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ALI applies for PHL’s 1st REIT

AYALA Land, Inc. (ALI) has submitted an application to the Securities and Exchange Commission (SEC) for the country’s maiden real estate investment trust (REIT) offer.

ALI, through its subsidiary AREIT Inc., submitted on Friday its REIT Plan stating it wants to offer the public up to 478,639,700 shares at P30.05 each. This will raise up to P1.356 billion in net proceeds for the company.

The offer is composed of 47,864,000 new common shares and 430,775,700 existing common shares, with an over-allotment option of up to 23,932,000 shares.

“Through this initial capital market transaction, ALI hopes to pave the way for the development of a REIT market in the country, bringing another milestone to the Philippine stock market,” the company said in a statement.

It added it wants to do an initial public offering of AREIT once it secures regulatory approvals from the SEC and the Philippine Stock Exchange, Inc.

A copy of AREIT’s prospectus said its REIT plan covers three commercial buildings: the 24-storey Solaris One, the mixed-use development Ayala North Exchange, and the five-storey McKinley Exchange, all located in Makati City.

“The company seeded AREIT, Inc. with Grade A office assets located in Makati CBD (central business district) and is expected to expand its portfolio with new acquisitions in the future,” ALI said in its statement.

Proceeds from the offer will be disbursed by the end of 2020, as required by the REIT guidelines, and divided into P1.22 billion for future investments in real estate (90% of total) and P136 million for general corporate purposes (10%).

Specifically, ALI wants to acquire Teleperformance Cebu from its subsidiary ALO Prime Realty Corp., along with other real estate properties in Metro Manila and key regions.

The filing of AREIT’s prospectus to the SEC marks the first successful attempt by the regulator in more than 10 years to attract local property developers into REITs. This came after the government relaxed its regulations on the REIT law last month, specifically by reducing the minimum public float requirement to 33% and removing the 12% value-added tax on transferring properties to a REIT vehicle.

DoubleDragon Properties Corp. previously disclosed plans to raise about P11 billion annually in the next six years through the REIT listing of one-fourth of its completed leasable gross floor area.

Other firms that have expressed interest in REITs are Megaworld Corp., Robinsons Land Corp., SM Prime Holdings, Inc., and Century Properties Group, Inc. — Denise A. Valdez

Razon company to conduct tender offer of Manila Water shares

MANILA Water Co., Inc. (MWC) incoming investor Razon-led Prime Metroline Holdings, Inc. is doing a mandatory tender offer of the water company’s shares as part of its acquisition.

A newspaper bulletin by Prime Metroline on Friday — which was disclosed to the stock exchange by MWC — said it is going to conduct the tender offer of MWC shares held by the public as part of its subscription to 820 million common shares in the water firm.

“The subscription (and hence the tender offer) is subject to certain conditions precedent including, satisfactory due diligence, waiver of pre-emptive rights, compliance with Philippine Competition Commission notification, and relevant third party consents,” it said.

As disclosed when MWC announced the entry of Prime Metroline earlier this week, the shares will be offered at P13 each.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said investors did not like the announced tender offer price as it is lower than MWC’s closing share price of P14.96 on Thursday.

Shares in MWC dropped P1.68 or 11.23% to close at P13.28 each on Friday.

But among other things, the entry of Enrique K. Razon, Jr. into MWC is expected to ease the company into an extension of its water concession agreement with the government, Mr. Tantiangco said.

Ayala Corp. said on Thursday that its executive committee approved giving Mr. Razon a 51% voting interest in MWC. This is through the granting of proxy rights by its wholly owned subsidiary Philwater Holdings Co. to Mr. Razon’s Prime Metroline — until he incorporates Trident Water which will be the vehicle for the transaction.

Ayala’s Philwater currently has 4 billion preferred shares in MWC, equivalent to 65.95% voting interest. Once proxy rights are granted to Trident Water, Ayala’s voting interest in MWC will drop to 31.6%.

“The tender offer, if it pushes through, would further tighten Mr. Razon’s grip on MWC. With this, we may see changes in MWC’s business strategies,” Philstocks’ Mr. Tantiangco said.

“Mr. Razon may… have something to bring to the negotiation table with the government which could increase the likelihood of a deal for the water concessionaire’s contract extension,” he added.

MWC, along with the other Manila water concessionaire Maynilad Water Services, Inc., is waiting on the government for a new concession term after President Rodrigo R. Duterte declared that there were onerous provisions in their previous contracts.

The two companies’ contracts were originally set to last until 2037, but Mr. Duterte threatened to cut this short.

