NEDA: No need for Bayanihan 3

NEDA_Karl Kendrick Chua | Juan Manila

 

MANILA Socio-economic planning Secretary Karl Kendrick T. Chua declares there is no more need for Congress to pass a third stimulus package when other measures meant to drive economic recovery are to be fully implemented.

“’Yung Bayanihan III sa tingin ko, hindi na kailangan kung buksan na natin ang ekonomiya. And pinaka-epektibo at cost-effective na paraan para ibalik ang consumer confidence ay ’yung pagbukas ng ekonomiya nakita natin sa datos (I think Bayanihan III is no longer needed if we will further reopen the economy, which is the most efficient and cost-effective way to boost consumer confidence),” Chua says.

He explains that funds from the Bayanihan II were not even spent and the FIST (Financial Institutions Strategic Transfer) and CREATE (Corporate Recovery and Tax Incentives for Enterprises) still have to be implemented.

On Friday, 19 February, House Speaker Lord Allan Jay Q. Velasco announced that the House of Representatives is “prepared to pass” House Bill No. 8628 or Bayanihan to Arise as One Act (Bayanihan III), which allocates 420 billion for programs such as cash handouts, wage subsidies, and financial assistance to hard-hit sectors.

But it can be noted that the validity of Republic Act (RA) No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II), which provides 165.5 billion for pandemic response measures, was extended until end-2021 after there were delays in disbursement and program rollout.

Meanwhile, the newly-signed RA No. 11523 or the FIST Act, which covers the establishment of asset management companies that will absorb the bad loans from banks, has not yet been implemented as rules and regulations are still being drafted.

Also the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law will slash corporate income tax and streamline fiscal perks is still awaiting President Rodrigo Duterte’s signature after its ratification on 3 February.

Chua says in a radio interview on Friday that another stimulus measure such as Bayanihan III is no longer needed if the country’s lockdown will be further eased, allowing the economy to recover faster. (JSM/JuanManila)


Featured image: National Economic and Development Authority (NEDA) chief Karl Kendrick T. Chua

Biazon to IATF: Localize reopening of businesses

Biazon to IATF: Localize reopening of businesses | Rep Ruffy Biazon | Juan Manila

 

MANILA — Muntinlupa City representative Rozzano Rufino ‘Ruffy’ Biazon has advised the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-MEID) to localize the reopening of businesses in the country depending on which local government units (LGUs) have already rolled out their vaccination programs.

Biazon gave the advice following an earlier call from a member of the University of the Philippines OCTA Research Group (UP-OCTA) that said the government should begin first with the much-awaited Covid-19 vaccine rollout before further relaxing the quarantine and minimum health safety restrictions in Metro Manila in order to avoid a further spike in the number of infections of Covid-19.

OCTA’s Dr. Guido David stressed that Metro Manila should not risk a surge in Covid-19 cases while the government awaits rolling out the expected vaccines because this could delay and scuttle the successful implementation of the government’s vaccination program.

“For Metro Manila, I think it’s too early to risk an MGCQ (modified general community quarantine) at this stage. Especially the vaccine rollout is yet to happen. So, the best thing is to wait first for the vaccine rollout,” Guido said.

Biazon supported this line saying that the vaccination program should be started first before easing restrictions because this would ensure that customers of businesses will be safe as the country continues to grapple with the coronavirus pandemic.

“The reopening of businesses should be staggered and based on which LGUs have already implemented their respective Covid-19 vaccine plans,” he said in a statement.

“This way, we can ensure that the patrons going to these businesses will not be at risk for infection to the coronavirus and become unknowing vectors,” the solon added.

Added to this, the Muntinlupa lawmaker stressed that the IATF should synchronize the opening of sectors in the economy with that of the Covid-19 vaccine plan for that specific sector.

“We should identify sectors in the economy to open up, and the reopening should be tied in with a vaccination plan for that sector. This will help boost not just immunity, but more importantly, the confidence of consumers to actually patronize those businesses,” Biazon said.

