How PSEi member stocks performed — July 16, 2020
Here’s a quick glance at how PSEi stocks fared on Thursday, July 16, 2020.
Stocks recover as gov’t extends relaxed lockdown
By Denise A. Valdez, Reporter
LOCAL SHARES recovered on Thursday after investor worries eased as the government announced the continuation of a relaxed lockdown in Metro Manila.
The bellwether Philippine Stock Exchange index (PSEi) rose 131.15 points or 2.18% to close at 6,147.66 on Thursday. The broader all shares index also gained 63.44 points or 1.79% to end at 3,607.80.
“The PSEi recovered after President Duterte extended the quarantine measures on Metro Manila instead of enforcing stricter restrictions,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.
The market was on a downtrend in the past days due to investor anxiety that quarantine measures might be tightened again as the number of coronavirus disease 2019 (COVID-19) cases continued to rise.
But President Rodrigo R. Duterte announced Wednesday night that quarantine measures, which have been relaxed since last month, will remain the same until the end of July.
Restrictions in Cebu City, which was on a strict lockdown the past weeks due to rising COVID-19 cases, were also relaxed starting Thursday. Mr. Mangun said this also helped boost investor confidence as several business activities are based in Cebu City.
For Regina Capital Development Corp. Head of Sales Luis A. Limlingan, the improvement of the PSEi can be attributed to optimism over the development of a COVID-19 vaccine.
News wires reported that the vaccine being developed by United States-based Moderna, Inc. is about to enter its third phase of trials this month. This news did not benefit the local market the past sessions, but started to influence the PSEi on Thursday.
“The PSEi closed much higher as investors focused on COVID-19 vaccine hopes and early signs of an upswing in business activity during the pandemic,” Mr. Limlingan said in a mobile message.
All sectoral indices closed in green territory. Property climbed 86.93 points or 2.93% to 3,047.81; financials added 25.24 points or 2.14% to 1,199.69; holding firms increased 122.78 points or 1.94% to 6,427.30; services picked up 25.04 points or 1.79% to 1,419.02; industrials rose 94.72 points or 1.29% to 7,416.38; and mining and oil gained 18.10 points or 0.35% to 5,181.43.
Value turnover stood at P4.41 billion with 4.8 billion issues switching hands, lower from the previous day’s P7.29 billion with 2.66 billion issues.
“Selling pressure was minimal, however, buyers were still quite cautious as evident in the trade volumes with turnover value at P3.67 billion, just half of the daily average. We may see the main index start to move higher,” Mr. Mangun said.
Advancers outnumbered decliners, 135 against 62, while 37 names ended unchanged. Offshore investors remained sellers, but net outflows fell to P641.67 million on Thursday from P1.65 billion the day prior.
Peso weakens as remittances sink in April
THE PESO weakened anew on Thursday on risk-off sentiment after the steep drop in April cash remittances, which was the worst in nearly two decades.
The local unit closed at P49.535 per dollar on Thursday, shedding 5.5 centavos from the P49.48 finish the day prior, data from the Bankers Association of the Philippines showed.
The peso opened the session at P49.49 per dollar, which was also its intraday best. Meanwhile, its weakest showing was at P49.60 against the greenback.
Dollars traded increased to $768.49 million from the $563.8 million logged on Wednesday.
The local unit’s depreciation came on the back of the deeper contraction in remittances from overseas Filipino workers, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
“The peso was slightly weaker but still in its strongest levels in more than three years after the weaker OFW remittances data,” Mr. Ricafort said in a text message.
Data from the Bangko Sentral ng Pilipinas (BSP) released Wednesday showed cash remittances sank 16.2% year-on-year to $2.046 billion in April from the $2.29 billion logged a year ago. The drop is the worst since the 33.5% contraction recorded in January 2001.
Year-to-date inflows also decreased 3% to $9.448 billion as of April against the $9.739 billion seen in the first four months of 2019.
The BSP blamed the decline on the unexpected repatriation of OFWs due to the pandemic. More than 88,000 Filipinos have been repatriated as of mid-July.
Meanwhile, a trader attributed the peso’s weakness to market worries on brewing US-China tensions.
