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Coronavirus infections near 53,000

The Department of Health (DoH) reported 1,233 new coronavirus infections on Friday, bringing the total to 52,914.

The death toll rose to 1,360 after 42 more patients died, while recoveries rose by 286 to 13,230, it said in a bulletin.

Of the new cases, 848 were reported in the past three days, while 385 were reported late.

DoH Director Beverly Lorraine Ho told an online news briefing 57% of the deaths were aged 60 years old and above.

She said they expect more patients to recover from the virus as local governments submit their data by Monday.

Health Undersecretary Maria Rosario S. Vergeire traced the spike of cases to increased testing and community transmissions due to lax health standards.

She said there were about 50,000 contact tracers, half of the government’s 100,000 requirement.

Meanwhile, seven more employees of the National Irrigation Administration (NIA) have been infected with the novel coronavirus, the agency said in a statement on Friday.

As of July 8, 640 workers have been tested, with 629 of them testing negative for the virus, it said.

The agency said three of its workers had recovered and no one had died.

Irrigation Administrator Ricardo R. Visaya urged all employees to practice precautions to lessen the spread of the virus.

The agency was locked down on July 1 so it could disinfect facilities and install office protective coverings.

All workers excluding essential personnel were placed under a 14-day quarantine while adopting a work from home scheme.

Employees had been given face shields, face masks, hygiene kits and multivitamins, while every office was given a germicidal UV light.

Also on Friday, the palace said the government would strengthen screening and surveillance activities in ports.

Presidential Spokesperson Harry L. Roque told a separate news briefing the state would employ more civilians for contact tracing and swabbing.

Subic Freeport and other ports will be designated as hubs for international crew change, provided that strict health protocols and guidelines were observed.

A one-stop-shop will be created under the Department of Transportation for the processing of arrivals at all gateways. — Vann Marlo M. Villegas, Charmaine A. Tadalan and Revin Mikhael D. Ochave

UP COVID-19 test kits approved for use

The Research Institute for Tropical Medicine has validated local test kits for the novel coronavirus, which were now ready for use at selected laboratories, the Department of Health (DoH) said on Friday.

The test kits developed by scientists from the University of the Philippines were recalled after a defect was found.

DoH was coordinating with the university so the kits could be used locally, Health Undersecretary Maria Rosario S. Vergeire told an online news briefing.

“We will issue a final advisory to our laboratories advising them that the UP test kits may now be used,” she said in Filipino. — Vann Marlo M. Villegas

32 dead OFWs from Saudi arrive

The Department of Labor and Employment (DoLE) on Friday started facilitating the return of dead overseas Filipino workers (OFW) in Saudi Arabia, the agency said in a statement on Friday.

The first batch included 32 Filipinos from Damman and 17 from Riyadh who arrived at 10:30 am. Twenty of them died of the coronavirus, the agency said.

“We have brought back the first 49 remains of our deceased OFWs from the Kingdom of Saudi Arabia,” Labor Secretary Silvestre H. Bello III said in the statement.

The next repatriation will bring back the remains of Filipinos in Jeddah, he said.

Meanwhile, the Department of Foreign Affairs (DFA) said it had been working with governments across the Americas, Asia and the Pacific and Europe through its foreign posts for the development of a COVID-19 vaccine.

In a statement, the agency said it had endorsed information on vaccine developments and potential international partners to the Department of Science and Technology.

The Philippine Council for Health Research and Development this week said the Philippines would join solidarity trials for the vaccine led by the World Health Organization. — Charmaine A. Tadalan

Seventh lawsuit vs anti-terror law filed

Labor groups filed the seventh lawsuit against the country’s expanded law against terror.

In a 60-page petition, the Center for Trade Union and Human Rights and Pro-Labor Legal Assistance Center asked the Supreme Court to stop the government from enforcing the Anti-Terrorism Act. They also asked the tribunal to nullify the law.

“Safeguards for the protection of those arrested and detained for terrorism no longer existed under the bill,” according to a copy of the lawsuit.

