Transcom sets work plan during lockdown

March 25, 2020 | 12:02 am

THE local unit of business process outsourcing firm Transcom Worldwide AB has laid down the work arrangement for employees during the Luzon-wide enhanced community quarantine.

“Transcom has many selfless employees camping in on our sites as well as local accommodation as prescribed and in strict accordance with the DTI (Department of Trade and Industry), DoLE (Department of Labor and Employment) and City Government directives throughout the lockdown,” said Mark Lyndsell, chief executive officer of Transcom Global English Region.

The government ordered the lockdown on March 16 until April 12, 2020.

“In the course of the last few days we have also moved many hundreds of our employees to work at home,” Mr. Lyndsell said.

“All those working whether on site or from home will be paid as normal during the lockdown,” he added.

Mr. Lyndsell said for those not camping in, the company has authorized the payment of pre-planned time off in accordance with the directives from the Labor department.

DLSU serves as a sanctuary to the homeless during enhanced community quarantine

March 25, 2020 | 12:01 am

De La Salle University is now serving as a temporary sanctuary for the homeless in Manila during the enhanced community quarantine. Sixty-one people, among them women and elderly, are currently staying at the 2^nd floor of the Enrique Razon Sports Center until the Luzon-wide lockdown is lifted. The initiative is in partnership with the Divine Word Missionaries (SVD) through their KAin, LIgo NG ayos (KALINGA) Program. SVD volunteers are looking after the basic needs of those who are taking shelter at the Sports Center. Financial donations to buy food, medicines, and health kits are accepted through the AJ KALINGA Foundation, Inc., Asia United Bank (AUB), AUB Peso Savings Account no.: 082-11-000496-2. For proper documentation, send deposit slips to lasallianmission@dlsu.edu.ph.

Life insurers to adopt special process for all COVID-19 claims

March 25, 2020 | 12:01 am

THE LIFE INSURANCE sector will adopt a special management process for claims related to the new coronavirus disease 2019 (COVID-19) to help policyholders get assistance faster.

“PLIA (Philippine Life Insurance Association, Inc.) in partnership with the Insurance Commission (IC) is adopting a special claims management process for COVID-19 related claims that will ensure relaxed requirements and expeditious settlement. This is the least our industry can do to provide assistance to our policyholders in their time of need,” PLIA said in a statement sent to reporters.

PLIA said companies in the life insurance sector have already implemented other general relief measures for policyholders such as a grace period for premium payments.

For instance, life insurer Manulife Philippines moved the deadline for filing COVID-19-related claims to June 30 from March 10 initially and extended the payment period for premiums to 60 days after due date.

Insular Life (InLife) also extended its grace period for premium payments due March to April 30 and assured all of its policyholders, except for those with accident-only policies, are covered against COVID-19.

“The life insurance industry is ready to respond to any eventualities that this outbreak may bring in terms of potential claim,” PLIA said in its statement.

It added that recently, they saw an “alarmingly” high mortality rate in the country at 8.5% on March 16 against the global average of 3.9%. However, PLIA said this went down to 6.5% as of March 23 “as the testing capacity of our health care network starts to expand with the increased availability of testing kits.”

“We remain confident that with the prudent regulations prescribed by the Insurance Commission to assure financial health of insurance companies we would continue to serve the industry and its policyholders well,” PLIA said.

Insurance Commissioner Dennis B. Funa issued Circular Letter (CL) 2020-18 “strongly” encouraging insurers to extend the grace period of premium payments of all insurance, pre-need and health maintenance organization policies by 31 days amid the ongoing crisis.

The IC also extended the filing of 2019 annual statement and audited financial statements of insurance companies until June 1 from the initial April 30 deadline to give relief to businesses whose operations were disrupted due to the month-long lockdown for the entire Luzon until April 12.

The IC, through CL 2020-21 published yesterday, also deferred the issuance of show cause order notices “until further notice” for insurance companies that failed to meet the minimum net worth requirement of P900 million last year.

“The show cause order shall be put on hold until further notice. Nonetheless, every company affected by the circular is hereby directed to comply with the minimum net worth requirement and the minimum capital investment requirement notwithstanding the suspension of the show cause order,” the document read. — BML

AC Energy completes stake purchase of Negros solar farms

March 25, 2020 | 12:01 am

AYALA-LED AC Energy Philippines, Inc. (ACEPH) on Tuesday announced that it has finished its purchase of controlling stakes in two Negros Occidental solar farms within its target date.

