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Stocks rise despite US-China tension




THE Dow Jones was up 1.3 percent.

Global stocks on Monday largely shrugged off the latest escalation of US and Chinese tensions as talks in  Washington on additional virus relief spending remained stalemated.

Europe’s main markets closed higher while New York’s top indices were mixed, with the Dow posting big gains and the Nasdaq retreating.

What form a new US spending package will take remained in doubt as the White House and Democratic leaders in Congress traded barbs and blamed each other for the failure to reach agreement.

President Donald Trump signed four executive orders over the weekend including one to defer payroll taxes, and another to provide $400 in weekly unemployment benefits, $100 of which will be paid by already cash-strapped states, to replace the $600 weekly payments that expired at the end of July.

Senator Chuck Schumer, the lead Democrat in the upper house of Congress, called Trump’s efforts “laughable,” while Treasury Secretary Steven Mnuchin called the Democratic proposal for aid to state and local governments “absurd.”

But Peter Cardillo of Spartan Capital Securities told AFP, “The market is ignoring negative factors.”

Investors also largely shrugged off the latest back-and-forth between Beijing and Washington ahead of trade talks this weekend and after orders from US President Donald Trump restricting Chinese-owned social media giants TikTok and WeChat.

China on Monday sanctioned 11 Americans, including senators Marco Rubio and Ted Cruz, in retaliation to earlier US sanctions on sanctions on a group of Chinese and Hong Kong officials — including the city’s leader Carrie Lam.

Hong Kong media mogul Jimmy Lai, one of the city’s most vocal Beijing critics, was meanwhile arrested Monday under the security law, deepening a crackdown on democracy supporters.

US Secretary of State Mike Pompeo said Monday he was “deeply troubled” by Lai’s arrest, calling it “further proof that the CCP (Chinese Communist Party) has eviscerated Hong Kong’s freedoms and eroded the rights of its people.”

Talks on the phase one US-China trade deal are set for this weekend, but the US administration imposed sanctions on several Hong Kong officials, with Beijing slapping sanctions on a number of leading Americans.

“With trade talks –- via videoconference -– scheduled for Saturday, you’d think investors would be in a state of distress over the tinderbox situation between the two superpowers,” said market analyst Connor Campbell at Spreadex.

“Instead the markets were fairly blasé about a topic that has caused triple-digit losses in the past,” he added.

The developments have put the spotlight on Saturday’s meeting of trade officials to review their “phase one” deal signed in January.

National Australia Bank’s Tapas Strickland said: “The running assumption in markets has been President Trump needed the phase one deal to succeed (as much as China) this side of the November elections to secure the midwest” farming belt.

“At the same time President Trump is running a hard China line into the elections,” he added.

Key figures around 2115 GMT
New York – Dow: UP 1.3 percent at 27,791.44 (close)
New York – S&P 500: UP 0.3 percent at 3,360.47 (close)
New York – Nasdaq: DOWN 0.4 percent at 10,968.36 (close)
London – FTSE 100: UP 0.3 percent at 6,050.59 (close)
Frankfurt – DAX 30: UP 0.1 percent at 12,687.53 (close)
Paris – CAC 40: UP 0.4 percent at 4,909.51 (close)
EURO STOXX 50: UP 0.2 percent at 3,259.71 (close)
Hong Kong – Hang Seng: DOWN 0.6 percent at 24,377.43 (close)
Shanghai – Composite: UP 0.8 percent at 3,379.25 (close)
Tokyo – Nikkei 225: Closed for a holiday
Euro/dollar: DOWN at $1.1737 from $1.1787 Friday
Dollar/yen: UP at 105.95 yen from 105.92 yen
Pound/dollar: UP at $1.3065 from $1.3052
Euro/pound: DOWN at 89.79 pence from 90.31 pence
West Texas Intermediate: UP 1.7 percent at $41.94 per barrel
Brent North Sea crude: UP 1. percent at $44.99 a barrel




Remembering Gari Tiongco

Gari’s creative entrepreneurial instincts, integrity, intellect, affability and easy-going manner made him an ideal partner to have for these conglomerates.

Bing Matoto



For some of my readers out there, you may be wondering who is Gari Tiongco?

