AT LEAST 16 business establishments and barangay chairpersons in Tacloban’s downtown area received citation tickets on February 26 as the city’s Solid Waste Management Team made the rounds to monitor the ‘No Segregation, No collection’ policy, the local government reported. The city administration has started stricter implementation of local laws on garbage management following an information campaign last week. Section 26 of City Ordinance No. 2017-13-37 authorizes the City Environmental and Natural Resources Office to issue citation tickets, including to village leaders who may be held responsible for failure to enforce waste policies. Violators will pay a fine ranging from P300 to P1,000 or render community service. The city also has an Anti-Littering Ordinance passed in 2007, which prohibits indiscriminate throwing of garbage as well as dumping trash in public spaces before the scheduled time of collection. Anti-littering fines are P500 for the first offense, up to P1,000 for succeeding violations, or community service for five to 10 days.
A MONITORING station will be constructed at the Bubunawan Irrigation Intake Facility in Bukidnon to improve data gathering and flood forecasting for the Cagayan de Oro River Basin. The Telemetered Rainfall and Water Level Gauging Station will be undertaken by the National Irrigation Administration (NIA) and the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), NIA announced on Wednesday as the two agencies signed an agreement for the project. “There is a need to install automatic rainfall and water level gauging equipment and construct repeater/relay towers to enable the speedy transmission of hydrological data… Thus, effectively carrying out flood forecasting and warning activities,” NIA said. PAGASA will be responsible for fund sourcing and implementation. The project is part of the government’s program to mitigate the impact of flooding through the establishment of early warning systems in all major river basins in the country, NIA said.
ENVIRONMENT SUMMIT
Cagayan de Oro City, the regional center and most urbanized part of Northern Mindanao, suffers from recurrent flooding and was the hardest hit area during typhoon Sendong (international name: Washi) in December 2011. It is hosting the 3rd Philippine Environment Summit, ongoing from Feb. 26–28, which focuses on concerns and solutions relating to food security, healthy environment, and sustainable economy. Cagayan de Oro Mayor Oscar S. Moreno, in his welcome speech for the gathering, presented local initiatives for improving disaster resilience not just in the city but for the entire Northern Mindanao Region. “Kami rin (We too) in our small ways, inspired by the Cagayan de Oro River Basin Management Council… We learned many lessons from Sendong… Ang ating (Our) battle cry is no more Sendong.”
The multi-sector Cagayan de Oro River Basin Management Council, created in 2010, has been undertaking rehabilitation and preservation programs for the interlinked watersheds, rivers, forests and seas. — MSJ
COTABATO, which is still in the midst of rehabilitation efforts for the series of earthquakes in October last year, was rocked by a magnitude 4.3 earthquake Thursday morning, with a reported intensity of 5 in the capital Kidapawan City and Tulunan town. The tremor was recorded at 9:03 a.m. with epicenter in Makilala town, based on the monitoring of the Philippine Institute of Volcanology and Seismology (Phivolcs). Members of the Provincial Disaster Risk Reduction and Management Office and other emergency responders immediately conducted an assessment and ocular inspection within the capitol compound in Kidapawan. Phivolcs said no aftershocks were expected.
BANANA EXPORTS to China, the Philippines biggest market in the last two years, is normalizing after a month-long disruption due to the COVID-19 spread, the Pilipino Banana Growers and Exporters Association (PBGEA) said.
“A month after the dwindling volume of shipments that created a slump in banana price from an average of USD8.00 per box to USD1.80 per box causing panic to small growers, this has slowly improved owing to the normalization of the situation in more ports, reopening of supermarkets and retail shops, as well as resumption of banking services,” the group, composed of the industry’s big players, said in a statement Thursday.
PBGEA also cites a Chinese importer’s assurance that the Philippines will remain the preferred source of bananas given its competitive cost.
“The demand from China is always there, even though there was disruption shortly due to the corona virus outbreak. Similar to the widespread episode of severe acute respiratory syndrome (SARS) in 2002, we do not see a long-term downward trend for bananas from the Philippines. The concern of Filipino exporters of a closure of China market is remote as the option to replace Philippine bananas is costly and unstable,” the importer said.