“If we open the businesses without a confidence-building measure such as a vaccination program, the consumer response may not be enough to sustain the overhead cost, as well as lead into another surge of infections,” he further said.

To recall, the IATF earlier allowed the reopening of more businesses like cinemas, museums, and tourist attractions such as theme parks in areas under a general community quarantine (GCQ), including Metro Manila.

However, the mayors of Metro Manila have opted to defer the reopening of cinemas in the region amid continuing concerns over Covid-19.
Malacañan has rescheduled the reopening of cinemas in GCQ areas for 1 March. (JSM/JuanManila)

Biz moguls to help in tax efforts

Online tax payment

 

MANILA — Business moguls pledged support for Government efforts to encourage tax payments and prodded authorities to also go after tax evaders.

Businessmen Ramon Ang, Enrique Razon, Manuel V. Pangilinan and Jaime Augusto Zobel de Ayala all signified their support for the Bureau of Internal Revenue (BIR) in its tax collection undertakings from corporations and the private sector during the BIR’s 2021 National Tax Campaign Kick-off.

They also proposed the need to expand the tax base.

“The BIR has transformed from a monolithic agency to a digital platform; it has to collect taxes from those who are not paying taxes,” said Razon, chairman of International Container Terminal Services Inc. and Bloomberry Resorts Corp.

Zobel de Ayala pressed on the BIR to continue digitizing operations, saying the pivot to digitization especially during the lockdowns has enabled more entities to pay taxes.

Ang said, San Miguel Corp. would continue paying its taxes 100 percent.

Pangilinan, meanwhile, assured that the PLDT Group would continue to support the BIR in its digitization efforts to help with its overall goal of improving its tax collection efforts.

“We will continue to build our 5G network… We’re doing our best to make 5G devices more affordable. By the end of the year, it will be even more affordable to a greater number of Filipinos,” Pangilinan said.

All four business magnates said they would continue to partner with the Government in nation-building through timely and accurate tax payments.

Finance Secretary Carlos Dominguez III said the BIR’s digital transformation program would be “fully functional and irreversible” to ensure the agency’s much improved services and highly efficient collection performance.

The BIR’s digitalization initiative is a primary thrust of the Duterte administration involving the implementation of a state-of-the-art data management system. The bureau will also apply the “cutting edge in the application of new technologies to achieve the best revenue performance,” Secretary Dominguez said.

The agency’s digital transformation is made possible through a grant from the United States for the BIR’s Information Communication Technology Modernization Strategy and Data Center. (JSM/JuanManila)

DTI works with Amazon to help MSMEs

DTI working with Amazon to help MSMEs

 

MANILA — The Department of Trade and Industry (DTI) is working with online retailer Amazon to help micro, small and medium enterprises (MSMEs) expand their market. The volume of business registrants with the DTI has jumped up compared to its records of previous years.

“This only shows how entrepreneurs are adjusting to the new normal due to the coronavirus pandemic,” Trade and Industry secretary Ramon Lopez said, “but there is still a need for these enterprises to differentiate themselves to compete in the global market.”

The DTI is helping MSMEs go online through the Virtual National Trade Fair, as well as other e-commerce platforms.

“This will mainstream the products of MSMEs, while establishing their online presence and help them generate sales despite the lockdown restrictions,” he said.

To help businesses, the DTI has been providing assistance through different MSME development programs.

“Last year, we had many new Philippine sellers on Amazon, and our contacts in Amazon have been working with us to get in touch with more local businesses,” Lopez said.

The DTI has also partnered with Union Bank of the Philippines to digitize sari-sari stores or the small general merchandise stores in local neighborhoods.

Businesses registered with the DTI for the year has reached over 108,000. As of January, the number of online business name registrations has reached 1,539. While in 2020, a total of 916,163 businesses registered with the DTI, up from 637,567 in 2019.

Online businesses registered with the DTI, meanwhile, reached more than 86,000 in December of 2020 from just 1,700 in the January to March 15 period of the same year. (JSM/JuanManila)

Eastern Communications sets PhP2.8 billion for expansion

Eastern Communications expands

 

MANILA — To further upgrade and expand its connectivity and information and communication technologies (ICT) services nationwide, telecommunications company Eastern Communications allocates P2.8 billion this year.

