BUSINESS Interest cut possible this year—Remolona

By Othel V. Campos

NEWLY-APPOINTED Bangko Sentral ng Pilipinas

Governor Eli Remolona said an interest rate reduction is possible within the year if inflation rate falls below 4 percent.

Remolona said the BSP’s Monetary Board might also consider an extended pause in interest rate adjustments, while it was reviewing all relevant data.

“We’re also looking forward to what we might do down the road. We’re not just looking at one policy rate. We’re looking at a path of the policy rate. It’s implicit in every decision we make,” he

In Brief

DBP approves P8.57b

loan

For Modern Transport

STATE-RUN Development Bank of the Philippines, the eighth-largest lender in terms of assets, approved a total of P8.57 billion in the first half this year under its PASADA program as it actively participates in the government’s efforts to hasten the modernization of the transport sector.

PASADA, or the Program Assistance to Support Alternative Driving Approaches, is DBP’s flagship program for the modernization of the country’s transportation system and offers flexible and competitive financing options tailored to the unique needs of transport corporations and cooperatives accredited by the Office of the Transport Cooperatives.

It said in a statement Thursday that the total loan amount consisted of 104 accounts.

DBP recently granted a P367.72-million credit assistance to an Iloilo-based transport cooperative for the acquisition of 148 brandnew modern public utility jeepneys.

DBP president and chief executive Michael de Jesus said the credit support to Metro Iloilo Transport Service Cooperative under DBP’s PASADA program would finance the acquisition of Euro-compliant PUJs to be deployed to seven routes in Iloilo City. Julito G. Rada

Telcos welcome EO

Streamlining Processes

THE country’s three largest telecom companies said a new executive order issued by President Ferdinand Marcos Jr. would further expedite the deployment of telecom infrastructure in the country.

Globe Telecom Inc., PLDT Inc. and DITO Telecommunity Corp. lauded the President for issuing Executive Order No. 32, which streamlines the process of obtaining government permits for the construction of telecommunications infrastructure.

The President’s order is seen to pave the way for greater digital transformation in the country, aligned with the government and private sector’s shared goal of bridging the digital divide by increasing access to digital resources, services and opportunities.

“We are grateful to President Marcos for issuing this EO, which will allow the telco industry and the adjunct TowerCo industry to further ramp up infrastructure builds that will provide life-enabling connectivity in an equitable way across the country,” Globe president and chief executive Ernest Cu said. “This will help accelerate the country’s digital transformation and open doors for more opportunities to Filipinos in the areas of education, employment and innovation,” he said. Darwin G. Amojelar

ERC asks NGCP to explain delay in 37 projects

THE Energy Regulatory Commission issued a show cause order to the National Grid Corp. of the Philippines to explain the alleged delay in the implementation of 37 transmission and other related projects. It said of the 37 projects, 26 are still uncompleted and three are yet to commence.

The ERC said NGCP’s delays in the 37 projects are at 820 days, ranging from 21 to 2,561 days.

The ERC directed NGCP to submit with 15 days from receipt of the order its explanation why no administrative penalty should be imposed upon it for violation of the agency’s orders and decisions pursuant to Section 21 and 9 (d) of the Electric Power Industry Reform Act of 2001.

ERC chairperson Monalisa Dimalanta said they expected NGCP to submit a response within 15 days from July 4, when the order was issued although the decision was promulgated on June 14.

The ERC said NGCP should submit detailed explanations on the cause of delay per project as well as the actual timeline of implementation per project in Gantt Chart format. Alena Mae S. Flores said during dinner with reporters at Manila Hotel Wednesday night.

Remolona said this would be one of the topics the MB would discuss in its next meeting.

He said an extended pause would help the BSP assess the extremely high interest rate level. The deceleration in inflation in recent months was “better than what we expected,” he said.

Inflation rate eased to a 13-month low of 5.4 percent in June from 6.1 percent in May. It was also the fifth month of deceleration this year since inflation peaked at 8.7 percent in January.

It slowed to 8.6 percent in February, 7.6 percent in March, 6.6 percent in April, 6.1 percent in May and 5.4 percent in June.

