-March, halting nearly all economic activity. Except for those offering essential services, many brick-and-mortar stores were shuttered through mid-May, prompting consumers to turn to online shopping.

In May alone, new business name registrations under internet retail stood at 9,692, nearly 450% higher than the 1,753 names registered from January to mid-March.

The month of June saw 33,000 new registrations.

“We look at this as a barometer of the growing interest in e-commerce, and with this, a concomitant need for the government to continue and scale up e-commerce interventions,” Ms. Pacheco said.

She said that the country has opportunities for market access, with e-commerce valued at $2.4 billion. This accounts for 4% of the country’s total retail valued at $63 billion.

“There are over 120 million mobile subscribers in our country, the Philippines is the highest internet user in the world. Yet only 10% spend online,” she added.

Logistics costs, she said, must be reduced to improve e-commerce.

The DTI plans to update its e-commerce roadmap, focusing on areas like retail security and speed. It has been working with the University of the Philippines (UP) Law Center for academic and technical assistance in developing the roadmap.

Daily seller onboarding at e-commerce company Lazada Philippines tripled during the lockdown. The company said that more Filipinos are now using digital payments for their online transactions from the previous preference for cash on delivery, as buyers sought contactless payment solutions amid coronavirus fears.

Lazada said cashless payments on their platform increased by more than two times during the lockdown, while monthly orders also doubled in the beginning of the year from 2019.

At the same time, there has been a spike in consumer complaints on online transactions during the lockdown, the Department of Trade and Industry reported.

The department received 9,044 complaints about online transactions in the five months to May, compared with 2,457 complaints in the same period last year. Around 8,000 of the complaints this year came in between April and May. — Jenina P. Ibañez

ADB OK’s $400-M loan for PHL agricultural sector

THE Asian Development Bank (ADB) on Wednesday said it has approved a $400-million (P19.576-billion) loan to support Philippine government’s reforms that aim to improve competitiveness of the agriculture sector and reduce poverty in rural areas.

In a statement on Wednesday, the multilateral lender said the Competitive and Inclusive Agriculture Development Program will help the government implement trade policy and regulatory reforms for agriculture, enhance public services and finance to the sector, and expand the social protection to rural families.

One of the reforms supported by the policy-based loan is the Rice Tariffication Law that lifted the quantitative restrictions on rice imports, while imposing higher tariffs to fund the sector’s mechanization.

“The Philippines has made tremendous strides in reducing the national poverty rate, but rural poverty remains high because of low productivity and limited crop diversification,” ADB Vice-President Ahmed M. Saeed was quoted as saying.

The funds will also be used to support financial assistance to farmers affected by the coronavirus pandemic and those that will transition to higher value crops. The programs include unconditional cash grants and zero-interest loans to over 160,000 small-scale farmers.

The loan will also expand the public feeding programs among preschool students in an effort to reduce malnutrition.

The ADB said the new loan will be complemented by the bank’s future investments on flood risk management in major river basis, improvement of irrigation systems, and promotion of agro-enterprise development.

Supporting the agriculture sector is part of the government’s recovery program from the coronavirus-induced crisis to ensure food security and reduce poverty, the ADB said.

The bank said the Philippines’ agriculture sector, which employs a quarter of the total labor force, “lags behind” its Southeast Asian peers in terms of productivity growth and competitivenes. 

It said poverty incidence in rural communities across the country “remains high, as do child malnutrition and stunting.”

The multilateral bank has set a $4.2-billion lending program to the Philippines this year, with the majority going to the country’s response to the ongoing pandemic.

As of Aug. 5, the government has secured $8.131 billion from a mix of loans and grants from external sources to fund its pandemic expenses, of which $2.6 billion were from the ADB. — Beatrice M. Laforga

Recovery hopes may still lift PSEi to 6,500-7,000 — FMIC

By Denise A. Valdez, Senior Reporter

THE BENCHMARK Philippine Stock Exchange index (PSEi) may end the year within the 6,500-7,000 range on the back of investor optimism over an economic rebound in 2021, investment banking firm First Metro Investment Corp. (FMIC) said.

In a virtual media briefing on Wednesday, FMIC Research Head Cristina S. Ulang said the market may see an uptrend starting end-August, coming from expansionary fiscal policy drivers and accommodative monetary policy from the central bank.

