00:56.7
We begin with energy.
00:57.9
A look at the morning trade in Asia.
01:00.0
Equities here struggled for direction once more after Wall Street benchmarks cooled and their momentum stalled.
01:06.6
Bonds here in Asia also fell this Thursday, mirroring selling pressure in the U.S. treasuries.
01:12.7
A look at the board now.
01:13.9
The Nikkei 225 is up nearly four-tenths of a percent ahead of wage figures in Japan.
01:20.3
South Korea's KOSPI, meanwhile, is unchanged while the ASX 200 is down half of a percent.
01:27.9
A look now at the financial markets in the United States.
01:32.2
Wall Street saw a mixed close overnight as stocks came under pressure from higher U.S. treasury yields.
01:39.6
Only the Dow was in the positive territory to mark its sixth straight winning session.
01:45.7
The S&P was unchanged while the Nasdaq was slower.
01:49.8
The market at this moment is looking for some form of leadership,
01:57.0
either freshness,
02:00.7
or some form of key signal beyond,
02:04.8
well, is the Fed going to raise or lower the federal funds rate?
02:09.7
The Fed funds rate, I think number one, has been taken out of the equation for any near-term change.
02:16.1
And number two, there's some question as to whether or not it's really the most relevant barometer or indicator to look at
02:24.4
in terms of which way is the stock market going.
02:27.9
The market is looking for leadership and right now, it doesn't know which way in which to turn to find that leadership.
02:39.0
Taking a look at U.S. futures now, they're pointing to a lower open.
02:42.8
Futures for the S&P and Nasdaq are down while the Dow is unchanged.
02:50.2
Back here at home, it's D-Day for the Philippine economy with first quarter growth data set to be released in the next hour.
02:56.7
The market is expecting the expansion rate at 5.9% from the 5.6% in the final quarter of 2023.
03:05.1
Now, Philippine Finance Secretary Ralph Recto previously projected a growth range of about 5.8% to 6.3%.
03:13.0
That's higher spending by government and the private sector seen as drivers of growth in Q1.
03:19.2
But watchers agree elevated inflation pushing back hopes for a rate cut by the central bank is among the headwinds.
03:26.7
The GDP print this Thursday caps off the week in economic data releases.
03:31.8
Earlier, we've had April inflation higher at 3.8%, March unemployment rate at 3.9%, and a narrower trade deficit of $3.2 billion.
03:45.3
Now, here's a look at the local corporate headlines we're watching this morning.
03:49.6
Fresh numbers from Andrew Tan's Megaworld.
03:52.3
The property giant reports a P5 billion net income.
03:56.7
In the first quarter, that's up 10% year on year.
03:59.7
Now, revenues also higher by 16% to nearly 19 billion on the back of Megaworld's core businesses seeing strong growth in the first three months.
04:10.7
Also in earnings, Cebu Pacific, owing to strong travel demand, more than doubles its first quarter net income to 2.2 billion pesos.
04:19.0
Its passenger business specifically chipped in 18 billion pesos in the overall revenue.
04:24.5
Cebu Pacific also flew over 5 million passengers in Q1.
04:30.4
And Security Bank issuing $400 million of senior unsecured fixed-rate notes.
04:37.3
The lender says this is a drawdown of its board-approved $1 billion medium-term note program.
04:43.5
The notes will be listed on the Singapore Stock Exchange.
04:47.4
Proceeds of this will be used, among others, to extend long-term liabilities,
04:52.8
expand funding base,
04:54.5
and fund other investments.
04:58.3
Also incorporate the infrastructure arm of the Aboitis Group,
05:02.2
investing 7 billion pesos for an economic zone in Tarlac province.
05:06.8
Aboitis Infra Capital held a groundbreaking ceremony on Tuesday for its Tari Estate,
05:12.8
which covers 200 hectares of land.
05:15.6
The eco-zone, seen to be completed in the next two years,
05:18.9
will be allocated for industrial, commercial, and residential use, among others.
05:24.5
Tari Estate is Aboitis Infra Capital's fourth economic estate,
05:28.9
with three other developments located in Batangas and Cebu.
05:33.0
The Trade Department, meanwhile, is bullish.
05:35.2
The Tari Estate will boost the economy by attracting more foreign investors into the country.
05:44.8
Philippine officials pointing to the El Nino weather phenomenon
05:47.9
for the surge in the number of agricultural workers who were out of jobs last March.
05:54.5
here are the official reports.
05:56.9
Around 2 million Filipinos were unemployed in March 2024,
06:01.4
bringing the country's unemployment rate to 3.9%,
06:04.9
according to the Philippine Statistics Authority.
06:07.8
This is higher than the 3.5% recorded in February.
06:12.5
PSA attributed the drop in employment to the El Nino phenomenon,
06:16.5
which left thousands of agricultural workers jobless.
06:20.4
318,000 workers in the agriculture industry lost their jobs
06:25.1
particularly those involved in growing of corn,
06:30.9
Reduced hog production due to cases of African swine fever
06:34.5
also affected employment.
06:36.7
Pag bumababa yung ating production,
06:41.0
yung ating mga operators ay nagbabawas din ng workers.
06:47.3
ang nakita natin na in terms of value production,
06:53.3
may reduction tayo dun sa,
06:54.2
kaya nagkakaroon din dito ng impact.
06:57.8
In the first quarter of 2024,
07:00.8
palay production contracted by 2%,
07:03.1
while livestock production also dropped by 3.6%.