“The peso depreciated from safe-haven demand after China hinted about imposing sanctions against specified US entities and individuals,” the trader said in an email.
China threatened to impose sanctions as US President Donald J. Trump approved an executive order to end preferential economic treatment for Hong Kong in response to Beijing’s imposition of a controversial security legislation on the special administrative region, Reuters reported.
“No external force can block China’s determination and confidence to maintain national sovereignty and security for Hong Kong’s long-term prosperity and stability,” Beijing’s Liaison Office in Hong Kong said in a statement.
For today, Mr. Ricafort and the trader gave a forecast range of P49.45 to P49.65 per dollar. — LWTN with Reuters
Metro Manila risks reverting to strict lockdown as cases surge
By Gillian M. Cortez, Jenina P. Ibañez
and Beatrice M. Laforga, Reporters
THE presidential palace on Thursday threatened to put Manila and nearby cities back under a stricter lockdown if cases of the coronavirus that has sickened more than 61,000 and killed about 1,600 people in the Philippines continue to surge.
“If there is no improvement in the numbers and people become complacent, it’s possible for Metro Manila to go back to a modified enhanced community quarantine,” he told an online news briefing in Filipino.
He added that President Rodrigo R. Duterte had wanted to put the metro under a stricter lockdown starting July 16 as recommended by experts from the University of the Philippines, but Metro Manila mayors appealed to keep its general quarantine, promising to use targeted lockdowns instead.
Mr. Roque on Wednesday announced new quarantine levels starting July 16. Most areas will be under a modified general community quarantine provided they impose strict zoning.
Reverting to a strict lockdown is a cause for worry for local businesses that have yet to operate fully given restrictions under relaxed quarantine in many parts of the country.
The Department of Health reported 2,498 new coronavirus cases on Thursday, bringing the total to 61,266. The death toll rose to 1,643 after 29 more patients died, while recoveries increased by 467 to 21,449, it said in a bulletin.
A quarter of Philippine businesses remained permanently or temporarily shut despite easing levels of lockdown, Trade Secretary Ramon M. Lopez told reporters in a group message on Thursday.
About half of those that reopened are operating partially, while about a fifth have become fully operational, he said, citing a poll of 2,135 companies made on June 4 to 17.
Sales at partially operating businesses have plummeted by as much as 90%, Mr. Lopez said.
Business closures are “a cause for worry,” the Trade chief said. “But I am confident that we will bounce back because of good economic fundamentals, but we need to save companies and jobs to restart and recover faster.”
The Philippines, which had been one of Asia’s fastest-growing economies before the pandemic, is on the edge of a recession after economic growth shrank by 0.2% in the three months through March.
Economists expect the contraction to have worsened last quarter as an extended lockdown in Manila, the capital and nearby cities took a heavier toll on local consumption.
President Rodrigo R. Duterte locked down the main island of Luzon in mid-March, suspending work, classes and public transportation to contain the pandemic. People should stay home except to buy food and other basic goods, he said.
He extended the lockdown — one of the strictest and longest in the world — for the island twice and thrice for the capital region. The lockdown in Metro Manila has since been eased, with more businesses allowed to reopen with a skeletal workforce. Mass gatherings remained banned.
Mr. Lopez said the government has been helping companies through financing, training, webinars and policies so they can restart operations and stimulate demand.
Barbershops and salons may now operate at 75% of their capacity in areas under a modified general community quarantine, and 50% in places under a general quarantine. Dine-in operations at restaurants will be allowed to operate at the same levels starting July 21.
Loan applications from micro, small and medium enterprises with the Trade department’s financing arm Small Business Corp. have exceeded its P1-billion fund.
Meanwhile, Finance Secretary Carlos G. Dominguez III said looser quarantine in Metro Manila and other key cities was unlikely to help the economy get out of a looming recession.
“I don’t know if it will deepen the recession, it probably will level it off, but certainly it will not pull us up,” he told reporters in a Viber group message.
Mr. Dominguez had wanted the government to ease restrictions in the capital region as early as June, pushing for a targeted lockdown instead to boost an economy that the coronavirus had brought to a near standstill.
Economic managers would review macroeconomic assumptions, he said.