In November, the Ayala energy unit signed a share purchase agreement to acquire shares of Macquarie Infrastructure Holdings (Philippines) Pte. Ltd., Langoer Investments Holding B.V., and the Government Service Insurance System in both San Carlos Energy, Inc. (Sacasol) and Negros Island Solar Power, Inc. (Islasol).

AC Energy Philippines’s wholly-owned subsidiary Giga Ace 2, Inc. paid P2.981 billion to acquire the shares of the investors in Sacasol, an increase by P200 million from the earlier reported purchase price of P2.772 billion.

It acquired 6,996 common B shares and 36,246 redeemable B shares in the 45-megawatt solar farm, which operates under the feed-in-tariff regime of the Renewable Energy Act.

Meanwhile, Giga Ace 3, Inc., ACEPH’s other subsidiary, also bought the shares of the same group of investors in the 80 MW Islasol for P1.629 billion.

The share purchases were in part of the listed firm’s target of achieving at least 2 gigawatts of attributable renewable energy capacity by 2025.

The deals were expected to close on or before March 31.

On Tuesday, shares in ACEPH went up 1.32% to close at P1.53 apiece. — Adam J. Ang

How PSEi member stocks performed — March 24, 2020

March 25, 2020 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Tuesday, March 24, 2020.

IOC, Japan agree to delay Summer Olympics to 2021

March 24, 2020 | 9:20 pm

TOKYO/ATHENS — Japan and the Olympics movement decided on Tuesday to delay this year’s Tokyo Games into 2021 as the coronavirus crisis obliterated the world’s last major imminent sporting event.

It was the first time in the Olympics’ 124-year history that they had been postponed, though they were cancelled outright several times during the two 20th-century World Wars.

After a call with International Olympic Committee (IOC) president Thomas Bach, Japan’s Prime Minister Shinzo Abe said the July 24-Aug. 9 event would be rescheduled for the summer of 2021 at the latest as proof of victory over the coronavirus.

“We asked President Bach to consider postponement of about one year to make it possible for athletes to play in the best condition, and to make the event a safe and secure one for spectators,” Abe said.

“President Bach said he is in agreement 100 percent.”

There was no immediate word from the IOC, though its executives were due to meet later on Tuesday.

Athletes were sad but relieved after weeks of worrying and struggling to train as the world headed into virtual lockdown from the disease that has claimed more than 16,500 lives.

“I compete in a little bike race, which is nothing compared to what is going on in the world right now,” American Olympic BMX champion Connor Fields said. “No sport is more important if it means more people might potentially die from this.”

Pressure on the IOC and its powerful president Bach had been accelerating fast in recent days, with Canada and Australia refusing to participate if the Games went ahead in the summer.

Athletes wholeheartedly endorsed the delay, given health risks and disruption to their training as gyms, stadia and swimming pools shut down around the world.

“To be honest, I’m left reeling and feeling a little lost. But the goal posts haven’t disappeared — just shifted. It’s time to recalibrate and fire up for the next challenge,” said Australia’s two-time Olympic champion swimmer, Cate Campbell.

The coronavirus outbreak has raged around the world since early this year, infecting nearly 380,000 people and wrecking sports events from the soccer Euros to Formula One.

Postponement is a massive logistical headache for hosts Japan, which has pumped in more than $12 billion of investment.

But a poll showed about 70% of the Japanese agree with a delay.

Tokyo Governor Yuriko Koike told reporters the delayed Games would still be branded “Tokyo 2020.” — Reuters

Peso strengthens anew on RRR cut

March 24, 2020 | 9:00 pm

THE PESO strengthened versus the dollar on Tuesday as the central bank cut banks’ reserve ratio anew and on the US Federal Reserve’s aggressive initiatives to lessen the economic impact of coronavirus disease 2019 (COVID-19).

The local unit closed at P50.90 versus the greenback on Tuesday, surging 43 centavos from its P51.33-a-dollar finish on Monday.

The peso opened the session only slightly better at P51.20 per dollar. Its weakest showing was at P51.21, while its intraday best was its close of P50.90 against the greenback.

Dollars traded went up to $563.9 million yesterday from $422.7 million on Monday.

A trader attributed the weaker dollar to further stimulus from the US central bank.

