Philippines

Philippines’ Largest Bank Posts Rare Loss, Braces for Defaults

BDO Unibank Inc., the Philippines’ largest lender by assets, posted its first loss in more than a decade after bolstering provisions for bad loans due to the pandemic, Bloomberg News reported. The bank said its net loss totaled 4.48 billion pesos ($91 million) in the three months ended June, compared with profit of 10.4 billion pesos a year earlier. It booked provisions of 22.4 billion pesos in the first half, in anticipation of potential delinquencies stemming from the coronavirus pandemic.

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Banks Eye Hanjin PH Debt Resolution

Local bank creditors of Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), the local unit of Korea’s shipbuilding giant Hanjin, expect resolution of the shipbuilder’s debt within the year. The local Hanjin owes five local banks a total of $412 million, considered as the biggest corporate default in the country, the Manila Bulletin reported. Among the creditor banks, Rizal Commercial Banking Corp. (RCBC) has the biggest loan exposure of $140 million followed by state-owned Land Bank of the Philippines with an estimated $80 million.

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Court of Appeals Orders Philippine Government to Pay INP Retirees’ Pension

The Court of Appeals (CA) has directed the Philippine government to proceed with the payment of P3.9 billion in pension benefits to retired members of the defunct Integrated National Police (INP), The Philippine Star reported. In an eight-page decision issued last Dec. 12, the Special 14th Division of the appellate court ordered the full implementation of a 2016 CA decision for the release of benefits to the INP retirees by the Philippine National Police (PNP) and Department of Budget and Management (DBM).
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Duterte’s Popularity Hit by Rising Inflation

Rodrigo Duterte was sworn in as Philippine president more than two years ago on a promise to be different from his predecessors. Like them, however, he is proving vulnerable on inflation and that will prove a challenge for his legislative agenda, the Financial Times reported. FTCR’s Economic Sentiment Index for the Philippines dropped to 48.9 in the second quarter, marking the first time consumers have turned pessimistic since the fourth quarter of 2015, and since Mr Duterte took office in June 2016.
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Philippines GDP Misses Expectations as Inflation Bites

The Philippine economy grew less than expected in the second quarter amid rising inflation, according to figures released on Thursday. The Philippines’ gross domestic product rose 6 per cent year on year in the three months through June, well short of the 6.7 per cent median forecast from a Reuters poll of economists and down from revised first-quarter GDP growth of 6.6 per cent, the Financial Times reported.
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Capital Restructuring Eyed to Address PT&T Debt Woes

Listed Philippine Telegraph & Telephone Corp. (PT&T) is poised to implement a capital restructuring plan that would settle long-running obligations ahead of the entry of a foreign strategic partner, Inquirer.net reported. A key feature of the plan, according to PT&T chief operating officer Miguel Bitanga, is the conversion of its creditors into preferred shareholders, which was outlined under the company’s court-mandated rehabilitation. This was linked to a series of steps, including increasing PT&T’s authorized capital.
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BSP Places Negros Rural Bank Under Receivership

The central bank has placed the New Rural Bank of Binalbagan (Negros Occidental) Inc. under receivership of the Philippine Deposit Insurance Corp. (PDIC). Under Monetary Board (MB) Resolution No. 1002.A dated June 9,2016, the PDIC was named receiver, effectively taking over the bank on June 10. The office address of the bank was registered at National Highway, Barangay Progreso, Binalbagan, Negros Occidental. This comes after the MB decided to prohibit the rural bank from doing business and to place its assets and affairs under receivership.
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Rodrigo Duterte’s Finance Chief Seeks to Spread the Wealth in the Philippines

The Philippines’ new finance secretary appointed by the hard-nosed incoming president, Rodrigo Duterte, has vowed that the new government won’t destroy the economic gains of the outgoing Aquino administration, but will work to spread them to ordinary Filipinos, The Wall Street Journal reported. “We are here to build on, not destroy, those gains,” said Carlos Dominguez, who last served as minister two decades ago. He currently owns the Marco Polo Hotel in Davao City on southern Mindanao island, where his childhood friend, Mr. Duterte, is the longtime mayor. Mr.
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2 Rural Banks Placed Under PDIC Receivership

The Monetary Board last week ordered the closure of two rural banks—one in Camarines Sur and the other in La Union, Inquirer.net reported. In a Dec. 10 circular, Bangko Sentral ng Pilipinas Deputy Governor Nestor A. Espenilla Jr. said the Monetary Board had decided to prohibit Peñafrancia Rural Bank of Calabanga (Camarines Sur) Inc. from doing business in the country. Also, the rural bank’s assets and affairs were placed under receivership pursuant to Section 30 of Republic Act No. (RA) 7653 or The New Central Bank Act, Espenilla said.
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