Gari is my fraternity brother at the Upsilon Sigma Phi, the oldest Greek-letter organization and fraternity in Asia, which was founded in 1918 in the University of the Philippines (UP). He was one of the fraternity’s leading lights. His budding leadership skills were in great evidence as the fraternity fellows bestowed upon him in 1967 the Most Illustrious Fellow designation, the undisputed leader of the fraternity. His campus leadership was timely as it was on the eve of the fraternity’s Golden Jubilee celebration. Upsilon was proudly basking in the glory of the nation’s leadership at that time, which was littered with Upsilonians. We had President Ferdinand Marcos, Senator Ninoy Aquino, House Speaker Jose Laurel and Chief Justice Enrique Fernando.

Gari was in the thick of the fraternity’s preparations for the celebration to ensure the fraternity’s campus lights were also Upsilonians in parallel with our elder senior brothers. He launched the all-student, all-Upsilonian cast stage play, Twelve Angry Men, which had future renowned TV broadcaster Angelo Castro in the leading role. He had recruited distinguished students to be involved in campus politics, like future UP President Fred Pascual and future Press Undersecretary Danny Gozo.

Big chunks of my life were also greatly influenced by Gari at that time. For one, I would not be an Upsilonian today if it was not for Gari. He was the brother who introduced the fraternity to me.

He was the brother who cared for me shortly after our final initiation rites. He was also the brother who taught me an abject lesson in humility (which is a story for another time).

All of these nuggets under Gari’s mentorship put me in great stead for my life. But most important of all, it was Gari who had set in motion my 53-year love affair with my beloved, Eliza.

Sadly, Gari’s light was extinguished last 16 August after a three-year-long battle against cancer. A battle that he refused to share even with his closest friends, because of his steadfast wish not to be looked at or treated any differently as he pursued his most cherished dream to provide affordable accommodations to the students of UP in Los Baños.

As a provinciano himself when he studied in UP to be a lawyer, Gari was always conscious of the fact that like most gifted but financially disadvantaged scholars of the State University, decent but inexpensive accommodations were few and far between in the various UP campuses. Shortly before his passing, his dream had come into fruition. The first dormitory building, named “Diwa,” or essence, had been completed and is now available for about 300 students for the coming school year when the pandemic would have eased enough to allow face-to-face learning. The name of the building is appropriate as it indeed captures the essence of Gari’s dream. When fully completed, the multi-building dormitory project will be able to accommodate about 1,000 students who will conveniently be housed in the heart of the Los Baños campus.

After Gari completed his studies in UP, he returned to Davao to set up a law firm with another fraternity brother, former Cabinet Secretary for Housing Dion de la Serna, to become the top corporate law firm in Davao in no time. After scaling the heights of lawyering, Gari, a man who was always in a quest for the next grand move, decided to move into entrepreneurship. Armed with the experience he accumulated from his father who was a contractor, he immersed himself in the business to emerge again as the top contractor in Davao. Shortly after, his business acumen successfully directed him into real estate development focusing on affordable vertical high-rise residential buildings and establishing low-cost cemeteries. Again, Gari excelled as he partnered with big corporate names such as the Gokongweis, the Florendos and the Gaisanos.

Gari’s creative entrepreneurial instincts, integrity, intellect, affability and easy-going manner made him an ideal partner to have for these conglomerates.

Gari’s life though was not just all business. He immersed himself as well in the affairs of his alma mater, UP. He served as President of the UP Alumni Association and became a member of the UP Board of Regents for two terms. But Gari’s latent avocation was really the arts. During his tenure in UP, he presided over the University’s Centennial celebrations, capped with several activities, such as the 100 Nudes for 100 Years Art exhibit, Sining Saysay Art Murals exhibit, Cuento Comico stage presentation and 100 Years of World Class Music. For the fraternity, he produced “Bintao” about the life of another Upsilonian, Wenceslao Vinzons. But above all, a lasting manifestation of Gari’s love for the arts and the fraternity is his much awaited, soon-to-be published book, Party of Forever, Stories of Upsilon Sigma Phi (and then some). It is Gari’s written compilation of all the stories of travel and fellowship he had regaled the brods throughout his most memorable and extraordinary life.