The Luzon-wide lockdown in the first 54 days cost the Philippine economy P1.1 trillion in potential revenue losses, equivalent to 5.56% of economic output, according to the National Economic and Development Authority.
Think tank Capital Economics projected the Philippine economy to contract by 8% this year, warning that a prolonged lockdown and the lack of fiscal support could delay the recovery.
“A long lockdown, which has now been in place for four months, and inadequate fiscal support, will delay the recovery in the Philippines,” it said in a note.
The palace on Wednesday said areas under the modified general community quarantine with strict granular lockdowns are Benguet, Baguio City, Ilocos Sur, Pangasinan, Ilocos Norte, La Union, Dagupan City, Cagayan, Isabela, Nueva Vizcaya, Bataan, Nueva Ecija, Pampanga, Bulacan, Tarlac, Zambales, Angeles City and Batangas.
Also included were Quezon, Lucena City, Oriental Mindoro, Occidental Mindoro, Puerto Princesa City, Albay, Masbate, Camarines Norte, Camarines Sur, Catanduanes, Sorsogon, Naga City, Iloilo, Negros Occidental, Capiz, Antique, Aklan, Guimaras, Iloilo City, Bacolod City, Negros Oriental, Bohol and Cebu Province.
Also under a modified general lockdown were Western Samar, Leyte, Biliran, Tacloban City, Zamboanga del Sur, Zamboanga Sibugay, Zamboanga del Norte, Misamis Occidental, Bukidnon, Lanao del Norte, Cagayan de Oro City, Iligan City, Davao Oriental, Davao del Norte, Davao del Sur, Davao de Oro, Davao City, Sultan Kudarat, Cotabato, South Cotabato, General Santos City, Lanao del Sur and Maguindanao.
Areas under a general community quarantine aside from Metro Manila were Laguna, Cavite, Rizal, Lapu Lapu City, Mandaue City, Ormoc City, Southern Leyte, Zamboanga City, Butuan City, Agusan del Norte, Basilan, Talisay, Minglanilla and Consolacion in Cebu Province.
Areas not mentioned in both classifications will be under a modified general community quarantine except for Cebu City, which was placed under a modified enhanced community quarantine. — with Vann Marlo M. Villegas
US lawmakers ask Duterte to repeal anti-terror measure
US LAWMAKERS have asked the government of President Rodrigo R. Duterte to repeal the country’s newly signed Anti-Terrorism Law, which they said arms the state to stifle dissent.
US Representative Janice D. Schakovsky said they sent the appeal through Philippine Ambassador Jose Manuel G. Romualdez.
“The Anti-Terrorism Act of 2020 simply represents a new weapon in the administration’s campaign to suppress dissent and will only worsen attacks on the ordinary people in the Philippines,” Ms. Schakowsky said at a briefing late Wednesday.
“I along with 45 of my colleagues sent a letter this morning to the government of the Philippines,” she said.
The law allows an Anti-Terror Council made up of Cabinet officials to perform acts otherwise reserved for courts, such as ordering the arrest of suspected terrorists. It takes effect on July 19.
It also allows the state to keep a suspect in jail without an arrest warrant for 14 days from the previous three days. The law considers attacks that cause death or serious injury, extensive damage to property and manufacture, possession, acquisition, transport and supply of weapons or explosives as terrorist acts.
“This law is over broad and we believe it is already being used to stifle peaceful dissent and target civil society including human and labor rights groups in the Philippines,” Ms. Schakovsky said.
“We fear it will also be used against anyone who protests against the government.” She asked American companies based in the Philippines to pressure the government to repeal the law.
Rep. Judy M. Chu, also among those who signed the appeal, said the letter was meant to put pressure on the Philippine government.
“It tells the Philippine government that we are watching,” she said at the same briefing. “We see the targeted killings of labor rights and human rights activists. We see the silencing of Rappler. We see the ongoing attacks against anyone who dared to speak out.”
“And we are telling them these outrageous attacks cannot stand.”
Senate President Vicente C. Sotto II said the US lawmakers were “misinformed.”
“They are misinformed,” he said in a separate online news conference. He said the Supreme Court wouldn’t be influenced by the congressional move in deciding on several lawsuits against the Anti-Terrorism Law.