“The bill also criminalized acts that have traditionally been considered legitimate exercises of free speech, freedom of expression, the right of peaceful assembly and freedom of association,” they added. — Vann Marlo M. Villegas

NEDA pushing for ‘lowest-possible-price’ Internet service

Economic managers have set their sights on lowering the cost of Internet access in the post-pandemic economy while also seeking to minimize online fraud and cybercrime.

In a briefing Friday, Acting Socio-economic Planning Secretary Karl Kendrick T. Chua said the economic team is supporting the Open Access in Data Transmission bill, which seeks to lower barriers to entry in the telecommunications industry to pave the way for better and cheaper Internet.

“What we are after here is the lowest possible price for the best possible service. By promoting the open access for data and internet, we are actually wanting the most coverage that can be felt by all the barangays that have not been able to connect well,” Mr. Chua said.

NEDA Undersecretary Rosemarie G. Edillon said a challenge for new companies wanting to join the broadband industry is that clients already subscribed to the telco incumbents would prefer to stay with one service provider.

“We see it (the measure) as a way in reducing the barriers to entry because… some of the subscribers to another telco would be discouraged from switching to another provider because they don’t want the hassle of changing their phone numbers, having to inform all their friends and… customers. So it actually presents a barrier to entry and we want that to be not a problem, but that would require this legislation,” Ms. Edillon said at the same briefing.

She said limited competition in the industry is discouraging innovation.

She said Philippine broadband in 2019 was ranked among the slowest but most expensive services in ASEAN.

Separately, Finance Secretary Carlos G. Dominguez III said Friday that the government is taking a closer look at the proliferation of cybercrime during the pandemic.

Mr. Dominguez said with more Filipinos making online transactions, the authorities “expect a spike in cybercrime.”

“The PNP (Philippine National Police) & DoJ (Department of Justice have been alerted & have assured me that they have upgraded their capacity to detect, investigate & prosecute cybercrime,” he told reporters via Viber.

In her presentation, NEDA’s Ms. Edillon said the Philippines had a broadband penetration rate of 17% in 2018, while 80% of Filipinos had access to 3G mobile techonolgy.

“Now, there’s promise because the market is still very very huge. There are so there’s still so many without telecommunication operators so there’s actually still huge demand and we can actually leverage this,” she said.

BCiting the National Information and Communications Technology Household survey, she said 96% and 91.5% of barangays in Cordillera Administrative Region (CAR) and Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) regions have no telecommunications towers.

Senators Ralph G. Recto and Grace S. Poe filed Senate Bill No. 45 or the proposed Open Acess in Data Transimission Act in July 2019. — Beatrice M. Laforga

Infrastructure program to create 1-M jobs once construction regains momentum

Acting Socio-economic Planning Secretary Karl Kendrick T. Chua said the flagship “Build, Build, Build” program has the potential to create around one million jobs once construction returns to full operations following the lockdown.

“On the ‘Build, Build, Build” program, in general, what we see here is every P1 million spent on the infrastructure program, we are seeing on job that is being created. So our infrastructure program is likely, when resumed fully, to create a million jobs, both direct and indirect,” Mr. Chua said in a briefing Friday.

The economic team is banking on the multiplier effect of infrastructure to revive the economy, which had ground to a halt during the lockdown.

“From the experience of the past few years, we see a significant boost actually to domestic demand as we resume many of the infrastructure programs and as we create the jobs that are associated with it,” he said.

The Labor department in May estimated that around 10 million Filipinos could lose their jobs this year due to the pandemic.

The National Economic and Development Authority (NEDA) estimated that month that the economy stands to lose P2.2 trillion in gross value-added this year as worker incomes dwindled while others were losing their jobs.

Nearly 70,000 Overseas Filipino Workers were repatriated between February and early July after losing their jobs in countries that were also hit hard by the coronavirus crisis.

Mr. Chua said the infrastructure program is still being reviewed and revised to prioritize projects with higher economic impact and are shovel-ready and fundable.

