Vivant ventures into sewerage project in Palawan

February 14, 2020 | 6:47 pm

A UNIT of Vivant Corp. has acquired a 45% stake in a company that is jointly developing with a local government a combined sewerage and septage facility for Puerto Princesa City in Palawan province.

In a disclosure to the stock exchange on Friday, Vivant said it was notified by wholly owned subsidiary Vivant Infracore Holdings, Inc. of the acquisition by Vivant Hydrocore Holdings Inc. of the equity interest in Faith Lived Out Visions 2 Ventures Holdings, Inc., or FLOWs.

“The transaction will result in Vivant ultimately owning 40% in Puerto Princesa Water Reclamation and Learning Center, Inc., the joint venture company of the City of Puerto Princesa and FLOWs,” it said.

Vivant also said that the value of the transaction is less than a percent of its stockholders’ equity.

The disclosure comes after the listed company earlier this week disclosed the signing of a 15-megawatt (MW) power supply agreement between the Bantayan Electric Cooperative, Inc. (Banelco) and Isla Norte Energy Corp.

Isla Norte is a consortium of Vivant Energy Corp., its wholly owned subsidiary Vivant Integrated Diesel Corp. and Gigawatt Power, Inc., with the Vivant group owning 65% total equity.

Under the agreement, Isla Norte will install a 23.31-MW diesel-fired power plant in the town of Bantayan, a popular tourist destination in northern Cebu.

Vivant Integrated Diesel is a wholly owned subsidiary of Vivant Energy, which manages the investments of publicly listed Vivant Corp. in the energy sector. — Victor V. Saulon

Sta. Lucia board approves joint ventures, land purchases

February 14, 2020 | 6:47 pm

STA. LUCIA LAND, Inc. said on Friday that its board of directors had approved three joint venture projects to develop areas in Luzon and the acquisition of 10 parcels of land, including two in Mindanao.

It told the stock exchange that the meeting held on Feb. 13 included resolutions approving the renewal and increase of the corporation’s credit line with China Bank Corp. of up to P2 billion.

The board also approved the borrowing of up to P2 billion from Sta. Lucia Realty & Development, Inc. The terms of the borrowing were reported to, and approved by, the related party transactions committee of the listed company.

Sta. Lucia identified parcels of land for acquisition in Luzon as located in the following areas: Palawan with a total area of 387,576 square meters (sq.m.); Batangas with 68,690 sq.m.; Bataan with 82,916 sq.m.; Laguna with 707,530 sq.m.; Pangasinan with 6,282 sq.m.; Rizal with 447,790 sq.m.; and Bulacan with 10,620 sq.m.

The two parcels of land for acquisition in Mindanao are in Surigao del Norte with an area of 65,409 sq.m., and in Davao City with an area of 50,000 sq.m. One area is targeted in Iloilo with an area of 38,745 sq.m.

The joint ventures involve the following: development of projects located in Rizal with a total area of 122,787 sq.m.; Bataan with an area of 377,043 sq.m.; and Pangasinan with an area of 218,545 sq.m.

Sta. Lucia’s board also approved resolutions authorizing the company to open accounts with BDO Unibank, Inc.

The board also approved resolutions approving the appraisal made by Colliers International Philippines of the company’s assets as of June 30, 2019.

On Friday, shares in Sta. Lucia rose by P0.02 or 0.80% to close at P2.53 each. — Victor V. Saulon

Cayetano says House to be “objective” on ABS-CBN franchise

February 14, 2020 | 6:47 pm

LAWMAKERS are open to any mode of scrutiny to make their judgment on the legislative franchise of media company ABS-CBN Corp. “more objective,” said House Speaker Alan Peter S. Cayetano on Friday.

“Congress is open to any kind of mechanics to make our judgment more objective. You wanna get a panel of experts aside from the congressmen to join the hearing? Okay ako ‘dun (I’m fine with that),,” he told reporters.

“But the timing and the way we’re going to do the hearings is very important,” he said.