Fresh banana is the country’s top agricultural export commodity, with 2019 shipments valued at $1.93 billion. — MSJ
ABS-CBN sues 2 illegal IPTV operators for pirating content
ABS-CBN Corp. announced on Thursday that it is suing two individuals in the United States for pirating the broadcast firm’s content through illegal internet-based protocol television (IPTV) boxes.
In a statement, the media giant said it is seeking “millions” in damages from the suspects for “allegedly pirating ABS-CBN’s copyrighted content via illegal IPTV boxes.”
Lawsuits were filed in federal courts against Alberto Ace Mayol Alfaro in the Southern District of Texas and Romula Araneta ‘Jon’ Castillo in the Central District of California.
The network said the Los Angeles Police Department arrested Mr. Castillo on Feb. 7 for “alleged violations of California Penal Code 593(d).”
The network also said the complaints include access to live programming “without paying the appropriate fees for such products, causing irreparable harm and damages to ABS-CBN.”
“We are thankful for the cooperation of the LA Police Dept. in investigating and arresting Castillo, a kingpin in this pirate box scheme. Defrauding the public by selling these fake boxes is a scam operation and preying on innocent people. We are very happy to have the cooperation of the police to enforce against these pirates,” ABS-CBN Head of Global Anti-Piracy Elisha Lawrence said.
ABS-CBN has been going after companies and individuals selling set-top boxes that provide access to its copyrighted movies and TV shows.
In December last year, the Lopez-led company announced that it filed a complaint at a US federal court in the Southern District of Texas against a certain Anthony Brown and 1700 Cuts Technology, seeking $4 million in damages for alleged content piracy and trademark infringement.
TFC.tv makes ABS-CBN shows and movies available for overseas markets such as the US and Canada.
An ABS-CBN official earlier estimated it lost around P300-400 million in potential movie revenues in 2018 due to piracy.
ABS-CBN Head of Infosec and Data Protection Officer Jay C. Gomez said in November that the company’s film revenues have continued to grow, racking up more than a billion pesos annually.
For the first nine months of 2019, ABS-CBN’s attributable net income rose 45% to P2.36 billion, on the back of an 8.6% rise in revenues to P32 billion.
The bulk of revenues came from advertising revenues, which went up 15% to P17.11 billion. — Arjay L. Balinbin
SC grants protection order to slain communist member’s family
THE SUPREME Court (SC) issued a permanent protection order for the estranged wife of a slain alleged member of the communist New People’s Army (NPA), and their two children against the Philippine National Police.
In a statement, the SC Public Information Chief said the court granted the petition for writ of amparo filed by Vivian A. Sanchez, who alleged that she and her daughters were subject to surveillance by the police after her estranged husband, Eldie Labanghisa, died.
“The totality of obtaining circumstances likewise shows that Vivian and her children were the subject of surveillance because of their relationship with a suspected member of the New People’s Army, creating a real threat to their life, liberty or security,” the high court ruled.
Ms. Sanchez first filed a petition for writ of amparo before the Regional Trial Court of San Jose Antique in August 24, 2018 against Police Superintendent Anthony D. Darroca, Police Superintendent Leo Irwin D. Agpangan, Police Chief Superintendent John C. Bulalacao, and the police officers under their authority due to the surveillance of the family.
The trial court issued the writ and temporary protection order on August 25 on the same year but dismissed the petition after a summary the following month, saying she failed to substantiate her claim that she became a person of interest after she identified her husband’s body.
The lower court said she failed to allege the acts of the police officers which threatened her security and liberty.
She then brought the case before the SC.
“While pursuing rebels is a legitimate law enforcement objective, the zeal of our police must be bound by the fundamental rights of persons, especially the loved ones of persons in interest. After all, the values we have in our Constitution are what differentiate us from lawless elements,” says the ruling penned by Associate Justice Marvic M.V.F. Leonen. — Vann Marlo M. Villegas
When Vantablack, then the world’s darkest material, came out in 2017, it sparked chaos in the art community. Surrey NanoSystems, its creator, had granted sculptor Anish Kapoor exclusive rights for artistic use of this “blackest black”– and many artists cried foul at the seemingly selfish move.