Aniceto K. Pangan of Diversified Securities, Inc. earlier called Mr. Razon an ally of the government, and dubbed Ayala’s decision to go to him a good move.

Aside from the water contract, Mr. Tantiangco said Mr. Razon’s entry may also help expand MWC’s operations. “With Mr. Razon’s experience in the global market, we could see the water service firm’s operations expand beyond [our] borders,” he said.

“[Ayala Corp.] in turn would be taking the backseat in MWC which will then allow them to focus on their other core businesses — their property, banking, telecommunications, and their industrial arm,” Mr. Tantiango added.

Shares in Ayala Corp. at the stock exchange lost P10 or 1.32% to P750 each on Friday. — Denise A. Valdez

Travel ban to slow down POGO’s real estate demand

IN A briefing in Makati City yesterday, the real estate consultancy services firm Colliers International Philippines said travel restrictions on China due to the novel coronavirus may lead to a shrinking of the Philippine Offshore Gaming Operators (POGOs) sector and a resultant increase in vacancy rates, especially in the Bay Area.

“There’s a travel ban imposed by the government to and from China. We see this constricting the flow of more Chinese offshore gaming employees here in Metro Manila. Hence, we expect lower take-up for office space from POGOs, because while POGOs want to expand operations, they do no have the people to man the operations,” Colliers Research Manager Joey Roi H. Bondoc said.

The Philippine government has imposed a temporary travel ban on flights to and from China, Macau, and Hong Kong since Sunday. Local airlines have suspended flights in these territories.

Data from Colliers said POGOS took up 333,000 square meters (sq.m.) of office space in Metro Manila in 2019, translating to a vacancy rate of 4.3%. With the blanket travel ban on flights to and from China, the firm projected that the vacancy rate in the metro this year may shoot up to 5.3%, with POGO take-up at 300,000 sq.m. This will tick higher to 6% if POGO take-up falls to 200,000 sq.m., to 6.8% if take-up is at 100,000 sq.m., and to 7.6% if POGOs take no space at all.

The effect is likewise expected in residential properties, as Colliers said POGOs contributed to higher demand in 2019, especially in Makati City, the Bay Area, Ortigas, and Quezon City.

“Note that 80% of new units that will be completed in 2020 are in the Bay Area, and (fewer POGOs) will have an impact on overall secondary vacancy in Metro Manila,” Mr. Bondoc said.

He said 11,400 new residential units are expected to be finished in the Bay Area this year. If this is fully taken up, vacancy rate in the whole Metro Manila would fall to 10.4%.

However, if take-up in the Bay Area settles at 6,000 units, the vacancy rate will rise to 14.4%; or if it falls to as low as 3,000 units, the vacancy rate will jump to 16.6%. In the worst case scenario that none of the 11,400 new units is taken up, the vacancy rate across Metro Manila increase to 18.8%.

Comparing the effect of the novel coronavirus against 2003’s SARS (Severe Acute Respiratory Syndrome) outbreak and 2009’s H1N1 influenza outbreak, Colliers Philippines Managing Director Richard T. Raymundo said the bigger impact may be traced to the the increased economic relationship between the Philippines and China.

“There’s only one difference right now with the coronavirus. Back with those two viruses (SARS and H1N1), we were not dependent on China. When there was SARS, our tourism numbers from China was (less than 10%). The tourism number right now for China is (21.73% as of November 2019),” he said.

Mr. Raymundo added the retail segment may also be affected, as most Chinese nationals living in the Philippines are luxury shoppers. “Anecdotal evidence from the high-end ones (say) it’s mostly a Chinese clientele for them,” he said.

Hotels may likewise feel the immediate impact, as the flight cancellations directly translate to reduced bookings and reservations.

Despite these challenges, Colliers believes the real estate sector may still enjoy several growth drivers this year: continuous demand for space from outsourcing and traditional sectors for the office segment; more launches in the fringes for the residential segment; the redevelopment of food courts for the retail segment; a record supply of 2,800 rooms for the hotel segment; and the growth of consumer spending for the industrial segment. — Denise A. Valdez

Jose Mari Banzon appointed president of SMDC

SM Prime Holdings, Inc. has appointed Jose Mari H. Banzon as the new president of its residential property business SM Development Corp. (SMDC).

In a statement released Friday, the listed property developer said Mr. Banzon will be taking up his new role after being executive vice-president of SMDC.

“Mr. Banzon’s new position puts him at the forefront of SMDC’s aspiration to establish new markets in the Philippines and in Southeast Asia. His unique experience and broad outlook of an international executive and a global Filipino makes him well-placed to lead SMDC moving forward,” SM Prime President Jeffrey C. Lim was quoted as saying in the statement.

