Fitch revises PH credit outlook to ‘stable’ on resilient economy

FITCH Ratings said Monday it affirmed the Philippines credit rating at investment-grade of ‘BBB’ but revised the outlook on the country’s long-term foreign-currency issuer default rating from “negative” to “stable” on resilient economic growth.

“The revision of the outlook to stable reflects Fitch’s improved confidence that the Philippines is returning to strong medium-term growth after the Covid-19 pandemic, supporting sustained reductions in government debt/ GDP, after substantial increases in recent years,” Fitch said in a statement.

The international debt watcher said the revision also reflected its assessment that the Philippines’ economic policy framework remains sound and in line with ‘BBB’ peers, despite its low scores on World Bank Governance indicators.

It said the revision comes despite some relative deterioration over the last years in credit metrics that previously had been strengths, including in government debt/ GDP and net external debt/GDP.

“We forecast real GDP growth of above 6 percent over the medium term, considerably stronger than the ‘BBB’ median of 3 percent, after a record outturn of 7.6 percent in 2022, reflecting normaliza- tion of activity after the pandemic and the government’s investment program.

It noted that growth moderated to 6.6 percent year-on-year in the first quarter of 2023, with the post-pandemic recovery boost fading. Ongoing reforms to the business environment and investment regulations create upside potential for growth, it said.

Fitch said it expects the general government deficit to narrow to 2.8 percent of GDP in 2023 and 2024, from an estimated 3.3 percent of GDP in 2022 and 4.6 percent of GDP in 2021.

This is consistent with a narrowing of the budgetary central government deficit to 5.7 percent of GDP by 2024 from 7.3 percent of GDP in 2022 and 8.6 percent of GDP in 2021.

Fitch said the gradual pace of consolida- tion reflects the authorities’ focus on fostering economic growth and development.

It said the narrower general government deficits compared with central government deficits reflect the surpluses of local government units and social security funds.

The government is projecting a CG deficit of 5.1 percent of GDP by 2024, with most of the consolidation coming from spending efficiency gains and capital spending reductions. Fitch said ther would be fully realized in its opinion.

“We consider the fiscal revenue targets unambitious and expect them to be exceeded, as in recent years. However, spending will also likely exceed budgeted amounts. Overall budget balance outturns have tended to be close to targets in recent history,” it said.

Pascual wants to pursue PH-EU free trade talks

TRADE Secretary Alfredo Pascual said Monday the Philippines is keen on pursuing the resumption of negotiations on the PhilippinesEU Free Trade Agreement.

Pascual said in a meeting with members of the European Union-ASEAN Business Council at Dusit Thani Hotel in Makati City that a successful negotiation of the FTA would help the Philippines secure additional duty-free market access beyond those covered by the EU GSP+ scheme and provide a conducive framework for attracting greater investments from the EU.

“I’d like to reemphasize our growth strategy centered around enhancing trade and investment. Our objective is to foster job creation and poverty reduction by uplifting the global position of our export sectors and driving investments into strategic areas,” Pascual said.

He said an FTA with the EU would put the Philippines at par with other ASEAN countries who were aggressively pursuing FTAs with the EU. The Philippines is also pursuing the re-authorization of the EU GSP+ that is set to expire by end-2023. Othel V. Campos

BMI predicts another BSP rate hike in June

THE Bangko Sentral ng Pilipinas is expected to increase the key interest rate at least once more by 25 basis points to 6.5 percent this year on continuing threat of elevated inflation, BMI, a unit of Fitch Solutions, said in a report Monday.

“We expect that the BSP will hike once more at the next meeting, which is scheduled on June 22, as disinflation momentum is likely to slow in the near term. The latest consumer price data showed inflation dropping to 6.6 percent yearon-year in April from 7.6 percent in March and 8.6 percent in February,” BMI said.

The April inflation marked the lowest reading since August 2022, with food prices increasing the least in seven months. BMI said while inflation might remain on a broad downward trend through end-2023, “the pace of disinflation will likely slow.”

It said the BSP’s move of keeping the key policy rate steady on May 18 at 6.25 percent marked a pause rather than an end to the monetary tightening cycle, as inflation remained above the BSP’s targeted ceiling of 4.0 percent and expected to subside only by the fourth quarter of this year.

