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00:00.0
Hello everyone, I'm Michelle Long, it's 9 in Manila, 10 in Tokyo, 9pm in New York.
00:13.3
The headlines, Asian stocks under pressure this morning following more hawkish Fed speak, hinting at higher for longer.
00:21.5
Here at home, the PSE index kicks off from 65.23 on course for its third weekly loss.
00:27.8
In corporate stories, Megaworld, sponsor of Emreid, completes the secondary share sale of 40.7 million Emreid shares in a block sale transaction.
00:41.1
Motorists told to brace for a mixed bag of fuel price adjustments next week, with gasoline going up, while diesel and kerosene are expected to head lower.
00:51.7
And later, what other sweet deals could Leicester-used Frutas Holdings be cooking up?
00:57.0
Frutas Director and Chief Financial Advisor Calvin Chua joins us live later on in the program.
01:04.8
President Ferdinand Marcos Jr. is speaking at the grand launch of Phase 1 of the National Fiber Backbone Project. Let's listen in.
01:11.7
Why do we do all of this? It is because it is clear to us that the internet has become the backbone of trade.
01:25.0
Communications, transactions within.
01:27.0
And amongst communities.
01:28.9
Because this backbone links us together, then it serves as the economic spine that props up our growth and supports our development.
01:38.1
More importantly, we understand that in order for Filipinos to reach their full potential, we must invest in a fast and reliable internet.
01:47.0
It gives me pleasure to lead the grand launch of Phase 1 of the first and only government-owned national fiber backbone.
01:55.4
I acknowledge the effort.
01:57.0
I acknowledge the efforts of the diligent officials and personnel of the DICT.
02:00.6
This is a great start to this long-term and multi-phased program.
02:05.5
I also wish to extend my profound gratitude to our partners in the private and public sectors, including the BCDA, Transco, NGCP, and the consortium that was led by META.
02:17.8
Indeed, the successful completion of Phase 1 is an enormous breakthrough.
02:23.1
And as we continue in our quest.
02:27.0
To increase internet connectivity and service capacity.
02:31.6
Spanning 1,245 kilometers.
02:36.6
The NFB Phase 1 is composed of 28 nodes from Lawag, Ilocos Norte, down to Roses, Quezon City.
02:44.5
It will also have an initial 600 Gbps optical spectrum capacity.
02:50.1
To serve the needs of the government and communities along the way.
02:55.2
It means that it will bring.
02:57.0
High-speed internet access to at least 14 provinces in northern and central Luzon.
03:02.7
Two national government data centers and four BCDA ecozones.
03:07.7
Furthermore, it will empower 346 national and local government offices connected to GovNet.
03:15.4
Boosting their overall operational efficiency and generating more than 145 million pesos in potential savings annually.
03:26.0
It will extend a digital lifeline to more than 3,000 Filipinos and different free Wi-Fi sites.
03:34.0
Enabling direct internet access for approximately 750,000 beneficiaries in regions 1, 3, and here in the NCR.
03:46.0
We look forward to the completion of the five next phases of the National Fiber Backbone Project by 2026.
03:56.0
Once finished, the DICT expects to increase the penetration rate from 33%, as it is now, to 65%.
04:03.2
Reaching 70 million Filipinos out of the current 115 million population nationwide.
04:11.1
It will also lower the price to as much as $5 per Mbps.
04:19.0
Lastly, nationally, this is the infrastructure that will open employment opportunities.
04:25.2
It will improve market efficiency, attract foreign investment, and stimulate livelihood across the different sectors of our economy and our society.
04:37.0
It will close the digital divide and bring to our people the transformative power of free and fast access to information.
04:45.5
It will allow the state to guarantee the people's enjoyment of the internet as a basic human right.
04:51.3
Even this early, we are assured that the NFP Phase 1.
04:55.2
will already make a significant impact on our internet connectivity,
04:59.3
as well as in the day-to-day activities of ordinary Filipinos.
05:03.3
One of the most important aspects that we have always focused upon is an effort,
05:12.4
and that's why connectivity has been very important,
05:15.6
is that it is a very big push to bring MSMEs into,
05:25.2
into the digital space.
05:26.9
So that we get to the point where the sari-sari store doesn't sell only to the village.
05:34.3
The sari-sari store can sell anywhere.
05:37.7
And that brings us into the digital space.
05:40.8
Even what we refer to as nano-enterprises.
05:45.8
I mean, I'm talking about the shoe shine boy, the mechanical, who has odd jobs, all of these.
05:51.0
Nano-enterprises will also have access to that.
05:55.2
And that will give them more opportunities.
05:57.2
And that is such an important part of the economic transformation
06:01.5
that we are hoping to achieve here in the Philippines.
06:06.2
And as we begin to reap the benefits of this project in our daily lives,
06:10.3
let this serve as an indicator of even grander ambitions and developments in the country in the future.
