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DA sees adequate stocks of pork, poultry

THE Department of Agriculture (DA) expects the supply of pork and chicken to be sufficient even with the extension of the enhanced community quarantine (ECQ) to the end of April.

Agriculture Secretary William D. Dar said the pork and chicken supply remain at healthy levels despite challenges like African Swine Fever (ASF) outbreak and the H5N6 Avian Influenza, or bird flu.

“For instance, we are projecting an ending stock in June 2020 good for 62 days for chicken and 10 days for pork, based on the data from the Philippine Statistics Authority (PSA) and consultations with industry stakeholders themselves,” Mr. Dar said.

Mr. Dar added that by January, the chicken supply is estimated to exceed the annual requirement of 1.3 million metric tons (MT) by 24%, equivalent to more than 400,000 MT and enough to supply the country for 157 days.

The DA also noted that there is an oversupply of pork among producers in the Visayas and Mindanao.

However, the DA said the National Meat Inspection Service (NMIS) estimates a deficit of around 121,000 MT by the end of the year due to a 21% contraction in the size of the hog herd due to ASF.

“We acknowledge the projected deficit in pork that is why we are rolling out interventions to increase swine production this early. We are requesting funds under the Plant, Plant, Plant Program to increase hog production and support our swine raisers,” Mr. Dar said.

The DA’s P31 billion food security program, known as Plant, Plant, Plant, addresses increased production for many crops, including corn which is used in animal feed, as well as livestock and poultry.

It expanded support for growers of small ruminants like goats and sheep.

Such projects will each receive a budget of P1 billion from Plant, Plant, Plant.

The DA will also strengthen hog raising in ASF-free areas and implement its urban agriculture project which includes native chicken production.

Based on field reports and consultations with hog and poultry industry stakeholders, the DA estimates that 11 regions will post a chicken surplus while seven regions will produce excess pork.

“As we have more chicken than pork, we encourage consumers to shift to the former, and consider other poultry meat, eggs and processed products,” Mr. Dar said. — Revin Mikhael D. Ochave

NEA authorizes rural utilities to redirect funds to customer subsidies

THE National Electrification Administration (NEA) is allowing rural power utilities to realign their budgets to fund relief programs for poor electric consumers.

In a statement Friday, the rural power regulator said electric cooperatives (EC) may reallocate those budgets for working capital, operating expenses, and social responsibility initiatives.

“The budget already appropriated for the said activities may be realigned into working capital requirements necessary to sustain and ensure the continuity of EC operations and to (finance) their CSR (corporate social responsibility) programs such as ‘Pantawid Liwanag’,” NEA administrator Edgardo R. Masongsong said in a statement.

NEA earlier told the electric cooperatives to cancel their planned institutional activities for 2020, such as membership assemblies and district elections, due to the state of calamity declared after the coronavirus disease 2019 (COVID-19) outbreak.

To aid the government’s COVID-19 relief efforts, power cooperatives led by the Philippine Rural Electric Cooperatives Association Inc. (PHILRECA) launched the Pantawid Liwanag program, which seeks to cover the costs of consumers with electricity usage under 20 kilowatt-hours (kWh), or those categorized as lifeline consumers.

The group said that 86 ECs have committed to implement the program in their franchise areas, waiving their customers’ bills from the March 26 to April 25 period.

PHILRECA is also lobbying for ECs to tap into funds accumulated under Energy Regulation (ER) 1-94. The fund sets aside for power plant host communities a one centavo per kilowatt-hour (kWh) take from total electricity sales.

After the passage of Republic Act. No. 11469 or the Bayanihan to Heal As One Law, the Department of Energy ordered the use of ER 1-94 funds to support the COVID-19 containment efforts of local government units (LGUs).

The funds can be used to purchase medical equipment, provide special risk allowances for health workers and facilitate mass testing, among other COVID-19 response projects allowed by the department.

“We hope that distribution utilities will be given access to this Electrification Fund as they have already available records, networks, and manpower to implement a project for the member-consumer-owners in the host communities — even if they are remitted to LGUs- and allow them to subsidize the electricity bills of marginalized groups in the EC’s franchise area,” PHILRECA said in a statement on late Thursday.