Perhaps the most famous reaction came from fellow artist Stuart Semple, who — as a form of both protest and performance art — made his self-created “pinkest pink” pigment available to anyone, with the caveat that Anish Kapoor never get his hands on it.
On the other hand, Ben Jensen, founder and CTO of Surrey NanoSystems, felt that artists were justified in reserving such rights. “You go back to when [J.M.W.] Turner [English Romantic period painter] was creating his blacks and you go up to him and say, ‘Hey, you created an amazing black, I want it,’ You’d have been laughed out of the art scene,” he said.
Whether you’re a Renaissance painter shifting to oil paints to keep up with the era’s stylistic demands, or a contemporary artist-and-scientist team developing a material even darker than Vantablack for a new piece, artists have always pushed for and utilized innovative tools in their work.
And with Fourth Industrial Revolution (4IR) technologies making their way into the art community, exciting possibilities– as well as new ways of feeling and experiencing– are being unlocked.
Different expressions
To an artist, the choice of medium is as instrumental as the actual art itself. With fresh “canvases” like Internet of Things (IoT), artificial intelligence (AI), augmented reality (AR), and virtual reality (VR) now at their fingertips, artists are able to explore new ways to express their thoughts and interpret the world around them.
Projects like Hito Steyerl’s Actual Reality and Estella Tse’s Two Sides of the Same Coin use augmented reality to discuss inequality and identity, respectively. The First Thinking Sculpture, inspired by Catalan architect’s belief in art as a sign of the times, uses IBM’s AI Watson to analyze opinions on AI, IoT, and security and moves its segments according to these trends.
Locally, Issay Rodriguez uses VR in her installation Doon, part of the upcoming Art Fair Philippines 2020. Inspired by her experiences with Aeta wild honey gatherers, participants are immersed in a fantastical beehive where they help bees gather honey and are rewarded for their actions. “My work was incepted not just to push the boundaries of virtual space, but also to weigh in the equal importance of physical play or space,” she said. “The Link is the perfect venue, because… of its multi-layer car park, so it’s like reliving the trek inside the forest but in a different sense.”
Aside from the art itself, 4IR technologies are also being used to improve and enhance the preservation and appreciation art. The National Museum of China uses AI and IoT to create customized environments for each specimen and predict potential threats to their infrastructure. Visitors to Connect, BTS, a series of global art installations commissioned by the eponymous South Korean band, can access augmented reality videos of the members explaining the piece.
For Ibba Bernardo, CEO of I AM Cardboard PH, these innovations in the art community make our digital experiences much more natural and engaging. “The user experience and interface [of mobile devices]… [they’re] catered to humans, but the device isn’t. The fact that our heads are bowed down and we consume media in tiny, 5×3 format screens isn’t optimal… That is our next [step], where we can interface with information with our heads held up high like human beings, not bent down at an angle.”
A palette of opportunities
As more and more members of the art community incorporate 4IR technologies in their projects, it’s produced some interesting economic effects. According to job site Hired, demand for AR/VR engineers increased by a whopping 1,400% in 2019. AI is also having its own moment, with computer vision and machine learning engineers tallying a 146% and 89% demand growth, respectively.
Rodriguez, who also teaches art and design part-time for high school students, believes in these great opportunities for the next generation. “This gives a lot of chances to my students who, if they are actually prepared with the skill sets, can already achieve so much… There [could also be] a lot of freelance opportunities where they won’t be confined by the traditional setup of going to the office, especially with the bad traffic.”
These new technologies are also making art more accessible to the general public. The Ayala Museum and I AM Cardboard PH, for example, were able to bring their VR historical dioramas to various schools since all they needed to work were the headsets.
“[Technology brings] down the cost of experiencing art and reduces the need to travel to see art, in most cases,” said Cristina Herfort and Sandra Palomar, representatives of art agency art/n23. “It also adds an educational dimension: it is easier and less elitist to bring art education with digital technology.”