Until next week… One big fight!

For comments, email [email protected]

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Megawide targets P3 billion from float





Diversified engineering and infrastructure conglomerate Megawide Construction Corp. is expected to raise fresh funds from the capital markets through the issuance of P3 billion worth of new preferred shares, with an oversubscription option of up to P5 billion.

This development came after Megawide filed its application with the Philippine Stock Exchange (PSE) on 21 September 2020.

“We see significant opportunities in both our organic and external pipeline amid the challenges emerging from the health crisis. We are very thankful to our partners for arranging this facility and gathering together the sources and users of fund, especially in this critical yet exciting stage for the company,” Megawide chairman and CEO Edgar Saavedra said.

Proceeds from the issuance will be used to fund its runway for growth program, which primarily includes the development of the 1.7-hectare Lot 2 at the Pañanaque Integrated Terminal Exchange (PITX), expansion of its pre-cast capacity, and initial design stages for the Mactan Cebu International Airport (MCIA) multi-use development.

Long list of projects

Other projects in Megawide’s pipeline include the Original Proponent Status (OPS), which is now in various stages of approval, for the MCIA Expansion Proposal, Carbon Market Redevelopment and the NAIA Rehabilitation Project.

Megawide believes that the government’s continued support to jumpstart the economy through the relaxation of credit, coupled with stable inflation and foreign exchange rate scenario, will support a favorable interest rate environment for the instrument’s pricing, which will be determined on the issue date.

“We also want to take advantage of this window of opportunity for investors who are searching for attractive investment alternatives and for projects that offer significant value. At the end of the day, we believe that all sectors – the public sector, private companies, and financial institutions – should come together for businesses to recover quickly. After all, we all share the single objective of economic progress and national development as we pursue our vision of a First-World Philippines,” Saavedra stressed.

RCBC Capital Corp. and PNB Capital Corp. are the joint lead underwriters for the capital raising exercise, which is targeted to be completed within November 2020.

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World Bank casts lower GDP outlook, high poverty incidence

Joshua Lao



Multilateral lender World Bank (WB) cast a more glum outlook in gross domestic product (GDP) terms for the Philippines, penciling a sharper economic contraction than the government’s eyed minus 5.5 percent for 2020. 

WB senior economist Rong Qian said that they are now looking at a 6.9 percent GDP contraction for the year, a notable revision from their previous minus 1.9 percent outlook. 

According to her, the lower local output could be partly attributed to the government’s decision to revert major cities into stricter quarantine measures in August. 

While at it, the WB economist said they expect a better GDP figure in the third quarter 2020 versus previous quarters as the government gradually opens up the economy, allowing businesses and other establishments to resume operations. 

“We expect that the third quarter is better than the second quarter and also trade data and fiscal revenue has also shown recovery. So we hope this will (be) sustained,” Qian told reporters during a virtual press conference on Tuesday. 

“The forecast and assumption for 2021 is that (the Philippines) will continue this gradual reopening of the economy and that the COVID-19 is under management, at least we won’t see another spike (inactive cases),” she added. 

For 2021, the WB economist said that they are projecting a GDP rebound to 5.3 percent and accelerating further to 5.6 percent come 2022. 

On a separate development, Socioeconomic Planning Undersecretary Rosemarie Edillon shared the same sentiment, citing a better GDP figure on a quarterly basis despite being lower year-on-year. 

“It will definitely (be) positive…but year-on-year, it will still be negative. We’re looking at indicators such as the purchasing managers’ index. It’s still below the 50 percent mark,” Edillon said. 

Higher poverty seen

Meanwhile, the country’s poverty level was expected to increase in 2020, owing to the pandemic’s impact, which displaced a lot of workers. 

“We have estimated that the 2019 poverty will be around 20.5 percent and 2020 will be 22.4 percent, so it’s a bit less than 2 percentage points more during this pandemic,” Qian said. 

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DTI sees improved trade, investment to India

Raffy Ayeng



The Philippines-India Joint Working Group on Trade and Investments (JWGTI) co-Chairs DTI Undersecretary Ceferino S. Rodolfo and Ministry of Commerce Joint Secretary Anant Swarup with Ambassadors Ramon S. Bagatsing, Jr. and Shambu S. Kumaran during their virtual meeting.