The June inflation rate was also within the BSP’s forecast range of 5.3 percent to 6.1 percent for the month.

Remolona, a seasoned international banker and a member of the policysetting Monetary Board since August 2022, succeeded Felipe Medalla as BSP governor this month.

Remolona said he would continue the priorities that bore fruit under the leadership of Medalla, and even work harder to do better during his term. He considers Medalla a mentor and lifelong friend.

“Together we must build on the progress we have already made. Inflation has finally started to come down as Gov. Philip explained. And if our models are right, we should be back in our target range even by the end of this year,” he said earlier.

Remolona assured that the Philippine banking system remained strong and their capital and liquidity were more than adequate.

“That’s why, in recovering from the pandemic, our banks have been a source of strength, unlike in previous crises, when they were a source of weakness.

The plumbing of our system -- our payments and settlement system -- has increasingly become digitalized and efficient. We are delivering greater and greater access to financial services for our people,” he said.

Remolona previously served as an independent director of Bank of the Philippine Islands where he chaired its risk management committee.

He was also a professor of finance and director of central banking at the Asia School of Business in Kuala Lumpur.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the appointment of Remolona was a “welcome development for the markets and the economy.”

By Jenniffer B. Austria

CENTURY Pacific Foods Inc. said approval for the Bataan-Cavite Interlink Bridge project by November 2023. ADB together with Asian Infrastructure Investment Bank earlier agreed to co-finance the civil works construction of the project which targeted to start by 2024.

Thursday it will allocate between P3 billion and P3.5 billion for 2023 capital expenditures, higher than the usual P2 billion to P2.5 billion, to increase production capacity of meat, coconut, pet food and packaging businesses.

CPNF executive chairman Christopher Po said during the annual stockholders meeting the company would expand the capacity of its businesses as demand remains strong despite inflationary pressures.

DPWH seeks $1.95-b ADB loan for Bataan-Cavite bridge

By Darwin G. Amojelar

THE Department of Public Works and Highways is eyeing a $1.95-billion loan from the Asian Development Bank to help fund the construction of the Bataan-Cavite Interlink Bridge Project. It said it was expecting to obtain approval for the ADB loan by November this year.

The ADB, together with Asian Infrastructure Investment Bank, earlier agreed to co-finance the civil works construction of the project which was targeted to start by 2024.

The project will be divided into seven contract packages, with the construction to begin first in the two on-land packages. Package 1 refers to the 5-kilometer Bataan Land Approach and Package

2 involves the 1.35-kilometer Cavite Land Approach.

Packages 3 and 4 are Marine Viaducts in the north and south with a total length of 20.65 kilometers.

Meanwhile, packages 5 and 6 are the North Channel and South Channel Bridges with a length of 2.15 km. and 3.15 km., respectively. The seventh package involves a project-wide ancillary works.

The BCIB project will provide a permanent road link between the provinces of Bataan and Cavite, the key missing link in the road network of Metro Manila, Central Luzon and Calabarzon regions.

The project will be about 32 km. long, comprising two cable-stayed bridges with the main spans of 900 and 400 me-

FRANCORP 500

CLUB. Shawarma Shack founder and chief executive Walther Uzi Buenavista (left) receives the prestigious Francorp 500 Club recognition as part of Francorp’s 25th anniversary celebration.

Buenavista receives the award from Francorp Philippines vice chair Ma. Alegria Sibal Limjoco who is widely recognized as the ‘Mother of Philippine Franchising’. She is also the vice chair of Philippine Franchise Association and honorary chair and adviser of the Philippine Chamber of Commerce and Industry. Francorp 500 Club recognizes brands that have grown to over 500 branches via franchising. Shawarma Shack, which delights customers with delectable Mediterranean fare, has now over 700 outlets nationwide.

Airasia PH launches Cebu-Narita flights to boost Japan presence

AIRASIA Philippines said Thursday it strengthened its Northeast Asia presence with the launch of thrice-weekly flights to Narita (Tokyo), Japan via the Mactan-Cebu International Airport.