To the real, through the “unreal”
While most of these artworks straddle the line between the tangible and intangible, their creators believe that they spark something very real within their audience. “I think of these virtual reality experiences that we make as ‘empathy machines’…You read it in a book, but we put you there,” said Bernardo, who has seen viewers cry after watching their VR installations.
They also help people to connect and reconnect with their surroundings, allowing them to see and feel the familiar world through a different lens.
“Instead of doing something that’s just showing what’s wrong in the world… I want to participate [in] and distribute new ways of looking at the world,” said Jakob Kudsk Steensen, whose virtual work Catharsis simulates the growth of a re-imagined old forest. “So I really hope that the audience who sees this… [would] want to connect with nature and the technology they live with in new ways.”
In a country where real estate has been booming for the last decade, particularly in the luxury residential and commercial segments, one company is making sure that no Filipino family gets left behind –– Prima Casa Land & Houses, Inc.’s Lumina Homes.
According to the Subdivision and Housing Developers Association, Inc. (SHDA), an alliance of over 200 private housing developers, there exists a massive housing deficit of 3.9 million units, which could rise up to 6.5 million in 2030 if the issue is not addressed.
Lumina realized this issue in as early as 2012 and has since developed over 50 projects nationwide –– and continuously growing ––to reach thousands of Filipinos in need of affordable housing.
Lumina was recently recognized by Pag-IBIG Fund as “Top 1 Developer” among its accredited developers in terms of housing loans takeout – loan value for 2019 at the 2019 Pag-IBIG Fund Chairman’s Report held last Feb. 7, 2020 at the Philippine International Convention Center (PICC) in Pasay City.
Lumina jumped from Top 6 in 2016 and 2017 rankings, and from Top 4 in 2018, and also received a special award for having the “most number of Pag-IBIG Fund housing borrowers served” for 2019.
Lumina President and COO Estrellita S. Tan thanks Pag-IBIG Fund for continuously listening to industry stakeholders and for finding ways to address issues and concerns through relevant and timely reform initiatives to address the growing housing backlog and contribute to the development of the countryside.
“Pag-IBIG Fund has truly given us the confidence to embrace an aggressive stance to expand across the country and to fulfill our commitment to build affordable communities and realize the Filipino dream of home ownership. We look forward to our continuing partnership and better linkage to further strengthen the industry,” she says, adding that Lumina is excited for the full implementation of Pag-IBIG Fund’s virtual platform, under the leadership of its president, Mr. Acmad Moti.
Continuously shedding light to the countryside
Today, Lumina developments are located in key town and provinces across the country: Rizal, Bulacan, Pampanga, Zambales, Bataan, Tarlac, Pangasinan, La Union, Nueva Ecija, Cavite, Laguna, Batangas, Quezon, Camarines Norte, Albay, Sorsogon, Iloilo, Capiz, Cebu, Negros Occidental, Agusandel Norte, Zamboanga Del Sur, Bukidnon, Misamis Occidental, and Davao.
Currently offering a roster of row houses, townhouses, and single firewall homes, Lumina’s home offerings are built of high-quality materials and cost from P500, 000 up to P1.7 million. If qualified by Pag-IBIG standards as a “low-income earner,” a buyer can pay for as little as P1, 897 a month at 3% interest for a brand-new home in a safe and secure Lumina community.
Lumina developments come complete with amenities like a covered multi-purpose hall, mini gardens and playground, and provision for commercial area.
By building in accessible locations close to major thoroughfares, transport hubs, schools, hospitals, and business and leisure centers, Lumina not just builds a self-sustaining community, it also provides every Juan the pride of homeownership.
For more information, follow @luminahomesofficial on Facebook and visit Lumina Homes’ official website at https://www.lumina.com.ph/.
THE CENTRAL BANK on Wednesday said it would tighten capital requirements on smaller standalone lenders, consistent with international standards that would let these financial institutions continue absorbing losses.
“The enhanced capital standard is aimed at promoting the safety and soundness of individual banks and the banking system,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.
“This reinforces the importance of maintaining sufficient level of common equity which could absorb losses on an ongoing basis,” it added.