07:07.2
But the Department of Agriculture said,
07:09.8
employment in the agriculture industry is expected to pick up in the second quarter
07:13.9
as government projects for irrigation systems come in.
07:17.5
Better weather conditions are also expected to be an advantage for the sector.
07:21.7
Bukod doon sa makarecover tayo,
07:24.1
sa weather nagtitame na yung effect ng El Niño.
07:27.7
Yung ating mga programa and activities,
07:31.7
normally makikikik in yan second quarter hanggang third, fourth quarter.
07:36.2
Yung first quarter, normally kasi nga yan, harvest season yan eh.
07:39.7
So pagdating ng second quarter,
07:42.0
diyan na uli yung malaking employment sa agri kasi land preparation,
07:46.7
for rice, for corn.
07:49.7
Despite a drop in employment,
07:51.5
there are industries that registered higher employment rates,
07:53.5
There are industries that registered higher employment rates,
07:55.6
including those in public administration and defense,
07:59.9
and information and communications.
08:02.1
Meanwhile, underemployment declined to 11%,
08:05.3
from 12.4% in the previous month.
08:08.7
Following President Ferdinand Marcos Jr.'s directive to review minimum wage rates,
08:13.6
the Department of Labor and Employment announced
08:15.7
that the Regional Tripartite Wages and Productivity Board
08:19.3
of the National Capital Region will initiate the review on May 16.
08:24.1
Labor Secretary Bienvenido Laguez ma-assures
08:27.1
this will eventually be followed by majority of the regions in the country.
08:31.4
This will eventually be followed by majority of the regions in the country.
08:32.4
Ang pinakauna dyan ang National Capital Region.
08:35.4
At ang kanilang review magsisimula na next week.
08:38.4
Dahil ang kanilang anniversary day sa July 16,
08:42.3
regions actually will be doing reviews probably in the period of July-August.
08:47.7
So you expect some developments.
08:51.7
The labor chief remains optimistic.
08:52.8
The labor chief remains optimistic.
08:53.6
That with the government's persistent efforts to improve ease of doing business,
08:58.5
more quality jobs will be created.
09:01.1
Lady Vicencio, ABS-CBN News.
09:05.4
Our first guest this morning is often dubbed the millennial businessman
09:09.1
who founded Solar Philippines in 2013.
09:12.0
Now the renewable energy firm, now known as SP New Energies,
09:15.9
building what would be the world's largest solar project in Central Philippines.
09:21.0
To discuss this and more, we have with us Mr. Leandro.
09:23.6
Leandro Leviste, Lian, welcome to Market Edge.
09:26.9
Good morning, Charlie. Thank you for having me.
09:28.9
Alright, now the Energy Department and government officials earlier this year
09:34.0
had pushed for the use of solar home systems to mitigate the impact of El Nino
09:38.7
on demand surges which is now straining our power resources.
09:43.3
What kind of response did you see from this call?
09:46.5
Was there an acceleration perhaps in the usage of solar systems in homes?
09:49.9
I think the demand has always been there for solar.
09:53.6
And the Philippines, because of the relatively high price of power.
09:56.6
And the El Nino phenomenon has only accentuated this.
09:59.9
The bottleneck, however, has largely been the lack of available local equity financing.
10:05.8
And there have been many steps, I think, recently to bridge this gap.
10:10.2
But I think financing remains the largest bottleneck for solar deployment in the Philippines.
10:15.2
Alright, but it's a different story, I would imagine, with businesses.
10:18.1
I mean, when you talk about consumers, they might need financing at some point.
10:22.2
But what about industries?
10:23.2
Are you seeing an acceleration as well?
10:26.4
With industries, the poor business has typically not been to purchase solar installations,
10:32.9
which is why a lot of people have been also procuring solar rooftop installations on a financing mode.
10:38.0
But that the main way that solar will be deployed, I think, is on ground-mounted installations
10:43.3
connected to the grid rather than these dedicated per-user installations that you may more commonly think of.
10:53.2
The country is working on improving its renewable energy mix.
10:56.5
How has that been for solar power as against the other RE options that the government is considering?
11:03.2
Have you seen growth in that sector or segment as well?
11:07.0
In relative terms, it's come quite a long way.
11:09.9
Let's say from 0.1% to 3% of the country's total energy.
11:14.7
That's a 30 times increase.
11:15.9
But it's still just, let's say, 3%.
11:18.1
And the potential is still there.
11:23.0
For a much greater growth that we hope will come in the next few years.
11:27.6
What milestones are you looking at when you say you want to improve the power mix of the country
11:31.9
and put more solar into it?
11:34.1
A few years would mean, what, a decade?
11:38.8
The main constraint on the solar farm installation, I noted earlier, is the availability of local financing.
11:48.8
But the stock exchange has actually been quite helpful.
11:51.2
I think a majority.
11:53.0
A majority of the last two years' IPOs have in fact been for solar energy companies.
11:58.2
So the momentum is definitely on the side of the growth of solar energy.
12:06.0
Now, Lian, you're working with the MVP Group following its buy-in to your company.
12:11.0
Where is this collaboration taking the business, the solar power business now?
12:17.3
As has been disclosed in the last few days,
12:19.5
there's actually a lot of interest in the funding of the,
12:23.0
Terra Solar Project,
12:24.5
which is touted to be the world's single largest solar project
12:29.4
with around 3,500 megawatts planned to be constructed in Nueva Ecija and surrounding areas
12:35.8
over just the next two years.