“We see a recovery happening next year, and therefore earnings will follow from the contraction of 30% this year to a recovery of 23% next year. That’s going to put us back on track to the five-year P/E (price-to-earnings) range of 18-19x, where the PSEi will be hovering between 6,500 to 7,000,” she said.

She noted the market has likely bottomed out as investors are “very forward-looking,” with eyes set on developments regarding the coronavirus vaccine, the P160-billion fiscal stimulus, and the passage of the P4.5-trillion budget for 2021.

“We saw the PSEi very resilient and moving higher… Hopefully we’re able to see mobility in a greater way at the end of August,” Ms. Ulang said. Other positive events coming from the central bank, which FMIC expects will implement another rate cut within the year, are expected to “somehow offset the negative sentiment coming from the (coronavirus) infection rate.”

“That I think is the focus now, being the stimulus now will impact next year’s results. And the P4.5-trillion budget next year is very exciting, along with the government commitment to the global recovery in 2021,” Ms. Ulang added.

The coronavirus pandemic has brought the PSEi down to a historic low of 4,623.42 in mid-March after opening the year at the 7,700 level.

Despite the events that put the world to a halt, FMIC said the pandemic’s silver lining is it has opened a rare buying opportunity that has not been seen in the last 10 years.

In the debt capital market, FMIC Investment Banking Head Daniel D. Camacho said three central themes may be observed for the second half: continued low interest rates, benign inflation, and sustained interest in offshore issuances.

He said monetary policy is expected to be front and center of the economic response, with the reserve requirement potentially reduced by 100 basis points-200 basis points, or from 12% to 10%, before the year ends.

In the equity capital market, Mr. Camacho said investors could expect the gradual easing of the lockdown, further fiscal policy to support businesses, and issuances that were pushed back, such as initial public offerings and real estate investment trust offerings.

He noted, however, that the reinstatement of stricture quarantine measures from Aug. 4 to Aug. 18 may see the PSEi range within 5,700-5,900, “as investors adopt a risk off position due to concerns over near-term economic challenges.”

The PSEi ended Wednesday’s trading at 5,995.00, up 41.06 points or 0.69% from a day ago.

Shakey’s posts P290-M loss on store closures and one-off expenses

SHAKEY’s Pizza Asia Ventures, Inc. (SPAVI) swung to a net loss in the six months to June as the coronavirus pandemic forced it to lock stores since mid-March.

In a statement Wednesday, the restaurant chain operator said it booked a net loss of P290 million in the first half, a turnaround of its P389-million net income in the same period last year.

Overall sales dropped 31% during the period, but the company did not disclose the figures as of Wednesday.

Fixed operating costs at both its stores and head office weighed on the bottom line, as well as P123-million one-off costs from streamlining and efficiency initiatives.

Without non-recurring expenses, the company’s net loss is P167 million.

When the government imposed a Luzon-wide lockdown in mid-March to contain the coronavirus outbreak, SPAVI said it had to close 91% of its overall store network.

As the quarantine protocols eased, SPAVI was able to reopen stores, with 267 stores or 95% of its network already operational at the end of June.

However, most of these are still on shortened hours and limited to delivery and carry-out services. This resulted in lost dine-in sales, but were partially offset by record sales from delivery and carry out.

“[T]here remain a number of bright spots, foremost of which is our core product pizza, which is the quintessential delivery and carry-out product,” SPAVI President and CEO Vicente L. Gregorio was quoted in the statement as saying.

“In spite of continuing lockdowns, we are looking to hit cash breakeven in the second half and should be on our way to recovery by 2021,” he added. “We are hopeful that the worst is now behind us.”

Among the company’s initiatives to preserve cash are cutting its capital expenditures by at least 60% and reducing annual dividend payments from 10 centavos to one centavo per share.

“Despite the challenges our business and the broader restaurant industry is facing, we remain optimistic about the future and are now readying ourselves to better compete in the so-called ‘new normal’,” Mr. Gregorio said.

SPAVI operates two restaurant brands in the Philippines: Shakey’s Pizza and Peri-Peri Charcoal Chicken.

Its shares at the stock exchange increased 16 centavos or 3% to P5.50 each on Wednesday. — Denise A. Valdez

Cebu Pacific posts losses as pandemic rages on

CEBU AIR, INC. swung to a net loss in the second quarter of 2020, hit by the ongoing coronavirus pandemic.