In his years as executive vice-president, Mr. Banzon moved the company to expand its product portfolio into new formats in both vertical and horizontal residential projects, commercial buildings and mixed-use developments.

With Mr. Banzon as president, SMDC said it “guarantees the fulfillment of its vision to uplift the Filipinos’ lifestyle through modern, convenient, upscale yet affordable homes.”

Mr. Banzon joined SM Prime in 2013. Before his stint with the Sy-led firm, he was executive vice-president and general manager of Federal Land, Inc., the property arm of GT Capital Holdings, Inc.

His experience also stretches outside the real estate industry, as he had previously worked in financial institutions both in the Philippines and Hong Kong.

Mr. Banzon earned his Bachelor of Arts degree in Economics and Bachelor of Science degree in Management of Financial Institutions from De La Salle University.

Sales from SM Prime’s real estate business through SMDC rose 26% to P31.35 billion in the first nine months of 2019, driven by the fast take-up of its ready-for-occupancy projects and a 26% increase in reservation sales. SM Prime’s total profits during the period climbed 18% to P27.6 billion.

Shares in SM Prime at the stock exchange gained 40 centavos or 0.95% to P42.35 each on Friday. — Denise A. Valdez

PHL has policy space to guard vs economic risks — IMF

THE PHILIPPINES has space to adopt expansionary fiscal and monetary policy if risks to economic growth emerge, the International Monetary Fund (IMF) said, even as it expects expansion to improve this year amid downside risks.

“The Philippines has policy space and could adopt a more expansionary macroeconomic policy

stance should downside risks materialize. Under these adverse risk scenarios, fiscal stimulus should be prioritized toward public capital and social spending programs,” the IMF said in its 2019 Article IV Consultation and Staff Report released on Feb. 6.

“The Bangko Sentral ng Pilipinas (BSP) also has substantial space to lower its policy rate if downside surprises materialize,” it added.

The annual health check is part of the multilateral lender’s regular surveillance work among member-economies, as required under Article IV of the IMF articles of agreement.

Representatives monitor economic and financial developments and discuss fiscal and monetary responses with government and central bank officials in countries they visit.

The IMF earlier maintained its growth forecast for the country at 6.3% thus year, which is faster compared to the actual 5.9% gross domestic product (GDP) growth print in 2019.

This forecast, however, is below the government’s 6.5-7.5% growth target.

Meanwhile, on Thursday, the BSP’s Monetary Board reduced key policy rates by 25 basis points (bp) in a preemptive move ahead of emerging risks. This brought the reverse repurchase rate, as well as the rate of the overnight lending and deposit facilities, to 3.75%, 4.25%, and 3.25%, respectively.

“The outlook is positive. GDP growth is projected to…rise to 6.3% in 2020, underpinned by government spending acceleration and the recent monetary policy easing,” it said.

It added that it expects inflation to end the year at 3%, “accompanied by a slight

widening of the current account deficit to 2.3% of GDP in 2020 as investment picks up.”

The multilateral lender said there are downside risks to growth amid ongoing trade tensions, global financial conditions, and natural disasters.

“The structural reform momentum and infrastructure push remain strong. Several landmark

reform bills have been signed into law recently, including rice tariffication, a national digital ID, the ease of doing business, and BSP charter amendments,” it said.

“The government has also revised the list of priority flagship infrastructure projects based on feasibility and cost-benefit considerations, with the objective of raising infrastructure investment to over 6% of GDP by 2022,” it added.

The IMF said current macroeconomic policies are “attuned to the outlook.”

“The moderate fiscal stimulus planned for 2020 and the monetary policy easing since mid-2019 are consistent with the economy moving back to growing at capacity and achieving the inflation objectives in the baseline outlook,” the lender said.

However, it noted that macroprudential policy response should be “proactive” amid financial risks like high credit growth in the real estate sector, volatile inflows, and other external shocks.

Meanwhile, it said closing the infrastructure gap in the Philippines would “require further reform efforts.”

“Enhancing public investment management, including by promoting greater competition and allowing easier public access to information in the procurement process, would enable the planned increase in the infrastructure investment enveloped and contribute to its timely and cost-effective implementation, and also reduce incidence of corruption,” the multilateral lender said.

It added that planned changes to tax incentives would help encourage investments, and, in turn, boost job creation.

“Bolder” implementation efforts will help achieve results from various reforms, the IMF said.

“Strengthening the capacity of the public administration, advancing with the ease of doing reforms, and continuing with the infrastructure push will be central in this respect,” it said.