It has started laying fiber optic cables to address requirements of companies in central business districts and placed strategic hubs in various regional locations to better serve the local enterprises, the company said in a statement.

Plans for expansion lined up in Davao City, Cagayan De Oro, Dumaguete, Tagbilaran, Bacolod, Roxas, Kalibo, Caticlan, Boracay, Naga, Legazpi, Iriga, and Sorsogon. Meanwhile, its network expansion in Iloilo and Tuguegarao have concluded.

“Eastern will continue this trend and we plan to be available nationwide in the next few years,” the company’s co-coordinator Aileen Regio said.

“This is an exciting time of growth for all of us and we, as a telecommunications company, look forward to being a big part of the Philippines’ stronger tomorrow,” she said.

While a number of its ICT solutions are already available across the country, the company will expand more services to empower various locations in line with the Government’s “Digital Cities” program.

The initiative is geared towards sustaining the rapid growth of the information technology and business process management (IT-BPM) sector and promote countryside development.

“We commend the efforts of Eastern Communications to broaden and strengthen their network within and beyond Metro Manila as it is supportive of our goal to drive inclusive growth in the countryside through the Digital Cities 2025 program,” IT & Business Process Association of the Philippines president and CEO Rey Untal said.

“These expansion plans will provide Philippine-based businesses much-needed access to innovative services and faster, more reliable internet connection, critical tools to forge ahead in this new normal,” Untal said.

Eastern Communications posted growth in 2020 largely because of the increased number of subscribers acquiring single to multiple services such as work from home productivity tools, residential internet, and enterprise connectivity.

It has also launched a variety of connectivity products and ICT solutions to businesses, which included upgraded and most advanced cloud service and cyber defense. (JSM/JuanManila)

UnionBank, BPI promote MSMEs loan portfolios

UBP, BPI promote MSMEs loan portfolios

 

MANILA — Union Bank of the Philippines and the Bank of the Philippine Islands, two of the country’s largest banks are promoting their lending portfolios for MSMEs (micro, small and medium enterprises) severely affected by the pandemic.

“The default rate start of the MSME sector has been improving over the past few months with the partial reopening of the economy,” says Manuel Santiago, chief mass market and financial inclusion executive at Aboitiz-led Union Bank of the Philippines.

The bank’s current default rate is about seven percent, which had already peaked at nine percent. When they started to see a decline, Santiago said, the bank had to make adjustments in its underwriting processes for MSME loans affected by the pandemic.

“I can attribute the improvement in those adjustments that were made because as I said the underwriting criteria is obviously not the same as pre-pandemic,” he said.

UnionBank has helped its MSME clients in their repayment plan.

A little time was needed to recover. “And right now the portfolios are quite stable. It probably is due to the fact that our credit underwriting processes have been in place ahead of the pandemic,” he says.

Loans disbursed by banks contracted for the first time in 14 years after declining by 0.7 percent to PhP9.18 trillion in end of December, and banks were wary of the borrowers’ capacity to pay amid the pandemic.

The Ayala-led Bank of the Philippine Islands (BPI), meanwhile, entered into a partnership with the Department of Trade and Industry (DTI) to further support small and medium-sized enterprises (SMEs) as they recover from the effects of the global health crisis.

Its business banking head, Eric Luchangco says, “The bank recognizes its role in supporting companies and helping the economy grow as it aims to build a more financially inclusive Philippines.

“We hope that through this partnership with DTI, we will be able to make it clear to our SME customers that they are not too small to be served by a large bank.

“We believe they deserve to have access to the same kind of financial products and services that larger companies already have access to.”

Under a memorandum of understanding, BPI would support DTI programs such as “SME Roving Academy,” “Kapatid,” “Mentor Me,” “Youth Entrepreneurship Program,” including regional trade fairs.