Meanwhile, labor groups filed the ninth petition at the Supreme Court questioning the legality of the law.
In a 36-page petition, the Federation of Free Workers, Trade Union Leaders of the Nagkaisa Labor Coalition and Kilusang Mayo Uno asked the court to stop the government from enforcing the law.
The law “carelessly runs contrary, disobedient, or is repugnant to the Constitution,” according to a copy of their pleading. The definition of the crime in the law is “vague and overly broad” and deprives people of their right to due process, they added. — Charmaine A. Tadalan and Vann Marlo M. Villegas
Senate lines up bills on economic stimulus
THE Senate has lined up measures that seek to aid business recovery amid a coronavirus pandemic and opening up the economy to more foreign investment when it opens its second regular session later this month.
Senate President Vicente C. Sotto III on Thursday said they would start work on bills in advanced stages such as the one extending President Rodrigo R. Duterte’s special powers against the pandemic.
Lawmakers are expected to approve the bill when the President gives his state of the nation address on July 27, he said at an online news briefing.
The bill provides for a P140-billion standby fund for low-income households, displaced workers and sectors hit hard by the crisis, including tourism.
Also on the Senate’s priority list is the bill seeking to cut corporate income tax to 25% and streamline fiscal incentives for companies, as well as measures supporting solo parents and coconut farmers, Mr. Sotto said.
Senators would also seek to amend the 83-year-old Public Service Act to clearly define “public utilities” which had been used interchangeably with “public services.” The bill will exempt sectors identified under public services from the 40% foreign ownership limit imposed on public utilities.
Both bills have been approved by the House of Representatives.
Also on the list are bills on medical scholarship, mandatory military training for senior high school students, creation of a disaster agency and condonation of agrarian and agriculture debt, Mr. Sotto said.
He also said he would ask fellow lawmakers to fast-track bills mandating 14th month pay for workers in the private sector, strengthening the government’s anti-illegal drug agency, setting up a hybrid electoral system and penalizing fake news.
“I will move for speedy but comprehensive committee and plenary discussions on these five priority measures which I believe can make a huge impact on the lives of the Filipino people,” he said in a statement. — Charmaine A. Tadalan
Regional Updates (07/16/20)
Zamboanga del Sur presents aquaculture upgrade plan for possible EU program funding
ZAMBOANGA DEL Sur is proposing three priority projects for boosting its aquaculture sector, including labelling for its dried fish products to expand its market. The Mindanao Development Authority (MinDA) will put the proposal in the list of projects for consideration under the €35.5-million European Union grant for the Mindanao Peace and Development Program. “The popular ‘Pagadian Bulad’ or Pagadian Dried Fish will soon be sold in neat vacuum-packs complete with traceability labels as the Zamboanga Del Sur Provincial Government starts a program to add value to its fisheries products,” MinDA Chair Emmanuel F. Piñol announced Thursday. “Dried Fish-Making is one of the major livelihood activities of fishing families in Zamboanga Del Sur but while the product is popular, it has not really gained a large share of the market because of concerns on food safety and traceability,” he added. The three proposed priority projects are: modern fish-drying and packing facilities;ice factory and cold storage either in Pagadian City or the town of Pitogo; and a milkfish fry hatchery to supply about 10,000 hectared of fishponds. Mr. Piñol said a MinDA team will assist the provincial government in preparing the formal project proposals, which will be submitted before end-August.
Duterte softens position on jailing water company officials
PRESIDENT RODRIGO R. Duterte said he will proceed with amending the contracts of both Metro Manila water concessionaires, but walked back earlier threats of imprisonment for the companies’ executives.
The President’s Spokesman Herminio L. Roque said in a briefing Thursday that the President also called for the return of charges improperly collected by Manila Water Co. and Maynilad Water Services, Inc. from consumers.
“Sabi pa rin ng presidente kailangang amendahan pa rin ang water concession agreement. Kinakailangang ibalik ang dapat ibalik sa taong bayan (The President said it is still necessary to amend the water concession agreements. There’s a need to repay some charges to the public),” Mr. Roque said.