The stricter capital requirement was only imposed on big banks and their thrift units before Wednesday’s announcement.
BSP said there would be an observation period until the end of 2021 to make room for a “smooth transition” to the revised capital rules.
Under the new rules approved by the policy-making Monetary Board, standalone thrift, rural and cooperative banks must provide for minimum capital ratios including a common equity tier 1 ratio of 6%, a tier 1 ratio of 7.5% and a capital conservation buffer of 2.5%.
These are on top of the minimum capital adequacy ratio of 10%. Tier 1 capital is largely made up of common equity tier 1 capital elements such as common shares, additional paid-in capital, retained earnings and undivided profits.
Additional tier 1 capital is mostly made up of eligible perpetual capital instruments.
This will put local bank rules at par with international standards under the Basel III requirements, the central bank said.
Smaller banks already have enough funds to comply with the rules and the central bank was just “formalizing” the requirements, BSP Deputy Governor Chuchi G. Fonacier said in an interview.
Banks covered by the revised standards must submit parallel capital adequacy ratio reports using the existing and new frameworks until Dec. 31 next year, BSP said.
The Basel III framework took effect in 2014 to improve banks’ risk management and force them to avoid excessive financial stress, as what happened during the 2008 global financial crisis.
BSP Managing Director Lyn I. Javier said in an interview that the stricter capital rules are part of the second phase of compliance with Basel III standards.
Suzanne I. Felix, executive director of the Chamber of Thrift Banks, said they were confident the industry could meet the requirements.
“Our members are definitely strong enough to meet the requirements,” Ms. Felix said in an emailed reply to questions, citing the industry’s capital adequacy ratio of 17%.
“I don’t think it will affect lending in general, though this may have an impact on banks that are into hybrid instruments,” she said, referring to securities that could qualify for both equity and debt.
Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc. said the reform seeks to strengthen the banking industry as a whole, given that smaller players are “really vulnerable to financial shocks and changes in the system.”
“It would be the most prudent thing to do to help these types of financial institutions weather the challenges of any financial system shocks,” he said in an e-mail.
The changes would also act as a “filtering mechanism” to separate the stronger banks from the weaker ones.
“It can also show which institutions need more help, and which ones can really stand alone,” he said.
THE CONTINUED global spread of the coronavirus disease 2019 (COVID-19), coupled with the Chinese government’s crackdown on its citizens employed by Philippine Offshore Gaming Operators (POGO), may dampen office space demand in the country this year.
The POGO industry, which is largely powered by Chinese employees, has grown exponentially in the last four years to become the top driver of office space demand.
JLL Philippines, Inc. Research Head Janlo de los Reyes said there may be a decline in office take-up from POGOs this year, mainly due to labor issues and travel restrictions arising from the COVID-19 outbreak.
“Landlords may become reluctant to accommodate new (POGO) tenants within their buildings due to health concerns. Similarly, we may likely see a dip in residential sales and leasing as the Chinese market is one of the major drivers in recent years,” he said in an e-mail.
POGOs are now also looking for new sources of Chinese-speaking workers, as the Philippines imposed a travel ban on China, Hong Kong, and Macau to curb the spread of the COVID-19.
“POGO firms continue to pre-lease office space due to be completed in the next two to three quarters. However, the challenge is to look for Chinese employees that will man the operations,” Colliers International Philippines Senior Research Manager Joey Roi H. Bondoc said in an e-mail.
“Operators are looking for employees outside Mainland China. And they plan to fit out once the new office towers are completed,” he added.
Colliers Philippines reported POGOs have pre-leased close to 54,000 square meters (sq.m.) of office space in the first two months of 2020. These are located in three business districts across Metro Manila.
Strong demand from POGOs has been fueling the growth of the office sector in recent years, outpacing the information technology-business process management (IT-BPM) industry.
Data from Leechiu Property Consultants (LPC) showed the POGO industry took up the largest office stock in 2019 at 738,000 sq.m. out of the 1.7 million sq.m. total office transactions.
POGOs’ net take-up for current supply stood at 613,000 sq.m., while 127,000 sq.m. are pre-commitments for future supply this year and 2021.