“We also flag growing upside risks to inflation as a result of food supply disruptions caused by adverse weather conditions. This could see the central bank hike once more to anchor inflation expectations,” BMI said. Julito G. Rada

CENTRAL center) underscores the country’s commitment to creating an enabling regulatory environment to promote responsible innovation, resilient financial systems and financial inclusion during a meeting with the Bank of Botswana at the BSP head office in Manila. With Medalla are (seated, from left) are BoB Deputy Governor Tshokologo Alex Kganetsano and advisor Sheila Malebogo Sealetsa; (standing, from left) Novus Transact Philippines Corporation country head Ariel Gumabao, BoB head of property management procurement and projects Moeti Modimana and banking manager Vincent Golebetswe, RCBC executive vice president Lito Villanueva, BoB director Julius Ghanie, Novus Technologies president and chief executive Ricardos Khoury, BoB coordinator Ruth Baitshepi and Novus Technologies vice president of strategic initiatives Sidath Wijeratne.

Globe says proceeds from sale of telecom towers reach nearly P100b

By Darwin G. Amojelar

GLOBE Telecom Inc. said Monday the total proceeds from the sale and leaseback of its telecom towers reached nearly P100 billion.

The telecom unit of the Ayala Group said it has actively sold non-strategic infrastructure since last year, aiming to offload 7,000 towers in what is potentially the largest sale and leaseback transaction in the Philippines.

The recent contract with Unity Digital Infrastructure pushed the number to over

7,500, representing the upper threshold of its divestment plan. The agreement entails the sale and leaseback of 447 towers, generating gross proceeds of P5.4 billion to be paid in tranches.

“At the moment I think we have upped our tower sale. We will see if there are any more opportunistic transactions for the balance year but the fact that we’re at 7,509 is already over our target,” Globe chief finance officer Rizza Maniego-Eala said.

The company said including the Unity deal, the gross proceeds for all tower transactions already reached P96.322 billion. Globe successfully transferred 44 percent or 3,120 assets of the 7,059 acquired by tower companies, yielding about P40.5 billion.

Globe said it would use the tower sale proceeds for capital expenditure investments, facilitating the improvement of the company’s financial standing. Globe earlier raised P11 billion from the closure of four tower sales with PhilTower Consortium Inc. (PhilTower). As part of this milestone, an additional 132 towers in Visayas and Mindanao were transferred to PhilTower, amounting to about P2 billion. Globe also turned over 710 of 1,350 towers, accompanied by PhilTower’s commitment to construct 750 more across the Visayas and Mindanao regions.

Aside from PhilTower, MIESCOR Infrastructure Development Corp. received 39 percent of the 2,180 towers and related passive telecom infrastructure under the first Globe portfolio. Frontier Tower Associates Philippines also received 44 percent of the second portfolio, which consisted of 3,529 towers.

Century Pacific raises P2.8b on strong investor interest in equity placement

By Jennifer

CENTURY

The deal was done book-built offering with Century Pacific Group Inc., the parent company of CNPF, as the sole selling shareholder.

CNPF said in a disclosure to the stock exchange the transaction was oversubscribed, anchored by high-quality long-

LAOAG FLIGHT.

Cebu Pacific Flight 5J 404 is welcomed with a water cannon salute upon landing at Laoag International Airport. Ilocos Norte officials and Cebu Pacific executives attended the inauguration of the airline’s Laoag-Manila route.

Study says Filipinos

By Othel V. Campos

FILIPINOS spend an average of P800 a month on sari-sari stores, with alcohol and tobacco getting the bulk of their budget. The consumer habit study found that Filipinos continue to allocate a portion of their monthly budget on vices like alcohol and tobacco, alongside other beverages and hygiene supplies.

only international and domestic institutional investors.

The transaction was priced at a tight discount of 5.2 percent to last close amid strong demand from investors.

“We are seeing opportunities at the holding company level and will be de- ploying proceeds across various investments,” CPGI chairman Christopher T. Po said.