The Department of Trade and Industry (DTI) and its counterparts in India are now gearing up to pursue concrete initiatives, as both parties foresee an enhanced promotion of trade and investment between the Philippines and India.

In a statement, Trade Undersecretary for Industry Development and Trade Policy, Dr. Ceferino S. Rodolfo, said this developed in view of the recently concluded virtual 13th Meeting of the Joint Working Group on Trade and Investments (JWGTI).

Rodolfo said during his meeting with Joint Secretary of the Ministry of Commerce of India Anant Swarup, discussions were focused on the initiatives to foster synergies in various sectors such as textiles, electronics (Smart manufacturing and digital technologies, IC design and electronics system design manufacturing), IT-BPM (telemedicine, health information management, software development and IT solutions and online learning), energy, and agriculture.

The Trade undersecretary noted that India was also encouraged to consider opportunities in the manufacture of active pharma ingredients, vaccines and essential medicines and establishment of R&D facilities for herbal medicines, as India holds the reputation as the “pharmacy of the world”.

“The Philippines still has a traditional view of India. This mindset has to change given the vast opportunities for collaboration that remain untapped,” said Undersecretary Rodolfo.


Reaching full potential

India’s Joint Secretary Swarup, meanwhile, shared the same view noting that “both sides share in each other’s total trade is negligible, from only about 0.3 – 1%, hence the full potential of the relations is yet to be reached.”

Swarup emphasized that pertinent trade and investment promotion agencies from both sides are now pitching up to chase real ingenuity for an improved preference of trade and investment between their country and the Philippines.

The DTI said that in 2019, India was the Philippines’ 14th top trading partner (out of 226), 17th export market (out of 220), and 13th import supplier (out of 194) with total trade of $ 2.4 billion.

India was also the 8th largest source of approved investments at P915.64 million in 2019.

The JWGTI serves as DTI’s dedicated platform to discuss trade and investment issues, proposals for economic cooperation, and concerns on the business environment.

The 13th JWGTI meeting was attended by various business organizations and was graced by their Excellencies Ramon S. Bagatsing, Jr., Ambassador of the Philippines to India and Shambhu S. Kumaran, Ambassador of India to the Philippines.

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Bargain-seekers power global stock markets surge




Major indices took little notice however as the Dow Jones jumped 1.5 percent.

Global markets surged higher Monday as bargain-seekers moved in following sell-offs triggered by virus spikes and the return of some economically damaging containment measures.

As the coronavirus death toll topped one million, the World Health Organization warned that figure could double without more global collective action.

Major indices took little notice however as the Dow Jones jumped 1.5 percent, adding to a strong finish the previous week.

And despite swirling clouds of Brexit uncertainty, London added 1.8 percent while Frankfurt and Paris gained 3.2 percent and 2.4 percent, respectively.

“Investors appear to be warming towards equities and other risk assets again,” remarked Fawad Razaqzada, market analyst with ThinkMarket.

“The relatively low (new) Covid-linked deaths mean investors are not showing too much concern towards rising virus cases. Instead, they remain optimistic over the potential approval of a vaccine soon, which together with ongoing central bank support will probably help accelerate the recovery,” Razaqzada added.

Elsewhere, investors kept an eye on the resumption of trade talks between Britain and the European Union, hoping for a breakthrough despite feuding over a controversial UK bill that threatens to scupper a deal.

The pound rallied against the dollar and euro on optimism surrounding the latest talks.

Traders also awaited the first US presidential debate this week, which could set the tone for November’s election, with many worried about potentially tense scenarios if the vote is close.

The agenda for US data this week includes reports on US manufacturing and consumer confidence and the September employment report.

On the corporate front, HSBC shares surged by almost nine percent in London following news that its biggest investor Ping An Insurance Group had increased its stake in the bank.

Shares in steel giant ArcelorMittal soared by almost 11 percent after the firm said it would merge its US operations with producer Cleveland-Cliffs.