“AirAsia’s mission has always been about democratizing air travel by offering bang-for-the-buck deals. And we are making it more convenient for travelers by opening more gateways in the country that will allow guests to directly fly to international destinations,” said AirAsia Philippines communications and public affairs head Steve Dailisan said. Narita is AirAsia’s fourth interna- tional destination directly flying out of the MCIA along with the thrice weekly flights to Kuala Lumpur and Seoul, and the four times weekly flights to Taipei.

The budget airline also plans on expanding its operations in Cebu, making it a convenient gateway for travelers from the south.

AirAsia Philippines also launched its 7.7 Sale from July 1 to 9 this year.

International flights including Hong Kong and Tokyo are available for as low as P577 to P3,077 for travels until Dec. 14, 2023.

All AirAsia’s domestic flights are also available for as low as P77 one- way base fare.

Meanwhile, travelers to Northeast Asia countries may now experience ease in visa application as South Korea opens e-Group visa application for regular tourists.

Starting June 27, groups of at least three members may apply for the egroup visa through accredited travel agencies.

AirAsia reminded guests that all international flights would continue to depart and arrive at the NAIA International Airport Terminal 3 following the transfer of all domestic flights to NAIA Terminal 2. Darwin G. Amojelar ters for navigation channels, 24 km of marine and land viaducts and 5 km of approach roads.

It will serve as an alternative route from north Luzon to south Luzon without traveling through the heavy congested roadways of NCR, and thus reduce the pressure on the existing north-south corridors.

BCIB may also serve as the main evacuation route for the people of Bataan, Cavite, Rizal and south NCR in case of a natural hazard, according to the DPWH.

The feasibility study for the BCIB Project was completed under the ADB’s Infrastructure Preparation and Innovation Facility in 2019, when the preliminary architectural and engineering design was prepared.

Pse Index Closing

Po said the group is more optimistic for the rest of the year as the decline in inflation rate, increase in minimum wage and stable peso are all positive trends for the consumer segment.

“Moving to the present, halfway through 2023, the sky hasn’t fully cleared. Uncertainties still remain. Nonetheless, management is working towards double-digit growth for our topline, supported by a resilient demand. Profits are on their way to improving as cost pressures ease, thus, for the year, we expect to deliver a mid to high single-digit improvement in our bottom line,” Po said.

He said while the increase in minimum wage would raise labor cost, this would be manageable as labor accounts for less than 10 percent of cost of goods.

Po said there were only a few company employees earning the minimum wage.

Po said as the company’s core branded products in the marine, meat and milk categories continue to deliver positive results, its emerging business, particularly coconut, pet food and plant-based meat products are also expected to post double-digit growth in the coming years.

“Coconut, plant-based alternatives and pet food are categories that are adjacent to our already existing businesses, where we can leverage capabilities and scale. We expect these segments to grow as disposable incomes rise and consumers add more goods to their baskets. These emerging businesses are meant to futureproof our company and deliver long-term, sustainable growth,” he said.

CNPF elected three new three new members of its board of directors. They include Stephen CuUnjieng, lawyer Regina Jacinto-Barrientos and Philip Soliven.

Bangko Sentral to begin posting overnight rate as market reference

By Julito G. Rada

THE Bangko Sentral ng Pilipinas said Thursday it will publish on its website an overnight rate that will serve as a market reference with the cessation of the global use of the London Interbank Offered Rate.

It said the overnight rate uses as reference the secondary market rate on the 28-day BSP bill to compute an ON equivalent.

“This starts a broader initiative to enhance the BSP ON Reverse Repurchase Agreement facility. Once the enhancements are fully completed, the new rate from the RRP facility will become the ON reference rate,” it said in a statement.

The BSP said that in pursuit of its statutory mandates, it either siphons excesses or augments shortfalls in market liquidity via open market operations. The main tool is the ON RRP facility which is based on the BSP policy rate. Under the existing framework, the RRP facility auctions a pre-announced amount at a fixed rate. The ongoing enhancements, such as the change in the auction window from 4 p.m. to 11 a.m., are designed to encourage more active liquidity management by the banks.