To maintain a good rapport with its SME clients, BPI provides free trainings on ways to secure a business, manage and leverage on loans, and banking in the new normal.

DTI undersecretary Blesila Lantayona, in the same vein, says, “The agency is strongly committed to help MSMEs recover from adversities brought about by the pandemic and to thrive in the new normal business environment.

“As both parties commit to work together in teaching MSMEs nationwide to adapt and possibly pivot their businesses to the new normal, we look forward to the actualization of this MOU by looking at the greater visibility of BPI, especially in the programs and projects of DTI regional and provincial offices.”

Based on DTI’s partial impact assessment survey on the MSME sector, about 52 percent of enterprises have gone back to full operation, 42.8 percent have partially opened, while 4.9 percent are still closed.

Thirty to 35 percent SMEs were reported closed in April 2020. (JSM/JuanManila)

Moody’s: China jumpstarts regional trade, Asean economies still struggling

China jumpstarts regional trade

 

MANILA China jumpstarts recovery as export demands in the Asia-Pacific (APAC) region is gaining traction. But then, exports alone will not quicken Southeast Asian economies. That is according to a report from Moody’s economists Steven Cochrane and Sonia Zhu. They said exports to China are “a critical lifeline to the APAC region.”

Vietnam, Malaysia, Taiwan and Indonesia are key beneficiaries of this Chinese demand. In particular, Vietnam and Taiwanwhere manufacturing has close links to China—has outperformed the rest in the region and have made easy rebound to pre-pandemic levels.

Singapore, meanwhile, has posted a 7.9 percent year-on-year increase in non-oil domestic exports (NODX) to China in January, according to figures on Wednesday. That’s even as NODX to China dipped to S$26.4 billion in 2020, from S$28.7 billion in 2019.

China’s growing trade demand came after planners targeted export-oriented manufacturers, suppliers and ports in their Covid-19 recovery strategy.

“This focus on getting the production side of the economy back on track effectively allowed manufacturing to spark China’s recovery beginning in the second quarter of last year, and to lift surrounding Asian economies in the second half of 2020 as they eased up on many movement restrictions,” the Moody’s economists noted.

However, they said, “this trade alone is not enough to guarantee full economic recovery,” especially with markets such as Indonesia, the Philippines and Malaysia struggling to contain coronavirus outbreaks that could affect industry activity.

“Regional trade between China and the rest of APAC also depends upon stable demand for goods from Europe and North America,” the economists added.

As such, most of Southeast Asia is not expected to resume pre-pandemic output until early-2022. Thailand and the Philippines, which are highly dependent on travel, tourism and hospitality, will be the last to recover, the Moody’s report projected.

Moreover, longer-term economic challenges in the region include fiscal positions, household and corporate debt, structural changes in supply chains and , and the loss of employment and income from the pandemic downturn.  (JSM/JuanManila)

Central banks plan to back digital units as crypto soars

Central banks plan to back digital units as crypto soars

 

  • Bitcoin rose above US$50,000 for the first time Tuesday, 16 February. At around 12.35 GMT, bitcoin hit an all-time high of US$50,547.70 (PhP2.449M), marking a 4.4% gain since Monday. It later stood at US$49,213.54 (PhP2.383M)
  • Corporate heavyweights as Elon Musk increasingly back the world’s most popular virtual currency

 

With the rapid rise of cryptocurrencies and the drop in global use of cash, a number of central banks, in response, have announced plans for bank-backed digital units.

 

Unregulated and attractive

Because it is unregulated by any central bank, bitcoin emerged as an attractive option for investors with an appetite for the exotic. A downside seen is that criminals have also picked up on its under-the-radar appeal.

Debate over the status of the digital asset, whether to be treated as money, an asset or a commodity, still rages. Traded via a decentralized registry system, called a blockchain, bitcoins require massive computer processing power in order to manage and implement transactions. That power, meanwhile, is provided by bitcoin miners, who do so in the hope they will receive new bitcoins for validating transaction data.

 

Crypto soars at record high, passed US$50K price level

Once the domain of internet geeks and hobbyists, bitcoin has since exploded in popularity and has now soared by almost 75% in value this year.