The listed operator of budget carrier Cebu Pacific on Wednesday reported a net loss of P7.96 billion for the quarter, reversing a profit of P3.79 billion in the same period last year.

The government-imposed travel restrictions during the period resulted in a nearly 93% decline in the company’s gross revenues to P1.42 billion from P23.53 billion in the year-earlier period.

Without indicating the details for the second quarter, the company said it had seen a 60.1% decline in passenger traffic from 11.2 million to 4.5 million in the first semester, as the number of flights was lower by 55.6%. There was also a 7.3-percentage point decrease in seat load factor from 87.2% to 80.8%, it added.

Total expenses for the second quarter also dropped 58.5% to P7.71 billion from last year’s P18.56 billion.

To recall, the carrier, in the first quarter, recorded a 24.9% decline in revenues to P15.91 billion from P21.18 billion in the same period last year. The company posted a net profit of P3.36 billion in the same period last year.

The coronavirus pandemic had triggered cancellation of flights to China, Hong Kong, Macau and South Korea “in varying periods due to the imposition of travel restrictions,” the listed company noted.

“With the rapid escalation of the situation surrounding coronavirus disease 2019 (COVID-19), the Philippine government implemented a community quarantine which then prompted the group to suspend all its scheduled flights beginning March 19, 2020. While some sporadic arrangements for sweeper flights to assist stranded tourists did occur, for the most part, the group’s operations were virtually nil until April when some cargo flights within the Philippines and eventually to countries like Japan, Thailand, China, Hong Kong recommenced,” it added.

The airline’s commercial passenger operations resumed on June 3, starting with limited-capacity domestic flights.

Still, the company described its consolidated balance sheet as “strong” as of June 30.

“As of June 30, except as otherwise disclosed in the financial statements and to the best of the group’s knowledge and belief, there are no events that will trigger direct or contingent financial obligation that is material to the group, including any default or acceleration of an obligation,” it added.

On Wednesday, shares in the company rose 5.53% to close at P41 each. — Arjay L. Balinbin

Atlas Mining net loss widens to P153 million

ATLAS CONSOLIDATED Mining and Development Corp. on Wednesday reported a net loss of P153.16 million in the second quarter, nearly five times more than its losses in the same period last year, largely after a decline in its copper revenues.

Quarterly revenues slipped to P4.01 billion, down 2.3% from a year ago, of which copper revenues accounted for nearly P2.99 billion, down 15.8% from P3.55 billion in the same period last year.

In a statement, the mining company said the copper price in the second quarter decreased, pulling down the average realized copper price for the first half to $2.47 per pound or 12% lower than the year-ago price.

At the same time, it said the average realized gold price increased by 26% to $1.647 per ounce this year.

Atlas Mining’s gold revenues during the quarter reached P993.25 million, up 79.2% from P554.33 million.

In the first half, the company’s net loss attributable to equity holders widened nearly three times to P189.92 million, in part because of higher deferred tax provisions this year.

Its core income rose 66% year on year to P366 million, against P220 million in the same period. Gross revenues fell 6% to P8.05 billion.

The company’s earnings before interest, tax, depreciation and amortization (EBITDA) increased 12% to P3.37 billion after the drop in revenues caused by lower copper prices was offset by lesser cash costs.

“This underpinned the increase in core income for the period and the increase in cash generated from operations, which enabled the payment of $20 million of its loans this year in addition to the $52.7-million loan payments for the year 2019,” the disclosure said.

The company’s wholly owned subsidiary, Carmen Copper Corp., posted a 5% increase in its copper metal production to 54.17 million pounds while gold production rose 26% to 22,815 ounces due to higher tonnage milled and higher realized gold grades.

Atlas Mining said its milling tonnage rose 9% to 9.07 million tons while its copper grades fell 5% to 0.311% and gold grades climbed 25% to 7.68 grams per dry metric ton (DMT).

“Copper metal content of concentrate shipped was sustained at the same level from 53.57 million pounds to 53.36 million pounds while gold content increased by 19% to 20,348 ounces due to higher gold grade,” the disclosure said.

Atlas Mining President Adrian Paulino S. Ramos said that despite the coronavirus disease 2019 (COVID-19) pandemic, the company was able to meet all shipments and endure difficult market conditions in the first half of the year.