Mr. Cayetano said the case was “not that urgent” because ABS-CBN could still operate until March 2022 when the 18^th Congress ends, as long as there is a pending bill for its franchise renewal.

He said the House of Representatives cannot immediately hold a hearing on the network’s franchise because “it will suck all the energy of the 18^th Congress.”

“Kung tayo mag-hearing ngayon, alam mo, sasabihin ko sa inyo kung ano mangyayari: it will suck all the energy of the 18^th Congress. Halos lahat ng miyembro, maga-attend. Mapapabayaan ang ibang mga importante,” he said.

(If we will hold a hearing now, what will happen is, it will suck all the energy of the 18^th Congress. All the members will attend. Other important matters will be set aside.)

The House Speaker urged those opposing the renewal of the media company’s franchise to submit evidence to the House committee on legislative franchises. He said the move would allow their submissions to be forwarded to ABS-CBN for it to respond.

“That’s the way our democracy works — welcome the issues against ABS-CBN, but also welcome their reply, so that we can finally get somewhere with all of these,” he said.

Asked when the chamber will conduct a hearing, he said, “when the time comes but definitely before March 2022. Possibly in May if we have time and if we have cooler heads on all the issues. Worst case, after SONA (State of the Nation Address in July).”

Separately, ABS-CBN told the stock exchange on Friday that it had received the notice from the Supreme Court requiring it to file, within a non-extendible period of 10 days, a comment on the petition for quo warranto and temporary restraining order or writ of preliminary injunction, filed by the Office of the Solicitor General.

“We will comply with the Notice of the Supreme Court,” it said. — Genshen L. Espedido

STI Holdings income up 10%

February 14, 2020 | 6:46 pm

STI Education Systems Holdings, Inc. reported a third-quarter net income of P152.6 million, up 10% compared with what it earned in the same period a year earlier.

In a disclosure to the stock exchange, the listed company that owns one of the largest private school networks in the country, said revenues for the three-month period ending Dec. 31, 2019 rose by 5% to P813.2 million.

“The increase was due to the improvement in the mix of students enrolled. A total of 55% or 45,902 of the group’s 83,967 total student population are enrolled in programs regulated by the Commission on Higher Education (CHED). Last school year’s percentage of students enrolled in CHED programs was at 50%,” it said.

The holding firm’s earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 13.4% to P377 million while EBITDA margin grew to 46% from 43% in the same period a year earlier.

STI Holdings said operating income during the period increased by 5% to P187.3 million.

“As the company’s line of business is in education, STI Holdings’ fiscal year begins in April and ends in March of the following year, which is aligned with the schools’ academic calendars. For school year 2019-2020, though, the opening of classes was moved to July from June,” it said.

The firm has three subsidiaries involved in education, namely: STI Education Services Group (STI ESG), STI WNU, and iACADEMY.

STI ESG’s network totals to 76 schools, with 38 owned schools and 38 franchised schools comprised of 69 colleges and seven education centers.

Founded on Feb. 14, 1948, STI WNU was granted its university status by CHED on Feb. 11, 2008. STI WNU’s campus sits on a 3.1-hectare property in Bacolod City.

iACADEMY is the premier school in the group that has senior high school and college programs focused on computing, business, and design.

On Friday, shares in STI Holdings slipped by 1.72% to close at P0.57 each. — Victor V. Saulon

Local shares down 1.6% as virus spooks investors

February 14, 2020 | 6:44 pm

By Marissa Mae M. Ramos, Researcher

THE main index edged lower on Friday as investors continue to worry over the coronavirus disease 2019 (COVID-19) outbreak.

The benchmark Philippine Stock Exchange index (PSEi) lost 121.12 points or 1.63% to close at 7,282.00 on Friday with the broader all shares index also dropping 38.13 points or 0.87% to 4,319.11.