He added that the economic team is looking to move up the priority list infrastructure projects that will improve the health system, the digital economy, water and housing.

“We also want to assure that the funding will not only be available this year but in two years to assure their bankability. We will be releasing very soon the updated list,” he said.

The Budget department reduced spending on infrastructure projects for 2020 to around P833 billlion from the initial P989-billion as the government redirected funding to the coronavirus disease 2019 (COVID-19) containment effort.

The infrastructure spending target was increased to P1.131 trillion in 2021, or around 5.3% of gross domestic product, with officials counting on Build, Build, Build to turbocharge growth from the expected low base in 2020.

The economic team said the 2021 budget will support the completion of the projects until 2022, fuel economic growth to 8-9% next year and generate around 140,000-220,000 additional jobs directly and indirectly.

The economy is projected to contract 2-3.4% this year. — Beatrice M. Laforga

ERC orders another refund of excess WESM fees

The Energy Regulatory Commission (ERC) has ordered another refund of excees fees collected at the Wholesale Electricity Spot Market (WESM) in 2016 and 2017.

The regulator’s decision had slashed the proposed market transaction fee by the Philippine Electricity Market Corp. (PEMC), the spot market’s governing body, in a decision issued July 9.

“The Commission determined the over-collection by getting the variance between the market transaction fee collected in 2016 and 2017, and the ERC-approved budget of PEMC for the same period. The resulting variance is the amount to be refunded which shall be apportioned among all the Luzon and Visayas participants,” ERC Chairperson and Chief Executive Officer Agnes VST Devanadera said in a statement Friday.

In its market fee proposal filed in 2015, PEMC wanted to collect P966.26 million from WESM participants in 2016 and P916.18 million in 2017.

But these fees were cut to P486.25 million for 2016 and P486.44 million for 2017.

The ERC based its decision on the “relevance and reasonableness” of PEMC’s utilization of each of its proposed cost component based on its 2016 and 2017 reports; its use of proof in verifying utilization; and pitting the expenditure of each cost item against industry standards and rules and regulations provided for government-owned and controlled corporations.

The PEMC was ordered to pay back market participants for the excess fees within 12 months of receipt of the ERC decision. It must also submit an action plan for implementing the repayment scheme and the adjustment to its transaction fee level.

The refund, according to the commission, must be reflected as a separate line item in the WESM monthly billing statement.

The ERC also set guidelines for future applications to collect market fees.

Last week, the regulator also ordered the PEMC to pay back WESM participants for excessive market fees in 2015.

It also ruled that the company’s expenditure plan was “unnecessary and unreasonable,” with no supporting documents to justify the collection. — Adam J. Ang

Nine additional merchants join Agri dep’t online platform

NINE additional merchants joined the Department of Agriculture’s (DA) online selling platform, which the department touted as a milestone in modernizing the supply chain for food.

On July 9, Agriculture Secretary William D. Dar signed a Memorandum of Agreement (MOA) with Mama Sitas, Tuko Fresh Produce, Farmers Juan Ranch, Moolk Creamy Corp., Moneth Agri Store, Chef’s Corner Meat Outlet, Chicqheen Mart, Rico’s Lechon, and Lively Grain, making them partners in the department’s online retailing initiative, which is known as e-Kadiwa.

“Digital technology has become a very important tool to enhance agriculture. With all the lockdowns, we need to empower and enhance these mechanisms for the future,” Mr. Dar said.

Mr. Dar said the DA will ensure that all products sold on the platform meet food-quality standards, and added that the market is working to mitigate infection risk.

E-Kadiwa allows for direct ordering of fruit, vegetables, meat, and fish for home delivery.

Mr. Dar said the coronavirus disease 2019 (COVID-19) has forced the agriculture sector to modernize and digitalize in order to adapt to the new environment. — Revin Mikhael D. Ochave

Gov’t to raise P30-B via 5-yr retail bond issue

The government is set to raise at least P30 billion via the issue of five-year retail Treasury bonds (RTBs) beginning next week to boost its resources by tapping a broader segment of buyers.

