COVID-19 to have no significant short-term impact on Huawei’s operations

May 28, 2020 | 12:01 am

CHINESE multinational technology company Huawei Technologies Co., Ltd. said the coronavirus pandemic will not have a significant impact on its operations in the short term but warned that a further spread of the virus will bring uncertainty to the continuity of its market supply.

“The pandemic won’t have much of a short-term impact on Huawei. As of today, most of our factories in China have resumed production and our total production capacity has recovered to normal levels,” the company said in a statement it provided to reporters after the Asia Pacific 5G Online Tour on May 20.

It said its supply hubs outside of China are working with its partners to support efforts to prevent the spread of the coronavirus diseases 2019 or COVID-19.

“Currently, production and operations in these supply centers are normal and supply risks are being adequately managed,” it added.

Huawei also said “further spread” of the virus that cannot be controlled “will create new long-term challenges and bring uncertainty to the continuity of its market supply.”

To ensure supply continuity and stability, the company said it is strictly enforcing infection prevention and control measures across its supplier network.

“These efforts will help them resume production while ensuring that their employees are healthy and safe,” it said.

During the online tour, Huawei officials showed to reporters its 5G exhibition hall named after Italian physicist and astronomer Galileo Galilei.

Huawei said it has invested a total of $4 billion in research and development work for 5G. “We have established nine 5G standards and research centers worldwide, have more than 500 experts working on standards, and hold positions in over 100 standards organizations,” it said.

Citing customer feedback, the company said it is “two to three years” ahead of its competitors.

“We believe that 5G…is much safer than any other technologies such as 4G and 3G. This is the key message we want to share.” Huawei India Chief Executive Officer Jay Chen said.

Huawei, which has been conducting research on 5G since 2009, said it now owns “3,367 families of 5G patents, accounting for more than 20% of the total and ranking No. 1 among all vendors.”

“We are committed to be the enabler of Asia Pacific’s digital transformation, including policy consultant on national digital strategy, and providing faster, safer, more efficient digital infrastructure (4G/5G Wireless +Wired, Ultra Broadband),” the Chinese technology firm also said. — Arjay L. Balinbin

Podium’s restaurants are ready for business

May 28, 2020 | 12:01 am

MOVEMENT restrictions in Metro Manila may be loosening but as the pandemic continues, it will still be quite some time before dining in restaurants will be allowed again because of the threat of infection. But that doesn’t mean cravings can’t be satisfied as many restaurants are offering delivery and pick-up services for their specialties. The Podium Mall in Mandaluyong City has launched its own to-go delivery service for some of its restaurants so customers can still order their favorite dishes.

The mall created a restaurant guide that is available on its website and social media channels. Customers can check it out, then call the restaurant of their choice to place their order and meal requirements. The purchase can be paid for in cash or via cashless payment systems agreed upon by the customer and restaurant. The deliveries will be made by the Podium’s partner courier service, Fastrack. Delivery fees depend on the customer’s location.

Several of the restaurants are also delivering via GrabFood, FoodPanda, and LalaFood. The restaurants can also handle pick-up or curbside deliveries.

Among the Podium restaurants that are open are Filipino restaurants Manam and Lola Cafe; Italian restaurants La Vita Ristorante Italiano, Motorino, and Salvatore Cuomo Café; Asian restaurants Marugame Udon, New Bombay, Paradise Dynasty, and Shi Lin; Mediterranean restaurants Cafe Mediterranean and Cyma. Also available for delivery are Michelin-starred Putien restaurant and the famous Wolfgang’s Steakhouse. — ZBC

LRT-1 operator invests in disinfection technology

May 28, 2020 | 12:01 am

LIGHT Rail Manila Corp. (LRMC), operator of Light Rail Transit Line 1 (LRT-1), has partnered with the University of the Philippines-Diliman’s National Engineering Center for the use of an ultraviolet technology to disinfect its train sets.

With the partnership, the university and LRMC will develop “different disinfection equipment using UVC (ultraviolet-C) technology that would best serve the LRT-1 trains.” They will also accelerate the mass production of the technology to immediately serve the entire LRT-1 line.

“The UVC technology would be essential in making sure that the LRT-1 trains, facilities, and stations remain safe and virus-free when the line reopens after the lifting of the modified enhanced community quarantine in Metro Manila,” LRMC said in a statement e-mailed to reporters on Wednesday.