“The crypto king has crossed the US$50,000 (PhP2.422M) price level for the first time as institutions are all over it,” says AvaTrade analyst Naeem Aslam. “There is a lot of FOMO (fear of missing out) among traders as the price is going through the roof and we have limited supply.”

Aslam told AFP (Agence France-Presse) that bitcoin could reach US$100,000 (PhP4.846M). “Of course, there will be some bumps but investors should consider them as an opportunity to bag some bargains,” he adds.

Bitcoin, on a meteoric rise since March last year when it stood at US$5,000 (PhP242.340K), was spurred by online payments giant PayPal, which said it would allow account holders to use cryptocurrency.

The unit last week blasted its way past US$45,000 (PhP2,181B) after Elon Musk’s electric carmaker Tesla invested US$1.5B (PhP72.7B) in the virtual unit. In a further boost, Tesla unveiled plans to accept the cryptocurrency from customers buying its vehicles.

 

Mastercard goes crypto, too

Mastercard and US financial giant BNY Mellon have meanwhile agreed to accept digital currencies as payments, even as many regulators remain skeptical.

Mastercard goes crypto
Under its Innovations, this is “why Mastercard is bringing crypto onto its network.”

Adding further legitimacy, Twitter chief Jack Dorsey and rap mogul Jay-Z are putting their heads together to make bitcoin “the Internet’s currency.”

Bitcoin, launched in 2009, the crypto hit the headlines in 2017 after soaring from less than US$1,000 (PhP48,465.00) in January to almost US$20,000 (PhP969.3K) in December of the same year.

The virtual bubble then burst in subsequent days, with bitcoin’s value then fluctuating wildly before sinking below US$5,000 (PhP242,310.00) by October 2018.

However, strengthening corporate support has transformed the outlook this time around, commentators say. “Growing corporate support for the crypto makes this a very different market to what it was in 2017,” says Markets.com analyst Neil Wilson. (JSM/JuanManila)

 

Taskforce T3 is beside Gov’t efforts on COVID-19 rollout

WHO: COVAX global vaccine facility

MANILA Taskforce T3 (Test, Trace, Treat), a private sector coalition, vows to strengthen its collaboration with the national Government as the arrival of the first batch of vaccines is fast approaching. The landing of COVID-19 vaccines under the COVAX global vaccine facility will prompt the Government’s rollout of the vaccination program. T3 backs a speedy pace of the Government’s drive.

 

  • COVID-19 Vaccines Global Access, abbreviated as COVAX, is a global initiative aimed at equitable access to COVID-19 vaccines led by the Global Alliance for Vaccines and Immunization, the World Health Organization, the Coalition for Epidemic Preparedness Innovations, and others.

 

“The private sector eagerly anticipates the arrival of the first batch of vaccines from the COVAX facility in order for the country to jumpstart its vaccination program. The collective goal for both the private sector and government is to vaccinate as many people as possible at the soonest possible time,” Guillermo Luz, chief resilience officer of the Philippine Disaster Resilience Foundation, says in a statement.

Luz recognizes that these initial vaccine doses were earmarked for priority sectors: health care professionals and senior citizens.

“Our medical frontliners have been tirelessly protecting and treating Filipinos from the beginning of the pandemic and we support the Government’s prioritization of health care workers in receiving the initial vaccine doses,” Paolo Borromeo, CEO of AC Health, says.

Taskforce T3’s technical support on vaccine administration and cold-chain logistics for the transit of temperature-controlled vaccine vials are in place.

With the Department of Health (DOH) and the National Task Force (NTF) against COVID-19, Taskforce T3 provides vaccine education campaign to inform citizens about vaccine safety and efficacy.

Taskforce T3 has also procured and donated vaccine doses to the national Government for its economic and essential frontliners. The procurement intends to augment the vaccine supply of the national Government and the vaccines secured from the COVAX facility.