Mr. Roque was referring to the environment fees collected by both companies even while their water treatment facilities were non-operational.
Mr. Roque said dealing with the pandemic has softened the President’s resolve to throw company executives in jail, because the companies proved helpful to the government in dealing with the public health emergency.
“Ang nawala lang ay ang determinasyon na ikulong sila (What has faded is the determination to jail them),” Mr. Roque said.
Mr. Roque said that before the pandemic, Mr. Duterte had assigned him to take the lead in filing charges against Maynilad and Manila Water, but later had to focus on addressing the pandemic. Before the emergency, Mr. Duterte routinely blamed Maynilad and Manila Water for alleged acts of “economic sabotage.”
The President ordered the Justice department earlier this year to draft new contracts for the water concessionaires after finding onerous provisions in the original deals. Mr. Duterte threatened company officials with arrest and lawsuits if they did not accept the new contracts.
Mr. Duterte during a speech in May apologized to the Ayala group and businessman Manuel V. Pangilinan, who controls Manila Water and Maynilad respectively, over his tirades. He expressed appreciation for the help extended by both groups during the pandemic. Mr. Roque said the government’s COVID-19 (coronavirus disease 2019) response was aided by P9.5 billion in aid from the Ayalas and P20 billion from Mr. Pangilinan. — Gillian M. Cortez
Bank account holders grew by 5M between 2017 and 2019 — BSP
THE Bangko Sentral ng Pilipinas (BSP) said about 5 million Filipinos gained access to formal bank accounts between 2017 and 2019, leaving about 51.2 million adults still unbanked.
Citing the results of its 2019 Financial Inclusion Survey, the BSP said in a statement Thursday that the banked population was about 29% of all adults in 2019, compared with 23% in 2017.
“The six-percentage point increase in account penetration represents an additional 5 million Filipinos opening an account within that two-year period, a notable improvement from the 0.6 percentage point growth between 2017 and 2015,” the BSP said.
The adult population in 2019 was estimated at 72 million.
Among the poorest Filipinos, the so-called Class E,account ownership rose to 27% in 2019 from 14% in 2017.
The penetration rate for Class ABC, the top income group, was estimated at 43%.
“While still significant, the account penetration gap in socio-economic class has considerably narrowed in 2019 compared to 2017 where class ABC posted account penetration almost four times higher than class E,” the BSP said.
The study found that 45% of the unbanked continued to be hindered by lack of money to open an account. Some 27% said they do not need an account (27%) while 26% lack the documentary requirements.
It said one powerful incentive for the unbanked to obtain accounts is easier access to government benefits or even their own salaries.
“More than half (56%) of recipients of government benefits received the funds via cash or check while 60% of working adults do not have an account into which they can receive their salary. With the cooperation and support of the government and private sector, receiving benefits and wages can be a strong incentive for the unbanked to open and use an account,” the BSP said.
The BSP considers accounts with banks, e-money issuers, and microfinance institutions as an indicator of financial inclusion.
The BSP noted that the survey results have yet to reflect the accelerated adoption of digital financial services during the pandemic.
The survey, which was conducted before the lockdown, found that e-money account holders rose to 12% of adults, from 8%. Adult Filipinos with bank accounts grew more slowly, to 12% from 11.5% in 2017.
DIGITAL DIVIDE
The study found that on average, three in five adults owned smartphones in urban areas while two in five have such access in rural areas.
“While 7 in 10 adults in Metro Manila have a smartphone and use the internet, this figure drops as we go farther from the capital (Balance Luzon — 6 in 10, Visayas — 4 in 10, Mindanao — 3 in 10),” the BSP said.
The study also found that four in five adults from class ABC owned smartphones while the corresponding proportion for Class E was two in five.
“Addressing the digital divide needs to be part of our broader inclusion efforts. Widely shared access to affordable and fast internet connection, along with universal access to a digital ID under the Philippine Identification System (PhilSys), will facilitate the scale and reach of digital financial services,” the BSP said.
The central bank is targeting a 70% financial inclusion rate among adults by 2023. — Luz Wendy T. Noble
PEZA seeking to attract investors with aid of current locators, foreign chambers of commerce
THE Philippine Economic Zone Authority (PEZA) said it is hoping to tap current locators to attract new investment via promotion efforts coursed through the various foreign chambers of commerce.