PHILRECA reiterated an earlier request to include electricity subsidies in the list of benefits under the Social Amelioration Program of the Department of Social Welfare and Development (DSWD).

“[W]e hope that the IATF (Inter-agency Task Force on Emerging Infectious Diseases) would still consider our appeal for the government to provide financial assistance to marginalized consumers through the electric cooperatives as this would certainly augment the limited capability and funds of the co-ops,” it said.

PHILRECA noted that more than half of the 121 rural electric utilities have allocated P118.3 million to pay for electricity expenses of their poor customers. — Adam J. Ang

DICT offers free online courses for ECQ-displaced workers, MSMEs

PHILSTAR/MICHAEL VARCAS

THE Department of Information and Communications Technology (DICT) said Friday that it is offering free online courses to workers and micro, small, and medium enterprises (MSMEs) which have been affected by the government-imposed enhanced community quarantine (ECQ).

“The technical training or webinars aim to provide alternative learning opportunities for the working population whose livelihoods were disrupted as the government imposed the quarantine to mitigate the COVID-19 (coronavirus disease 2019) threat,” the DICT said in a statement.

It added that MSMEs are also encouraged to participate in the program.

The short courses offered are social media marketing and comprehensive affiliate marketing.

The department said the social media marketing course, which will run for seven days at two hours per session, “focuses on proper management of social media platforms to optimize social campaigns and promote brand growth in the digital market so affected MSMEs can strategize business plans even amidst the pandemic.”

The comprehensive affiliate marketing course is intended for those “who had been rendered jobless by the quarantine… (to) allow them to work freelance jobs.” The course will last 10 days and with 20 further hours of support.

It also plans to offer digital governance training for chief information officers, planning or policy officers, ICT service officers, ICT project managers, management information system (MIS) officers, and ICT practitioners from both government and private organizations.

“All slots for the various tracks had been filled, with training proper expected to run from April 16, 2020 onwards,” the DICT said.

DICT Secretary Gregorio B. Honasan said: “We will continue to work towards the mitigation of the COVID-19 threat for our workers, entrepreneurs and leaders through ICT-enabled capacity-building initiatives in line with the directives of President Rodrigo Roa Duterte and in support of the measures issued by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases.”

Recently, the Technical Education and Skills Development Authority (TESDA) offered free online training courses in electrical systems and electronics, tourism, entrepreneurship, ICT, and so-called 21st century skills.

It said a total of 19,598 students signed up between March 16 and March 29. — Arjay L. Balinbin

Fitch Solutions warns of heightened political risk associated with PPPs

FITCH Solutions Macro Research warned of a “high degree of political risk” in long-term contracts for public-private partnership (PPP) projects even with the government recently adopting a policy favorable to PPPs.

According to a Fitch Solutions note issued Friday, the government’s shift to a friendly stance towards PPPs, with a PPP framework considered to be the most comprehensive in the region will boost Philippine infrastructure as investments pour in.

However, Fitch Solutions said long-term PPP contracts are subject to political and regulatory risks, based on the record of government interventions that caused some projects to hit roadblocks.

“The Philippines’ established PPP framework will facilitate PPP transactions and lend support to growth of the infrastructure industry, which we expect to expand by 8.2% year—on-year, in real terms from 2021 to 2025. However, we highlight a high degree of political risk associated with long-term contracts in the Philippines that could result in difficulties post-commercial and financial close,” according to the note, PPP Profile: Philippine PPPs Subject To Political Risks.

Fitch Solutions said the government recently acknowledged the role that the private sector can play to provide investment. Early in the government’s term, economic managers had sought to carry out the infrastructure program largely with public funds and Overseas Development Assistance (ODA).

The government has since included more PPP-funded projects in its revised list of 100 infrastructure flagship projects, providing more opportunities for the private sector to participate in the program.

“We hold a moderately favorable view of the Philippine PPP market, given the government’s eagerness to engage the private sector through the use of PPPs,” it said.

It said political risks over the long term may arise due to changes in leadership, if the succeeding administrations do not agree with the priorities of the current government, and the revocation of concession agreements, which could weaken investor confidence.