12:37.6
So the potential is just even to complete this one project,
12:43.4
that would be approximately double the total installed solar capacity in the whole Philippines
12:49.7
just on one site.
12:50.9
And once that's done,
12:53.0
the potential for more such large-scale installations in the Philippines.
12:57.1
And aside from that project,
13:00.1
other parts of the country that you're eyeing?
13:03.6
Well, we'd be quite happy just to finish this one project first.
13:07.2
But the country definitely needs all the new supply that it can.
13:10.9
And I would like to emphasize that it's not even a matter of one power source competing with another
13:15.5
because there is a shortage of supply.
13:18.6
Essentially, any power company in the Philippines that puts up a power plant,
13:23.0
should no longer have a problem getting a market for its power.
13:26.3
And the government is really trying to encourage everyone to put up new plants.
13:30.4
So it's good that there's a lot of private sector interest to put up new plants.
13:34.0
And that's good for business.
13:35.3
And it's also good for the country to have as much new supply as possible.
13:39.1
I'm wondering how much did El Niño play a factor into the way you plan things now?
13:44.4
A lot of observers are saying, you know, this is not just a local phenomenon.
13:48.8
This is not just a short-term phenomenon, but global warming in general,
13:54.4
These conditions have given us an insight on just how short we are in terms of power sources.
14:00.4
So did plans change because of these?
14:03.5
I would say that as far as the urgency for people to put up solar installations,
14:07.9
it was already at 100% before El Niño.
14:10.6
So it can't really go above 100%.
14:13.0
But the need of the country is definitely greater.
14:16.4
And it just underscores the urgency for the country to help the private sector put up new power plants.
14:23.4
Aside from power, you know, so many things to look forward to this year from you.
14:27.8
Your recent acquisitions as well, one of which is a stake at the Roasan Company Incorporated.
14:33.7
Could you share with us, perhaps, potentials and possibilities for RCI?
14:38.9
How strategic is this for further pushing the renewable energy agenda on your part?
14:45.4
Well, considering that it is a publicly listed company, we also would want to be respectful
14:50.6
on the types of comments that we will make.
14:53.1
But the general comment that I would say is we are in the business of looking for undervalued assets.
15:00.4
And we certainly think that the assets of certain of these companies are definitely attractive
15:06.1
at at least the prices that were available in the market just recently.
15:10.8
The use for the underlying assets in the case of a large land bank in Batangas, for example,
15:16.7
is not necessarily for solar.
15:18.3
Because there's so much potential to develop our provincial areas.
15:22.6
And from our years in developing solar projects, we have come to really see the opportunity
15:29.8
to purchase tracts of land that might not be appreciated by the market.
15:36.1
And just like in the case of Espinec in Nueva Ecija, suddenly a small solar investment in land in Nueva Ecija
15:43.5
can bring in a very big power plant investment.
15:46.5
So we hope that that kind of formula can be replicated in many other provinces in the country.
15:52.6
To benefit the growth of solar energy in the whole country.
15:56.2
For this particular investment, if it's not solar, what possibilities are you seeing for those properties?
16:01.3
I think the main problem in the whole country is a lack of investment for industries that create jobs.
16:07.6
And in Nasubu, Batangas, Central Azucarera Don Pedro just shut down in the past year,
16:13.4
laying off supposedly over 10,000 workers.
16:17.2
And the need, I think, is to replace those old sector jobs.
16:24.3
And when you have new industries, you have demand for power, demand for housing, demand for other developments
16:30.6
that will support this new local economy.
16:33.7
And I would also like to note the fact that there is a lot of opportunities to invest in projects
16:43.8
in this same Nasubu, Batangas area.
16:46.7
And that perhaps we can also allude to the fact that we also have an interest,
16:52.6
in Rojas and Company Inc., but also a prospective deal to invest in another such sugar company,
17:00.0
Rojas Holdings Inc.
17:01.5
So, tell us more about that investment for Rojas Holdings, if there's something you can share at this point.
17:07.4
Rojas Holdings Inc. is publicly listed and currently not trading because the company shut down its operations
17:15.9
due to the difficulty of the sugar milling business over the last few years.
17:22.6
We hope we can work with the company to turn it around and create jobs for the benefit of Nasubu, Batangas.
17:31.5
Are you also keen on entering the eco-zones in terms of investing, Lian?
17:36.9
Well, definitely that's the framework in which people look at making these big land consolidations in these areas.
17:45.5
The ABS-CBN's parent group has First Philippine Industrial Park in Santo Tomas, Batangas,
17:51.3
which I would say is one of the...
17:52.6
which is one of the highest leverage ways to help people.
17:55.4
A relatively small percentage of the total cost of developing building is the land.
18:04.5
But because of the land with the infrastructure that industrial parks like FPIP has laid out,
18:09.8
these huge Japanese manufacturing companies were able to come into the Philippines and boost the economy of places like Batangas.
18:17.5
And speaking of the Lopez Group, you also bought an 8.5% stake in ABS-CBN Corporation,
18:22.4
what track are you seeing or do you wish to see for this company?
18:26.1
We certainly have a soft spot for ABS-CBN because my mom was working in the station in my first five years of life.
18:33.1
And we know a lot of people who are there and truly, sincerely wish to help the company.
18:40.0
We hope that by purchasing shares in the company and even just with the performance of its stock recently,
18:47.9
we can help bring back the confidence of the market
18:51.6
so that we can work together to help ABS regain its leadership in the media sector.