On the other hand, Colliers originally projected POGOs to take up more than 300,000 sq.m. or a third of total office space demand for 2020.
In the worst case scenario where the POGO industry does not take up additional office space this year, Colliers’ Mr. Bondoc said vacancy rates in Metro Manila may rise to up to 7.6%.
Office vacancy in Metro Manila stood at 4.3% in 2019, according to Colliers.
“So far, Colliers has assumed that the global health scare is likely to peak in (first half of) 2020… However, we acknowledge the possibility of a more negative scenario and this is likely to extend the travel ban. Hence, disruption…might last into (the second half of) 2020,” he said.
Despite the challenges, Colliers is hopeful IT-BPM and traditional firms will make up for an expected slowdown in office space demand from POGOs.
“Note that the Metro Manila office market does not depend on a single segment for absorption,” he said. “[W]e also have traditional firms and outsourcing companies that could fill the void.”
Demand from the IT-BPM sector stood at 573,000 sq.m. in 2019, representing 34% of total take-up. Demand from other sectors such as flexible work spaces, banking and finance, technology, real estate and government, reached 379,000 sq.m. or 22% of the total.
The highly domestic nature of manpower for these sectors is seen to keep them relatively resilient from the impact of the COVID-19 epidemic.
As business districts that relied on POGOs for growth may see slower office demand this year, Mr. Bondoc said they may easily attract outsourcing and traditional companies that are looking to consolidate operations.
THE CONTINUED global spread of the coronavirus disease 2019 (COVID-19), coupled with the Chinese government’s crackdown on its citizens employed by Philippine Offshore Gaming Operators (POGO), may dampen office space demand in the country this year. Read the full story.
LOCALLY TRADED GOODS declined in the fourth quarter of 2019, the government reported yesterday.
Preliminary results from the Philippine Statistics Authority (PSA) report on “Commodity Flow in the Philippines” showed the volume of goods traded during the last three months of 2019 contracted by 45.4% to 3.95 million tons from 7.24 million tons previously.
Likewise, the value of these traded goods shrank by 27.8% to P127.76 billion from P177 billion in the fourth quarter of 2018.
Commodity flow, also known as domestic trade, refers to the flow of goods in the country through water, air, and rail transport systems. The bulk, or 99.6%, of the trade was mainly facilitated through water transport systems.
Nine out of the 10 commodity categories monitored by the PSA reported a decrease in trade quantity. Food and live animals — which accounted for the biggest share of trade in terms of volume — fell 42.2% to 1.21 million tons. Similarly, its trade value went down by 50.9% to P20.75 billion.
The biggest decline was seen in “manufactured goods classified chiefly by material,” whose trade volume fell 76.4% to 389,952 tons. Its value also went down by 35.3% to P13.85 billion.
On the other hand, the quantity and value of trade in “commodities and transactions not classified elsewhere in the [Philippine Standard Commodity Classification]” rose by 323.1% (to 626,399 tons) and 140.6% (to P9.97 billion), respectively.
The National Capital Region was the top source of commodities in the fourth quarter, with outflows amounting to P42.59 billion. It had a domestic trade surplus of P32.49 billion.
Meanwhile, the Caraga Region was the top destination of commodities with total inflows reaching P28.97 billion, and posting a trade deficit of P23.06 billion.
“The fourth-quarter gross domestic product (GDP) picked up to 6.4%, which means that domestic trade, both in volume and value, has also increased. Thus, this recent data release was not expected at all,” said UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion in an e-mail.
Mr. Asuncion added that had commodity flows through land been included in measuring domestic trade activity, the fourth-quarter reading could have shown gains.
“I suspect that if there was a way to measure trade through land, this particular economic data would be correlated to economic growth, [that is], if GDP rises, domestic trade increases as well,” he said.
According to the PSA, the domestic trade data exclude the flow of goods through land due to the “absence of an approach to capture data in the archipelagic islands of the country.” Rail transport statistics were also not included, the PSA said, due to the rehabilitation and upgrade of state-owned Philippine National Railways.