“Market continues to be in light volumes after a number of bonds and preferred share were offered past months. Also, the COVID-19 has made the volatility in the market that creates uncertainties in the investment surroundings at this time,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.

Manuel Antonio G. Lisbona, president of PNB Securities, Inc., said the “dramatic 10-fold spike in new cases of the COVID-19 virus in China has spooked a lot of investors.”

“Investors are becoming more concerned that the virus will cause the global economy to slow down. Declines in air travel/tourism and global manufacturing and supply chains have already been observed and investors are extrapolating these into other sectors,” Mr. Lisbona said in an email.

“Concerns are also rising that China could be understating its numbers so as not to induce panic or increase discrimination against its citizens outside their borders,” he added.

China, the center of the new coronavirus, confirmed around 15,000 new cases with a few hundred additional deaths this week after adopting a new diagnosis methodology for the COVID-19, CNBC reported on Thursday.

Data from the World Health Organization showed that as of Feb.12, China’s death toll was at 1,114 with a total of 44,730 confirmed cases.

At home, Tourism Secretary Bernadette Fatima T. Romulo-Puyat said that the country’s tourism sector could lose up to P42.9 billion from February until April as travelers are expected to cancel scheduled flights and postpone events amid the virus scare.

At the trading floor, a total of 888.41 million issues worth P6.45 billion were exchanged on Friday, down from the previous day’s 978.23 million issues valued at P4.77 billion.

All sectoral indices ended lower. Industrials lost 95.04 points or 1.05% to 8,936.64; holding firms gave up 77.96 points or 1.09% to 7,051.97; property dropped 66.61 points or 1.66% to 3,928.65; mining and oil shed 44.21 points or 0.62% to 7,058.64; financials fell 25.12 points or 1.42% to 1,738.95; and services slipped 14.40 points or 0.99% to end the trading session at 1,440.30.

Advancers edged decliners, 100 against 82, with 44 listed names left unchanged.

Offshore investors continued to be sellers with net foreign outflows ending at P864.82 million, higher than Thursday’s P528.74 million.

Insurtech firm Saphron launches new “heartbreak insurance” product

February 14, 2020 | 5:57 pm

In perhaps one of the more innovative product launches in the insurance market today, local insurtech startup Saphron today offers “heartbreak insurance” aimed at ensuring that your next breakup has at least a little silver lining (in this case, a one-night hotel stay to nurse yourself back together).

MONA, or “Move On NA”, is reportedly the first-ever heartbreak insurance product to hit the local market. It only costs P300 and assures one that, in case life gets in the way of love, the insured has a staycation waiting for them at any one of Saphron’s partner hotels.

Backed by Pioneer Insurance, MONA is actually a form of Events Cancellation Insurance, which secures a predetermined benefit for the insured if a similarly predetermined event is cancelled. Saphron says this product is designed to be attached to anniversary celebrations, weddings, and the like.

“In case your planned wedding or any relationship anniversary celebration gets cancelled because of a breakup, a critical illness, a cancelled flight, or any of our covered event cancellation causes, we intend to give you that break from heartbreak, with a one-night stay at one of our partner hotels nearest your locality,” the company shared.

Saphron is one of a number of startups under Talino Venture Labs, a venture builder focusing on inclusive and innovative enterprises.

You can find out more about Saphron’s new product MONA here.

Nationwide round-up

February 14, 2020 | 1:01 am

Swede in terrorist list denied entry

A SWEDISH national whose name is included in an international list of suspected terrorists was denied entry into the country, the Bureau of Immigration reported on Thursday. His three companions on a flight from Singapore were also barred from entering through the Ninoy Aquino International Airport last February 5. Grifton SP. Medina, the BI’s port operations division chief, said the passengers were booked on the first flight back to their port of origin. The alleged terrorist’s identity was not disclosed for security reasons, Mr. Medina said. “He is just one of thousands of international terrorists whose names were included in the shared database containing information supplied by the various law enforcement and intelligence agencies here and abroad,” he said. State agents said the four were of Iraqi descent from Iraq’s Kurdistan region. — Vann Marlo M. Villegas