It added that lifting restrictions on foreign direct investments, improving poverty reduction efforts, easing the bank secrecy law, and investing more in climate change adaptation and mitigation, among others, will also boost the government’s reform agenda. — LWTN

R&I upgrades Philippines’ credit rating to BBB+

JAPAN-BASED Rating and Investment Information Inc. (R&I) has upgraded the Philippines’ credit rating on the back of its positive growth performance, healthy fiscal conditions and its infrastructure development drive.

R&I has upgraded the country’s credit rating by a notch to “BBB+” from “BBB”, just a step away from the minimum score within the government’s targeted “A” scale. R&I also assigned a “stable” outlook to its rating on the Philippines, signifying that the grade is unlikely to be changed within the short term.

“R&I said the upgrade was based on its assessment of the Philippines’ positive growth performance and prospects on the back of the government’s infrastructure development drive, as well as the government’s ability to keep its fiscal condition healthy,” the Bangko Sentral ng Pilipinas’ Investor Relations Office (IRO) said in a statement on Friday.

Aside from this, IRO said the ratings firm also took into consideration better socioeconomic climate in the Philippines.

Based on R&I’s report as cited by the IRO, the country’s economy was said to be driven by the current administrations’s aggressive public investment, its “commitment to fiscal discipline”, its “confidence of achieving the downward trend of the debt ratio even as public investments rise.”

Moreover, R&I took into consideration the country’s lower unemployment and poverty rates as well as rising per capita gross national income.

“Favorable assessment from Japanese credit rating agencies like R&I has become more important for the Philippines in recent years, given the government’s successive issuances of Samurai bonds in the Japanese market as part of the strategy to diversify sources of financing,” IRO said in a statement.

The economy grew by 5.9% in 2019, missing the government’s target range of 6-6.5%.

Meanwhile, data from the Philippine Statistics Authority (PSA) showed the unemployment rate slipped to 5.1% in 2019 from 5.3% in 2018. The 2019 figure is also the lowest in 14 years.

The PSA also reported that poverty incidence decreased to 16.6% from 23.3% in 2015, translating to about 5.9 million poor individuals lifted from poverty.

“…hitting an A-scale rating from R&I and the other debt watchers within the next two years is achievable. But of course, we can never be complacent…,” BSP Governor Benjamin E. Diokno was quoted as saying in the IRO statement.

“On the part of the BSP, we will continue to adhere to the sound conduct of monetary policy and banking supervision,” he added.

Earlier, Mr. Diokno identified key structural reforms which he said could boost the country’s credit ratings, including amendments to the Anti-Money Laundering Act of 2001 (AMLA) and the Human Security Act of 2007 (HSA), amendments to the Agri-Agra laws paired with fresh reforms in financial consumer protection and deposit secrecy.

Mr. Diokno said a “stronger economy” is the objective and getting the “A” rating is not the end in itself.

Despite this, he cited benefits that the country may reap from an “A” rating, including lower borrowing costs for the government, which will cause more savings that can be utilised to “fund more roads, urban transport, mass housing, education, health services, and social welfare”.

“Over time, interest rates on loans may also decline, thus benefiting individuals and firms securing loans for consumption and investments,” he added.

Meanwhile, Finance Secretary Carlos G. Dominguez said the country’s “strong macroeconomic fundamentals plus the [President Rodrigo R.] Duterte administration’s aggressive investment strategy, while maintaining fiscal discipline, show that we deserve the higher rating.”

In 2019, S&P Global Ratings also upgraded its credit rating for the country to “BBB+” on the back of above-average growth and strong external and fiscal position that have buoyed the economy.

Meanwhile, Fitch Ratings and Moody’s Investors Service affirmed their “BBB” and “Baa2” ratings for the country, respectively, which are both a notch above the minimum investment grade. — Luz Wendy T. Noble

Gross international reserves slip in January

THE COUNTRY’S dollar reserves slipped at end-January as the government paid its foreign exchange obligations, latest central bank data showed.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) released on Friday showed gross international reserves (GIR) stood at $86.422 billion as of January, down by 1.61% from the $87.839 billion seen at end-December but still higher by 4.77% from the $82.481 billion seen as of end-January 2019.

The end-January turnout ended five successive months of higher dollar reserves. Despite this, the level was still within the $86-billion target GIR level of the central bank for this year.

“The month-on-month decline in the GIR level reflected outflows arising from the national government’s foreign exchange withdrawal, which was used mainly to pay its foreign exchange obligations,” the BSP said in a statement.

Despite the decline, the GIR can still provide cover for 7.6 months’ worth of imports of goods and services and payments of primary income.