“Our costs significantly improved due to the completion of our peak waste stripping years. Lower stripping costs going forward should give Atlas the operating efficiency to weather any copper price cyclicality and to begin to pay down our debt,” he said.

“We remain mindful of our responsibility to our many stakeholders during the COVID-19 pandemic and have made operational adjustments that prioritize the health and safety of our people, while collaborating with our communities to ensure their welfare,” he added.

On Wednesday, shares of Atlas Mining were unchanged at P2.64 per share. — Revin Mikhael D. Ochave

AC Energy local unit earns nearly P2 billion after asset infusion

AYALA-LED AC Energy Philippines, Inc. (ACEPH) recorded P1.96 billion in net income in the first semester from over a quarter loss previously, driven by the additional assets injected into the company.

To recall, the company has entered into a deal with AC Energy, Inc., which acquired shares equal to P2.97 each from the listed firm for its energy projects with 176 megawatts (MW) of capacity. These add to the 145-MW renewable energy projects that ACEPH bought early in the year.

With more projects, the company said it can launch more local investments soon.

“This allows us to make additional near-term investments in the country, which is much needed during these difficult times,” AC Energy President and Chief Executive Officer Eric T. Francia was quoted as saying in a disclosure to the stock exchange, Wednesday.

Also contributing to its first-half profit are its thermal plants with higher availability and the greater contracted capacity sold through Manila Electric Co.’s (Meralco) generation bidding.

South Luzon Thermal Energy Corp. posted 95% availability between January and June, while ACEPH’s peaking diesel plants provided 93% of available generated power.

The company also started delivering power from its 200-MW baseload and 110-MW mid-merit facilities to Meralco in the period.

It claimed the contracted capacity has offset the lessened volumes and reduced spot market prices during the lockdown months since mid-March.

ACEPH is in the process of changing its corporate name to AC Energy Corp., signifying the integration of AC Energy’s domestic and foreign businesses.

Earlier, it said the combined platform is valued at approximately P97 billion with a perceived attributable capacity of around 1,500 MW in operating and under-construction power plant projects, 60% of which are renewables.

It has yet to receive approval for the name change, while the Philippine Stock Exchange has already signed off its stock symbol change to ACEN, effective Aug. 14.

The power company aims to become Southeast Asia’s biggest renewables platform and reach 5,000 MW of capacity over the next five years.

Shares in ACEPH fell by 4% to close at P2.64 each on Wednesday. — Adam J. Ang

When times get tough, plant a garden

By Joseph L. Garcia, Reporter

“THE whole world is aflame. All the peoples of the United Nations are fighting the savage enemies of freedom,” blared a propaganda film by Disney and the US Department of Agriculture in 1942. The title of the film? Food Will Win The War, in turn taken from a WWI slogan popularized by President Woodrow Wilson. We at home now fight a war, not against the Axis Powers as in the 1942 film, but against a virus. During times of trouble, it is wise to have easy access to food. Three ladies we talked to took it directly from the Earth (with a little bit of prodding from their green thumbs).

These three ladies, like most of us, have been spending a lot of time at home, and have converted vacant lots or rooftops into vegetable gardens. They sound a lot like victory gardens the Allies encouraged their citizens to grow during WWII: they served to reduce pressure felt from food shortages, as well as boosted morale by making people on the homefront feel they were in on the fighting too.

The ladies we talked to did it for different reasons. Based on their answers, it had a lot to do with finding themselves through the earth.

“I had my own veggie garden while I was in grade school, also at a vacant lot. It gave me a sense of purpose and accomplishment. And because neighbors would ask for whatever I had harvested, it made me proud,” said Miren Suntay. “When we moved house, gardening ended because there was no place to start a veg garden where we moved to. Also, I lost interest because, well, boys,” she said in jest. “I wanted to start gardening again about 10 years ago, after my husband passed away. But time and energy was hard to muster. Five years ago, I began. My housekeeper, a green thumb herself, had always grown ornamental plants — so we fought a lot about that. I wanted gulay too!”