Retired Justice Buena, 87

THE RETIRED supreme Court Associate Justice Arturo B. Buena passed away at the age of 87 on February 13 due to a “lingering illness,” the court announced. Mr. Buena was appointed to the high court on January 5, 1999, and served until his retirement on March 25, 2002. Prior to this, he was an associate justice at the Court of Appeals starting in 1986. He started his work in government in 1956, two year after passing the 1954 Bar exams, as liaison officer in the Office of the Speaker at the House of Representatives and as legal and technical assistant at the Senate Electoral Tribunal. He was also an assistant to former Justice Jose P. Bengzon in the turnover of supervision of the lower courts to the high tribunal. He also worked as acting deputy court administrator, deputy court administrator, and acting court administrator before his appointment to the appellate court. A native of Guiuan, Eastern Samar, Mr. Buena earned his pre-law and law degrees at the University of Santo Tomas, where he also taught law. One of the SC rulings he penned was the October 2000 decision dismissing the petitions filed against the Visiting Forces Agreement with the United States. — Vann Marlo M. Villegas

Retired cops with drug trade links can still face criminal charges

PHILIPPINE NATIONAL Police (PNP) Chief Archie Francisco F. Gambo said on Thursday that cops who will take the offered early retirement option amid an investigation on illegal drug trade links can still face criminal charges after they leave the service. “Kapag nag (If you take the) optional retirement kayo hindi ibig sabihin na (it does not mean that you are) off the hook,” he told reporters in Camp Crame. By availing of the optional retirement, Mr. Gamboa said the police officers are still entitled to their benefits, but they could still be charged criminally if there is evidence against them. Presidential Spokesperson Salvador S. Panelo, in a briefing at the Palace, made a similar statement saying, “Giving them the retirement option doesn’t mean that they will not be prosecuted if there’s evidence they’ve been involved.” Mr. Gamboa also appealed to the media to refrain from focusing on naming the prominent personalities among the 357 cops under investigation, saying all of them are entitled to the presumption of innocence until proven guilty. Of the total, 15 officers have taken early retirement while 43 are marked AWOL, or absent without leave, after they skipped a drug test ordered by the police chief. — Emmanuel Tupas, PHILSTAR and Gillian M. Cortez

Agri chief calls on private sector veterinarians to help battle ASF spread

AGRICULTURE SECRETARY William D. Dar called on veterinarians in private practice to volunteer their services in the government’s program to stop the spread of the African Swine Fever (ASF) that is threatening the country’s P400-billion hog industry. “This is the time to unite and be part of a national movement to eradicate the African Swine Fever,” Mr. Dar said during the International Farmers Summit held February 12 in Pasay City. He said private sector veterinarian can team up with the Department of Agriculture’s ASF Crisis Management Task Force for monitoring and surveillance, information dissemination, and planning on how to manage, contain, and control the deadly disease. The first ASF outbreak in Rodriguez, Rizal was confirmed in August 2019, and later spread in various parts of Luzon. Most of the cases have been addressed, except in some towns in Pangasinan where infected swines were reported in January. A new outbreak, this time in different parts of the Davao Region in Mindanao, is currently being managed.

Nation at a Glance — (02/14/20)

February 14, 2020 | 1:00 am

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

CITIRA unlikely to be passed in March

February 14, 2020 | 12:33 am

THE MEASURE lowering the corporate income tax and streamlining fiscal incentives is not likely to hurdle the Senate before the March 13 adjournment, according to the Senate president, even as the Executive branch pressed the chamber for prompt action on the key tax reform.

“Malabo ’yung CITIRA (Corporate Income Tax and Incentives Rationalization Act) at PIFITA (Passive Income and Financial Intermediary Taxation Act),” Senate President Vicente C. Sotto III said in a radio interview aired on Thursday.