The BSP added that the reserve level is also “equivalent to 5.3 times the country’s short-term external debt based on original maturity and four times based on residual maturity”.

The central bank’s gold reserves, which form part of the country’s foreign exchange buffer, was steady at $8.016 billion for the eighth consecutive month since June but slipped 4.65% from the $8.407 billion logged at end-January 2019.

Meanwhile, gains from investments abroad, which accounted for the bulk of dollar reserves, stood at $73.97 billion, climbing from the end-December and end-January 2019 levels of $75.303 billion and $69.969 billion, respectively.

The country’s reserve position in the International Monetary Fund (IMF) also slipped to $588 million from the $590.4 million seen as of end-December. However, it was still higher compared to the $477.2 million seen a year prior.

BSP data also showed that foreign currency deposits went down to $2.667 billion from the $2.747 billion as of end-December, although still higher than end-January 2019’s $2.441 billion.

Special drawing rights — or the amount which the Philippines can tap from the IMF’s reserve currency basket — was steady for the second month at $1.181 billion but lower compared to the $1.192 billion seen at end-January 2019.

Net international reserves (NIR), which refers to the difference between the central bank’s dollar reserves and total short-term liabilities, likewise slipped to $86.42 billion as of end-January 2020 from the end-December 2019 level of $87.84 billion.

Sought for comment, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said aside from the government needing to pay off its obligations in the beginning of the year, the lower GIR level also came after global events.

“It was rather a turbulent start for 2020 with various events happening such as the short-lived US-Iran issue, the Taal volcano eruption, and now, the 2019-nCoV (novel coronavirus) outbreak that is still unfolding,” he said in an email.

“These events have brought volatility in various markets and the most recent one, the far-reaching economic impact still very much unknown,” Mr. Asuncion added, noting that GIR for the rest of 2020 is likely to resiliently grow in 2020 despite some short-term risks.

For his part, ING Bank-NV Manila Senior Economist Nicholas Antonio T. Mapa noted that aside from the GIR, consistent remittance and BPO (business process outsourcing) flows will help augment export receipts and provide support to the economy.

“Previously it [GIR] was the first and only line of defense against fluctuations in spot trading or speculative attacks on the currency but now it is but one of several lines of defense with other measures and facilities in place to weather impending financial market storms,” Mr. Mapa said in an email, noting that GIR remains to be healthy and still provides ample support to the financial market.

Security Bank Corp. Chief Economist Robert Dan J. Roces also said the current reserve level continues to provide “potent buffer to protect the country from any possible fallout against the peso.

“Lesser current linkage with greater China compared with our regional neighbors means the peso is more insulated from negative impact from the coronavirus epidemic,” he said in an email, noting that they forecast the peso to trade at P51 a dollar by the end of the first quarter. — Luz Wendy T. Noble

Prolonged coronavirus outbreak to hurt PHL growth

THE SPREAD of the novel coronavirus (2019-nCoV) is estimated to hurt the economic growth by 0.3% if the outbreak stays longer or until June largely due to impact on tourism sector, according to preliminary estimates by the National Economic and Development Authority (NEDA).

In a press conference on Friday, NEDA Secretary Ernesto M. Pernia said the economic impact could further rise to as much as 0.7% of gross domestic product (GDP) if the virus lingers until December.

Mr. Pernia said the estimates were based on a scenario where inbound Chinese tourists will be cut by 100% and foreign tourists coming in will be reduced by 10% from the baseline during the given period, but are still subject to change depending on the gravity of situation.

But if the outbreak will only be felt for one month, the impact on GDP will only be at 0.06%.

“[The estimates were done considering that the outbreak] will be steady state of where we are now because once it escalates and it becomes very serious then we will have different numbers,” he said.

Tourist arrivals from China stood at 1.71 million from January to November last year, accounting for 22.9% of the overall tourist arrivals in the country during the period, based on data from the Philippine Statistics Authority.

According to Mr. Pernia, inbound tourism income or expenditure by travellers and tourists accounted for around five percent of the country’s P19-trillion economy.

However, he said the impact could be mitigated through increased domestic tourism given that local travels accounts for more than half of the total tourism sector, which accounts for 12.7% of GDP.

“Domestic tourism is greater actually. Because if you combine inbound tourism with domestic tourism, the percentage in GDP is about 12.7%… More than half of travel and tourism is domestic compared with international, inbound. So we might be able to make up for.. what we lose from inbound tourism…in terms of domestic tourism if Filipinos decided to travel internally na lng instead of going abroad,” Mr. Pernia told reporters during the briefing.