Light Rail Manila Corp. (LRMC) teamed up with the University of the Philippines-Diliman’s National Engineering Center to develop “different disinfection equipment using UVC (ultraviolet-C) technology that would best serve the LRT-1 trains.”

LRMC said further that its partner was also tasked “to continue its research into the technology, as well as monitor and test its effectiveness once the LRT-1 resumes operations.”

LRMC Head of Health, Safety, Environment, and Quality Andrea Mellind C. Madrid said: “We are constantly looking for ways to innovate and explore better alternatives to ensure that the LRT-1 is safe for our passengers and employees. With the use of proven technology, we are able to help them feel safer and more confident while riding LRT-1 by effectively reducing the risk of catching COVID-19.”

University of the Philippines President Danilo L. Concepcion said: “The use of UVC is an effective disinfection technology being implemented in hospitals, clinics, and even in other facilities abroad. We are incredibly proud of the UP National Engineering Center for their breakthrough, as we are glad to serve our country and our fellow Filipinos in fighting the threat of COVID-19.” — Arjay L. Balinbin

Oriental Petroleum and Minerals Corp. to hold annual stockholders’ meeting via remote communication on June 25

May 28, 2020 | 12:01 am

Yields on seven-day term deposits inch lower

May 28, 2020 | 12:01 am

YIELDS ON the central bank’s term deposit facility (TDF) slipped on the back of higher bids as well as the slight recovery in oil prices.

Tenders for the seven-day papers offered by the Bangko Sentral ng Pilipinas (BSP) on Wednesday totalled P273.755 billion, higher than the P150 billion on the auction block and also going beyond the P242.052 billion in bids seen last week for the P120 billion up for grabs.

Yields sought by lenders ranged from 2.25% to 2.254%, a slightly narrower band compared to the 2.25% to 2.258% logged on May 20. With this, the average rate of the one-week term deposits settled at 2.2516%, slipping by 0.27 basis point from the 2.2543% logged a week ago.

“[The] auction results continue to reflect market preference for the BSP’s deposit facilities amid ample liquidity in the financial system,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.

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

The 14- and 28-day day term deposit offerings remain suspended. The BSP halted offering term deposits in mid-March to support the banking system amid the imposition of the lockdown measures.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the lower yields came amid a continued increase in demand for the term deposits.

“This still manifests increased peso liquidity in the financial system looking for higher yielding outlets for short tenors such as the 7-day TDF,” he said in an e-mail.

Mr. Ricafort said although yields continued to go down, the decrease became more marginal due to the uptick in oil prices.

“The upward correction in global oil prices to new 2.5-month highs could have also slowed down the weekly decline in the 7-day TDF yield,” he added.

Global oil prices have seen some recovery after sliding to negative territory in April. This, as major oil producers stand by their commitment to cut their output by nearly 10 million barrels per day from May to June amid slower demand brought about by the pandemic.

As some economies start to gradually reopen, there has also been a slight rise in demand from major oil importers such as China.

Mr. Ricafort said the decrease in TDF yields also lessened as rates are already close to the April inflation print of 2.2%.

“Any level below the said inflation rate is already considered negative net interest rate return,” he said.

The April headline print was a five-month low and the slowest since the 1.3% seen in November last year.

The Philippine Statistics Authority will report the May inflation on June 5. — Luz Wendy T. Noble with Reuters

How PSEi member stocks performed — May 27, 2020

May 28, 2020 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Wednesday, May 27, 2020.

Stocks rebound on optimism over virus vaccine

May 27, 2020 | 9:00 pm

By Denise A. Valdez, Reporter

LOCAL SHARES ended Wednesday’s session higher as prospects of an anti-coronavirus disease 2019 (COVID-19) vaccine lifted investor sentiment.

The benchmark Philippine Stock Exchange index (PSEi) rose 26.95 points or 0.49% to close at 5,523.78 yesterday. The broader all shares index added 16.10 points or 0.48% to 3,329.12.

“The Philippine market rallied on new vaccine news, and optimism over positive signs of global economic recovery,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

Global pharmaceutical company Merck & Co. announced on Tuesday it has ongoing initiatives to develop an antiviral drug against COVID-19, which it said will use the same technology as its Ebola vaccine, Forbes reported.

