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Investors on sidelines ahead of inflation report

LOCAL STOCKS slipped amid tepid trades on Thursday as investors stayed mostly on the sidelines ahead of the release on Friday morning of inflation data for the month of June.

The 30-member Philippine Stock Exchange index (PSEi) dropped 27.76 points or 0.34% to close at 8,064.92, while the broader all-shares index slipped by 7.64 points or by 0.15% to finish at 4,931.99.

“It wasn’t a pretty day for the index as the PSEi traded flatly the entire day before even being sold down at close. Volume was also relatively low at only P5.0 billion (P4.5 billion ex-blocks),” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an e-mail.

“Note that this movement comes ahead of June’s inflation release tomorrow morning.”

The Bangko Sentral ng Pilipinas expects June inflation to have settled within the range of 2.2-3%, lower than May’s actual inflation of 3.2% and June 2018’s 5.2%, while BusinessWorld’s poll of 12 economists late last week yielded a 2.9% estimate median.

AAA Southeast Equities, Inc. Research Head Christopher John Mangun also noted PSEi’s sluggish trading for the day, citing the lack of compelling leads.

“Several second liners traded more than blue-chips which indicates the intent to find opportunities which are not present in the big blues. Nothing seems to be exciting investors in this market, and we may continue to see the PSEi go lower with immediate support at 8,000,” Mr. Mangun said in an e-mail.

Four of the six sectoral indices ended in negative territory, led by holding firms that plunged 0.97% or 76.46 points to close at 7,738.01. Mining and oil slumped 0.96% or 73.28 points to finish at 7,493.31; property gave up 0.26% or 11.66 points to 4,340.34; while industrials shed 0.13% or 15.62 points to end at 11,905.54.

On the other hand, financials climbed 0.89% or 15.37 points to 1,736.48, while services added 0.24% or 4.17 points to 1,702.84.

Foreign investors turned bearish, ending Thursday with P216.68-million net sales, against the previous day’s net inflows of P273.71 million.

Trades thinned to 740.03 million shares worth P5.06 billion from Thursday’s 1.31 billion worth P7.62 billion.

Stocks that declined narrowly edged out those that gained, 94 to 92, while 57 others ended flat.

Wall Street rallied ahead of the Fourth of July holiday. The Dow Jones Industrial Average rose 0.67% or 179.32 points to 26,966. The S&P 500 index climbed 0.77% or 22.81 points to 2,995.82, while the Nasdaq Composite index went up 0.75% or 61.14 points to 8,170.23.

Asian markets ended mixed in the face of Wall Street’s record highs amid expectations the Federal Reserve would turn dovish, as well as lingering fears about US-China trade tensions. Japan’s Nikkei 225 and TOPIX added 0.3% and 0.65%, respectively, and South Korea’s KOSPI and India’s S&P BSE SENSEX gained 0.61% and 0.11%, respectively, while the Shanghai SE Composite shed 0.33% and Hong Kong’s Hang Seng slipped by 0.21%. — Arra B. Francia

Peso rises anew vs dollar

THE PESO strengthened against the dollar on Thursday on the back of weak economic data in the United States.

The local unit closed Thursday’s session at P51.13 versus the greenback, three centavos stronger than the P51.16-per-dollar finish on Wednesday.

The peso opened the session slightly weaker at P51.18 per dollar. It dipped to as low as P51.20 intraday, while its best showing stood at P51.04.

Trading volume dropped to $775.7 million from the $924.2 million that switched hands the previous session.

“The peso strengthened on heightened bets of a July (US Federal Reserve) rate cut following the release of weaker new jobs and non-manufacturing sector reports,” a trader said in an e-mail.

According to a report from Automatic Data Processing, Inc. and Moody’s Analytics, private companies in the United States created only 102,000 jobs in June, missing the market estimate of 140,000 polled by Reuters.