18:58.4
Alright. Now, Leon, how active do you intend to be involved in the businesses that you're buying at this point?
19:05.0
Like I mentioned earlier, we are really focused on investing rather than operating most of our target acquisitions
19:13.2
because that's the way that I think we can create the most leverage.
19:16.2
It's actually quite similar in that respect to what we do with the solar land.
19:21.6
We are focused on finding the attractive opportunity and then see our value in making the investment.
19:30.0
But the expertise in operating, such as in the example of constructing and operating these large solar projects in Nueva Ecija,
19:38.2
are best with our partners like Miralco, whom we're very glad to have as the controlling shareholder in SBNEC,
19:45.9
and which is a good example, I think, for how there's a lot of synergy and a lot of potential for partnership.
19:51.6
With big companies whom we trust to be the controlling shareholders of these companies.
19:56.5
Alright. Lastly, Leon, acquisitions could still happen in the future.
20:00.6
Are there other businesses that you're eyeing in the near future?
20:03.9
What are you looking for perhaps in the businesses?
20:06.4
You already mentioned about potential and being undervalued. What else?
20:12.7
I think if you can just find more of these undervalued companies with attractive assets,
20:16.8
then you don't really need much else to do.
20:19.6
So, the key, I think...
20:21.6
I think is finding a lot of these companies that have a large part of their assets also in land.
20:26.3
And we're looking at a bunch more.
20:29.6
Also, in provincial areas because we think that when you can create industries with jobs,
20:35.0
then you help promote the local economy, which will be good for the people and also good for business.
20:40.1
And is this a timeline-bound search that you're having right now?
20:43.8
I mean, do you have a timeframe perhaps as to the future acquisitions, particularly those businesses that involve land?
20:49.5
It's important to come in on that.
20:51.4
It's important to come in at the right price.
20:52.4
So, we are opportunistic in terms of what opportunities present themselves whenever there are attractive opportunities that we see.
21:00.4
All right. On that note, Mr. Leandro Levis of Solar Philippines, a pleasure to have you on the show.
21:04.9
Thank you so much for taking our invitation.
21:06.9
Thank you very much.
21:08.9
All right. Moving on to more news.
21:10.9
About 6 to 7 million overseas Filipino workers could benefit from the Philippine government's partnership with a banking firm, RCBC.
21:17.4
Now, the undertaking is aimed at empowering such workers in digital banking.
21:21.4
The Migrant Workers Department reported that Wednesday, after signing a deal earlier in the week with the banking company to equip OFWs and their families with the necessary skills and knowledge to navigate the digital financial landscape.
21:38.4
The manner in which we defend OFW rights, the intensity upon which we do that, will be the same intensity in which we protect,
21:50.4
or be there in terms of an OFW trying to maximize the gains of overseas employment.
21:57.4
So, if an OFW earns so much income, we should be there as government to help an OFW make sure that the earnings are intact in a sense that an OFW can use that same income for basic needs, education, shelter, clothing, food of their families,
22:19.4
and to make their earnings grow.
22:23.4
We had the pre-launch, the soft launch actually, it was in November last year.
22:29.4
Because you know that December would be the high season for remittances.
22:35.4
So, what we've seen, there is now a surge as much as 43% in terms of deposit level or growth in deposit level versus December last year.
22:48.4
So, there is, again, it shows, this data would show us, would tell us that OFWs or overseas Filipinos, you know, have the capability to save,
22:58.4
have the capability to be responsible, you know, citizens when it comes to handling their finances.
23:08.4
The Philippines raises $2 billion as it returns to the international capital markets.
23:13.4
The Treasury Bureau said Wednesday that amount was raised from its first deposit.
23:18.4
It is due to a double-tranched global fund sale or bond sale this year.
23:22.4
The 10-year debt securities due 2034 were priced at US Treasuries, plus 80 basis points,
23:30.4
reflecting a tightening of 40 basis points from its initial price guidance.
23:35.4
The 25-year sustainability bonds maturing in 2049.
23:40.4
Meanwhile, we're priced at the 5.67% area, which is also 45 basis points tighter.
23:48.4
The BOT said the Philippines took advantage of improving market sentiment due to a softer-than-expected U.S. labor market print,
23:56.5
which alleviated concerns over the Fed's next rate moves.
24:01.2
Finansakitari Ralph Recto Aminual said the enthusiastic response for the offering shows the strength of the Philippine economy.
24:09.0
Proceeds of the issuance will be used for infrastructure projects and social services, among others.
24:15.0
Red and yellow alerts across Philippine grids trigger a power price hike in May.
24:22.8
The country's sovereign wealth fund bears plans to invest in the country's power infrastructure in the future.
24:30.2
Alvin El Chico has details.
24:32.9
The country's biggest power utility confirms electricity rate for the coming May billing is going up
24:39.5
due to the series of yellow and red alerts in the Luzon grid,
24:43.0
which pushed prices up.
24:44.7
But the spot market, where Meralco gets a part of its supply.
24:48.5
Hindi naman siguro ito magiging aabot ng piso.
24:52.3
Kung piso, yung naging redaction natin noong nagdaan buwan.
24:55.3
So kung hindi ito aabot ng piso, it simply means the rates of May will still be lower compared to March.
25:01.7
But it's not only Meralco that sources electricity from the spot market.
25:06.0
A number of electric cooperatives nationwide are also affected by higher spot prices.