Mr. Sotto said Senator Juliana Pilar S. Cayetano, chair of the Ways and Means committee, discussed the tax reform measures during a Senate caucus.

“Sinasabi niya sa amin ’yung mga intricacies, medyo maraming questions (She told us the intricacies, there are many questions),” he said.

Mr. Sotto said the Senate leadership is scheduled to meet with the Executive department on Monday evening (Feb. 17), and later with Finance Secretary Carlos G. Dominguez III on Wednesday (Feb. 19).

“Siguro matatalakay din namin ‘yan (Maybe we can also tackle this),” he added.

The Department of Finance (DoF) recently came out with a newspaper advertisement that quoted President Rodrigo R. Duterte’s fourth State of the Nation Address (SoNA) on July 22, 2019, in an apparent public plea to the Senate.

“I implore Congress to immediately pass Package 2 of the Comprehensive Tax Reform Program, which will gradually lower corporate income taxes, and improve fiscal incentives,” the ad, which was published in the Feb. 11 issue of The Philippine Star, read in part.

Sought for comment, Finance Assistant Secretary Antonio Joselito G. Lambino II explained the newspaper ad forms part of its information drive.

“We are doing all we can to support our legislative champions. This includes various forms of engagement — media interviews, explainers, briefers, speaking at public events, face-to-face meetings. We also provide legislators and their staff data and analysis on our tax reform packages upon request,” Mr. Lambino said in a phone message, Wednesday.

The Senate version of the measure is still being finalized by the committee; while its counterpart, House Bill No. 4157 was approved on Sept. 13, 2019.

Ms. Cayetano on Wednesday said she is close to sponsoring the measure in the plenary, but no timeline was given.

Finance Secretary Carlos G. Dominguez III earlier said he expects the CITIRA to be passed into law by March.

The government is hoping the CITIRA will spur more foreign investments in the country, as it proposes to cut corporate income tax to 20% from the current 30%.

However, the uncertainty over the bill’s provisions on tax incentives has been identified as one of the reasons for slowing foreign investments.

Foreign direct investments fell by 29.9% to $6.413 billion in the January to November period last year. Data provided by Philippine Economic Zone Authority showed that approved investments in 2019 dropped 16.19% to P117.54 billion, from P140.24 billion in 2018.

The Senate panel is also currently deliberating on the proposed PIFITA, in an attempt to meet the Finance Department’s year-end target for its passage.

Mr. Duterte has a history of threatening the Senate for not prioritizing his legislative agenda. At his SoNA in July 2017, he singled out Senator Juan Edgardo M. Angara, then the Ways and Means committee chair, for signaling that they will not pass the version of the second tax reform package as proposed by the DoF.

“I call on the Senate to support my tax reform in full and to pass it without haste,” Mr. Duterte said at that time. “Si Angara ayaw rin mag-clap. Bantay ka lang sa election, tingnan mo (Angara does not want to clap. Wait for the election, you will see).”

Lawmakers have become reluctant to support tax measures, drawing from the experience of incumbent Senate President Pro Tempore Ralph G. Recto, who lost his 2007 senatorial bid over the increase of value-added tax to 12% from 10%.

Aside from the CITIRA and PIFITA, other pending reform measures are the proposal to provide a uniform framework for real property valuation and assessment; and the bill increasing government’s share from mining revenues. — Charmaine A. Tadalan and Beatrice M. Laforga

Non-Chinese travelers also staying away from PHL amid virus outbreak

February 14, 2020 | 12:32 am

By Arjay L. Balinbin
Reporter

JENNY, a 31-year-old Filipina who works as a cook in South Korea, canceled a plan to visit relatives in Cotabato City this summer amid a coronavirus disease 2019 (COVID-19) outbreak that has killed more than a thousand people and sickened tens of thousands more in China.

“I have to be confined at the Seoul National University Hospital for two weeks when I return to ensure I don’t have the virus,” she said via Facebook Messenger chat. “I don’t want to go through that hassle.”