On the other hand, the non-manufacturing index conducted by the Institute for Supply Management stood at 55.1 in June, falling short of the 56.9 tallied in May as well as the 55.9 expected by the market.

These reports come ahead of the release of June non-farm payrolls (NFP) data on Friday which is expected to have climbed to 160,000 in June, coming from a meager 75,000 jobs in May.

However, another trader said the weak economic data had little effect on peso-dollar trade.

“There was an initial reaction overnight, although come morning, most currencies like the peso didn’t move much,” the second trader said. “Most of the currencies, just like the peso, traded fairly quiet, given the US holiday on July 4.”

The trader added that market players are still waiting for the NFP as well as the June inflation to be released today.

For today, both traders expect the peso to trade between P51 and P51.30. — Karl Angelo N. Vidal

US envoy vows support under treaty in sea row

AMERICAN AMBASSADOR to the Philippines Sung Y. Kim assured that the United States will stand by its obligation under the Mutual Defense Treaty (MDT) should aggression by the Chinese government over the West Philippine Sea continue.

The ambassador also asked China to refrain from executing provocative actions in the disputed areas, following reports that the Chinese government recently fired anti-ship missiles in the South China Sea.

“All I can say is to refer to what Secretary of State (Mike) Pompeo made very clear during his visit to the Philippines a few months ago, which is that if there is an armed attack against Philippine forces, against Philippine aircraft, Philippine public vessels, it will trigger our obligation in the defense treaty,” Mr. Kim told reporters in a briefing ahead of the US Independence Day celebration in Makati on Wednesday evening.

The MDT between the Philippines and the US, signed August 30, 1951, provides in Article IV that “Each Party recognizes that an armed attack in the Pacific area on either of the Parties would be dangerous to its own peace and safety and declares that it would act to meet the common dangers in accordance with its constitutional processes.”

The succeeding article defines that “an armed attack on either of the Parties is deemed to include an armed attack on the metropolitan territory of either of the Parties, or on the Island territories under its jurisdiction in the Pacific Ocean, its armed forces, public vessels or aircraft in the Pacific.”

Mr. Kim also raised that all nations, particularly claimants, should act according to international policies to maintain order in the disputed waters.

“I’ll just make a very general comment, we obviously urge all countries to refrain from provocative unilateral actions that’s inconsistent with international norms and practices,” he said.

“We have stated our position very clearly for quite some time and I believe our friends in the Philippines agree that China should refrain from such actions.”

Sought for comment on the alleged Chinese missile firing, Presidential Spokesperson Salvador S. Panelo said the Palace will await results of the investigation that will be conducted by the Department of National Defense based on “firsthand knowledge.”

“We will investigate on our own. We will do it our way,” Mr. Panelo told reporters in a briefing on Thursday.

Foreign Affairs Secretary Teodoro L. Locsin, Jr., for his part, agreed with Mr. Panelo’s remarks, saying in a social media post on Thursday: “the DFA (Department of Foreign Affairs) relies only on official military intelligence; we despise civilian sources.”

He also wrote, “We work hand in glove with the armed forces because war is conduct of diplomacy by other means as diplomacy can be the conduct of war with a measure of finesse.” — Charmaine A. Tadalan with a report from Arjay L. Balinbin

Spokesman asserts: Duterte-Xi verbal deal valid, binding

AMID CONFLICTING positions among the President’s men on the legality and enforceability of the 2016 verbal fishing agreement between the leaders of China and the Philippines, Malacañang on Thursday asserted that there is “no room” for any other interpretations on the matter, stressing that the deal is “valid.”

“As far as the President is concerned, and as far as I’m concerned also, very clear ang sinabi niya (what he said). There is no room for any interpretation,” Presidential Spokesperson Salvador S. Panelo told reporters in a press briefing on Thursday when asked to clarify the confusion on the issue.