Fitch Solutions cited the cancellation of the concession extension agreement for Metro Manila’s water concessionaires in December. This “derailed any long-term plans which these companies have devised, and in the short term, created a high degree of financial difficulties, in aspects such as borrowing and attracting new capital, due to revenue uncertainty.”

The Metropolitan Waterworks and Sewerage System (MWSS) privatized its water distribution operations in 1997, granting concessions to Maynilad Water Services Inc. and Manila Water Co., which now service the two zones of capital region.

The MWSS, which remains the industry regulator, granted extensions to the two water companies well ahead of the expiration of the original concession agreements, which were cancelled last year as part of a government crackdown on allegedly “onerous” concession contracts across all industries that were disadvantageous to the government.

All utilities, as well as transport companies and toll road operators, are also subject to regulatory approval for tariff hikes, adding another layer of risk.

“Loose definition of these provisions (in contracts) could have resulted in the numerous clashes between the concessionaires and MWSS, whenever the former attempts to hike water tariffs. These are also the provisions which were deemed ‘onerous’ by President Duterte, and is a motivating factor for his decision to revoke the concession extension agreements,” it added.

Fitch Solutions said another example is the Ninoy Aquino International Airport Terminal 3 Project which was implemented under the Ramos administration, but “several amendentns” to the contract were reportedly made during the Estrada administration.

When President Joseph E. Estrada was ousted, his successor Gloria Macapagal-Arroyo ordered a review of the Build-Operate-Transfer (BOT) contract.

“We view the change in leadership as a source of risk to long-term contracts between the government and private participants, as incumbent leaders may not necessarily agree with what their predecessors had implemented,” it said. — Beatrice M. Laforga

AIIB doubles size of COVID-19 borrowing facility to $10 billion

THE Asian Infrastructure Investment Bank (AIIB) said it doubled its available funding pool to $10 billion due to strong demand from countries seeking funds to contain the coronavirus disease 2019 (COVID-19) outbreak.

In a statement Friday, the Beijing-base AIIB said the volume of requests has “substantially exceeded” the $5 billion initial funding level for its COVID-19 Crisis Recovery Facility.

AIIB said clients have requested “immediate assistance” to ease pressure on health infrastructure; liquidity support for financial institutions to provide working capital and address cash shortages; and “immediate fiscal and budgetary support” for governments.

The crisis recovery facility can be tapped to support both public and private sector responses to the public health crisis and also fund recovery plans.

“We are facing a formidable challenge, with the depth and severity of the crisis growing with each passing day. It was imperative that we respond to the urgent and extraordinary scale of demand from our members to significantly increase the scope of our response,” AIIB President Jin Liqun was quoted as saying.

AIIB said its board has also approved measures that will streamline the bank’s partnerships with other development banks. It said it is closely working with other international financial institutions to establish a “network of support options, especially for the most vulnerable economies.”

Some AIIB member countries have submitted their proposals which are now up for review, including India for $500 million to expand testing capacity and healthcare system, Turkey for a $500 million credit line for two of its development banks which intend to provide working capital for businesses, and Indonesia, which is seeking $250 million to boost hospital capacity and improve emergency response efforts.

AIIB on April 3 approved $355 million for a China emergency health system project.

Finance Secretary Carlos G. Dominguez III has said AIIB is among the multilateral lenders that the government is considering for its funding needs.

Mr. Dominguez said economic managers will also present to the AIIB the Philippines’ recovery plan and long-term program to boost its healthcare system. — Beatrice M. Laforga

Bank loans to small firms to count in computing reserves

THE central bank announced a relief package for small businesses in the form of incentives for banks to to the sector, which is expected to have been hard hit by the coronavirus disease 2019 (COVID-19) crisis.

“The Monetary Board (MB) approved a package of measures to further reduce the financial burden on loans to micro-, small-, and medium-scale enterprises (MSMEs). Loans granted to MSMEs shall be counted as part of banks’ compliance with reserve requirements,” Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said in a statement issued late Thursday.

The decision was approved by the MB alongside another 50 basis-point (bp) rate cut which took effect Friday. Mr. Diokno said that the guidelines related to the small-business lending measure will be issued by the BSP.