“The peso appreciated due to the broad softening of the greenback after the US Federal Reserve announced more drastic monetary policy easing measures overnight,” the trader said in an e-mail.

The Fed on Monday announced extraordinary array of programs to backstop an economy reeling from sweeping restrictions on commerce that scientists say are needed to slow the coronavirus pandemic and ultimately keep more people safe, Reuters reported.

For the first time, the Fed will back purchases of corporate bonds, backstop direct loans to companies and “soon” will roll out a program to get credit to small and medium-sized business. It also said it will expand its asset purchases by as much as needed to stabilize financial markets.

The series of actions marks a massive intervention by the US central bank beyond the financial markets, where it has so far concentrated its firepower, into the real US economy.

Aside from the Fed’s move, the Bangko Sentral ng Pilipinas’ (BSP) announcement of a 200-basis-points (bps) reduction in universal and commercial banks’ reserve requirement ratio (RRR) also boosted the peso, according to Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“The latest cut could also help support and shore up confidence on both the local economy and financial markets, including the peso,” Mr. Ricafort said in a text message.

The move will bring the RRR of big banks to 12% effective March 30, according to BSP Governor Benjamin E. Diokno. He said potential cuts to the reserve requirements for other banks and non-bank financial institutions will also be explored.

The reserve ratios of thrift and rural banks are at four percent and three percent, respectively. The RRR of non-banks with quasi-banking functions is at 14%.

“The RR cut is intended to calm the markets and to encourage banks to continue lending to both retail and corporate sectors. This will ensure sufficient domestic liquidity in support of economic activity amidst this global pandemic due to the coronavirus disease,” the central bank said.

For today, the trader expects the peso to move around the P50.85 to P51.05 levels, while Mr. Ricafort gave a forecast range of P50.75 to P51. — L.W.T. Noble with Reuters

Shares rebound on Fed, BSP stimulus measures

March 24, 2020 | 9:00 pm

LOCAL SHARES gained some momentum yesterday as investors reacted to news of monetary easing measures in the Philippines and United States.

The benchmark Philippine Stock Exchange index (PSEi) added 30.90 points or 0.65% to 4,774.27 on Tuesday. The broader all shares index also climbed 20.93 points or 0.71% to 2,947.95.

“The market inched up today as the US Fed pledged quantitative easing measures which seem to be ‘bottomless’,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message on Tuesday.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan pointed to the same driver, but noted that “some gains faded in the end as Senate failed to reach a stimulus agreement.”

The PSEi hit as high as 4,864.86 intraday until gains were trimmed to as low as 4,771.78.

Mr. Limlingan said among the things that helped sustain the climb was the announcement of the Bangko Sentral ng Pilipinas (BSP) that it is reducing big banks’ reserve requirement ratio (RRR) by 200 basis points starting March 30.

The central bank said this is expected to support domestic liquidity to combat the effects of the coronavirus disease 2019 (COVID-19).

“The sudden move is projected to inject an additional P200 billion into the economy and provide some cushion to the perceived slowdown,” Mr. Limlingan said.

Meanwhile, the US Federal Reserve on Monday rolled out an extraordinary array of programs to backstop an economy reeling from sweeping restrictions on commerce that scientists say are needed to slow the coronavirus pandemic and ultimately keep more people safe, Reuters reported.

Back home, sectoral indices at the PSE closed mixed yesterday. Property rose 90.86 points or 3.72% to 2,531.46; holding firms improved 59.04 points or 1.27% to 4,702.65; and mining and oil improved 49.29 points or 1.26% to end Monday’s session at 3,946.76.

On the declining side were industrials, which lost 187.72 points or 3.16% to 5,752.53; services, which fell 10.55 points or 1.01% to 1,030.54; and financials, which dipped 0.26 point or 0.02% to close the day at 1,103.87.

Some 565.34 million issues valued at P5.09 billion switched hands yesterday, from Monday’s 413.31 million issues worth P5.68 billion.

Advancers stood at 114, decliners at 68, and unchanged names at 31.

Net foreign selling grew to P1.05 billion from P443.77 million on Monday.