25:10.9
They include Aklan Electric Cooperative or Akelco,
25:14.7
which derived 40% of its April supply from the spot market.
25:20.0
Noong nakaraang buwan po, tumaas kami ng 1 peso and 49 centavos.
25:25.7
Based dito sa paunang analysis namin sa Corplan,
25:30.1
baka umabot kami sa 5 piso na per kilowatt hour na taas,
25:35.8
singil sa kuryente sa darating na Mayo.
25:38.3
The Energy Regulatory Commission advises electric co-ops to obtain a so-called anti-bill shock,
25:44.7
so that it can pay the power supply from the spot market
25:48.7
and implement a staggered increase for its member consumers.
25:53.1
So far, only two co-ops have taken the loan.
25:56.7
Walang requirement ang land bank na kolateral.
26:00.0
Tapos yung interest nito, meron lang konting interest based on market,
26:05.3
but zero interest spread.
26:07.2
So very concessional yung rates na binigay ng land bank for this product.
26:13.3
it now plans to get a similar loan from land bank
26:16.6
to mitigate the rate hike impact on its customers.
26:30.8
Meanwhile, the National Electrification Administration says,
26:34.6
the controversial Maharlika Investment Corporation
26:37.2
will invest in Occidental and Oriental Mindoro's power systems.
26:43.3
Maharlika acquire the whole loop, the backbone of the transmission.
26:50.8
So we can improve the quality of service.
26:54.4
The quality, mawalan tayo ng low voltage.
26:57.2
Rafael Kuncing, President and CEO of Maharlika Investment Corporation,
27:01.5
confirms the fund is earmarking 2 billion pesos
27:05.4
to upgrade the power infrastructure of Mindoro Island.
27:09.1
The multi-billion peso investment is seen to help connect
27:12.7
the island to the national grid
27:14.5
and stave off power outages similar to last year.
27:18.6
Our role, basically, as Maharlika,
27:22.1
is to find ways by which we can then, well, improve.
27:26.6
Particularly, we're going to be focusing on the lines.
27:29.9
We don't need to be investing in the generation capacity
27:33.5
because there are a number already who wish to do that.
27:36.5
It would be in the lines that we would then invest.
27:39.5
We will be looking at what the investment,
27:42.7
what the type of investment that is required
27:44.3
in order to prepare Mindoro for its eventual connection
27:50.0
into the main grid.
27:52.0
And once that grid is connected by NGCP,
27:58.2
then we go to the next project.
28:01.4
Alvin Ochico, ABS-CBN News.
28:06.0
It's time for a quick break.
28:07.1
Up next, we take a look at how the local boards
28:09.4
will open trade as investors await Manila's crucial,
28:14.0
Manny Acampo of ICCP joins us for this market analysis.
28:17.8
Market Edge will be right back.
29:12.7
Thank you for watching Market Edge.
29:20.7
The headlines, we continue to await the release of the official first quarter growth figures for the Philippine economy.
29:26.8
The Statistics Bureau announces the data half an hour from now.
29:31.5
The Philippine Defense Secretary accuses China of violating the anti-wiretapping law for recording talks on an alleged deal on the Ayungin Shoal.
29:40.4
And the Philippine Justice Department prepares a legal briefer for the President should the International Criminal Court issue arrest warrants in its drug war probe.
29:52.6
Time to zip through some of our top headlines for major business papers now.
29:57.1
From Business World, the Board of Investments set to embark on an investment mission to Europe to solicit electric vehicle, renewable energy, upskilling, and agriculture investments.
30:07.8
From Business Mirror, the country's farm output.
30:10.4
It posted a slight gain in the first quarter, about 0.05% to be more specific.
30:16.2
Now, despite the El Nino that wreaked havoc on the crop sector.
30:21.5
And from the Philippine Daily Inquirer, President Ferdinand Marcos Jr. says the government has disbursed 59.8 billion pesos,
30:29.1
or that's nearly 79% of the allowances entitled to emergency health workers who serve at the height of the COVID-19 pandemic.
30:40.4
The Philippine Stock Exchange opens trading this Thursday.
30:43.5
The main index climbs to 66.70.
30:46.1
That's an opening after nearly two-tenths of 8% now.
30:50.2
The local bourse closed higher yesterday as well as investors parsed through a mixed bag of economic data.
30:57.4
Now, Mr. Manny Ocampo of Investment and Capital Corporation of the Philippines, or ICCP, now joins us on the show for his insights.
31:04.2
Good morning, Manny.
31:05.8
Hi, Stanley. Good morning.
31:07.1
All right, we're waiting for the release of the first quarter GDP.
31:10.4
What is the consensus and what is your own projection?
31:15.1
And what might you have priced in to arrive at those numbers, Manny?
31:18.8
Sure. The consensus, at least I've seen in the paper, seems to be at about 6.1%.
31:25.7
We are actually looking at something lower, about 5.96%, just slightly lower.
31:32.4
So, you know, I think we're maybe being cautious with our growth rates.
31:40.4
Growth rate forecast due to, you know, the government really wasn't able to, in the first quarter, not able to really kick off the interest pending that we had hoped that they would kick off with the bank at least during the first quarter.
31:56.6
So, that wasn't quite happening yet.
31:59.7
So, there, Stanley.
32:02.1
All right, Manny.
32:04.0
Now, if those GDP numbers would, in fact, tend to be weaker than your projections, do you see this as already the lag?
32:10.4
The effects of high interest rates?
32:12.8
Well, yes, interest rates have, you know, really affected us since last year.