Key figures around 2110 GMT 

New York – Dow Jones: UP 1.5 percent at 27,584.06 (close)
New York – S&P 500: UP 1.6 percent at 3,351.60 (close)
New York – Nasdaq: UP 1.9 percent at 11,117.53 (close)
EURO STOXX 50: UP 2.8 percent at 3,223.19 (close)
London – FTSE 100: UP 1.5 percent at 5,927.93 (close)
Frankfurt – DAX 30: UP 3.2 percent at 12,870.87 (close)
Paris – CAC 40: UP 2.4 percent at 4,843.27 (close)
Tokyo – Nikkei 225: UP 1.3 percent at 23,511.62 (close)
Hong Kong – Hang Seng: UP 1.0 percent at 23,476.05 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,217.53 (close)
Pound/dollar: UP at $1.2840 from $1.2746 at 2100 GMT on Friday
Euro/pound: DOWN at 90.92 pence from 91.26 pence
Euro/dollar: UP at $1.1664 from $1.1631
Dollar/yen: DOWN at 105.56 yen from 105.58 yen
West Texas Intermediate: UP 0.9 percent at $40.60 per barrel
Brent North Sea crude: UP 1.2 percent at $42.43 per barrel


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MSME key to recovery – UNDP

MSME will play a crucial role in the Philippines’ efforts to recover from the crisis brought about by this pandemic.

Joshua Lao



Interventions for the micro, small and medium enterprises sector will be crucial in order for them to recover from the impact of coronavirus pandemic. / Photograph courtesy of pond

As majority or 99.5 percent of business establishments in the country belong to the micro, small and medium enterprises (MSME) sector, assistance for such will be crucial for an inclusive recovery from the coronavirus pandemic.

This was learned from the United Nations Development Programme (UNDP) as it revealed in its latest report that MSME suffered greatly from the government-imposed community quarantine measures, disrupting cash flows and bringing higher income losses.

The survey made by the UNDP showed that 81 percent of MSME respondents experienced low consumer demand alongside shortages related to transportation and logistics.

About 80 percent of the respondents admitted a reduction in their average monthly income from the April to June period versus their regular monthly income prior to the health crisis.

In terms of financial assistance, over half or at least 60 percent of the MSME reported that they were unable to received any of such from any stakeholder, including the government and the private sector.

As such, UNDP Philippines officer-in-charge Enrico Gaveglia explained the key role MSME will play in the government’s aim to bring the economy back to its pre-pandemic levels.

“MSME will play a crucial role in the Philippines’ efforts to recover from the crisis brought about by this pandemic. UNDP will continue to support the government and its development partners to facilitate their sector

representation in policy dialogues and program planning so as to capitalize on available solutions that could prevent further closures of MSME,” he said.

According to Gaveglia, they are currently working with the private sector to provide online resources and ensure that all MSME can get the necessary e-commerce training to support their digitalization efforts.

The UNDP executive added that digital infrastructure in the country will play a major role in enabling the development of a new market space online.

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DTI seeks opening of more businesses

To reopen the economy safely, with the same degree of enforcement and minimum health standard, it still can be GCQ, and just reopen other sectors under Category III from 50 percent operating capacity to 100 percent.

Hananeel Bordey



Whether the government implements general community quarantine (GCQ) or modified GCQ, Department of Trade (DTI) secretary Ramon Lopez wants to open more businesses to help the economy recover.

During the Senate deliberations of the proposed P5.5 billion DTI budget, Lopez disclosed that they want industries operating in 50 percent capacity to work 100 percent, regardless of the lockdown protocol being implemented.

“I am in favor of MGCQ but only for the purpose of reopening the economy,” Lopez told the Senate Finance Committee.

“To reopen the economy safely, with the same degree of enforcement and minimum health standard, it still can be GCQ, and just reopen other sectors under Category III from 50 percent operating capacity to 100 percent,”
Lopez said.

This was already proposed to the Inter-Agency Task Force for Emerging Infectious Diseases (IATF) but he explained that opening more industries doesn’t mean the health protocols will be relaxed.

“I made this proposal even to the IATF. But as I proposed this, I made sure and clarified that there will be no easing of enforcement and also the minimum health standard (will be implemented),” he said.