Tourists not just from China and its administrative regions, but from all over the world have canceled their trips to the Philippines because of the virus scare, according to Jose C. Clemente III, president of the association of local travel agencies.

About 10% of his company’s two million bookings outside China as of Feb. 3 had been scrapped, he said by telephone.

Still, he thinks it could have been worse. “Cancellations from other markets, especially the Western markets have not been as much as we had anticipated,” said Mr. Clemente, who is also president of Rajah Tours Philippines, Inc.

Tourism Secretary Bernadette Fatima T. Romulo-Puyat has said the industry could lose P42.9 billion from February to April — P16.8 billion this month, P14.11 billion in March and P11.98 billion in April.

Roberto Lim, executive director and vice-chairman of the Air Carriers Association of the Philippines, Inc. (ACAP) said they expect to lose about P3 billion from ticket refunds in the next two months after the Philippine travel ban on China and its administrative regions.

The Philippines has three confirmed cases of COVID-19, including one death, all involving Chinese nationals. More than 400 people have been checked for infection, more than half of whom had been confined, according to health authorities.

The government wants Filipinos to visit local spots in the face of an international tourism decline because of the outbreak.

LOW RATES
No less than President Rodrigo R. Duterte is joining the domestic travel campaign by visiting Boracay, Cebu, and Bohol.

Travel operators are trying to entice the market with lower rates for local destinations, while hotels and restaurants have cut rates by up to 50%, according to the Tourism department. Airlines will also offer lower fares.

The Tourism Congress of the Philippines (TCP) said as much as 40% of Boracay flights were canceled since the Philippine travel ban on China, Macau, and Hong Kong was imposed early this month.

Marites Lopez, a 32-year-old entrepreneur from Sultan Kudarat who accepts online travel bookings through the Unified app, said she had only one client this year — a Filipino worker from Saudi Arabia.

Travel inquiries from Singapore and Taiwan did not materialize, she said via Facebook Messenger chat.

“It’s very difficult because the situation is very alarming especially with talks that the new coronavirus is airborne,” she said. “I have lost a lot of sales because of that.”

The Health department has said there is no evidence yet that the virus could be transmitted through the air, citing the World Health Organization.

Mr. Clemente said the industry should find ways to attract foreign visitors amid the coronavirus scare.

“We will definitely continue marketing to our tourism markets and we will do our best to offer more palatable rates,” he said.

“We will continue imposing the guidelines and other health procedures imposed by the Department of Health, Department of Transportation and all other agencies,” he added.

Foreign arrivals reached 7.4 million in the 11 months to November last year, 15% higher than a year earlier, according to data from the Tourism department.

The agency said last month it targets to attract 9.2 million international visitor arrivals this year.

“We may have to revisit that figure, depending on how long this situation persists,” Mr. Clemente said.

Cabinet Secretary Karlo Alexei B. Nograles cited the need for a “catch-up plan” to meet tourism targets instead of revising these now. “It’s too early to reassess the situation. Reassessment will probably happen after the second quarter.”

Aside from Western tourists staying away from Asian destinations including the Philippines, some local travelers have also canceled their trips overseas.

“Filipinos planning to travel abroad have expressed concerns about their travel plans and some of them have already cancelled or rebooked their flights,” Charo Logarta-Lagamon, a spokesperson for budget carrier Cebu Pacific, said by telephone.

“We are hoping that we could damp down the effects of the coronavirus outbreak,” Mr. Clemente said. “We hope a vaccine will be found soon.”

Lauren Glover, a British English teacher in her late 30s who plans to visit the Philippines, is keeping an eye on the situation in the country.

“If the Philippines gets more confirmed cases, I will definitely not be going there anytime soon,” she said in a chat message.

Coronavirus may delay PHL economic recovery

February 14, 2020 | 12:31 am

THE spread of the coronavirus disease 2019 (COVID-19) could delay the recovery of the country’s economic growth this year as it could impact drivers like remittances, consumption and tourism, according to ANZ Research.