32:20.7
But I think what a lot of corporates have done would be to adapt to the higher for longer environment as far as rates are concerned.
32:32.5
Do we see a break in interest rates happening anytime soon?
32:37.1
You know, I think we're...
32:40.7
We're being less optimistic on a rate cut happening in the second half.
32:48.3
At best, maybe the late...
32:52.0
Sometime in the fourth quarter.
32:53.9
That would be our earliest.
32:55.7
And that will have to be preceded by the US Fed cutting at their side first.
33:01.0
Yes, I'd like to go back to government spending that you have already covered a while ago.
33:05.4
Now, last year's lower GDP was substantially attributed to weak government spending.
33:10.2
Now, last year's lower GDP was substantially attributed to weak government spending.
33:10.3
Now, last year's lower GDP was substantially attributed to weak government spending.
33:10.4
Now, last quarter of 2023, there was a lot of catching up on the part of infrastructure spending.
33:17.0
Now, do you think those efforts will now be apparent in the first quarter GDP?
33:21.6
Because this, apparently, the kind of spending since late last year has been somewhat sustained.
33:28.5
So, is that a big chunk of GDP now?
33:34.3
And that's why we're still looking at 5.9 or 6% growth.
33:39.5
If we didn't see that kind of spending during the last quarter of last year,
33:46.5
then we probably would have been looking at something lower for this first quarter.
33:51.3
But anyway, that being said, the expectations have been a continued pickup.
34:01.0
Weather was still good in the first quarter.
34:03.2
And, you know, the second quarter, weather will be an impact.
34:09.5
Again, I guess, on productivity and continued investment standing.
34:15.3
We're worried actually about the second quarter growth
34:19.2
because that's when, you know, the impact of El Nino was more felt.
34:25.4
Yeah, more pronounced.
34:26.8
But you may not worry a lot, Manny,
34:29.3
because we do have a lot in the pipeline in the next couple of months
34:32.7
as far as government spending is concerned.
34:35.6
You know, the latest global bond offer,
34:38.5
deemed a success recently,
34:41.0
the proceeds of which will fund the infra push.
34:43.9
We also spoke yesterday to Maharlika Investment Fund President Rafael Consingo
34:48.0
who told us that several projects of the wealth fund that it will invest into
34:52.9
will be up and running at least by the last or third or the last quarter of the year.
34:59.8
Now, that might change the picture significantly for GDP this year.
35:05.3
Later part of the year, as you mentioned.
35:09.1
Still at later part of the year.
35:10.4
Now, while we all want better growth numbers, Manny,
35:13.3
positive reading, of course, may just support, you know,
35:16.6
the BSP's direction of a much later rate cutting
35:19.1
when it doesn't see that the current high rate significantly impact the economy.
35:23.4
So, what are your thoughts there?
35:26.0
You know, I think, well, people will, as I mentioned,
35:30.4
people have adopted and have accepted already the current interest rate regime
35:36.3
and people are working around, you know,
35:38.0
the private sector actually is working around this new environment.
35:42.5
So, you're still seeing a lot of the corporates approach the bond markets for funding.
35:51.8
And, you know, even with the higher rates, you know,
35:55.0
you have, what, ADC coming up with their bond offering,
36:00.4
SM Prime Holdings, even San Miguel coming up with mega bond offerings.
36:05.7
And they're looking at longer term.
36:07.9
Now, rather than the initial strategy of maybe looking at shorter term bonds
36:14.2
that would, you know, maybe look at refinancing a couple of years down the road.
36:18.8
But, you know, I guess that's an accepted view that, you know,
36:22.6
rates are here to stay longer.
36:24.0
So, people are, you know, maybe locking in current rates already
36:30.5
and establishing a funding base for them to pursue their new projects.
36:36.1
So, Manny, here's...
36:37.9
Perhaps a headwind for a lot of corporates.
36:40.8
You know, the latest jobs numbers seeing a rise of 3.9% in March,
36:44.5
which was attributed to lower spending by businesses due to inflation.
36:48.3
Now, as we speak now, the NCR wage boards are about to convene to tackle wage hike proposals.
36:54.5
Now, if ever these new wages take effect, how do you price them into business growth for 2024?
37:00.6
And the employers, of course, are already cautioning about this,
37:04.0
that it will significantly affect their costs.
37:07.9
You know, wage hike increases for workers will actually affect more your medium-sized corporates.
37:19.6
The big-sized corporates, I think that they should be okay in absorbing any, you know,
37:26.3
wage increases for that one, sadly.
37:28.9
But the medium to small-sized enterprises, that will hurt them a bit.
37:37.9
And, you know, if that's the bigger part of the economy,
37:42.1
you know, unfortunately, growth may be affected by that.
37:48.1
So, that's something we're closely monitoring.
37:51.9
We were, you know, we expected that weaker, you know, labor numbers to come out,
37:59.2
but maybe not that weak.
38:02.2
So, we hope it will stay where it is.
38:06.9
Now, let's talk about...
38:07.9
Let's talk now, Manny.
38:09.1
We're still range trading on GDP Announcement Day.
38:12.6
What is the market pricing in for economic growth?
38:15.0
And if growth turns out to be weak, where will it lead today's market?
38:20.9
So, I think what has been priced in is 6.1% GDP growth.
38:29.0
Anything substantially lower, and substantial is maybe 5.8 or lower,
38:35.9
that will be on...
38:37.5
That should affect the market on the downside.
