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Bill enhancing Agri-Agra Law filed

A LEGISLATOR has filed a bill seeking to ensure greater access to credit in rural communities.

Albay Rep. Jose Maria Clemente S. Salceda filed House Bill (HB) 6039 on Thursday to enhance Republic Act 10000 or the Agri-Agra Reform Act of 2009.

The bill seeks to solve what is says is the main cause of the failure of the 2009 law, which is “the lack of income-sustaining value chains for farmers and fisherfolk”.

“Agri-Agra requires banks to lend a certain portion of their portfolio to farmers and fisherfolk. Of course, it has not worked to the fullest because farmers aren’t banked in the first place. High-risk ang farmers for conventional banks. Bukod diyan, malayo ang bangko sa bukid. Marami pang requirements kaya magpapabalik-balik ka. Siyempre, ‘yung iba, sa malapit na five-six na lang hihiram” Mr. Salceda said in a statement.

Under the bill, lending to programs or projects that seek to make financial services available at little or no cost to farmers can be considered in assessing bank’s compliance with the Agri-Agra Reform Law.

The bill also extends credit access to programs and projects that “align with a more modern vision for agriculture”.

Despite accessibility issues, the congressman said farmers can still be included in the banking and lending system through virtual banking.

“Fortunately, we no longer have to do physical banking because of virtual applications that allow you to open a bank account in your cellphone and borrow from a BSP-registered bank. And because virtual banks operate at lower costs, mas mura ang loans na kayang ibigay. Virtual banking will grow even more accessible when my Virtual Banking Act is passed. Once that happens, my amendments to Agri-Agra will also help ensure that even farmers from remote communities can be included in the banking and lending system. Basta may signal — so let’s also pass the Public Service Act amendments” Mr. Salceda said.

HB 78, which was also filed by Mr. Salceda last July, seeks to amend the Public Service Act or Commonwealth Act 146 “to effect the necessary changes in the antiquated provisions of the law to increase its relevance to contemporary concerns”.

The Public Service Act is a law that was crafted in 1936 to govern and regulate public services in the country to ensure that basic public services were accessible to everyone equally.

HB 6039 also subjects the implementation of its provisions to congressional oversight, to ensure that policymakers are “responsive to possible needs and opportunities for enhancements”.

The measure also seeks to create an Agricultural and Fisheries Capacity-Building Finance Policy Council which will set targets for banks’ annual contributions, identify eligible recipients of the special fund, and undertake reporting, monitoring, evaluation and audit requirements of the activities financed.

According to Mr. Salceda, the amendments to the Agri-Agra Act is in response to the Bangko Sentral ng Pilipinas’ request to Congress that key financial reform bills be passed so that the country could reach A-credit rating in two years.

The amendments also follow the congressman’s other financial inclusion bills, including HB 5913 or the Virtual Banking Act, and the Financial Consumer Protection Act or HB 5976.

Mr. Salceda filed the Virtual Banking Act last Jan. 6 which seeks to provide a regulatory framework for virtual banks.

Meanwhile, the Financial Consumer Protection Act, which was filed last Tuesday, gives financial regulators the abilities of rulemaking, surveillance and inspection, market monitoring, and enforcement powers relative to consumer protection.

“The bills I have been filing are all interconnected. Social infrastructure, financial inclusion and protections, improvements in the business environment — all of them are part of a vision that foresees the country’s emergence as a predominantly middle-class society, yung pati farmer negosyante. These Agri-Agra amendments are crucial, especially the provision on financial inclusion for rural communities” Mr. Salceda said.

Quirino Rep. Junie E. Cua filed a similar bill last December which mandates banking institutions to strengthen the financing system for agricultural, fisheries, and rural development of the country.

HB 5681 was endorsed for plenary approval by the House Committee on Banks and Financial Intermediaries last Dec. 18. — Genshen L. Espedido

PCC backs classification of motorcycle taxis as public transport

THE COUNTRY’S antitrust watchdog has expressed support for the classification of motorcycle taxis as a mode of public transport as it continues to call for market-driven competition.

The Philippine Competition Commission (PCC) said in a statement on Friday that it supports Senate bills amending the Land Transportation Code to legitimize the service as public transport.

“The Senate bills are timely, widen the choices for commuters, and open opportunities for businesses and innovators,” it said.

In turn, the PCC said it would ensure competition and consumer welfare are protected.