In a notice of offering published Friday, the Bureau of the Treasury (BTr) said the five-year RTBs will be auctioned over three weeks starting July 16 until Aug. 7.

The upcoming offer will be the second of the year and 24th overall for the Treasury. In February, the government raised a record P310.8 billion from RTBs – including P250 billion in “new money” and P60.8 billion from the exchange offer program.

The BTr said it has the option to increase the volume awarded and may close the offer period earlier if necessary.

Aside from the usual selling agents such as banks, the BTr said small investors can access the bonds via the Online Ordering facility on its website and through the new BONDS.PH mobile application offered by the Union Bank of the Philippines.

It said the bonds can also be bought via the electronic payments (e-payments) facilities of China Banking Copr., Development Bank of the Philippines (DBP), First Metro Securities and Brokerage Corp. and Land Bank of the Philippines (LANDBANK).

Selling agents can place bids of at least P500 milion. The RTBs will be issued in scripless form and will be sold in minimum denominations of P5,000.

Bonds purchased online will require a minimum P5,000 investment, capped at P500,000 per transaction.

Interest rates will be based on curent market levels of comparable securities. Interest payments will be made quarterly in arrears.

The bonds will be issued on Aug. 12 and mature on Aug. 12, 2025.

The RTBs will be listen on the Philippine Dealing and Exchange Corp. (PDEx).

RTB target small investors and are positioned as low-risk instruments with relatively high yields.

The BTr said the 24th issue is eligible for exchange by holders of series RTB 10-01, FXTN 05-73, RTB 10-02 or FXTN 07-57, who can turn in these papers for the new RTB.

It also opened up the exchange offer program for the RTB issue in February to holders of RTB 3-08, issued in 2017. — Beatrice M. Laforga

DBP to adjust lending portfolio to ‘maximize’ benefit to slowing economy

THE Development Bank of the Philippines (DBP) said it is adjusting its lending portfolio to favor priority sectors with the most potential development impact as the economy braces for a severe economic downturn, its CEO said Friday.

DBP President and CEO Emmanuel G. Herbosa said the review will allow the bank to “concentrate on initiatives” supporting key sectors while “ensuring profitability and sustainability” for the bank as the economy slows.

“We are rationalizing our lending programs to maximize available resources to our priority sectors as we assist them in coping with the challenges of a vastly-changing socio-economic landscape,” Mr. Herbosa was quoted as saying in a statement.

He said “updating the features” of some the bank’s programs will be in line with the changing needs of the market and as the bank prepares for a bigger role that it will play in implementing the stimulus bills that are pending in Congress.

Currently, a majority of the bank’s loans are devoted to infrastructure and logistics; micro, small and medium enterprises; the environment; social services and community development.

Mr. Herbosa did not cite details of the portfolio adjustments. The DBP had yet to reply at deadline time.

Under the proposed Bayanihan II law, the DBP and the Land Bank of the Philippines (LANDBANK) will introduce low-interest loan programs to affected non-essential businesses.

Also, around P15 billion will be earmarked to supplement the DBP’s capital while LANDBANK will be getting P30 billion, with both acting as the wholesale banks.

“It is imperative for all financial institutions, such as the DBP, to productively use their available resources to benefit more stakeholders as we gradually emerge from this pandemic,” Mr. Herbosa said.

He added that the DBP and institutional partners will ensure that the resources are “maximized” with no program “redundancies.”

The bank’s net profit fell 7% to P1.46 billion in the first quarter after it increased loan loss provisions due to the pandemic. — Beatrice M. Laforga

NPL ratio could double to 4-5% due to faltering economy – S&P

The banking industry’s non-performing loan ratio (NPL) could hit 4-5% due to the pandemic, which has weakened businesses and thrown many out of work.

“In our base case, we assume the NPL ratio for the Philippine banking system could double to 4%-5% from current levels,” Nikita Anand, analyst at S&P Global Ratings said in an e-mail.