Meanwhile on the trade side, Trade Secretary Ramon M. Lopez said the impact to the economy will be “minimal” since the country’s trading activities with Hubei, China, where the first case of the virus was detected and is currently on total lockdown, only accounts for roughly one percent of the total trade of the country to China.

“Obviously if you cannot get your supplies from Hubei or Wuhan, we look at alternative sources so our operations here will not be affected…[and] further minimize the impact… [Also], it may (result in) more trade with other countries kung saan ‘yung (where we get our) alternative source,” Mr. Lopez said in the same forum.

In a separate text message to reporters, Mr. Lopez said Philippine trade with Hubei province accounts for less than one percent of the value of the country’s total trade with China.

Mr. Lopez said exports to Hubei comprise just 0.5% of the Philippines’ shipments to China. Imports from the province are at around 1.2% of the total from the country.

Total trade with Hubei is just at 0.9% of the Philippines’ trade with China.

“Assuming companies sourcing from affected areas in China may find temporary alternative sources so as not to disrupt their supply chain. So this would further minimize impact on trade,” Mr. Lopez said.

He said trade with China comprises 20% of the country’s transactions.

Based on data from the Philippine Statistics Authority, exports to China in the first 11 months of 2019 cornered 13.6% of total outbound shipments. Imports from China in the same period were just at 22.7% of total inbound shipments.

Mr. Lopez said the main impact of the coronavirus will be on tourism.

“But it can mean the lowering of hotel and plane rates to encourage more domestic tourism,” he said.

On Thursday, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said their estimates showed that the outbreak could dent the economic growth in the first half by an average of 0.3% — 0.1% for the first quarter and by 0.4% in the second quarter.

Mr. Pernia on Friday reiterated that the country could also save on foreign exchange due to limited international travels and spending.

Finance Secretary Carlos G. Dominguez III had said they are keeping this year’s growth target of 6.5-7.5% despite the coronavirus outbreak and Taal Volcano’s eruption last month.

According to the January issue of the Market Call by University of Asia and the Pacific and the First Metro Investment Corp., the economy could recover this year and grow by 6.2-6.6% from the slower-than-expected 5.9% full-year expansion in 2019.

“The faster pace will likely spill over to the entire 2020 with similar drivers as in Q4-2019-NG operational and capital spending as well as solid consumer spending given the robust job gains in in the last three quarters of 2019,” the report sent to journalists yesterday said.

“However, a much stronger eruption of Taal volcano and prolonged spread of the N-corona virus could slow the economy slightly, but negative investor sentiment from it may delay PSEi’s (Philippine Stock Exchange Composite index) recovery,” it added.

On Friday, the Department of Health reported the death of another of the more than 200 people under investigation (PUI) for the 2019 novel coronavirus due to another underlying illness.

In a briefing, Health Undersecretary Rolando Enrique C. Domingo said there were 215 PUIs as of Friday, Feb. 7.

“The cumulative total of PUIs reported is 215. Of the PUIs, 184 are currently admitted and isolated, nine have refused admission, 17 have been discharged under strict monitoring, while two have died of other causes,” he said.

He added that a PUI died on Thursday, saying: “The second PUI death which was confirmed yesterday is a case of pneumonia in a patient with underlying restrictive lung disease.”

The first reported death among PUIs was Chinese man who died from pneumonia but tested negative of the virus over a week ago.

But also included in the PUIs are the three Chinese nationals who were already declared positive of the virus. The first case is a 38-year-old woman who is in stable condition but is still confined in the hospital, while the second case is a Chinese man who died. The third case is another Chinese woman who has been discharged and has flown back to China.

Globally there are over 31,000 cases of the 2019 nCoV, most of which are in China. The death toll has reached up to 630. — Beatrice M. Laforga with inputs from J.P. Ibañez and G.M. Cortez

Tourist destinations restrict entry amid coronavirus threat

LOCAL POLITICAL units of areas with popular tourist destinations are imposing restricted entry rules amid the continued threat of the novel coronavirus.

In Boracay, one of the country’s most popular island destinations, the municipal government of Malay issued an order on Friday preventing the entry of all persons with travel history from China, Macau, and Hong Kong for the past 14 days.

Malay Acting Mayor Frolibar S. Bautista signed the executive order after the town council passed a resolution on Thursday giving him authority to do so.

Madel Joy T. Tayco Nurse II of the Municipal Health Office of Malay and spokesperson of the town’s inter-agency task force said the Malay council adapted the resolution initially passed by the inter-agency task force on Wednesday.

Following the order, border patrols will be deployed at the town’s boundaries to check the travel history of visitors. The patrol teams will be composed of members of the police, military, Department of Tourism, and the Municipal Health Office (MHO).