“I have my garden at my property, but have also taken a portion of a vacant lot to grow most vegetables. I requested for those constructing houses in the village to dump their soil on this empty lot, instead of them having to pay to haul soil to another site. Win win!” said Ms. Suntay, who also set up a Facebook page, The BF Urban Gardeners, for her neighborhood. Her garden grows okra, eggplant, ampalaya (bitter melon), alugbati (Malabar spinach), sili (chilies), tomato, kangkong (water spinach), papaya, watermelon, basil, tarragon, peppermint, oregano, onion, garlic, stevia, blue ternate (clitoria ternatea, commonly known butterfly pea), avocado, pipinito (baby cucumber), mustard, lettuce, cucumber, ube (purple yam), chicharo (green peas), squash, melon, spinach, “and a few more.”

Susan Isorena-Arcega, PR Consultant for Manila Broadcasting Co., has a garden on her rooftop. “I love flowers, particularly hibiscus and bougainvillea. But since I got diagnosed with Stage 3 endometrial cancer last year, I decided to cultivate edibles, too,” she said.

“I already had a lush growth of ternate after a friend gave me pods when I visited Dewi Sri Farms in Pila, Laguna several years ago, and some ginseng, ashitaba, and oregano as well. But then I went into isolation because I was immuno-compromised, and rented a studio unit a street away from my family. I decided to start with the same plants on the rooftop of the apartelle where I live. It was just a laundry area, with grey cement and unfinished posts with steel jutting out, but with magnificent views of Rockwell. I wanted to add some color somehow. I had some cucumber, carrot, tomato, and lettuce seeds that I had previously bought from the hardware at Robinsons but never got to plant, so I said, well, let’s try it.”

In March, the garden got busier when the city was placed under a community quarantine and Ms. Isorena-Arcega began working from home. She heard that the Department of Agriculture — Bureau of Plant Industry was giving out seeds. “I wrote them and they gave me okra, kangkong, upo (calabash), pechay, and mustasa (Chinese cabbage, and Chinese mustard) which I planted too,” she said.

She also used recyclable materials like big water bottles as plant containers. “When my landlady saw the seedlings sprouted and tomatoes actually bore fruit, she decided to join in and had her handyman set up trellises around the rooftop. I have harvested cucumbers, pechay, kangkong, and mustasa several times already. My landlady grew alugbati, ampalaya, aloe vera, tanglad (lemon grass), kamuning (orange jessamine), and eggplant. She too has harvested. Ngayon meron na rin siyang pakwan (she now has watermelon)!”

Victoria Fritz, meanwhile, helped jumpstart a community effort up in Blue Ridge. “I started growing vegetables in our backyard when I lost my day job, just last September. So one could say that a loss brought forth a garden. I am just a beginner gardener. I have grown bushels of tomatoes, eggplants, a few bell peppers that turned out small, and healthy okras,” she said. “The ECQ gave birth to The Garden Club at Blue Ridge A, our village. I am a board member of the Blue Ridge A Homeowner’s Association, and when one resident asked for a gardening group, our board responded. It just started in June, and is mainly a support group of vegetable growers. We exchange tips, ideas and seeds, among other things. We have held two teaching webinars.” The Garden Club is a joint project of the HOA and the Blue Ridge A Barangay Council.

“Last July, we began looking into an empty lot to serve as a community garden. A Garden Club member, Eleanor, took the initiative to request seeds from the Bureau of Plant and Industry, since it is BPI’s program to offer seeds to private groups. Twelve people have signed up to volunteer. However, due to COVID-19 and the rainy weather, getting together in the community garden has been put on hold for now. Our plan is to grow a whole range of vegetables, and even ornamental plants. We plan to compost in the soil first, to create rich and healthy soil, ready for planting. Next we will plant the seeds from BPI.”

We asked the ladies for tips on planting a successful urban garden. Most of them emphasized the value of good soil. “Skill gives the edge, but soil composition can truly turn a struggling vine into the most lush (plant),” said Ms. Suntay. All of them had tips on making great compost, to use on soil to make it richer. “You need to compost food waste in the soil. Start with the fruit and vegetable trimmings, which are clean and compost most quickly. Layer the pot with soil, then food waste, put some dried leaves if you have them, and cover with soil completely. After about a month, or even less, this soil is now compost where you can grow seeds,” said Ms. Fritz. “I enrich mine further with banana peels cut into tiny bits,” offered Ms. Isorena-Arcega. She added, “Essentially, plants thrive on a lot of TLC — daily watering and pruning.”