“A successful vaccination rollout is crucial to our country’s efforts to manage the COVID-19 pandemic and support our ultimate goal to protect lives and provide livelihood. The private sector is unwavering in its commitment to assist the national Government by providing resources and expertise to ensure the success of its vaccination program,” says Joey Concepcion, founder of Go Negosyo and presidential adviser for entrepreneurship.

Taskforce T3 was formed in April 2020 to work closely with the NTF to manage the outbreak of the pandemic.

It launched “Ingat Angat Tayong Lahat” campaign to build consumer confidence and encourage Filipinos to help rebuild the economy and protect jobs, as long as strict safety guidelines and protocols are followed. (JSM/JuanManila)


Featured image: World Health Organization (WHO) Headquarters in Geneva, Switzerland.

Phoenix Petrol open for sale, after Q3 losses and growing finance charges

Phoenix Petroleum is open to sell stakes

MANILA — With the oil industry reeling from the adverse impact of the ongoing coronavirus global pandemic, one of the country’s largest fuel retailers intends to sell a minority or even a controlling stake in the company after aggressive expansion in the past years only sunk it more in debts despite boosting company earnings. As of Q3 2020, Phoenix stood at PhP49.2 billion in debt, of which PhP37.8 billion was current or due within a year.

Its business difficulties were also further amplified by the onslaught of the Covid-19 pandemic which caused the company to register a net loss of PhP75 million as of September 2020, reversing the PhP931.5 million profit the previous year as revenues fell 22.4 percent to PhP56.8 billion on lower oil prices. The company, however, said recovery was underway with its retail business at 80 percent of pre-pandemic volumes so an influx in capital by prospective investors remains viable in the future.

The Philippine Rating Services Corp.—or PhilRatings, a rating agency that provides credit ratings for bonds, commercial paper, banks and other financial institutions, local governments, project finance transactions and asset-backed securities—expressed these concerns in a July 2020 report when it pointed to Phoenix’s increasing interest expenses and declining profit margins. It said Phoenix’s coverage ratios to pay obligations had been dropping since 2017, triggering financial analysts to say that Phoenix’s lower ratio indicated more difficulty in servicing debts.

“Given such, the level of finance charges of the company has grown since 2017, exceeding profitability growth rates,” PhilRatings noted while giving Phoenix a “stable outlook” status.

Davao-based businessman Dennis Uy of Phoenix Petroleum Philippines Incorporated says he is “open” to selling shares for the company’s ownership in a bid to mitigate company losses citing the pandemic-induced economic slump experienced not only by the Philippines but by the rest of the world.

Uy, founder, president and chief-executive-officer of Phoenix, clarifies though that no final decision has actually been made but his decision to “sell’ is in consideration that potential new investors in the oil firm would provide Phoenix with a “stronger balance sheet and higher earnings per share (EPS).”

Data from the Philippine Stock Exchange (PSE) shows the petrol retailer has a market value of PhP18.4 billion and is listed as among the most recognizable companies in Uy’s group. Uy has a range of firms in property, logistics and gaming to restaurants, education and telecommunications via Chinese startup Dito Telecommunity.

An independent fuel retailer established in Davao in 2002, Phoenix has shown encouragement in taking on bigger players many times its size, including the “Big 3” oil companies: Petron Corporation, Pilipinas Shell Petroleum, and Chevron Philippines.

Phoenix, through Uy’s support of the former Davao City mayor’s presidential bid in 2016, was identified as a major donor of President Rodrigo Duterte and it is during Duterte’s term that saw Phoenix and Uy’s other companies’ rapid expansion.

Last year, Phoenix has reached 665 retail stations across the country and has displaced Chevron to become the country’s third-biggest oil company after Petron and Pilipinas Shell. This paved the way for the firm to launch an aggressive acquisition campaign for a liquefied petroleum gas company Petronas Energy Philippines in 2017 and the local Family Mart convenience store chain the following year. The company’s growing debts worried lenders despite the purchases. (JSM/JuanManila)


Featured image: P20/liter Thanksgiving Promo by Phoenix Petroleum at its Barra, Opol station, May 2020. Photo via CDODev.com