“Whether in the experimental phase or once the law on MCs will be passed, competition must be recognized as an essential element in stakeholders’ operations that bear impact on the riding public.”

The technical working group (TWG) studying motorcycle taxis recently reversed its decision to terminate the pilot run of the ride-hailing services.

PCC reiterated its suggestion to the TWG to consider the implementation of multi-homing, or allowing riders to work with more than one company.

“We acknowledge the legitimacy and objectives of the study, and the need to on-board as wide a set of perspectives as possible. With this in mind, we encourage the TWG to consider the pro-competitive effects of multi-homing in its study,” the statement said.

“Multi-homing also incentivizes platforms to continuously innovate and compete to keep both drivers and passengers safe and satisfied. Preventing multi-homing among drivers may lead to inefficiencies that will ultimately be detrimental to the riding public.”

PCC said that while it recognizes the limited duration of the pilot study, further operation of motorcycle taxis as services should “ensure fair, market-driven competition.”

The commission offered support to the TWG and government agencies to help formulate policies that promote both competition and stakeholder welfare. — Jenina P. Ibañez

Jollibee completes $600M bond sale

JOLLIBEE Foods Corp. (JFC) has completed its dollar bond market debut with the issuance of $600-million guaranteed senior perpetual capital securities by its wholly-owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL).

In a disclosure to the stock exchange Friday, the listed restaurant company said the transaction was completed on Thursday after proceeds were credited to JWPL’s account. The securities are scheduled for listing at the Singapore Exchange Securities Trading Ltd. on Friday.

“This transaction represents the first ever bond or perpetual securities issuance from JFC and the first time that JFC has tapped the capital markets since its Initial Public Offering in 1993,” the company said.

JFC said it originally planned to raise $400 million from the dollar-denominated bond issuance, but the offer was almost 10 times oversubscribed, pushing it to reach $600 million. This also resulted to a tightening of the final pricing to 3.9% from 4.25%.

“This marks the lowest pricing for a five-year perpetual securities issued by a Philippine company reflecting the strong demand for a JFC bond and the reputable credit standing of the company,” it said.

The securities are unrated and payable semi-annually. As perpetual bonds, the securities have no maturity date, meaning investors will not redeem their investments but will instead get a steady stream of interest payments.

JFC intends to use the proceeds from the offering to refinance its short-term debt after it acquired International Coffee and Tea, LLC last year, the operator of The Coffee Bean & Tea Leaf brand. The remainder will be used for general corporate purposes.

“The objective of management for this issuance is to further strengthen the balance sheet of JFC to build a stronger foundation for accelerating its growth in order to achieve its vision to become one of the top 5 restaurant companies in the world,” the company said.

In the first nine months of 2019, JFC’s earnings fell 26% to P4.53 billion due to losses in its operations of Smashburger and Red Ribbon.

Shares in JFC at the stock exchange gained P5.40 or 2.55% to close at P217 each on Friday. — Denise A. Valdez

Airlines ordered to cancel PHL flights to and from Wuhan

THE Civil Aeronautics Board (CAB) has ordered the suspension of all flights linking Wuhan, China and the Philippines to protect the country from the spread of the new flu-like virus.

In a statement Friday, the aviation regulator said it ordered all airlines to cancel such flights indefinitely, except those operated by Royal Air Charter Services and Pan Pacific Air, which are only allowed “for the sole purpose of ferrying their charter passengers back to Wuhan.”

Royal Air has flights linking to Wuhan on Jan. 24 and 27, while Pan Pacific Air has one scheduled on Jan. 25. The CAB allowed these trips to proceed as scheduled, provided the return flight from Wuhan will have no passengers and the airlines will “exercise extraordinary vigilance in ensuring the health and safety of its passengers and crews.”

The CAB has raised the alert on passengers coming from Wuhan after a Chinese boy in Cebu City tested positive for the new coronavirus earlier this week.

As of Friday, the virus has killed 26 and affected over 800 in China, Reuters reported.

While the suspension of flights is currently limited to those connected to Wuhan, the center of the outbreak, CAB Executive Director Carmelo L. Arcilla said the agency is continuously monitoring developments in other Chinese cities.

Arlines are also directed to monitor events and take necessary precautionary measures to arrest the spread of the virus.