ING Bank-NV Manila Senior Economist Nicholas Antonio T. Mapa said the latest package from the BSP mirrors actions taken to keep small businesses afloat elsewhere.

“Although a different model used by other countries such as the US and Indonesia that have specific funds set up primarily for SMEs, it follows the current trend of BSP flexing while investors look to the fiscal side of the fence to match,” Mr. Mapa said in an email.

He added that the initiative may prove to be a ”de facto” reduction in the reserve requirement ratio (RRR), which will free up funds for banks to inject into the economy.

The latest RRR reduction took effect April 3. The reserve requirement for big banks was reduced by 200 basis points (bps) to 12%. The central bank also reduced the minimum liquidity ratio for stand-alone thrift and rural banks by 400 basis points to 16% until year’s end to support to smaller lenders as the pandemic threatens to disrupt the financial sector.

However, Mr. Mapa said that previous trends show that timing determines the effectivity of such liquidity boosts.

“(A)s what we’ve seen from past RR reductions, credit conditions and the general state of the economy matter in the timing of such moves and throwing money at the problem is not as effective unless channeled effectively,” Mr. Mapa said.

Mr. Diokno has said that monetary policy works with a lag, a consideration that was weighed in recent actions.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said that BSP’s move is a form of aid for embattled firms during the pandemic.

“Linking this to reserve requirement compliance may further encourage banks to extend the ‘bayanihan’ help to the major employers of the economy. This is a direct boost to the most vulnerable businesses impacted by the COVID-19 pandemic,” he said in an email.

Mr. Asuncion said that guidelines to be imposed by the BSP need to be “clear and targeted” to ensure maximum impact for the intended beneficiaries.

The latest rate cut reduced overnight reverse repurchase, lending and deposit rates to 2.75%, 3.25%, and 2.25% effective Friday.

“These measures should thus mitigate the adverse impact of the outbreak on the economy by reinforcing the health and fiscal measures already being rolled out by the National Government. The monetary initiatives will also quicken economic recovery as the pandemic fades,” the BSP said in a statement. — Luz Wendy T. Noble

Naga rural bank turns in banking license

A RURAL bank in Bicol has been permitted to voluntary surrender its banking license, according to the Bangko Sentral ng Pilipinas (BSP).

In a circular dated April 14, BSP Deputy Governor Chuchi G. Fonacier said that the Monetary Board approved the voluntary license surrender of First Naga Rural Bank, Inc.

“The end-view of the voluntary surrender of the banking license is to proceed with voluntary dissolution and liquidation,” Ms. Fonacier said in a text message.

The Philippine Deposit and Insurance Corp. handles the liquidation and administration of assets of such lenders.

The BSP allows for a voluntary surrender of a banking license for lenders undertaking a voluntary dissolution and liquidation or those that want to become non-bank institutions.

Operating income of rural banks hit P29.627 billion in 2019, up from P26.554 billion a year earlier, according to the BSP.

Meanwhile, total assets stood at P243.891 billion in 2019, from P229.867 a year earlier. — Luz Wendy T. Noble

Peso weakens on rate cut, China GDP contraction

THE peso weakened Friday on continuing concerns about the coronavirus disease 2019 (COVID-19) outbreak’s impact on the gloabl and following the central bank’s rate cut.

The peso closed at P50.90 against the dollar, after finishing at P50.80 Thursday, according to data from the Bankers Association of the Philippines.

The peso opened at P50.78, with an intraday low of PP50.93 and a high of P50.72.

Dollars tradding volume was $491.6 million, up from $352.1 million Thursday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso weakened in the wake of another rate cut by the Bangko Sentral ng Pilipinas.

“The peso closed at P50.90 a day after the surprise (50 basis—point) cut in policy rates that reduce the interest rate income of peso-denominated fixed-income investments,” he said in a text message.

On Thursday, BSP Governor Benjamin E. Diokno announced that the Monetary Board slashed policy rates further by 50 basis points to encourage lending to support the economy during the COVID-19 crisis.

This brought down rates for overnight reverse repurchase, lending, and deposit to 2.75%, 3.25%, and 2.25%, respectively.

The cut came less than a month after the 50-bp reduction in a scheduled Monetary Board meeting on March 19, which took effect on March 20.