This news, along with New York’s hiring of over 1,700 contact tracers to mitigate the spread of COVID-19 in the city, boosted investor confidence and lifted US markets on Tuesday.

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices gained 2.17%, 1.23% and 0.17% respectively on Tuesday.

For AAA Southeast Equities, Inc. Research Head Christopher John Mangun, the better performance of the local market on Wednesday was attributable to bargain hunters.

“The PSEi started the day with a minor sell off. Investors were more optimistic (on Wednesday) than (on Tuesday) as they started bargain hunting which pushed the market higher toward the end of the trading session,” he said in an e-mail.

He also noted shares in First Gen Corp. (FGEN) drove up the main index after Singaporean company Valorous Asia Holdings Pte. Ltd. announced interest in buying its shares.

“FGEN was the biggest gainer for the main index today, up 14.2% after a Singaporean firm announced to purchase shares through a tender offer at a premium,” Mr. Mangun said on Wednesday.

Four of six sectoral indices ended trading in green territory. Mining and oil grew 127.73 points or 2.94% to 4,465.23; industrials rose 108.24 points or 1.52% to 7,200.37; financials increased 10.18 points or 0.94% to 1,087.34; and holding firms climbed 31.87 points or 0.57% to 5,573.69.

On the other hand, services shed 3.80 points or 0.28% to 1,315.70 and property lost 7.06 points or 0.25% to 2,757.83.

Value turnover on Wednesday stood at P5.48 billion with 1.51 billion issues switching hands, a slight increase from the previous day’s P5.17 billion with 1.36 billion issues.

Advancers bested decliners, 99 against 78, while 47 names closed unchanged.

Foreign investors remained sellers yesterday, but net outflows dropped to P209.92 million from P1.18 billion on Tuesday.

“The PSEi ended above its 5,500 support level today which may draw more momentum for a move higher. We could see it move higher in the coming days to test resistance,” Mr. Mangun said.

Peso weakens versus the dollar on worsening US-China relations

May 27, 2020 | 9:00 pm

THE PESO succumbed to the greenback on Wednesday amid risk-off sentiment due to a wider budget deficit in April and renewed tensions between the US and China.

The local unit ended trading at P50.68 per dollar, shedding 15 centavos from its P50.53 close on Tuesday, according to data from the Bankers Association of the Philippines.

The currency opened the session at P50.51 per dollar. Its weakest was at its close of P50.68 while its intraday best was at P50.46.

Dollars traded climbed to $856.48 million on Wednesday from the $491.5 million on Tuesday.

The weaker peso came after the release of the April fiscal deficit, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

“The peso closed to its weakest in a month after the announcement of wider budget deficit data which showed contraction in government revenues and sharp increase in government expenditures,” he said in a text message.

A record fiscal deficit worth P273.9 billion was seen in April, reversing the P86.9-billion budget surplus in the same month in 2019, according to data from the Bureau of the Treasury.

Meanwhile, a trader said risk-off sentiment due to uncertainties caused by the US-China spat took its toll on the peso.

“The peso depreciated as investors remained cautious amid uncertainty over future quarantine policies beyond May 31 and lingering US-China geopolitical tensions,” the trader said in an e-mail.

For Thursday, Mr. Ricafort and the trader expect the peso to move around the P50.55 to P50.75 levels. — L.W.T. Noble with Reuters

Sotto estimates P548B needed for economic stimulus in 2020

May 27, 2020 | 8:46 pm

SENATE President Vicente C. Sotto said the chamber’s stimulus bill is expected to require P548 billion in funding for the remainder of 2020 and a further P80 billion next year.

“For 2020, ang expected natin dito kakailanganin ng mga (we estimate a requirement of) P548 billion for the entire year,” Senate President Vicente C. Sotto III said in a virtual briefing, Wednesday. “For 2021, the estimate is around P80 billion.”

Mr. Sotto made the remarks in support of Senate Bill No. 1542, which he said hopes to cover areas not addressed by the Bayanihan to Heal as One Act, or Republic Act 11469, the government’s first major legislation in response to the coronavirus pandemic.

The Senate bill will “restore economic growth, maintain employment levels, and expand the productive capacity of the country,” Mr. Sotto said in a statement Wednesday.

The bill among others provides for mandatory mass testing, wage subsidies for non-essential businesses, freelancers, the self-employed and returning Overseas Filipino Workers.