Airline operator Civil Aviation Authority of the Philippines (CAAP) said it is likewise “closely monitoring” passengers from China, with special attention to the Kalibo International Airport where direct flights from Wuhan land.

In a statement, CAAP said its preparedness procedures for communicable diseases have been activated in international airports in Puerto Princesa, General Santos, Zamboanga, Davao, Kalibo, Laoag and Iloilo.

“Protocols are already in place in the airports where airport frontline personnel have been advised to wear face masks, maintain proper hygiene and practice regular handwashing. Posting of public advisories informing about coronavirus infections and the strict monitoring of suspected passengers are now also being enforced,” it said.

The Manila International Airport Authority, which operates the Ninoy Aquino International Airport in Manila, has also required the provision of a quarantine with space for health examination and the availability of hand sanitizers in the four terminals of the airport. — Denise A. Valdez

CHED chairman welcomes review of UP-Ayala lease contract

THE Commission on Higher Education (CHED) welcomed the government’s review of Ayala Land, Inc.’s (ALI) contract to develop a property of the University of the Philippines (UP) in Diliman, Quezon City.

President Rodrigo R. Duterte had ordered the review for possible “onerous” provisions, Presidential Spokesperson Salvador S. Panelo told reporters on Thursday.

In a statement on Friday, CHED Chairman J. Prospero E. De Vera III said he shares the concerns raised by the Commission on Audit (CoA), which observed that the lease contract for the UP-Ayala Land Technohub is “grossly disadvantageous to the government.”

“As a UP faculty member and former Vice President for Public Affairs, I share the concerns raised in the COA Report and look forward to a fair and impartial review,” he said.

The UP-Ayala Land TechnoHub is a joint development of the University of the Philippines Diliman and ALI.

Mr. Panelo earlier pointed out ALI is paying P22 per square meter (sq.m.) every month, based on an online source. ALI responded, saying it pays P171 per sq.m. a month.

Mr. De Vera said he will raise the issue at the UP Board of Regents on Feb. 3, encouraging the board to instruct all UP offices to provide necessary documents and interview individuals involved in transactions.

The TechnoHub contract is the second Ayala Group contract under review by the government, after Manila Water Co. Inc. The government plans to offer new contracts to Manila Water and Maynilad Water Services, Inc after reviewing the two water concessionaires for allegedly ”onerous” provisions in the previous ones. — Jenina P. Ibañez

BPI raises P15.3 billion from bond offer

BANK OF THE Philippine Islands (BPI) raised P15.3 billion in peso-denominated bonds following strong demand, marking its second largest issuance to date in the local debt market.

In a disclosure to the local bourse on Friday, the Ayala-led lender said the amount raised was more than five times its initial offer of P3 billion. It said the bank decided to upsize due to strong demand from both retail and institutional investors.

BPI said the bonds have a tenor of two years and carry an interest rate of 4.2423% per annum. Interest payments will be made quarterly while the principal will be settled at the maturity date.

This issue was the lender’s second largest peso bond issue next to the P25 billion bond issuance it had in 2018.

“The bonds have been issued, and are now tradable on the Philippine Dealing & Exchange Corp. (PDEx),” the bank said in the statement.

Earlier, the lender said the proceeds from the issue will be used to diversify its funding sources and also support its expansion plans.

BPI Capital Corp. was the sole selling agent for the bonds while Standard Chartered Bank’s Philippine Branch acted as a participating selling agent in the transaction. The two banks also served as the joint lead arrangers of the issue.

BPI in November 2018 raised P25 billion in fresh funds for the bank’s expansion plans, upsized from its initial guidance of P5 billion.

The fixed-rate notes carry a coupon of 6.797% per annum to be paid quarterly until March.

The Ayala-led lender also raised P3 billion via long-term negotiable certificates of time deposit (LTNCTD) in October last year. The notes have a tenor of five-and-a-half years and carry an interest rate of four percent per annum.

BPI booked a net income of P8.29 billion in the third quarter of 2019, jumping 38.6% from its profit in the comparable year-ago period.

In nine months to September 2019, the lender’s net profit was at P22.03 billion, up 29.5% from the P17.01 billion booked in the same period in 2018.

BPI shares inched up 0.43% or by 35 centavos to end at P82.25 apiece on Friday. — Beatrice M. Laforga

Banks’ lending standards mostly unchanged in the fourth quarter

MOST LENDERS maintained their overall credit standards for both enterprises and households in the fourth quarter, a Bangko Sentral ng Pilipinas (BSP) survey found.

