BUSINESS

By Julito G. Rada

LARGE supply shocks will compel the Bangko Sentral ng Pilipinas to again raise the benchmark interest rate which is now at 6.25 percent, Governor Eli Remolona said Friday.

Remolona said in an interview with Nomura research analyst Euben Paracuelles the country was not yet “out of the woods,” meaning risks remained that could impact the economy and the trajectory of inflation.

“If we have new supply shocks on inflation, which are unusually large, and

Ayala Corp.’s core income climbed 55% in six months

CONGLOMERATE Ayala Corp. reported a 55-percent increase in core net income in the first half of 2023, lifted by solid contributions from banking, property and power generation businesses.

Ayala said in disclosure to the stock exchange Friday first-half core net income amounted to P20.5 billion, or 38 percent higher than the pre COVID levels.

Ayala president and chief executive Cezar Consing said the positive results from Bank of the Philippine Islands, Ayala Land Inc. and ACEN Corp. compensated for the P2.4 billion one-off provisions booked by AC Industrials. Including one-off items, the conglomerate’s net income was up 13 percent to P18.4 billion.

“For the balance of the year, we will build on our solid first-half results and continue to recycle capital wherever it makes sense to do so,” Consing said.

BPI’s net earnings grew 23 percent to P25.1 billion driven by average asset base expansion, margin growth and reduced provisions, while ALI’s profit jumped 41 percent to P11.4 billion as its property development and commercial leasing businesses registered higher revenues. ACEN’s net profit jumped 94 percent to P4.2 billion on higher net generation from a stronger wind regime and increased operating capacity. Jenniffer B. Austria

Security Bank posted

P4.9-b profit in first half

SECURITY Bank Corp. said Friday it posted a net income of P4.9 billion in the first half of 2023, driven by growth in core businesses, increase in quarterly net interest margin and normalized credit provisions.

Net interest income increased 9 percent in the six month period to P15.7 billion, while non-interest income went up 2 percent to P4.9 billion. Service charges, fees and commissions grew 7 percent to P2.8 billion.

Pre-provision operating profit was P8.2 billion. The bank set aside P1.6 billion as provisions for credit losses in the first half, an increase from P408 million a year ago. Gross non-performing loan ratio decreased to 3.06 percent from 3.28 percent.

NPL reserve cover improved to 100 percent from 92 percent. Return on shareholders’ equity was 7.67 percent, while return on assets was 1.20 percent.

Total deposits reached P525 billion, with the share of low-cost savings and demand deposits rising to 63 percent from 59 percent a year ago. The bank said it shed high-cost deposits, resulting in a 13-percent year-on-year decrease in time deposits.

Dominion Holdings books P125.3-m income

DOMINION Holdings Inc., formerly BDO if El Nino turns out to be very severe and combined with a confluence of other factors, we would have to tighten again,” Remolona said.

Leasing & Finance Inc., said Friday net income grew to P125.3 million in the first half of 2023 from P3.7 million in the same period last year.

Gross income increased more than six-fold to P162.3 million as the firm reallocated its funds to higher yielding investments and debt securities to capitalize on the prevailing attractive interest rates. Total resources reached P6.3 billion, majority of which was accounted for by shortterm investments. Stockholders’ equity improved to P6.25 billion, derived primarily from net profits.

The company obtained an approval from the Securities and Exchange Commission on July 18, 2022 for the change in corporate name of BDO Leasing and Finance to Dominion Holdings, the shift in primary and secondary purposes from a leasing and financing company to that of a holding company and the corresponding amendments to articles of incorporation and by-laws.

This is to give Dominion Holdings more flexibility to pursue business opportunities that can enhance shareholder value for stockholders. Its primary purpose now is to hold/ own real estate properties, securities/shares of stocks and other assets of other companies and engage in investment and business activities involving these assets.

He said inflation settled at 4.7 percent in July, and the BSP wanted it to fall within the target range of 2 percent to 4 percent.

“But we also want to be comfort able that inflation is staying within that range and inflation expectations remain anchored. As you know, if we don’t tighten when those shocks materialize, then expectations could get out of hand, inflation will feed on itself and it gets much harder for us,” he said.

Remolona said the recent pauses by the Monetary Board in the past two meetings meant the signals from the data were still mixed and not consistent. He said some indicators showed the economy was holding up, while others showed it was weakening.

“If this continues, then it’s likely prudent for us to still pause,” Remolona said.

The policy-setting Monetary Board will hold its next meeting on Aug. 17, 2023.

Remolona said local inflation would have more weight in the BSP’s next policy moves, although it was closely watching the actions of the US Federal Reseve.

BSP Deputy Governor Francisco Dakila Jr. said inflation might return to the target range before the fourth quarter of 2023.

Dakila said in a panel discussion during the Post-SONA Philippine Economic Briefing in Cebu the latest trajectory of inflation in the past six months was very encouraging. He said inflation was forecasted to average 5.4 percent this year, still above the target range.