It will also waive registration and related fees as well as grant special trading accommodations to micro, small, and medium enterprises.

A counterpart measure in the House, approved at committee level Tuesday, proposes funding of P1.3 trillion for the government’s flagship infrastructure projects, mass testing, and wage subsidies among other forms of assistance to those affected by the crisis.

Mr. Sotto said during the videoconference that he expects to fund the bill via loans, savings from previous budgets, and unused 2020 funds.

“Lahat ng available funds na hindi nagamit nitong mga nakaraang taon at itong taon na ito kasama para ma-i-fund ang proposal (All available funds from last year and this year will fund this proposal),” he said.

Mr. Sotto said an extension of the Bayanihan Law’s effectivity will likely be passed by the Senate. “Walang kaduda-duda na ma-e-extend namin yan (Without a doubt we will extend it),” he said in the briefing.

Separately, Senate President Pro Tempore Ralph G. Recto asked the Department of Social Welfare and Development (DSWD) not to delay the second tranche of the social amelioration program (SAP) over local government failures to file the required paperwork.

“The DSWD says that a condition for the release of the second installment of SAP is the local government’s liquidation report on the first wave of the cash distribution,” he said in a statement.

“In ordinary times, this audit rule should be followed strictly. But in the midst of the pandemic, it should be relaxed, not waived, but only insofar as extending the deadline of submission, and not making it a requisite for the release of the next tranche.” — Charmaine A. Tadalan

CREATE bill approval by June 3 seen possible

May 27, 2020 | 8:46 pm

THE proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) could be approved on final reading ahead of the Congressional break, Senate President Vicente C. Sotto III said on Wednesday.

Mr. Sotto said the Senate Ways and Means Committee will be meeting with the government’s economic managers after Wednesday’s session, which will determine whether the bill will be included on the calendar for deliberations Monday.

“Mag-mi-meeting sila mamaya after the session and therefore makakabalita tayo kung kaya ng sponsorhip on June 1 (They will meet later after the session and we will get word soon if the bill can be sponsored by June 1),” he said in a virtual briefing Wednesday.

“Pwedeng second reading, interpellations ng Monday and Tuesday and then may pag-asang ma-third reading on Wednesday (It’s possible to have second reading and interpellations on Monday and Tuesday and then there is a chance of third reading by Wednesday), or even on the June second itself.”

The measure was certified as urgent by President Rodrigo R. Duterte, thereby allowing the chamber to do away with the three-day interval in approving bills on second and third reading.

House Ways and Means Committee and Albay Rep. Jose Ma. Clemente S. Salceda had said he is open to adopting the Senate version, provided it is “fiscally responsible.”

Congress has until June 3 to act on remaining measures before it goes on a nearly two month break. It is set to resume on July 27.

The CREATE bill is the revised version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA), which now provides for the immediate reduction of the CIT to 25% from the current 30%.

This will further be reduced by 1 percentage point annually beginning 2023 until 2027. In its previous version, the bill proposed to gradually reduce the rate until it reaches 20% in 2029.

The tax reductions were accelerated due to the coronavirus disease 2019 (COVID-19) pandemic. The bill is now positioned as a means of attracting investment from foreign companies looking to move out of China.

“Ito ay mag-e-entice sa mga investors maraming umaalis sa mga lugar na may problema, katulad ng China. Mas maganda ‘yung ang mga investors na ito dito sa Pilipinas (We hope to entice investors moving out of problematic locations like China. We’d prefer that such investors come to the Philippines),” Mr. Sotto also said.

Finance Secretary Carlos G. Dominguez III has described the bill as the “most important economic reform in decades.”

The new version will also extend the sunset period for enterprises enjoying incentives to four years from the 2-7 year period under CITIRA.

The bill forms part of the administration’s comprehensive tax reform program, along with proposals to simplify the tax structure for financial instruments and provide a uniform framework for real property valuation.

The government has so far enacted a measure cutting personal income taxes and increasing or adding levies on several goods and services.

Another law grants an estate tax amnesty and an amnesty on delinquent accounts, while two more laws separately increased the excise tax on alcohol products and conventional and electronic cigarettes. — Charmaine A. Tadalan

Non-expiration of franchises approved in principle by Senate committee

May 27, 2020 | 8:45 pm

THE Senate Committee on Constitutional Amendments and Revision of Codes approved in principle on Wednesday a measure allowing franchises with pending renewal applications in Congress to continue operating past the franchise expiration date.