The fourth quarter Senior Bank Loans Officers’ Survey of the central bank released on Friday showed the October to December period was the 43rd consecutive quarter when majority of the banks opted to keep their borrowing standards “broadly unchanged.”

For the said edition, 48 out of the 65 banks tapped for the poll responded, representing a response rate of 73.8%. Among respondents, 42 were universal and commercial banks and 23 were thrift banks.

The survey’s modal approach found that 84.8% of banks kept their loan standards for corporates, higher than the 81.6% with the same response in the third quarter of the previous year.

On the other hand, the diffusion index’s (DI) result pointed out to a net tightening of credit standards for enterprises. Respondent banks attributed to “their perception of stricter financial system regulations, deterioration in the profitability and liquidity of banks’ portfolios as well as in the profile of borrowers, and lower risk tolerance of respondent banks.”

“In terms of specific credit standards, the net tightening of overall credit standards was reflected in the reduced credit line sizes; stricter collateral requirements and loan covenants; and the increased use of interest floors,” the BSP said in the report.

“Banks’ responses likewise pointed to a net tightening of credit standards across all borrower firm sizes, namely, top corporations, large middle-market enterprises, small and medium enterprises (SMEs) and micro enterprises based on the DI approach,” it said.

Meanwhile, 89.7% of respondent banks also kept their overall credit standards unchanged for loans extended to households during the quarter, based on the modal approach. However, the DI approach likewise reflected a net tightening of credit standards for these kinds loans.

“The overall net tightening of credit standards for household loans was attributed by respondent banks largely to their more uncertain economic outlook, perceptions of stricter financial system regulations, and reduced tolerance for risk, along with a deterioration in borrowers’ profile,” the central bank said.

For this quarter, most of the respondent banks said they expect steady overall loan demand from firms and households,

Meanwhile, DI-based results show expectations of a net increase in credit demand from businesses and households.

“For business loans, the expected net increase in demand was associated largely with corporate clients’ higher working capital requirements,” the central bank said.

On the other hand, the expected net increase from household demand of loans was attributed to anticipation of higher household spending and “more attractive financing terms offered by banks.”

As for credit standards, banks said results based on the modal approach showed most respondent banks expect credit standards for firms to remain unchanged this quarter, while results based on the DI approach indicated expectations of continued net tightening of lending standards.

For household loans, both the modal and DI approaches showed expectations of steady credit standards “largely on account of respondent banks’ unchanged tolerance for risk and steady economic outlook, as well as expectations of unchanged profile of banks’ borrowers.” — LWTN

Moody’s affirms UnionBank’s credit rating

MOODY’S INVESTORS Service has affirmed its investment grade rating UnionBank of the Philippines, Inc., citing the bank’s robust capitalization and large pool of liquid assets.

In a statement on Thursday, the credit rater said they have affirmed UnionBank’s long-term local and foreign currency issue ratings of Baa2, a notch above the minimum investment grade and at par with the country’s credit rating.

Likewise, Moody’s said it has also affirmed the lender’s foreign currency senior unsecured rating of Baa2, foreign currency senior unsecured medium-term note (MTN) program rating of (P)Baa2, as well as Baseline Credit Assessment (BCA) and adjusted BCA of baa3.

In its assessment, Moody’s considered that the bank will have support from the government in times of need.

“The support assumption is predicated on UnionBank’s moderate market share in terms of deposits, which stood at around 3% as of Sept. 30, 2019,” Moody’s said.

Meanwhile, the affirmation of UnionBank’s BCA is on the back of the lender’s strong capitalization and large pool of liquid assets, Moody’s said.

“The BCA also incorporates the bank’s reliance on high-cost, confidence-sensitive time deposits for funding, as well as the rising asset risks associated with the bank’s growing retail franchise,” it added.

Moody’s noted that the Aboitiz-led lender has been banking on growing its “higher-yielding but riskier” loans disbursed to small and medium enterprises. This move is expected to lead to a gradual shift in the asset mix of the bank towards riskier assets in the next 12-18 months, it said.

The bank’s net profit hit P8.5 billion in January to September 2019, a 40% year-on-year jump from the comparable 2018 period.

UnionBank’s shares closed at P59.80 apiece on Friday, up by 1.18% or 70 centavos from its previous close. — LWTN

Peso rises on positive growth prospects

THE PESO strengthened on Friday on the back of continued optimism on the country’s growth prospects and as oil prices fell.