Madel Joy T. Tayco of the MHO said the policy is intended to keep Boracay Island free from the coronavirus.

“Even without the flights (from China, Hong Kong, and Macau based on a nationwide ban), there are many Chinese and non-Chinese nationals that were able to enter the country and they reached Aklan through the domestic flights,” she said.

Malay falls under the jurisdiction of Aklan province.

As of February 5, there were 303 persons under monitoring in Malay, all of them staying in different hotels in Boracay.

“We monitored 303 of them, mostly Chinese nationals. The 22 that we recorded on Wednesday was already included in the number,” Ms. Tayco said.

Aklan Governor Florencio T. Miraflores, meanwhile, said six isolation rooms have been prepared in one of the government hospitals to cater to persons under investigation, or those showing symptoms of the coronavirus and have pertinent travel history.

Earlier, the Island Garden City of Samal in Davao del Norte and the island province of Guimaras in Western Visayas also announced their respective entry restrictions to foreign tourists.

JEJU
Jeju Island in South Korea, also a popular holiday destination, has temporarily suspended the visa-free entry policy for Filipino tourists, the Bureau of Immigration (BI) announced Friday.

“We have already instructed our immigration officers not to allow the departure of any Filipino bound for Jeju unless the passenger was issued a visa by the Korean Embassy,” BI Port Operations Divisions Chief Grifton SP. Medina said in a statement.

The BI was informed of the suspension by the Korean Embassy in Manila.

Coronavirus cases have reached over 28,000 globally as of February 6, with three in the Philippines and 23 in South Korea.

TARLAC
Meanwhile, the local government of Capas town has passed a resolution opposing the use of facilities at the New Clark City (NCC) as quarantine site for Filipinos repatriated from Hubei province in China.

The NCC is located in Tarlac province, with Capas and Bamban as host towns.

Capas Mayor Reynaldo L. Catacutan, in a statement posted on social media Friday, said the “last minute decision” of the Department of Health to use the Athletes’ Village in NCC should be reconsidered.

He addressed his appeal to Health Secretary Francisco T. Duque III and President Rodrigo R. Duterte.

“I am perturbed by the fact that the Department of Health did not at all, in any way, involve the Capas LGU (local government unit) in its last-minute decision for New Clark City Capas to be used as quarantine zone for these Persons Under Monitoring,” he said.

The Capas town council voted in support of the mayor during a session on Friday.

Local officials expressed concern that residents around NCC might catch the virus despite no confirmed case nor reported symptoms among the 45 returning Filipinos.

On Thursday, Mr. Duque said the Bases Conversion and Development Authority (BCDA), which manages the NCC, offered the facility as an isolation area for the Filipinos who are expected to arrive next week.

The facility was constructed for the 2019 Southeast Asian Games late last year. The next scheduled activity at the venue is in April.

Prior to announcing the use of the NCC, the government looked at Fort Magsaysay, a military reservation in Nueva Ecija, as a potential site for the 14-day quarantine period.

Earlier this week, Presidential Spokesperson Salvador S. Panelo said local governments should “act in accordance with the tempo dictated by the National Government or face charges for non-feasance.” — Emme Rose S. Santiagudo and Gillian M. Cortez

Duterte orders ASF zoning implementation as 2 Davao City villages placed on lockdown

PRESIDENT RODRIGO R. Duterte has issued the order for the implementation of the national zoning plan to contain the spread of the African Swine Fever (ASF).

In Administrative order No. 22 dated February 5 and released the next day, Mr. Duterte directs all national government agencies and local government units to comply with the National Zoning and Movement Plan for ASF issued earlier by the Department of Agriculture (DA).

“There is an urgent need to ensure consistent implementation and compliance with DA Administrative Circular No. 12 to more effectively control the ASF virus towards its complete eradication,” he said.

The zoning plan divides the country into two general zones: the free zone and the containment zone. The four categories under containment zone are the protected zone, the buffer zone, the surveillance zone, and the infected zone.

The DA, Department of Trade and Industry, and Department of Interior and Local Government “are directed to monitor compliance.”

DAVAO CITY
The President’s order was signed the same day that ASF cases were confirmed and announced in Davao City, his hometown.

Two barangays in the city’s Calinan District are now on lockdown as authorities take measures to prevent the spread of the disease that is highly contagious and fatal to swines.

The lockdown prohibits live pigs, processed pork and other pork by-products from entering or leaving the villages of Dominga and Lamanan, located outside the city center, according to DA-Davao Regional Director Ricardo M. Oñate, Jr.