“Concerns remain as… Fitch…has downgraded its outlook on the Philippines’ full-year gross domestic product from 6% to 4%, (and revised) its outlook on our banking sector from ‘stable’ to ‘negative’. The daily rise in infections will keep investors on their toes until we see signs that it has been contained,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail. — Denise A. Valdez with Reuters

Vehicle sales seen flat in 2020; autos considered ‘non-essential’

March 24, 2020 | 8:37 pm

VEHICLE SALES in the Philippines are expected to be flat in 2020 as the enhanced community quarantine in Luzon shutters dealerships, Fitch Solutions Country Risk and Industry Research said in a downgrade of its previous estimate of 7.4% growth.

The automotive sector outlook published by Fitch Solutions Monday projected overall new-vehicle sales growth in the Philippines of 0.4% to 371,456 units in 2020.

“The closures of non-essential business activity will negatively impact vehicle sales in H120, as physical automotive dealership activity grinds to a halt which will prevent consumers from making new purchases,” it said.

In 2019 vehicle sales rose 3.5% year-on-year to 369,941 units, according to data from Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA). This represented a recovery from the 2018 industry slump, when sales fell 16% to 357,410 units.

President Rodrigo R. Duterte last week announced a month-long Luzon lockdown in a bid to contain the spread of COVID-19, closing most private businesses and banning public transport. Toyota Motor Philippines Corp., which manufactures cars in Laguna, suspended production until mid-April.

Fitch Solutions said that the inability to make vehicle purchases during the lockdown will cause a significant drop in sales, and economic and employment uncertainties will mean spending will likely go to essential goods.

“We believe that the fear created by COVID-19 will prompt consumers to hold off spending on non-essential goods, such as cars.”

Fitch Solutions expects lower sales for both passenger and commercial vehicles in 2020, but over the longer term it sees the market growing until the end of the decade.

The report said passenger vehicle sales will fall 1% in 2020, but will grow by an annual average of 6.8% from 2020–2029 as incomes rise and car-ownership rates rise from a low base.

“We hold a more bullish outlook for sales from 2021 onwards, as pent-up demand, due to delayed vehicle purchases, and the reopening of vehicle retail operations lead to a resumption of the expected expansion period in (passenger vehicle) sales,” it said.

“We believe that this increased demand for (passenger vehicles) will be led by higher incomes in the coming years as the country’s long-term economic outlook remains favorable.”

Commercial vehicle sales are expected to increase by 1% in 2020, but in this segment higher growth is projected up to 2029.

The modernization program for public utility vehicles that incentivizes the replacement of older jeepneys with environmentally-friendly light commercial vehicles, it said, is expected to face headwinds.

“In light of the total ban on all forms of public transport… transport operators will face significant losses in revenue due to a collapse in commuter demand, thus prompting them to hold off on their planned fleet renewals.”

But Fitch Solutions said it expects that the modernization program and the government infrastructure program may later on increase commercial vehicle demand.

According to CAMPI-TMA data, year-on-year sales for passenger vehicles were flat at 109,197 units sold in 2019. Commercial vehicle sales in 2019 grew 5% to 260,744 vehicles.

Socioeconomic Planning secretary Ernesto M. Pernia said GDP growth may slow to 4.3% in 2020 if COVID-19 continues to spread and the lockdown extends to the second semester. GDP growth in 2019 was 5.9%, its lowest level in eight years. — Jenina P. Ibañez

Government authorizes negotiated procurement under state of calamity

March 24, 2020 | 8:37 pm

THE Department of Budget and Management (DBM) said the government procurement policy board (GPPB) has authorized a simplified procurement process to expedite transactions during the state of calamity declared in response to the COVID-19 outbreak.

In a statement, the Budget department said GPPB Resolution No. 03-2020 allows procurement projects to apply the rules of Negotiated Procurement (Emergency Case) during the state of calamity, which will have a duration of six months.

The DBM said that “end-user units” or other procuring units can directly recommend revisions to the head of the Procuring Entity (HoPE) and do not need to wait for the Bids and Awards Committee’s (BAC) recommendation in case of revisions to its annual procurement plan (APP).

“Moreover, a separate written confirmation requirement from the HoPE is not needed prior to the approval of the contract,” the statement read.

DBM said the HoPE can also allow the end-user or other procuring units to “directly negotiate with a legally, technically, and financially capable supplier, contractor, or consultant. Hence, the BAC need not be the one to negotiate or procure.”

Meanwhile, the HoPE can also assign awarding of contracts to any official of the procuring body provided that there is no conflict of interest.