The local unit finished trading at P50.815 on Friday, strengthening by 16.50 centavos from its Thursday close of P50.98 per dollar.

It also appreciated by 7.60 centavos from its Jan. 17 close of P50.891.

The peso opened at P51 per dollar. Its weakest point for the session was at P51.01 while its intraday best was at its close of P50.815.

Dollars traded inched up to $1.082 billion from $981.95 million on Thursday.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed the peso’s rise to fourth quarter gross domestic product (GDP) data reported on Thursday.

“It seems the market was upbeat on Q4 GDP results yesterday. Strength may have been also coming from positive expectations of 2020 economic growth,” he said in a text message on Friday.

Fourth quarter GDP growth clocked in at 6.4%, a pick up from the downwardly revised six percent growth in the third quarter. This put the 2019 growth average at 5.9%, which was behind the minimum 6% growth eyed by the government.

Finance Secretary Carlos G. Dominguez III has said he expects GDP growth to pick up this year on the back of the government’s spending catch-up.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the local unit climbed on the back of low global oil prices.

“Peso exchange rate closed stronger after lower global oil prices at new 1.5 month lows that could lower the import bill and trade deficit,” Mr. Ricafort said in a text message.

Reuters reported that oil prices fell 2% on Thursday as worries over the spread of the coronavirus from China point to lower fuel demand if it stunts economic growth. — L.W.T. Noble

Local shares end flat as China virus fears persist

By Denise A. Valdez, Reporter

LOCAL shares ended flat on Friday anud heightened worries across the globe over China’s coronavirus outbreak.

The benchmark Philippine Stock Exchange index (PSEi) inched up 7.06 points or 0.09% to close at 7,623.41. The broader all shares index gained 19.37 points or 0.43% to 4,523.57.

“Shares closed flat with some concerns regarding the severity of the Wuhan coronavirus. The World Health Organization concluded that it is now a local Chinese emergency, but the situation has not yet become a global health emergency,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

On Thursday, the WHO called the new coronavirus that killed 26 people in China “an emergency in China,” saying it was a “bit too early” to consider this a “public health emergency of international concern.”

More than 800 cases of the novel coronavirus have been reported globally. The Health department announced earlier this week that a Chinese boy traveling to Cebu City tested positive for coronavirus.

The Civil Aeronautics Board on Friday decided to suspend all flights connecting Wuhan to any point in the Philippines, with the exception of a couple charter flight operators that will be bringing back Chinese tourists to Wuhan until Jan. 27.

Chinese stocks slumped on Friday, as the Shanghai SE Composite index dropped 2.75% at the close. Other Asian markets ended mixed: Japan’s Nikkei 225 index climbed 0.13% and Hong Kong’s Hang Seng index grew 0.15%, while South Korea’s Kospi index lost 0.93% and Thailand’s SET 50 index shed 0.37%.

At the PSE, four sub-sectors performed positively on Friday. Mining and oil advanced 88.68 points or 1.13% to 7,968.19; property picked up 26.19 points or 0.66% to 3,962.32; industrial added 59.46 points or 0.62% to 9,728.72 and services increased 9.23 points or 0.60% to 1,544.66.

In the red were holding firms, which shaved 27.81 points or 0.38% to 7,348.36, and financials, which dipped 2.71 points or 0.15% to 1,810.37.

Some 847.15 million issues worth P5.72 billion switched hands on Friday, increasing from Thursday’s 669.94 million issues valued at P6.63 billion.

Foreign investors chose to stay away from the PSE on Friday, as net foreign selling grew to P556.51 million from P132.6 million on Thursday.

Former Agriculture Usec Segfredo Serrano on increasing productivity of Filipino farmers & fisherfolk

According to Former Agriculture Undersecretary Segfredo Serrano, the Philippine government should not forget to allocate budget for the basic things needed by local farmers and fisherfolk. These include research and development, technology promotion, access to markets, and a favorable regulatory environment. These, along with other measures, will help enhance the productivity and competitiveness of Philippine agriculture in the domestic and international markets.

Former Agriculture Usec Segfredo Serrano on trade negotiations

Former Agriculture Undersecretary Segfredo Serrano said international farm trade negotiations should be supported by expanding high-value crops exports.

 

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