He explained, “There’s no contradiction naman. Ang sinasabi nila, the policy is huwag papasok sa EEZ (exclusive economic zone). Ang sinasabi naman ni Presidente, ang problema nga diyan, iyang policy na iyan ay sila ang may hawak ng buong karagatan. Kaya hindi natin pupuwedeng ipagpilitan ang sarili natin sa kanila kasi nagri-react din sila (What they are saying is that the policy is that the Chinese should not go within the EEZ. What the President is saying is the problem is, that policy, the Chinese have a hold on the entire sea. That’s why we cannot insist on our position because they also react).”

“Kaya nga (That’s why) I want to avoid any armed hostilities,” he added.

On Wednesday Cabinet Secretary Karlo Alexei B. Nograles said the verbal agreement between China’s President Xi Jinping and President Rodrigo R. Duterte may represent “an agreement to come to an agreement.”

He also said that if this agreement amounts to a treaty, it has to “pass through the Senate.”

For his part, Foreign Affairs Teodoro L. Locsin, Jr. said the agreement “cannot be enforced” because it is “verbal” in nature.

Mr. Panelo further said that the Cabinet members “are entitled to their own interpretation,” but at the same time shared the President’s frustration over being misunderstood on the issue.

The spokesman said that for the President, it is not a question of “Did you allow?” Chinese vessels in the EEZ but that China firmly believes it has ownership of the entire South China Sea.

“Kaya nga nag-uusap tayo na huwag tayong magkasakitan, iyon ang hindi ninyo naiintindihan (That is why we are talking so that we don’t end up injuring each other, that is what you do not understand). That’s exactly the word of the President.” — Arjay L. Balinbin

Whoever is Speaker must back admin’s economic agenda

AS THE BATTLE for House speakership drags on with more players joining the fray, two lawmakers believe that what is crucial is for the new leader to have an understanding of and support the administration’s economic reform agenda.

“Kailangan maisulong ang mga reform programs ng Pangulo (The reform programs of the President must be pushed)… he must be able to mobilize a national consensus around the President’s program,” said Albay 2nd District Rep. Joey S. Salceda in a press briefing in Quezon City on Thursday.

He added, “Importante rin sa bansa na masuportahan po ang lahat ng (It is also important for the country that we support all the) structural reforms ng Pangulo, sa pananaw ko ang ekonomiya ngayon ay nasa (of the President, because I can see that our economy is already at the) take-off stage na.”

For his part, Anakalusugan Party-list Rep. Michael T. Defensor said the 18th Congress is the right time to push for economic and political reforms.

“This is the best time because for the first time in Congress, we have in the House and Senate, where the President has a very strong majority,” said Mr. Defensor.

Mr. Defensor also noted that the speaker must possess leadership skills because the position calls for coordination not just among congressmen, but with the President and his Cabinet.

Both lawmakers expressed support for Leyte 1st District Rep. Ferdinand Martin G. Romualdez to be the next speaker.

“Our choice for speakership is not just our personal choice, but what will also benefit the President. How the legislative agenda will be achieved,” said Mr. Defensor.

Meanwhile, Mr. Salceda said that it is also the best time to give another chance to the proposals for the Retail Trade Liberalization Act and Foreign Investments Act.

Both failed passage in the 17th Congress.

Out of 28 measures in the Common Legislative Agenda for the 17th Congress approved by the Legislative-Executive Development Advisory Council, lawmakers were able to pass 14, including three bills that form part of the government’s Comprehensive Tax Reform Program.