During the same hearing, Lopez disclosed that there are 90,000 business establishments that remained closed and there are 4.4 million workers displaced.

Until the end of September, National Capital Region and nearby regions are placed under GCQ, the second to the most relaxed quarantine protocol set by the government.

Malacañang is expected to announce the quarantine protocol that the government will implement this week.

with Raffy Ayeng

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SEC rescinds license of FCash for violations

The SEC CGFD found FCash liable for multiple violations of SEC MC 18, which provides for the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.




The Securities and Exchange Commission (SEC) on Monday said it canceled the certificate of authority (CA) of FCash Global Lending Inc. to operate as a lending company due to its unfair debt collection practices.

In an order, the SEC Corporate Governance and Finance Department (CGFD) found FCash liable for multiple violations of SEC Memorandum Circular 18, Series of 2019 (SEC MC 18), which provides for the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.

FCash, which operates online lending platforms Fast Cash and Fast Cash Loan, made multiple attempts to collect loan payments by contacting or threatening other persons that the borrower identified as guarantors or
co-makers, according to the CGFD.

FCash likewise sent messages threatening borrowers with charges for estafa before the National Bureau of Investigation, and service of writ of garnishment or writ of attachment.

SEC said FCash also threatened to report borrowers to their respective employers, and used abusive words when communicating with them over the phone.

The CGFD also noted how FCash took advantage of borrowers’ lack of awareness on legal terminologies to compel them to pay their loans.

Initially, the CGFD imposed a fine of P25,000 against FCash for its first violation of SEC MC 18 on 25 September 2019 and another fine amounting to P50,000 for its second violation on 26 September 2019.

On 12 December 2019, the CGFD formally charged FCash for its third violation of the SEC MC 18.

On the other hand, FCash contended that it should not be charged with violating SEC MC 18 based on complaints involving loan transactions consummated prior to the effectivity of the circular.

“Respondent was bound to comply with its provisions at the time it became effective — with respect to new and existing loan accounts, insofar as the latter remain pending and demandable,” the CGFD noted.

“In any case, even before the effectivity of SEC MC 18, there was neither right nor obligation on the respondent’s part to harass or employ abusive tactics in conducting its collection. It is basic that in the exercise of rights and performance of duties, one must act with justice, give everyone his due and observe honesty and good faith.”

The commission issued SEC MC 18, which took effect on 8 September 2019 in response to several complaints for unreasonable, abusive and unfair practices that lending and financing companies used in order to collect debt from borrowers.

The CGFD added that FCash has logged the highest number of complaints for collection harassment since 2017.

“SEC has consistently reminded the public to be cautious and mindful of the terms and conditions of a loan contract before consenting to the same, especially the interest rates, penalties, and other charges,” the CGFD said.

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Capital markets remain strong

Despite the recent uptick in interest rates, it’s still a good opportunity to raise capital with borrowing costs at these low levels.

Joshua Lao



Capital markets remain strong and will continue to provide credit access for corporates’ fundraising needs, a Bank executive said.

First Metro Investment Corporation head of investment banking Daniel Camacho said that there is no drought of financing options for local companies as they can tap banks as well as non-bank sources to fulfill their financing requirements.

“Investment banks like First Metro continue to help companies in their fundraising, primarily peso bond issuances as well as other financial instruments that suit clients’ needs,” he explained.

According to Camacho, equity and debt markets remain viable sources of fundraising given current conditions like low interest rates and ample liquidity in the financial system.

“The regulatory environment is very supportive and market liquidity is ample. Investor sentiment continues to be positive as the economy reopens but understandably interest is on the shorter end with tenors of five years and below,” he explained.

“Despite the recent uptick in interest rates, it’s still a good opportunity to raise capital with borrowing costs at these low levels,” he added.

The Bank executive likewise said that capital markets will remain healthy, especially when the eyed economic recovery happens in 2021.

“We are eagerly awaiting consumer confidence to return and with their pent-up demand boosting companies’ spending and investment, thus increasing issue volumes in the capital markets,” he said.

Rizal Commercial Banking Corporation chief economist earlier said that current corrections in local IOU yields remain in progress as global markets further reopen their economies.

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