Mr. Ricafort added that latest economic data releases from China and the US also weighed on the peso.

“The sharp decline in China’s GDP (gross domestic product) in Q1 2020 also partly caused some increase in global risk aversion,” he added.

According to China’s Bureau of Statistics, the Chinese economy economy contracted 6.8% year-on-year in the first three months, the first retreat since at least 1992 when quarterly GDP records began.

A trader who asked not to be identified said the rate cut as well as new economic data from the US affected the peso’s performance.

“The peso weakened following the announcement of an off-schedule 50-point basis BSP point policy rate cut yesterday and as new US layoff numbers for this week remain elevated,” he said in an email.

Reuters reported that 22 million Americans applied for unemployment benefits over the past month, representing about 13.5% of the work force. — Luz Wendy T. Noble

Digital push gains support as virus disrupts business

By Adam J. Ang

MORE companies are compelled to revamp their business models to step into further digitalization as the global coronavirus disease 2019 (COVID-19) pandemic has greatly affected the ways of doing business in the present age.

In a webinar hosted by the Management Association of the Philippines on Friday, leaders of JG Summit Holdings Inc., SyCip Gorres Velayo (SGV) & Co., and 1771 Group of Restaurants discussed the ways they are balancing their commitments to manage their workforces, to serve their customers or clients, and to aid the country as it grapples with the public health crisis.

“I think it [pandemic crisis] has accelerated our own conclusion that we need to really do digital ways of working,” said Nicasio L. Lim, group senior vice president for corporate resources of JG Summit.

He noted that the present crisis has opened many opportunities for the digital integration of various businesses for further productivity.

“We realize there’s a lot of opportunities to increase our productivity to do mergers and integrations on the ways of how we do our systems and processes,” Mr. Lim said.

Besides flexible work arrangements, many businesses have implemented work-from-home scheme for their employees as the country is placed under enhanced community quarantine (ECQ).

Based on data from the online job portal JobStreet, almost half of Filipino workers (47.8%) desired the option to work from home.

Workers of professional services firm SGV & Co. have turned into a remote working scheme since the implementation of the ECQ.

“We are able to shift to a work-from-home working arrangement immediately during the ECQ given that we’ve invested highly in digital transformation over the past years,” Julie Christine O. Mateo, a talent leader from the company, said.

But the firm noted that workers faced some challenges with the work set-up, such as feelings of isolation, time management, and even personal struggles.

To resolve this, the human resources department of the company has regularly put up a series of activities intended to engage them.

“What keeps us busy right now is we have to continue to engage our people on a virtual set-up which is different from a face-to-face set-up,” Ms. Mateo said.

Meanwhile, companies providing essential services claimed they have enforced safety measures and protocols as ordered by the government.

The 1771 Group, which has temporarily shuttered their food business since the enforcement of the ECQ, planned to reopen restaurants by the end of April, according to Ramon Ricardo V. Gutierrez, the company’s chairman and chief executive officer.

JobStreet noted that employees, especially those who cannot work remotely, will also seek medical and insurance coverages for themselves and their families from their employers, aside from mandatory government benefits.

Also, it said that a majority of the workforce (88%) wanted double-pay during holidays or in such events as calamities.

Both JG Summit and the 1771 Group cited that health insurance companies have offered telemedical consultations for those who wish to avail them.

“How employers will treat their people today will greatly influence the decision of their employees after this pandemic. Employees will remember how their employers have treated them today,” Mr. Lim said.

JobStreet said employees are watching how companies respond to the COVID-19 crisis. “With this, it’s important that your company continues to make strides forward,” it said.

GRADUAL WORK RECOVERY
Meanwhile, the Department of Labor and Employment (DoLE) is considering a gradual return of employees to work as soon as the ECQ lapses by the end of the month.

“We are thinking that should the lockdown period really end on April 30… it should not be an abrupt report-to-work for all the workers. We are thinking of maybe a gradual [return], about 30%, and then after one month, another 50%, and then 75%,” DoLE Undersecretary Ana C. Dione said in the webinar.

This move will help companies make necessary adjustments in occupational safety and health (OSH) protocols for their workers, along with the implementation of social distancing measures being ordered by the government.