38:41.1
We believe that the support at 6,500 is very strong,
38:48.0
and maybe that will be an immediate target on the downside for the market
38:54.1
if numbers don't come in as expected.
38:57.9
Now, if numbers actually come out better than the 6.1%,
39:04.8
so call it 6.3 or higher,
39:07.5
your immediate resistance will probably be at about 6,800.
39:14.6
So, that becomes the target.
39:16.0
Still range trading, a very tight range trading, Stanley.
39:21.4
But, you know, we'll see.
39:23.4
Then, you know, your impetus actually becomes more at the corporate level.
39:29.4
So far, we've been encouraged by the results being brought out by our big corporates.
39:35.1
So, that's encouraging.
39:37.0
As you mentioned,
39:37.5
you know, we already had seen the first quarter earnings.
39:40.7
The season is concluding, in fact.
39:42.7
Now, how do you feel about the revenues that you saw so far?
39:45.4
Many companies have shown resilience, actually.
39:47.8
But, are you seeing some weakness now in terms of earnings
39:50.5
as against your expectations at the start of the year?
39:54.3
Well, for us, I think most of the major corporates are pretty much on track.
40:00.7
You know, we'll maybe take a look at some of the other companies
40:06.8
that have reported.
40:07.6
Weaker earnings than expected or declines.
40:12.0
And maybe take a look at that, see if there will be any recovery in the second quarter.
40:18.6
But, generally speaking, we're quite happy and pleased with how the PSEI companies
40:27.6
are turning up their first quarter results.
40:31.3
And lastly, Manny, you know this market is looking for both direction and inspiration.
40:34.8
Is there anything else in near term that excites you?
40:37.5
About the markets?
40:39.0
Another IPO, perhaps?
40:41.7
Well, there are OGPs listing on funding.
40:45.6
That should be a very interesting thing to do, thing to take a look at.
40:53.3
They are in the right metal, if you'd like.
40:57.6
And they, you know, the earnings results, revenue and earnings results of OGP
41:05.3
have been very strong.
41:06.5
And, you know, we're looking forward to that.
41:07.5
So, you know, whether it's, whether the price cut that they said their IPO price
41:14.7
eventually leads to an immediate upside, we think there's a 10-15% upside that they
41:21.3
left over at their IPO price.
41:26.2
Let's see what happens there.
41:27.5
Manny Ocampo again of ICCP.
41:29.6
Thank you so much for taking our invitation today.
41:31.7
Have a great day.
41:32.2
Thank you very much, Stanley.
41:34.0
On to more news now.
41:35.3
Hundreds of Filipinos trooped to the Philippine Central.
41:37.5
Bank in Manila on Wednesday to demand the release of their share of a hundred trillion pesos
41:42.6
in supposed hidden wealth.
41:44.9
Karen D. Guzman reports.
41:47.8
Ang aking panawagan, simple lang.
41:50.9
Saan ba yun ang Pilipino?
41:52.9
Yun ang aking panawagan.
41:54.8
Thousands of Filipinos, mostly elderly from various provinces, braved the heat
41:59.1
as they gathered in front of the Central Bank of the Philippines on Wednesday.
42:03.0
They are demanding cash, supposedly from a hidden account meant for the public.
42:07.5
The group's organizer, Gilbert Langres, founder and leader of Democratic and Republic
42:12.7
Guardians Philippines Incorporated, said the Central Bank is hiding funds amounting to
42:17.4
100 trillion pesos.
42:19.4
He claims to have the documents to back this up.
42:22.4
According to Langres, the initial fund of 19.5 trillion pesos is under what he called
42:27.8
Bagong Lipunan Secret Book of Redemption.
42:30.4
Ang mga tagapagmana ng nakatagong kayamanan na narito sa loob mismo ng Bako Sentral ay kailangan
42:36.1
na magamit para sa tao.
42:39.2
The documents allegedly came from the Treasury Department of the BSP, which includes serial
42:44.2
numbers, gold deposits, and total amount to be given to Filipinos.
42:48.6
Ang kailangan na ito, maiparinig, maiparating sa taong bayan, na mayroon pa pala tayong
42:53.6
pag-asa ang mamuhay ng mapayapa at masagana.
42:57.0
The supposed claimants have this to say.
42:59.7
Yung mga mamanahin ng mga tao, dapat nang ipagkaloob.
43:05.4
Yung mga mamanahin.
43:06.3
Kasi matagal na ito.
43:08.4
Andyan lang yung pera. Andyan yung pera. Bakit ayaw nilang ibigay sa mga tao?
43:14.3
Kasi tayo ang pinakamayaman sa buong mundo. Bakit ayaw nilang ibigay?
43:20.6
In 2016, the group held a similar protest. They hope government will soon take action.
43:27.2
Mahabang proseso po ito na kung ito'y ipoproseso ngayon, bago matapos ang taong ito,
43:32.3
kung ang lahat ng mga nasa ating pamalaan ay makiisa, mabuksan na ang datos sa Banko Sentral,
43:38.0
na ang itong Banko Sentral nito ang siyang keeper ng kayamanan na ang bagong lipunan,
43:43.6
which is printed with a backup of gold. Intended for the Filipino people.
43:48.4
Some policemen stationed outside the central bank said they extended assistance to those who needed medical attention.
43:55.0
May mga nahihilo na, kaya humingi po tayo ng tulong sa ating City Disaster Risk Reduction Management Office
44:01.0
at mayroon po mga dumating ng mga ambulance at handang umalalay.