Still, growth is expected to remain on track, with the government and the central bank expected to support the economy with fiscal and monetary stimulus.

In a report released on Thursday, the research arm of ANZ Bank said the COVID-19 outbreak is a “key downside risk” to the Philippine economy.

“A hit to Q1 GDP (gross domestic product) growth looks likely, but further out, the impact on full-year growth will depend on how quickly the virus spread can be contained and how quickly infrastructure spending can be pressed into action,” ANZ Research said, adding the impact on full-year GDP is “unclear for now.”

The economy grew by 6.4% in the fourth quarter, bringing the full-year 2019 figure to 5.9% in 2019, slower than 2018’s 6.2% and missing the downward-revised 6%-6.5% set by the government for that year.

The full-year reading was also the slowest in eight years, and also broke the economy’s seven-year streak of at least six percent growth.

ANZ Research said the outbreak could trim first-quarter growth by as much as 0.42 percentage point (ppt), which they forecast to be at 6.8%.

It, however, maintained its 2020 GDP growth forecast at 6.2% on the back of the assumption that COVID-19’s economic impact “should be relatively modest.”

The government is targeting 6.5% to 7.5% GDP growth this year.

“Recent high frequency indicators, such as credit and import growth, suggest that economic conditions are recovering, albeit at a modest pace,” ANZ Research said.

“In our base case scenario, we assumed that the bulk of the negative impact will occur in Q1 followed by a recovery in growth in H2, supported by both monetary and fiscal stimulus.”

UnionBank of the Philippines, Inc.’s Economic Research Unit (ERU), in a separate research note yesterday, for its part said annual GDP growth in 2020 could be stalled at 5.8% in the case the COVID-19 outbreak continue for about six months. ERU’s baseline 2020 growth forecast is at 6.6%.

CURRENT ACCOUNT
ANZ Research said slower economic activity in China and other affected countries will have spillover effects on the Philippines, particularly tourism, remittances and import demand, which could consequently affect the country’s current account.

ANZ said Mainland China accounted for just 0.1% of total remittances in the 11 months to November 2019, while remittances from Filipinos working in Hong Kong and Taiwan accounted for 2.6% and 2.0% respectively, bringing the cumulative number to 4.7%.

“It is also important to bear in mind that around a fifth of overseas Filipino workers are engaged in the shipping (passenger and cargo) industry, so any weakness in cruise travel or global trade…will have a negative impact.”

The report said a 50% drop in remittances from mainland China, Hong Kong and Taiwan for three straight months, coupled with a 20% decline in inflows from the rest of Asia, could shave 0.11 ppt off first-quarter GDP. Meanwhile, an extended decline in these inflows for a year could trim as much as 0.51 ppt from full-year GDP growth.

Meanwhile, slower Chinese economic activity due to business closures and internal travel restrictions will likely dampen Chinese demand for imports, it said.

“The Philippines’ exposure to goods exports…to China is estimated to be around 1.6% of GDP… Thus, a 20% drop in import demand from China for three months will translate to a 0.08 ppt hit to Philippines’ Q1 GDP through this channel,” it added.

With Chinese exports to the Philippines also likely to take a hit amid factory shutdowns, local industrial production may also be affected negatively.

Still, ANZ Research said the Philippines may be “relatively less exposed” than its neighbors to trade disruptions due to the outbreak.

As for tourism, ANZ Research expects tourist arrivals from other countries, not just China, to slow amid contagion fears, with the suspension of flights to some countries most affected by the virus also preventing some Philippine overseas workers from returning to work.

A reduction in Chinese visitors, which was the country’s second biggest tourism market last year, is expected to affect GDP by between 0.20-0.56 ppt, depending on the extent of the outbreak and the decline in tourist arrivals.

ANZ Research, however, said lower oil prices will give the current account some buffer versus the expected negative economic impact of COVID-19.