Two are still awaiting Mr. Duterte’s signature, the security of tenure bill and the bill increasing taxes on tobacco products, while one priority measure, the coconut levy fund, was vetoed. — Vince Angelo C. Ferreras

Judiciary complex to rise in New Clark City

THE SUPREME Court (SC) and the Bases Conversion and Development Authority (BCDA) signed on Thursday a memorandum of understanding for the 5.8-hectare Judiciary Complex that will be built at the National Government Administrative Center (NGAC) in New Clark City in Tarlac. The signing was led by Court Administrator Jose Midas P. Marquez and BCDA President and Chief Executive Officer Vivencio B. Dizon. The Judiciary Complex will house the regional office of the SC with an archive center, data center, and training center with living quarters. It will also be used by the court’s attached agencies such as the Philippine Judicial Academy, the Judicial and Bar Council, and the Mandatory Continuing Legal Education Office. “It is an ambitious project also because we want to break ground by this October 2019, or some three months from now,” Mr. Marquez said in a speech during the signing ceremony, adding that it will also shelter sharing rooms and regional offices of the Court of Appeals, Sandiganbayan, Court of Tax Appeals, and Commission on Audit. “We’re fortunate that the highest tribunal is joining us with the vision for the New Clark City. This huge support adds value to Clark’s steady growth which will further expand with the development of connectivity infrastructure, such as Clark International Airport new terminal building and the construction of railways,” Mr. Dizon was quoted as saying in the press release. — Vann Marlo M. Villegas

DoE, Japan’s METI to review Mindoro power development plan

THE DEPARTMENT of Energy (DoE) has stepped up plans to improve the delivery of electricity in Mindoro island as it looks to review a power development proposal for the province in partnership with Japan. In a statement on Thursday, Energy Secretary Alfonso G. Cusi said his department, along with the Ministry of Economy, Trade and Industry (METI) of Japan are planning to review Mindoro’s power development master plan as part of a power sector technical cooperation agreement (TCA) signed in June 2018. “Providing stable and reliable power in off-grid areas remains a considerable challenge to our goal of total electrification. Mindoro is one of those island provinces that has been plagued with power problems for decades,” Mr. Cusi said. The DoE described Mindoro as having communities remaining without electricity, while those with access to it suffer from unreliable services. The island, the country’s seventh largest, has a total land area of 10,571 square kilometers and a population of about two million. “With the help of METI, we will be able to undertake a comprehensive study of the Mindoro grid, and assess the feasibility of introducing a micro-grid system as a source of stable power. If everything goes well, Mindoro would serve as an electrification model for the rest of the off-grid islands in the Philippines,” Mr. Cusi said. Under the proposal, the DoE has requested METI, together with Japanese firm KPMG AZSA LLC, to provide technical assistance for the formulation of a comprehensive and integrated power system development and operational pIan for Mindoro. The proposal also seeks to help build capacity towards the total electrification of households in the island, particularly villages and communities in the peripheries of the remote uplands and coastal areas through the introduction of a micro-grid system. — Victor V. Saulon

Gov’t raids Malabon facility making fake cigarette labels, stamps

THE GOVERNMENT has raided a facility in Malabon that produces fake labels and stamps, according to Finance Secretary Carlos G. Dominguez III on Thursday. “The raid at the Malabon printing facility is positive. Not only does the site produce fake labels, it also prints fake stamps,” Mr. Dominguez said in a mobile message to reporters. Mr. Dominguez added that according to the operator, the machine is capable of producing 3,500 pieces of stamps per hour. “At P35 per stamp, that’s P122,500 in lost revenue per hour. If the machine operates eight hours per day, five days a week, 50 weeks a year, it can produce P245 million a year of fake tax stamps,” he said. The government has been cracking down on fake tax stamps and contraband products, which are considered to be sources of revenue losses for the government. In May, the Bureau of Internal Revenue (BIR) penalized a Tacloban-based businessman P212 million criminal and tax evasion charges due to alleged possession of cigarettes with fake excise stamps. In April, a Pangasinan-based alleged manufacturer of tax stamps was slapped with criminal and tax evasion charges worth P3.4 billion, after he was caught with seven reams of fake cigarettes and fake stamps. — Reicelene Joy N. Ignacio

Police chief-turned-senator plans to strengthen laws vs terrorism, drug traffickers