Ms. Isorena-Arcega and Ms. Suntay both admitted to talking to their plants. They share the practice with Charles, Prince of Wales. “I happily talk to the plants and trees, and listen to them. I think it’s absolutely crucial,” he said in a BBC documentary.* Ms. Suntay said in a mix of English and Filipino, “I talk to them. I say ‘sorry’ if I need to cut or move them. I ask why they are not growing as they should — they haven’t answered. They might soon, if this pandemic continues,” she said in jest. One might think it’s silly, but science is on their side (not so much on Prince Charles’, if only based on his sex): an experiment by the Royal Horticultural Society, as reported by The Telegraph in 2009, found that “Women gardeners’ voices speed up growth of tomato plants much more than men’s.”** “In an experiment run over a month, they found that tomato plants grew up to two inches taller if they were serenaded by the dulcet tones of a female, rather than a male,” continued the report.

The obvious benefits of urban gardening during a pandemic includes ready access to food. Aside from nourishing the body, what you get from an urban garden — or actually, just growing things in general — helps the spirit too.

“Gardening is beneficial in so many ways. A vegetable you grow will be hygienic, organic and earth friendly. You know what you put into it (no chemical fertilizers and pesticides), and it has zero carbon footprint since it didn’t travel. It’s also economical for you, and means savings,” said Ms. Fritz. However, “For me as a Zen practitioner, it’s most important benefit is spiritual. It brings me closer to the earth, and my true self. I am happy in the soil.”

“I derive a lot of happiness tending to the garden. It’s like rearing children,” said Ms. Isorena-Arcega. “Essentially you bring forth life.”

“Really, because we live in a concrete jungle, it’s nice to see more greenery and color. Plus birds, butterflies, and dragonflies too.”

“I suspect it keeps people sane, these past months in particular,” said Ms. Suntay. “It keeps anxiety at bay. It helps keep you focused on how self reliant we can be, given the circumstances. Seeing something thrive because of your work is so fulfilling. It doesn’t need to be a vegetable garden, although having one would mean less trips to market and less exposure to the public. An ornamental one, with all the colors and textures, does wonders feeding good energy.”

*https://abcnews.go.com/GMA/prince-charles-eavesdrops-tourists-speaks-plants/story?id=11679656

**https://www.telegraph.co.uk/news/earth/earthnews/5602419/Womens-voices-make-plants-grow-faster-finds-Royal-Horticultural-Society.html

TDF yields go up as bids decline after record retail bond issuance

YIELDS ON THE term deposits offered by the Bangko Sentral ng Pilipinas (BSP) rose on Wednesday as bids declined following the record-high amount raised from retail Treasury bonds (RTBs) last week.

Total bids for the BSP’s term deposit facility (TDF) hit P264.94 billion on Wednesday, lower than the P320-billion offering. It was also smaller than the P526.49 billion in tenders logged the previous week for the P380 billion on the auction block.

Broken down, the seven-day deposits fetched bids amounting to P98.58  billion, lower than the P140-billion offering as well as the P196.23 billion in tenders recorded on Aug. 5.

Rates for the one-week tenor ranged from 1.75% to 2.25%, a wider band than the 1.75% to 1.756% margin seen last week. This caused the average rate of the papers to settle at 1.781%, increasing by 2.68 basis points (bps) from the 1.7542% seen last week.

Meanwhile, the 14-day term deposits attracted tenders worth P104.13 billion, lower than the P130 billion auctioned off and the P247.365 billion in bids last week for the P180 billion up for grabs.

Banks asked for returns ranging from 1.75% to 2.625%, a wider margin than the 1.75% to 1.77% seen last week. This brought the average rate of the two-week deposits to 1.8658%, rising by 10.92 bps from the 1.7566% logged during last week’s auction.

For the 28-day papers, demand stood at P62.23 billion, surpassing the P50 billion on offer but lower than the P82.895 billion in tenders seen the previous week for the P80 billion on the auction block.

Accepted yields for the one-month deposits ranged from 1.7527% to 1.8125%, wider than the 1.75% to 1.799% band the previous week. Following this, the average rate for the tenor settled at 1.777%, inching up by 1.15 bps from the 1.7655% recorded a week ago.

The TDF is the central bank’s primary tool to mop up excess liquidity in the financial system to better guide market interest rates.