Revised APPs must involve projects related to the emergency situation. This includes “provision of food packs, lease of venue or real property for use as quarantine facilities, purchase of COVID-19 testing kits, among others.”

However, the HoPE will have to confirm if funds are available to cover the procurement exercise.

President Rodrigo R. Duterte placed Luzon under enhanced community quarantine until April 12 to slow the spread of COVID-19. — Beatrice M. Laforga

BIR tax amnesty deadline extended

March 24, 2020 | 8:36 pm

BUREAU of Internal Revenue (BIR) has extended the cut-off date for the tax amnesty on delinquencies by another 30 days to May 23 as a form of relief to taxpayers affected by the COVID-19 lockdown.

The BIR released Revenue Regulations No. 5-2020 Tuesday, allowing the extension of the cut-off date for availing of the tax amnesty on delinquencies from the original April 23 deadline, in light of business disruption caused by the pandemic and the resulting lockdown.

“All persons… with internal revenue tax liabilities covering taxable year 2017 and prior years may avail of the Tax Amnesty on Delinquencies within one year form effectivity of these Regulations or until April 23, 2020. However, the said date may be extended if the circumstances warrant and extension such as is case of country-wide economic or health reason/s,” according to the regulations, approved by Finance Secretary Carlos G. Dominguez III.

Through series of revenue memorandum circulars (RMCs) earlier, the bureau also extended other filing and payment deadlines, including the income tax return (ITR) filing, which was extended to May 15 from the April 15.

In RMC 30-2020 dated March 23, the BIR said the deadline for filing and payment will be extended for another 30 days if the month-long Luzon-wide lockdown is extended, if the May 15 extension falls within the new quarantine period.

“If the ECQ (enhanced community quarantine) period (is) extended further, then filing of returns and payment of the corresponding taxes due thereon and submission of reports and attachments falling within the enhanced extended period shall also be extended by 30 calendar days,” according to the RMC, a copy of which was released yesterday.

In RMC 31-2020, the bureau also extended for 30 days the submission deadline for other documents such as the letter answer to notice of informal conference, response to the preliminary assessment notice, protest letters, supporting documents for requests for re-investigation of audit cases, appeals for reconsideration to the commissioner after a final decision on disputed assessments, and other similar letters.

It also moved the deadline for filing applications for value-added tax refunds for those falling due on March 31 to April 30.

The government hopes to collect P3.49 trillion this year to fund its P4.1-trillion spending plan, with the remaining funds to be sourced from its borrowing activities. The BIR is tasked to collect P2.576 trillion.

President Rodrigo R. Duterte placed Luzon under ECQ until mid-April to slow the spread of COVID-19. — Beatrice M. Laforga

Agri dep’t agencies to host Kadiwa farmers’ markets

March 24, 2020 | 8:35 pm

AGRICULTURE Secretary William D. Dar has instructed various agencies of the Department of Agriculture (DA) to designate portions of their compounds as markets for agricultural products.

Additional stalls for the Kadiwa ni Ani at Kita program will go up around the National Capital Region (NCR) to give the public more access to produce during the COVID-19 quarantine.

“We want to provide the public as many options possible to access affordable and nutritious food. The DA offices shall be ready to accommodate buyers but they should, of course, follow the quarantine guidelines and physical distancing procedures,” Mr. Dar said.

Kadiwa ni Ani at Kita links local government units (LGUs) with farmers for direct distribution and delivery of commodities.

The farmers’ market concept was tested on March 21 and 22 in Cainta, Rizal.

Participating farmers’ associations included Baguio’s Hola Green, Batangas Organic and Natural Farming Association, Agripreneur Farmers and Producers Association, and Mama Agnes of Bataan.

“It’s a win-win for both consumers and producers with the Kadiwa event in Cainta for the farmers’ groups and residents enjoying affordable and nutritious agri-fishery products amid this health crisis,” Mr. Dar said.

The DA plans to roll out more Kadiwa stores around Metro Manila to ease the supply situation which may have come under pressure due to movement restrictions in and out of the National Capital Region.

Assistant Secretary for Agribusiness and Marketing Kristine Y. Evangelista said targeted locations are Quezon City, Pasig, Manila, Pasay, and Taguig.

“At least 66 Kadiwa sites will be opened nationwide,” Ms. Evangelista added. — Revin Mikhael D. Ochave