Ms. Anand said both businesses and households will be hurt by the crisis, which in turn will raise bad-loan levels.

“We expect businesses and consumers to feel the pain from a weak economy, higher unemployment, and lower remittances from overseas Philippine workers,” she said.

FTamma Febrian, associate director of the Financial Institutions Group at Fitch Ratings, said segments such as the micro-, small, and medium-sized enterprises and consumer lending are “at most risk of deterioration.”

“We’re also closely monitoring the real estate sector, which will also be affected by weakened consumer spending and higher unemployment and is sensitive to dynamics in the POGO (Philippine Offshore Gaming Operators) sector,” he added.

According to the Bangko Sentral ng Pilipinas (BSP), te industry’s NPLs in May rose to 2.43% from 2.31% in April.

“The slight uptick in NPLs may be traced to borrowers from the real estate industry and individual borrowers who availed of motor vehicle loans,” BSP Managing Director for Policy and Specialized Supervision Lyn I. Javier said in an e-mail.

“This may be expected as there were minimal real estate business activities during the enhanced community quarantine and households’ paying capacity was impaired by the work and travel restrictions,” she added.

The bad loan ratio peaked at 17.6% in 2002 in the aftermath of the Asian Financial Crisis.

“We recognize that the COVID-19 pandemic may exert pressure on the current quality of bank loan portfolios, but we expect the impact to be manageable due to the banking system’s preparedness,” Ms. Javier said.

As of the end of 2019, the industry’s capital adequacy ratio was 15.4% on a stand-alone basis and 16% on a consolidated basis, which are both beyond the 10% minimum requirement by the BSP.

“Compared to regional peers, Philippine banks entered the pandemic with relatively strong asset quality and good loan-loss coverage, which has provided the banks adequate buffers to absorb further loan deterioration.” Joyce Ong, an analyst at Moody’s Investors Service, said.

Banks have also increased loan provisioning in the first quarter to factor in the potential fallout from the pandemic.

In May, bank allowances for credit losses rose 26.7% year on year to P253.4 billion

“In our opinion, Philippine banks’ good capital position and provisioning for NPLs put them on a relatively strong footing to manage rising risks from the economic slowdown driven by COVID-19,” Ms. Anand said. — Luz Wendy T. Noble

Gov’t increases stake in UCPB to 97%

The government increased its stake in the United Coconut Planters Bank (UCPB) to 97% from 75% previously, the Department of Finance (DoF) said, while placing a P30 billion deposit to support the bank.

In a statement Friday, Finance Secretary Carlos G. Dominguez III said the government converted into special preferred shares P12 billion worth of notes that UCPB had issued to the Philippine Deposit Insurance Corp. (PDIC).

UCPB issued the notes to PDIC in 2009 as part of the bank’s recapitalization program.

The notes are convertible to special preferred shares and the PDIC exercised this option, “effectively increasing the government’s shareholdings in UCPB to 97%,” PDIC President Roberto B. Tan was quoted as saying.

Mr. Tan added that the Bureau of the Treasury (BTr) also made a P30 billion deposit to UCPB to support the bank.

Mr. Dominguez, who chairs the PDIC board, said the move “reaffirms the government’s commitment to support the bank.”

In a Viber message, he told reporters Friday that the administration has been following the concept of “strengthening the capital bases and rationalizing the structures” of government-owned financial institutions including UCPB, Land Bank of the Philippines (LANDBANK), the Development Bank of the Philippines and the Overseas Filipino Bank (OFBank).

“[The policy has] the objective of improving their level of service and value for their stakeholders, the Filipino people. This latest move of PDIC of converting the capital note it held to more permanent special preferred shares in UCPB is totally in line with the above objective,” he said.

“We expect the Board of UCPB to consider re-orienting their focus on serving the farmers and processors of coconut andother vegetable oil products, but balancing their portfolio with exposure to other industries and clients in the middle market,” Mr. Dominguez added. — Beatrice M. Laforga

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