Likewise, DoLE will create some adjustments in the implementation of Republic Act 11058 or the OSH Law.

As part of the employment recovery plan of the Labor department, Ms. Dione said: “We are also putting up some programs for those who will be laid off or those who will be unemployed.”

SEC warns of illicit use of its logo

THE Securities and Exchange Commission (SEC) told the public to refrain from engaging with online pages that appropriate its official logo on social media for exploitative reasons.

In an advisory issued on Thursday, the corporate regulator noted that there are individuals and groups who use its official logo on social media platforms, such as Facebook, without its prior permission.

“[T]he public is hereby advised to exercise caution in dealing with any individual or group of persons who use the official SEC Logo in its social media accounts,” the advisory read.

It also told them to disengage from any activities or services being offered by those entities.

The regulator warned that those who will be found illegally using its logo for business or personal gains will be “severely dealt with by law and may incur criminal liability or otherwise sanctioned or penalized accordingly.”

It stressed that the National Historical Commission of the Philippines-registered logo is a property of the agency.

The SEC advised the public to only transact or communicate concerns on matters related to the agency at its website or personally through its offices across the country.

Further, it told them to report any social media pages using its official logo. — Adam J. Ang

Globe forges deal to acquire US technology firms

AYALA-LED Globe Telecom, Inc. said it has entered into an agreement to acquire for $4 million (P200 million) substantially all of the assets of US-based technology companies Cascadeo Corp. and Cascadeo Partners.

The telecommunications service provider said the purpose of the agreement is to speed up the development of its Information and communications technology (ICT) capabilities and solutions, and to provide a full suite of cloud-native products and services to its customers.

In a disclosure to the stock exchange, Globe said the executive committee of its board of directors approved on Friday the acquisition of the assets of Cascadeo Corp., Cascadeo Partners, and Cascadeo’s Philippine unit Cascadeo, Inc.

Globe said the committee also approved the creation of new entities through which the acquisition will be made.

“Globe, along with Cascadeo, will make follow up investments for growth capital to fund the company’s expansion strategies,” it said.

Cascadeo was founded in 2006 and focuses on automation, cloud-native platform, data analytics, serverless infrastructure, and programmatic security.

The company, headquartered in Seattle, Washington, also provides professional consulting services.

Globe said further that Cascadeo operates a Cloud Operations Center of Excellence in Manila, which serves its customers in both the US and the Philippines.

Globe President Ernest L. Cu said: “The joint venture with Cascadeo will further strengthen our ability to invent, innovate, and experiment. We will be leveraging on Cascadeo’s Cloud-Native Consulting and Managed Services capabilities to further solidify our credibility as a cloud solutions provider for enterprises and small and medium business customers who are ready to digitally transform.”

Meanwhile, Cascadeo Corp. Chief Executive Officer Jared Reimer said: “We’re excited to have a partner like Globe in the next stage of our growth journey. Their commitment to cloud-first and speed of adoption are rare to see in large organizations.”

He also cited Globe’s “balanced achieving business goals with taking care of their people.”

“We continue to be amazed by the talent of the Filipino workforce and partnering with Globe will be instrumental in helping us become an employer of choice as we broaden our footprint in the Philippine market,” Mr. Reimer said. — Arjay L. Balinbin

Robinsons Land raises oversubscription option for P15-B bonds

ROBINSONS LAND Corp. (RLC) has doubled the over-subscription option for its P15-billion fixed-rate bonds, a move that is usually prompted by greater demand for its debt offering.

In a stock exchange disclosure on Friday, the Gokongwei-led property developer announced that its board agreed to raise the over-subscription option for its latest bond offer to P10 billion from P5 billion.

RLC did not provide further details as these are yet to be finalized.

In March, the company offered its peso-denominated issuance, which has an aggregate principal amount of P10 billion.

The bond offer is subject to the requirements of the Securities and Exchange Commission and the rating process of the Philippine Rating Services Corp.

RLC is the real estate and hotel arm of listed JG Summit Holdings, Inc. The company posted a 6% increase in net income in 2019 to P8.69 billion as its revenues jumped to P30.58 billion.

On Friday, shares in RLC grew by 5.83% to close at P15.26 each. — Adam J. Ang

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