“Although lower remittances from Asia and weaker tourism receipts will exert downward pressure on the current account, this could be offset by a reduction in the fuel import bill…” ANZ Research said.

“Much will depend on the pace of recovery in capital imports going forward. At present, despite the risk from the virus outbreak, we expect any deterioration in the current account deficit in 2020 to remain manageable.”

POLICY SUPPORT
“Broadly, while the virus outbreak may delay the expected [economic] recovery, we still expect it to come through, given the monetary and fiscal stimulus involved,” ANZ Research said.

It said the timely passage of the 2020 budget will support the economy’s recovery after growth slowed in the first two quarters of 2019 due to the delay in the enactment of that year’s spending plan.

“We expect government spending in the year to expand at a sustained pace underscoring an improvement in public construction investment… Furthermore, legislation passed late last year, allows any unused funds from 2019 (both for capital outlays and operating expenses) to be allocated in the current year — a provision for an extra boost if needed,” it said.

ANZ Research also noted that the Bangko Sentral ng Pilipinas (BSP) earlier this month cut its policy rates by 25 basis points (bps) “to solidify the improving growth trajectory and guard against downside risks from the outbreak.”

The rates on the BSP’s reverse repurchase, overnight lending and deposit facilities now stand at 3.75%, 4.25%, and 3.25%, respectively.

Both ANZ Research and UnionBank’s ERU expect another 25-bp cut from the BSP this year. However, “a higher-than-expected impact from the coronavirus may extend the easing cycle further,” ANZ Research said.

“With the difficulty of assessing the economic impact of the COVID-19 health scare to China and to the region, UnionBank’s ERU thinks that another 25 bps cut may be pushed earlier than expected,” ERU said.

BSP Governor Benjamin E. Diokno has said the central bank is looking to cut rates by another 25 bps by midyear even as risks to the economic outlook persist. — LWTN

Pasig City to get Anti-Red Tape Unit

February 14, 2020 | 12:30 am

THE ANTI-RED TAPE AUTHORITY (ARTA) signed its first agreement with a local government unit (LGU), partnering with Pasig City for the creation of a specialized unit to address bureaucratic red tape.

ARTA Director-General Jeremiah B. Belgica inked the memorandum of understanding (MoU) with Pasig City Mayor Victor “Vico” N. Sotto to establish the Anti-Red Tape Unit, ARTA said in a statement Thursday.

The unit would notify ARTA about the formulation, modification, and repeal of regulations. It would verify the accuracy of the city’s Citizen’s Charter and its compliance with the zero contact policy and prescribed processing time.

Citizen’s charters detail each government agency’s checklist of requirements and procedures for its applications and request processes. ARTA last year set a December deadline for agencies to submit their respective charters.

“With the signing of this Memorandum of Understanding, we’re confident that Pasig will become much better in removing red tape in the coming years… [And through] this partnership, we will be able to help each other make Pasig business-friendly and make our systems and processes more efficient sa tulong po ng bawat isang nasa kwartong ito (with the help of everyone in this room,” Mr. Sotto was quoted as saying in the statement.

The MoU details the support to strengthen the implementation of the Ease of Doing Business law in Pasig from the UPPAF (University of the Philippines Public Administration Research and Extension Services Foundation, Inc.) Regulatory Reform Support Program for National Development (RESPOND) Project and United States Agency for International Development (USAID) Philippines.

The Ease of Doing Business law or RA 9485 was passed in 2018 to improve efficiency in government services.

The Philippines improved its ranking in the World Bank’s 2020 Doing Business report to 95^th from 124^th a year earlier, but was still seventh among the 10 Southeast Asian nations measured.

ARTA is also set to assist Pasig City in assessing their business one-stop shop and in activating its local board assessment appeals, which hears appeals on property assessments.

The authority also presented their programs on a regulatory reform team, one-stop shops for construction permits and property registration, and regulatory impact assessment training, among others. — J.P.Ibañez

1...9,8769,8779,878...14,238 Page 9,877 of 14,238