Post transaction, CPG will continue to own a majority stake in CNPF with 66-percent stake.

The public ownership of CNPF will increase to 34 percent from 31 percent, which will improve the trading liquidity and allow for greater investor participation in the stock, the company said.

“We do not expect any sale of CNPF shares by CPGI for the foreseeable future. As a majority shareholder, we continue to support the long-term prospects of CNPF,” Po said.

UBS AG Singapore Branch acted as sole placement agent for the transaction.

CNPF grew its first-quarter net income by 6 percent to P1.5 billion as sales rose 6 percent to P15.6 billion.

The company’s main business segments include canned tuna, canned meat, milk, coconut and plant-based products

The share price of CNPF ended lower by P0.95 to close at P25 Monday.

spend an average of P800 on sari-sari stores each month

Using data gathered from 200,000 sari-sari stores nationwide, data analytics start-up Packworks said cigarettes, alcohol, hygiene products, soda drinks and powdered drinks were the top 5 essential goods that make up the monthly budget of a regular Filipino household.

“It’s a war amongst cigarettes and liquor, beverages and hygiene products. While Filipino households continue to prioritize essential goods, it’s apparent that many consumers have formed habits or indulgences that significantly influence their spending decisions,” said Packworks data product manager Samantha de Guzman. Packworks intelligence tool Sari IQ also revealed disparities when it comes to brand preferences. While the categories of goods purchased were largely uniform, the specific brands that con- sumers gravitated towards showed significant regional variance.

The National Capital Region led the country in consumer spending with an average weekly basket size of P452.32 or P1,809.28 a month. Consumers from NCR showed a clear preference for brands such as Marlboro and Fortune for cigarettes, Cream Silk for hair care, Emperador Light for alcoholic beverages and Surf with Fabcon for detergent.

FedEx opens logistics center for

dangerous goods in Cebu

FEDEX Express said Monday it opened onestop shop logistics solutions for dangerous goods in Cebu.

FedEx Express said it provides greater convenience to customers shipping over 2,200 types of dangerous goods from class 1 to 9 such as paints, perfumes, bleaches and electronic devices with lithium batteries to overseas markets. Dangerous goods are items or substances that may pose health, safety or environmental hazards if not handled carefully.

“This suite of services gives businesses enhanced capabilities to expand their portfolio and meet the growing demands of their customers. We hope to open up more possibilities for local businesses to tap into global trade opportunities, as well as contribute towards Cebu’s continuous growth, as one of the country’s key economic and tourism hotspots,” said FedEx Express Philippines managing director Maribeth Espinosa. FedEx said through its expertise, dangerous goods are safely packed, marked, labelled and appropriately documented, meticulously handled and shipped by trained personnel to ensure they arrive safely at their destination. Othel V. Campos

Repower expects 2023 net income to rise 7.8% to P300m

By Alena Mae S. Flores

REPOWER Energy Development Corp. expects net income to reach P300 million in 2023, up 7.8 percent from P168 million last year.

Revenues climbed to P382 million in 2022 from P233 million in 2021, reflecting a strong momentum in terms of financial performance.

REDC said one of the factors leading to the company’s strong financial performance is the favorable regulatory regime under the feed-in-tariff program—a policy designed to provide a guaranteed fixed rate for renewable energy investors.

“If the government can support us with more financial capabilities to achieve financial closure for the projects, that would help a lot,” REDC president Eric Peter Roxas said in an interview with ANC’s Market Edge.

The company is pursuing an initial public offering of 200 million primary common shares, with an over-allotment option for another 30 million secondary shares. The shares will be sold at P5 apiece.

REDC intends to use the proceeds for its expansion plans such as partially funding the equity portion of Pulanai mini hydro power project and Piapi minihydro project in Bukidnon and Quezon provinces, respectively and acquiring other renewable energy projects.

REDC has six operating power plants in Laguna, Quezon and Camarines Sur.

Two more power plants will come online by June 2023, increasing the company’s operational capacity by over 60 percent.

The company set its sights on “growing another 1,000 megawatts in its portfolio, concentrated on hydropower projects, possibly upstream and downstream of existing power plants and seawater pump storage” in the next five years.