SENATOR RONALD M. dela Rosa, who will chair the public order and dangerous drugs committee, will be filing bills strengthening government operations against terrorism and high-level drug traffickers. The former police general said it is high time to amend Republic Act No. 9372, or the Human Security Act, following a recent blast in Sulu that involved the first known Filipino suicide bomber. “Human Security Act, dapat kagaya din sa ibang bansa, ‘yung (it should be similar to those in other countries, like the) Homeland Security Act (of the US), na you can take those suspected to be terrorist,” he said in a briefing on Thursday. Mr. dela Rosa has also filed a bill, proposing to reinstate capital punishment, but only for crimes involving the illegal drug trade. He also said that he would propose that the death penalty be executed through a firing squad. — Charmaine A. Tadalan

CoA cites NHA’s poor completion of Yolanda housing projects

THE COMMISSION on Audit (CoA) flagged the National Housing Authority (NHA) for completing only 117,167 of the 203,471 housing units intended for the victims of supertyphoon Yolanda (international name: Haiyan), which struck in November 2013. “The low percentage of completion is caused by land boundary disputes, issues on road right of way, unbuildable area on site, non-issuance/delayed approval of permits, inclement weather condition, change of site location/housing design, issuance of Notice and Order of Termination of Contracts, and termination of contracts,” said CoA in its annual audit report. Of the completed houses, 62,474 remain unoccupied “due to lack of water and power supply, accessibility of the housing site to source of livelihood, rectification and correction of findings per CPES (Constructors’ Performance Evaluation System),” among other issues, said CoA. The state auditors recommended that NHA closely monitor timelines for completion of projects by contractors and act immediately on contracts terminated and those with issued notice and order of termination. — Vince Angelo C. Ferreras

NAPC, BARMM gov’t tackle anti-poverty strategy with 5 provinces in the Bangsamoro region still the poorest

THE NATIONAL Anti-Poverty Commission (NAPC) and the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) government met this week to discuss strategies towards bringing down the poverty rate in the region, which stood at 63% as of the first semester 2018. “Among the 40 poorest provinces in the country, the five provinces of BARMM compose the top five,” NAPC Secretary Noel K. Felongco said at a press conference in Cotabato City on July 30. Citing a data from the Philippine Statistics Authority, Mr. Felongco said Sulu had the highest poverty rate at 74.3%, followed by Lanao del Sur at 73.7%, and Basilan, Maguindanao and Tawi-Tawi with 72.1%, 55.1%, and 23.4%, respectively. BARMM Assistant Executive Secretary Abdullah Cosain said the new regional government “is very much aware of the poverty incidence” and they are optimistic that the provisions of the Bangsamoro Organic Law (BOL), particularly on their expanded resource management authority, would benefit the poor.

NATURAL RESOURCES
“According to the socio-demographics, 64% of our population is still in the sector of agriculture and fisheries, which means that majority of our three million population depend on agriculture and fisheries,” Mr. Cosain said, “This is the area where we believe that the intervention from the Bangsamoro government would be very critical. If we can improve farming and fisheries then it is one way of hopefully reducing poverty incidence here.” He also said that the BARMM government aims to tap the region’s other abundant natural resources.

“As we can see, one of the reasons why economic activity remains vibrant in Tawi-Tawi is because of the mining activity there. Looking at the other natural resources of the BARMM provinces, we do believe that once these are tapped, magkakaroon ito ng magandang effects sa mga tao (It will have a significant impact on the people).” He also assured that the “Bangsamoro government will proceed with the cautious path since we want the utilization of these (natural resources) to ultimately benefit the people.” The NAPC, meanwhile, reintroduced its Sambayanihan Serbisyong Sambayanan (SSS) program, the five-year development plan intended to reduce poverty nationwide, which stood at 21.6% in the first half of 2018. — Tajallih S. Basman

Nation at a Glance — (07/05/19)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Nation at a Glance — (07/05/19)

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