The committee was tackling Senate Bill No. 1530, which seeks to address contingencies like the National Telecommunications Commission’s (NTC) decision to issue a cease-and-desist order against ABS-CBN after its franchise expired on May 4.

The NTC said Wednesday that it filed the cease and desist order in light of the quo warranto petition filed by Solicitor General Jose C. Calida, and that it has no authority to grant a provisional franchise.

“We never issued a provisional license to any broadcaster while their franchise was pending in Congress. What happened is we just allowed them to continue operating,” NTC Commissioner Gamaliel A. Cordoba said.

“The difference with ABS-CBN (is that) the case for quo warranto was filed by the Solicitor General, kaya naging untenable (which is why it became untenable) on our part to let it continue.”

Senator Franklin M. Drilon said the bill will address inconsistencies on the part of the NTC in implementing the law.

“This representation sees the very clear inconsistency in the manner in which NTC has applied its power or authority to issue a cease and desist order,” he said.

“There were no cease and desist orders issued to various franchises which expired while their applications were in Congress,” he said.

Retired Supreme Court Justice Antonio T. Carpio said the NTC’s actions constitute “unequal protection” under the law, which the proposed bill will address.

He also recommended that the panel provide retroactive effectivity to ensure the measure addresses the ABS-CBN case, once enacted.

The bill seeks to amend the Revised Administrative code by expanding the coverage of the provision granting the non-expiration of licenses to include franchises.

Senator Francis N. Pangilinan, who chairs the panel, has terminated hearings on the bill, which it plans to “report out by next week.”

Congress has until June 3 to act on remaining legislative measures before it goes on break until July 27. — Charmaine A. Tadalan

Lopez says pandemic warrants review of drug price controls

May 27, 2020 | 8:45 pm

TRADE Secretary Ramon M. Lopez proposed a review of drug price controls to help the pharmaceutical industry better respond to coronavirus disease 2019 (COVID-19).

Mr. Lopez said at the online membership meeting of the Philippine Chamber of Commerce and Industry Tuesday that the industry should discuss with the government what adjustments can be made to help better address the pandemic.

“Kailangan pag-usapan uli ‘yan kung makakatulong na ma-revise ulit ‘yung programa na ‘yan. (We need a new discussion on whether revising the policy will be helpful)”

“On the other hand, the industry is saying that we might not be able to enjoy the innovations (available),” particularly if price controls cover innovative products.

President Rodrigo R. Duterte in February issued Executive Order (EO) No. 104 setting maximum retail and wholesale prices on certain drugs. It will take effect in June.

The Pharmaceutical and Healthcare Association of the Philippines (PHAP) has said that the government stands to lose P28 billion in revenue from lost corporate tax, value-added tax, and customs duties. The industry group said its own sales will drop by P57 billion from P200 billion due to the price controls.

Mr. Lopez said in a mobile message to reporters that he will not yet comment on whether or not he supports the suspension or delay of the implementation of the order.

“I haven’t reviewed the impact of COVID-19 on the EO. I suggested that DoH (Department of Health) may need to review the pros and cons given different situations now under COVID.”

Executive Order 104 applies to drugs addressing the leading causes of mortality and drugs that have high price differences with those in the international market. It also applies to drugs that have limited competition in terms of generic counterparts or market access and drugs where the innovator product, the first drug containing the approved active ingredient, is the most expensive and most dispensed in the market.

The order applies to 133 drug formulas.

The pharmaceutical industry group has asked to withdraw the measure, “especially at this time when the government needs funds to fight COVID-19.”

PHAP President Beaver R. Tamesis said in a phone interview on Wednesday that price controls disincentivize international companies from entering the market, particularly if they produce drugs that address COVID-19.

He said that he is not certain if COVID-19 drugs are included in the current list of medicines subject to price controls.

He added that the policy environment created by the price control measures along with a lack of patent protection works against the Philippines.

“In an environment where there are price controls, where you cannot get your product registered (right away), what do you think will happen in terms of prioritization to get into the country? So it is a disincentive particularly when you have a crisis,” he said. — Jenina P. Ibañez