44:05.7
The group left after a BSP representative assured them their message will be delivered to the relevant agencies.
44:12.4
Pansin namin marami sa mga kasamahan natin dito na nandito ngayon, may mga edad na.
44:17.5
Kaya nga po pinapakiusapan ko si Mr. Gilbert na sana kausapin yung mga tao na magsi-uwi na.
44:25.9
At least kami naman makikipag-ugnayan na lang sa iyo.
44:31.0
It's not the first time crowds would flock to the BSP demanding money.
44:34.9
In 2011, a group of people asked the BSP to release 100 trillion African dollars allegedly deposited by their leader.
44:43.0
In a statement, the BSP said they do not distribute money directly to people
44:47.5
and instead gives dividends to the government to contribute to programs that will improve the life of Filipinos.
44:53.8
Karen de Guzman, ABS-CBN News.
45:01.0
We're taking a quick break.
45:04.7
More stories when we come back.
45:06.3
Market Edge will be right back.
45:37.5
Philippine officials standing firm no deal was made with China over the West Philippine Sea.
45:42.1
A local newspaper on Wednesday revealed the transcript of a phone call recording allegedly between Philippine Armed Forces Western Command Chief Vice Admiral Alberto Carlos
45:52.1
and an unnamed Chinese diplomat, both agreeing to a new arrangement in Ayungin Shoal.
45:58.4
But the AFP asserts it will not dignify China's claim, saying transcripts can easily be fabricated while audio recordings can be forged
46:06.4
using deepfake technology.
46:10.0
The Philippine Navy also believes the issue is part of China's disinformation campaign that should be put to rest.
46:18.5
We will not dignify reports like that.
46:21.8
Again, it's a zombie story.
46:23.8
Let's bring it back to where it rightfully belongs, to the grave.
46:26.9
Anybody could say anything.
46:29.1
These stories will be rehashed.
46:30.5
We have to understand that today's warfare is a battle of narratives.
46:34.6
It's a battle of shaping the perception.
46:36.4
It's a battle of shaping the perception of the people.
46:39.0
Meanwhile, for Manila's Defense Chief Gilberto Teodoro Jr., the Chinese Embassy violated the law
46:44.5
should the alleged recording of a phone conversation be proven.
46:48.8
The Foreign Affairs Department is investigating the allegations.
46:54.2
If this statement is true from the Chinese Embassy that they recorded anyone in the Philippines,
47:04.7
they admit that they violated the laws of the Republic of the Philippines,
47:12.3
particularly the anti-wiretapping law.
47:15.9
And they made, if this is true, a law that violates international relations and violates the law.
47:28.1
Because they did not agree with the Department of Foreign Affairs,
47:34.2
and they did not agree with the Department of Foreign Affairs,
47:34.4
and they operated under it.
47:41.1
China, meanwhile, remains mum on reports.
47:43.9
Beijing may soon release the audio recording of the alleged phone call with a Philippine military official.
47:49.9
The Chinese Foreign Ministry says the Chinese Embassy in the Philippines has released details about the relevant communication
47:55.9
on managing the situation in Ayungin Shoal.
47:59.5
This as it again insists the facts of the alleged new model are clear.
48:04.0
And backed by hard evidence.
48:07.3
It also says Manila denying these objective facts hurts its own credibility
48:12.2
and puts peace and stability in the South China Sea in jeopardy.
48:18.4
The joint military drills between Manila and Washington nearing their end.
48:23.0
Ahead of the Balikatan's completion, troops from both countries sank a decommissioned China-made ship
48:30.1
which represented an enemy force approaching Philippine territory.
48:34.0
It was only after two hours of firing before the ship sank Wednesday morning.
48:39.7
For military officials, the drills allowed troops from both countries to enhance their interoperability
48:45.0
in maritime security and territorial defense operations.
48:49.9
The mission of trying to prevent an aggressor from landing on the Philippine soil.
48:56.3
So we are confident that we will be able to do our mandate to protect the country.
49:02.6
We are confident we can work well with each other.
49:05.6
Practicing alongside one another so we can learn how each other operates
49:10.4
and how we're going to react to certain scenarios.
49:12.6
So we'll continue to prepare.
49:14.0
The goal is to continue training, continue to building the partnership.
49:20.9
The annual drills which involve at least 16,000 Filipino and American troops will end Friday.
49:28.2
Several of the drills this year were set around islands and provinces facing Taiwan.
49:32.6
And the South China Sea.
49:36.6
And before we go, Korean dramas now have a new tool under their belt which is artificial intelligence.
49:43.6
For the hit TV show Queen of Tears, generative AI was used to depict a snowy forest for a particular scene.
49:51.3
It learned the structure of complex trees and created the patterns on a large-scale LED screen.
49:58.0
Many of the car scenes on the show were also filmed using the virtual.
50:02.6
Freeing the production from the boundaries of time and location.
50:07.9
Now Queen of Tears recorded the highest viewing rate for cable channel TVN.
50:13.0
It also made Netflix's global top 10 non-English series for eight consecutive weeks.
50:22.4
And that's it for the show.
50:24.0
I'm Stanley Palisada.
50:25.0
Thank you so much for watching.
50:26.1
You can listen to our interviews again on the ANC Market Edge podcast available on Spotify.
50:31.0
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50:34.0
And exclusive content of our shows online.
50:36.6
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50:39.1
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50:40.0
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50:41.8
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