“The TDF auction results reflected in part the temporary impact of the scheduled settlement of the retail treasury bonds as well as the market participants’ reaction to recent developments such as the release of the lower-than-expected Q2 2020 GDP (gross domestic product) data,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.

The government raised a record P516.3 billion from its three-week RTB offer which closed on Friday. The proceeds will be used for the government’s coronavirus response as tax collections fall amid slowing economic activity.

The country’s GDP shrank by 16.5% in the second quarter after the 0.7% contraction in the first three months, plunging the economy into a recession.

Recent signals from the central bank chief that rates are likely to be maintained in the near term also caused TDF yields to go up, said Rizal Commercial Banking Corp. Chief Economist Michael R. Ricafort.

BSP Governor Benjamin E. Diokno on Monday said there is “no compelling reason” right now for further rate cuts as its previous easing moves have yet to be digested by the market.

The central bank chief said keeping rates unchanged for the next few quarters is a “possibility” as the Monetary Board’s previous moves were anticipatory in nature.

The BSP has slashed benchmark rates by 175 bps so far this year, bringing the rates on its overnight reverse repurchase, lending and deposit facilities to record lows of 2.25%, 2.75% and 1.75%, respectively.

The Monetary Board will review its policy settings on Aug. 20. — Luz Wendy T. Noble

2GO swings to P622-M loss on limited operations

2GO GROUP, INC. posted an attributable net loss of P621.60 million for the second quarter compared with a profit of P23.73 million in the year-earlier period, citing limited operations in various areas, especially Luzon, as a result of coronavirus quarantine restrictions.

In a regulatory filing on Wednesday, 2GO Group reported that its gross revenues for the quarter declined 30.32% to P3.93 billion from the last year’s P5.64 billion.

The group said travel revenues significantly dropped during the period due to quarantine-related travel restrictions, which started in mid-March.

“The Group experienced a slowdown in volumes particularly in April and May, when most of the Philippines was under enhanced community quarantine. The group’s revenues increased in June as the National Capital Region and certain areas transitioned to general community quarantine, though revenues are still below 2019 levels,” it added.

The listed company’s gross expenses for the quarter declined 17.33% to P4.39 billion from P5.31 billion posted in the same period last year.

To recall, the listed shipping and logistics provider posted an attributable net loss of P108.92 million for the first quarter from the previous year’s net loss of P369.03 million.

The company attributed its net loss in the three-month period to reduced travel revenues, especially during the last two weeks of March when the government placed the entire island of Luzon under an enhanced community quarantine to contain the virus.

“It is expected that trade receivables, particularly those due from small- and medium-scale enterprises, will likewise deteriorate in collectability and may necessitate provisioning for estimated losses due to non-collection as may be deemed prudent,” the listed company also said on Wednesday.

It said as of the date of its quarterly regulatory filing, the company’s management has set aside a provision of around P55 million for estimated losses due to noncollection.

“Except as disclosed in the management discussion or notes to the consolidated financial statements, there are no other known trends, events, material changes, seasonal aspects, or uncertainties that are expected to affect the Group’s continuing operations or that will trigger direct or contingent financial obligation that is material to 2GO, including any default or acceleration of an obligation,” it added.

On Wednesday, shares in the company rose 1.58% to close at P8.38 each. — Arjay L. Balinbin

Century Properties gets nod to acquire joint-venture shares

THE Philippine Competition Commission (PCC) has approved Century Properties Group, Inc.’s (CPGI) acquisition of voting shares in Century City II Development Corp. (Century Development II).

CPGI will acquire common shares representing 40% of the total outstanding capital stock in Century Development II from FMT Kalayaan, Inc.

Century Development II is a joint venture between Century City Development Corp. and FMT Kalayaan, Inc.

CPGI will acquire sole control after the termination of the joint-venture agreement, and after the sale of FMT Kalayaan to CPGI of its 511,561,143 common shares of stock in Century Development II.

The 40% of the total outstanding capital stock has a par value of P1 each. The purchase price of the sale shares is P1.9 billion.

The proposed transaction is not likely to result in competition concerns because it will not change the structure of the office leasing market, PCC said in a press release on Wednesday.

The commission said there are enough competitive constraints from others in the office leasing market in Makati City and Bonifacio Global City after the transaction.

PCC will take no further action.