Mr. Oñate appealed to backyard hog farmers to avoid swill feeding, or giving food scraps, which is suspected to be the source of the contamination.

“Nagba-back trace po tayo kung saan nagsimula ang problema na ito (We are back-tracing now to determine where the problem started),” Mr. Oñate said in a media briefing late Thursday.

City Veterinarian Cerelyn B. Pinili said 16 pigs have died in the area since the second week of January when the livestock inspector first attended to reported sick hogs.

Some of the treated animals recovered, but several blood samples submitted to the Bureau of Animal Industry tested positive for ASF.

Mr. Oñate said the “1-7-10 protocol” prescribed by the DA is already being implemented.

Under the 1-7-10 quarantine procedure, hogs within a one-kilometer radius of the outbreak will be immediately culled and buried, and the area disinfected; the seven-kilometer radius will be placed under surveillance and subject to sampling and testing; and strict monitoring of entry and exit points within 10 kilometers.

The police have been tapped to assist in the checkpoints.

The hog population in the two villages is about 2,000, based on the city’s livestock record.

Davao City is the second local government unit in the Davao Region, and the rest of Mindanao, with confirmed ASF cases.

The first case was reported last week in the town of Don Marcelino in Davao Occidental province.

The entire province was immediately placed on lockdown and a state of calamity was declared earlier this week.

An ASF outbreak in the country was first confirmed in September last year, affecting parts of the northern island of Luzon. Much of the contamination has been contained, except in some towns in Pangasinan where cases continued to be reported in the past weeks. — Gillian M. Cortez, Maya M. Padillo and Carmelito Q. Francisco

MSME sanitary inspection to be delegated to local governments

SANITARY INSPECTIONS for small businesses will soon be devolved to local government units (LGUs) from the Food and Drug Administration (FDA), with Quezon City piloting the program.

The Anti-Red Tape Authority (ARTA), in a statement on Friday, said LGUs will be given the authority to conduct inspections on micro, small, and medium enterprises involved in processing low-risk food products.

The move is expected to address the backlog in FDA’s Center for Food Regulation & Research (CFRR) in releasing licenses to operate.

“Under current practice, LGUs are to conduct inspections for sanitary permitting apart from the inspections being done by FDA as part of the processing for the issuance of License to Operate (LTO),” the statement said.

“Through the deputization of inspection functions, LGUs would be able to inspect processing plants for issuance of FDA’s LTO, together with their inspection for sanitary permits, making LGUs as supervising body while retaining jurisdiction to FDA.”

ARTA said LGU inspectors will be trained and given a standard checklist for inspections based on FDA’s Good Manufacturing Practice regulations.

ARTA Director-General Jeremiah B. Beligica met on Friday with the FDA, the Department of the Interior and Local Government, the Quezon City government’s health department, and the National Association of Business Permits and Licensing Office to discuss the steps towards deputization.

“Working together is the core of what we are doing in ARTA. That’s why we are grateful for FDA and Quezon City who have welcomed us and are leading the developments that we need to see in the government. Through this, we will be able to deliver faster and ultimately better service to the people,” Mr. Belgica said.

Low-risk food products for FDA registration, based on a 2016 circular, include certain fats, oils and fat emulsions; processed fruits; vegetable and edible fungi; confectionery; cereal-based products; processed meat and meat products; and bakery wares, among others. — Jenina P. Ibañez

DoJ orders probe on immigration officials involved in trafficking

THE DEPARTMENT of Justice (DoJ) has ordered a probe on immigration officials allegedly involved in human trafficking and escort services.

Justice Secretary Menardo I. Guevarra, in Department Order No. 038 dated January 22 but released only on Friday, directed the National Bureau of Investigation (NBI) to investigate the alleged link of Bureau of Immigration (BI) officials in prostitution services.

“The NBI, through director Dante A. Gierran, is hereby directed and granted authority to conduct an investigation and case build up on the alleged involvement of Bureau of Immigration (BI) officials and personnel in human trafficking activities and escort services,” the order said.

The investigation also involves the alleged facilitation of Filipinos leaving for work abroad using a tourist visa.

Mr. Guevarra also wants a check on foreign nationals entering the Philippines through Kalibo International Airport, Puerto Princeso International Airport, and Kalibo International Airport.

A report on the investigation and case build up must be submitted within 30 days.

In a message to reporters on Friday, BI Spokesperson Dana Krizia M. Sandoval said the BI will cooperate with the DoJ throughout the investigation process.

“The Bureau is open and welcomes any investigation of its mother department, the Department of Justice, in uncovering any possible human trafficking and escort services in several international airports,” she said. — Gillian M. Cortez

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