Even so, Mr. Asuncion said the figures are “concerning” considering that the Philippine economy expanded in the fourth quarter. “An explanation can be that numbers are coming from higher bases because of higher economic growth compared to 2018,” he said.
On the other hand, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the annual declines in domestic trade volume and value for the quarter were “expected” and “consistent” with the declines in manufacturing output and imports dragged by the effects of the US-China trade war.
“Fundamentally, the year-on-year declines in both local manufacturing output and in imports resulted in less volume and value of goods traded and transported throughout the country,” he said in an e-mail interview.
Mr. Ricafort also said the government underspending partly due to the almost four-month delay in the passage of last year’s national budget may have affected commodity flows as it “brought less materials or inputs especially for infrastructure projects traded and transported domestically.”
OUTLOOK
Domestic trade may be adversely affected by the ongoing coronavirus disease 2019 (COVID-19) outbreak, economists said.
“[For] the first quarter and succeeding quarters this year…the COVID-19 outbreak may have an impact on domestic trade, but estimating the potential impact may be difficult at this point,” UnionBank’s Mr. Asuncion said.
“Demand for goods that are actually traded may be driven by one’s perception of health and safety, and the threat of the COVID-19 spread can cause fear and can affect one’s consumption behavior,” he added.
For RCBC’s Mr. Ricafort, COVID-19 would “remain a major headwind” on domestic trade figures this year, with the slowdown in manufacturing output, exports, and imports acting as “offsetting factors” to any increased government spending this year.
Nonetheless, he noted domestic trade “could pick up” starting in the first quarter in view of the timely approval of the 2020 national budget as well as the extension of the validity of the 2019 budget.
PHILIPPINE equities sank the most in four years, and some analysts are already watching out for a bear market.
As fears over the spreading coronavirus escalate, the Philippine Stock Exchange index lost 3.9% to 6,909.84 on Wednesday, taking its three-day slump to 6.8%. Manny Cruz, a strategist at Papa Securities Corp. in Manila, says the gauge could test the 6,692.23 level in the coming months, marking a 20% slide from its 2019 high, as concerns over the outbreak and its impact undermine expectations of stronger economic and earnings growth this year.
“It wouldn’t be far to enter a bear market with the continued uncertainty,” said Mr. Cruz, who correctly called a market rout in 2018, when earnings didn’t support valuations. “If more advanced economies are taking a hit, what more with the Philippines? While we have one of the fewest cases, this can quickly and dramatically change, just like what happened in South Korea.”
Virus fears are hounding the Philippines even as it has had only three cases so far. Now the nation’s benchmark gauge is about 3% away from entering a bear market. With Wednesday’s sell-off, its year-to-date loss has mounted to almost 12%, the world’s worst performance after Lebanon and Thailand, which entered bear territory on Monday.
Philippine shares were already hit by President Rodrigo R. Duterte’s verbal attacks on some of the nation’s biggest business groups for contracts he alleged were disadvantageous to the public. Still, before the outbreak, analysts and investors came into 2020 with an optimistic outlook. The nation’s biggest money manager, BDO Unibank, Inc., and First Metro Investment Corp. were among those that anticipated a double-digit gain for the nation’s equity index this year, thanks to accelerating economic and earnings growth. But with the coronavirus, things have changed.
“It’s unthinkable earnings won’t take a hit,” Mr. Cruz said, adding that 10% profit growth this year for Philippine companies could be“optimistic” because the outbreak has affected supply chains and consumer behavior. “There will be a big dent in first-quarter earnings that will extend into the next three months.”
He expects rallies to be short-lived as risk-off sentiment has yet to peak since infections are still growing globally. “The next stage from here will be talks and fears of a recession” once the virus hit becomes apparent on the economies affected, he said.
And the effect will extend beyond the tourism and consumer sectors, he warns. A slowdown in manufacturing would slow demand for loans and electricity, creating a “domino effect” on other industries and the economy, according to Mr. Cruz. That’s why he favors stocks where he sees a more muted impact, such as lenders and developers including Bank of the Philippine Islands, Security Bank Corp., Metropolitan Bank & Trust Co. and Ayala Land, Inc. — Bloomberg