CPGI is a publicly listed company in real estate development. Its parent company Century Properties, Inc. works on real estate development, selling and leasing, property management services, asset management services, marketing and promotion of service, and hospitality and leisure.

The commission, which reviews big-ticket mergers and acquisitions, received five notifications with a combined value of P49.3 billion since it restarted notifications in mid-May. — Jenina P. Ibañez

Xiaomi wants to be a manufacturing powerhouse

XIAOMI CORP. celebrated its 10th anniversary with the launch of some new products and the promise from its chief executive officer that it’ll become “a major force in China’s manufacturing sector that no one can ignore” over its next decade.

Co-founder and CEO Lei Jun took the stage on Tuesday to recount Xiaomi’s history — born as an internet upstart that disrupted China’s retail status quo — and plot out a markedly different course for its future. “Xiaomi will systematically empower China’s manufacturing industry with internet know-how,” Mr. Lei said. “Smart manufacturing will fuel the prominent growth of Chinese brands.”

Xiaomi said it has developed a fully automated smartphone assembly line and its investment arm has invested in about 70 semiconductor or smart-manufacturing firms. The smart factories that Xiaomi envisions would compete with manufacturing specialists like Foxconn, also known as Hon Hai Precision Industry Co., which has previously made similar efforts to smarten up its processes. For Mr. Lei, it’s an essential move to ensure Xiaomi’s prosperity, as “we can’t defend our industry position without continuing to move forward.”

For the present, Xiaomi remains focused on its consumer business, which was graced by the launch of a new flagship Android phone in the 6.7-inch Mi 10 Ultra, adding to the rapidly expanding stable of 5G smartphones. The device differentiates itself with a 120x zoom system nestled in a large multicamera array on its back along with a super-fast 120W charger in the box. It starts at 5,299 yuan ($763) and will be available from Aug. 16. Alongside it, Xiaomi also unveiled a transparent OLED TV set and a Lamborghini Edition GoKart, burnishing its credentials as a company willing to make bold design decisions.

Now the world’s fourth-largest smartphone brand, Xiaomi was founded by a team including serial entrepreneur Mr. Lei and former Google engineering director Lin Bin in Beijing in early 2010. Pioneering an internet-based sales and marketing model, Xiaomi became an instant hit in China where most mobile devices were sold by brick-and-mortar resellers and telecom carriers.

The company distinguished itself by selling phones with sleek designs — commonly accused of imitating Apple, Inc.’s iPhone too closely — the most up-to-date processors and prices that were a fraction of those from competitors like Apple, Samsung Electronics Co. and Lenovo Group Ltd.

In an effort to expand its appeal and markets beyond China, Xiaomi made a big splash in 2013 by hiring Google’s Hugo Barra, then Android vice-president, to lead its international efforts. With his help, the company undertook a campaign to shed its widespread image as an iPhone copycat and invested more in developing its own design and engineering credentials. The company expects to spend 10 billion yuan ($1.4 billion) on research and development this year, Mr. Lei said.

At the zenith of its powers, Xiaomi briefly held the no. 3 spot among global smartphone makers and was China’s leader. But around 2016, local competitors Oppo and Vivo cut into Xiaomi’s market share by adopting the opposite strategy to Mr. Lei’s online focus: enlisting tens of thousands of private electronics store owners to sell their devices in small towns and villages. The move unlocked access to rural residents eager for their first smartphone, a market with hundreds of millions of potential buyers that Xiaomi wasn’t able to reach.

After some supply chain issues around the same time, Xiaomi slumped to seventh in global smartphone shipments, according to IDC data, and Mr. Lei hired former Qualcomm, Inc. executive Wang Xiang to steer Xiaomi’s new international expansion strategies from India to Spain and the UK.

The Chinese company has been on a recent run of introducing futuristic-looking phones featuring industry firsts, such as bezel-less screens and exotic materials like ceramic bodies. Mr. Lei has also tried to lift Xiaomi beyond smartphones with an expansive array of other consumer products that can be purchased from the company’s online store, including laptops and luggage.

The Beijing-based company has invested in a large number of hardware startups to make Mi-branded appliances and electronics from rice cookers to scooters. Yet the efforts have so far failed to convince investors that Xiaomi is an internet company rather than a hardware vendor. Xiaomi’s stock has mostly traded below its initial public offering price since its debut in Hong Kong two years ago. — Bloomberg

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