PEZA Director General Charito B. Plaza said in a phone interview Thursday that the authority is working on a memorandum of understanding with the foreign chambers, who are being counted on to organize virtual investor forums in their home countries.
“Madali nilang ma-contact ‘yung other investors from their countries (It’s easier for them to contact other investors in their home countries) who are not yet here,” she said.
She said she will ask the chambers to help attract potential Japanese locators as well as businesses moving operations from China.
Foreign chambers have said that potential investors are hindered by travel restrictions to help contain the spread of the coronavirus disease 2019 (COVID-19).
The British Chamber of Commerce of the Philippines said that UK investors are still planning to make long-term investments in the Philippines and called for an easing in business travel rules.
Ms. Plaza said that some business travel may be granted exemptions via PEZA.
“(The government) allows us to let foreign investors come in, so si PEZA ang magre-request ng exemption (PEZA will be the one to request exemptions),” she said.
“So ang process ngayon is we have existing foreign investors who are in their countries now who now want to come back. The process is I write DFA (Department of Foreign Affairs) seeking an exemption from the prohibition of foreigners. Pwede kaming humingi ng exemption na our existing investor wants to come back to the Philippines and will be bringing their mga fellow investors or company subsidiary nila to come (The current situation is that foreign investors in their home countries want to return to the Philippines, and bringing them back involves vouching for them with the DFA. We hope they also bring more potential investors),” she said.
PEZA approved P22.5 billion worth investment projects in its July board meeting, the majority from new activities registered by current locators.
The investment promotion agency in the first five months of 2020 approved P29.5 billion worth of investment, down 32% year on year. The PEZA board did not meet in June due to the health risks.
Ms. Plaza said PEZA locators are focusing on reducing their import dependence, where possible organizing complete their supply chains within the Philippines, after the lockdowns disrupted their access to imported raw materials.
“It will attract more investors (because) it will lower their cost of production (if materials are) available in the country,” she said. — Jenina P. Ibañez
Visa expects payments industry to retain 70% of lockdown users after emergency ends
AROUND 70% of Filipinos that used digital payment channels during the lockdown will likely continue to do so, Visa, Inc. said, citing the results of a study.
Visa said in a statement Thursday that digital payments have picked up recently and continued use by most customers is expected after the lockdowns.
The result compares to the 75% average across Asia and the Pacific and the 68% global average.
Some 22% of Filipinos surveyed said they will return to their previous payment habits when the crisis is over while 8% said they are unsure.
According to the study, 42% shifted their preferred payment method from cash to credit cards, debit cards and mobile wallets. The regional average for such cashless channels was 61%, while the global average was 59%.
Some 44% of Filipinos expect their online purchases to increase, while 29% believe such purchases will “stay the same as the last month.” About 20% will revert to previous levels while 7% said they do not shop online.
“However, at the moment, consumers have yet to necessarily see the online shopping experience as more positive than bricks-and-mortar,” Visa said, noting that only 37% consider the online shopping as better than going to physical stores.
Dan Wolbert, Visa country manager for the Philippines and Guam, said that data showed one in six active Visa cardholders in the Philippines tried online transactions for the first time this year to buy essential goods such as groceries and medicine and pay for utilities and business-related expenses.
“We approached the study with the intention of gaining a timely, deeper and clearer understanding of how Filipino consumer behaviors are changing in the current environment. In this new normal, we’re seeing a shift — Filipinos are becoming more digital, and the COVID-19 situation has forced consumers to adopt this change in behavior,” Mr. Wolbert said.
Visa said the study was conducted across 40 markets, 11 in the Asia Pacific region. It also monitored Internet searches using artificial intelligence.
“The shift to e-commerce means that it is even more crucial that we work with our partners to streamline the online shopping experience for Filipinos. Currently, we are working with new partners, including SMEs who have onboarded e-commerce platforms to enable digital payments acceptance and help drive a seamless and secure online shopping experience for Filipino consumers,” Mr. Wolbert added. — Beatrice M. Laforga