06:16.9
That is if we remain determined and steadfast in completing the next phases of this project
06:22.5
to further build on our capacity,
06:24.5
boost our connectivity,
06:26.5
and foster greater inclusivity.
06:30.5
I call upon everyone involved in this mega-project to remain committed to our original vision.
06:38.5
To bring our businesses closer to consumers,
06:41.5
our nation closer to the rest of the world,
06:43.5
and our people closer to their loved ones.
06:46.5
All through the connections that we are building through the National Fiber Backbone.
06:51.5
So to all my fellow public servants,
06:53.5
my challenge to you is to spread these initiatives to all corners of the Philippines.
06:59.5
Especially to those who remain without access to the internet.
07:04.5
Let us remain steadfast in our belief that working side by side,
07:09.5
keeping our promises one by one,
07:11.5
we will attain a bagong Pilipinas that fosters a more secure,
07:16.5
comfortable, and fulfilled life for everyone.
07:19.5
Let us persist in pushing the boundaries of what is achievable.
07:22.5
Collaborating, innovating, and adapting whenever possible
07:26.5
to ensure that every Filipino is empowered in this digital era.
07:31.5
Ladies and gentlemen,
07:33.5
I look forward to seeing the fruits of the first phase of the National Fiber Backbone
07:37.5
and the subsequent completion of the National Broadband Plan.
07:43.5
on this very important day,
07:45.5
congratulations to one and all.
07:47.5
Mabuhay ang bagong Pilipinas.
07:49.5
Maraming salamat po.
07:50.5
At magandang umaga po.
07:52.5
Thank you very much.
07:54.5
There you have it.
07:55.5
The National Fiber Backbone is a vital component of the government's National Broadband Program
08:00.5
which aims to enhance the country's ICT infrastructure
08:03.5
and improve internet connectivity.
08:05.5
The NFB will activate the National Grid Corporation of the Philippines' Dark Fiber,
08:09.5
or unused fiber optic cables,
08:11.5
and commission the laying out of fiber optic cables along 123 sites in the Philippines.
08:18.5
Phase 1 of the project,
08:20.5
which spans 1,245 kilometers,
08:23.5
is composed of 28 nodes running from Lawag, Ilocos Norte,
08:27.5
down to Rosas in Quezon City.
08:29.5
It has an initial 600 GPPs optical spectrum capacity
08:35.5
to serve the needs of government and communities along its way.
08:38.5
We are talking about high-speed internet access to at least 41 provinces
08:43.5
in northern and central Luzon,
08:45.5
two data centers,
08:46.5
and four BCDA ecozones.
08:48.5
It will also empower 346 national and local government units
08:53.5
connected to gov.net,
08:55.5
boosting overall operational efficiencies.
08:58.5
They're looking at generating 145 million pesos
09:02.5
in potential savings annually because of this,
09:05.5
and to extend the digital lifeline to more than 3,000 Filipinos
09:08.5
and different Wi-Fi sites.
09:11.5
They are expecting 750,000 beneficiaries as well
09:17.5
and Metro Manila.
09:19.5
The President says he's looking forward to the completion
09:21.5
of the next five phases by the year 2026.
09:27.5
the DICT will be able to increase penetration rate
09:30.5
from 33 percent the current to 65 percent,
09:33.5
reaching 17 million Filipinos out of a 115 million strong population.
09:39.5
With that wider reach,
09:41.5
the price is also expected to go down to as low as just $5 per MBPS.
09:47.5
The President is saying the most important use for this
09:51.5
is to be able to close the digital divide
09:54.5
and embrace MSMEs and nano-enterprises
09:57.5
into the digital space.
10:00.5
Again, this is the first and only government-owned
10:03.5
national fiber backbone.
10:05.5
Phase one out of six.
10:11.5
let's go to stocks.
10:12.5
Asian markets set to fall,
10:13.5
mirroring weakness from Wall Street peers.
10:16.5
amid more hawkish Fed speak.
10:18.5
Now, equities in Australia,
10:21.5
Japan are declining.
10:23.5
The KOSPI index not spared.
10:25.5
The Nikkei 2 to 5 KOSPI index down nearly 2 percent each.
10:29.5
Well, futures for Hong Kong also pointing lower,
10:32.5
although contracts for China,
10:34.5
for mainland China,
10:35.5
offering a bit of a relief.
10:37.5
It is actually looking up this morning.
10:40.5
Now, U.S. equity futures meanwhile.
10:42.5
Let's take a look at the board.
10:46.5
It's down as well after the S&P 500 slipped
10:49.5
for a fifth day with its most influential group,
10:51.5
tech-leading declines.
10:53.5
While the mighty dollar resumed its advance,
10:55.5
while the yen swung between gains and losses,
10:58.5
its officials raised concern over excessive moves in currencies.
11:02.5
just for context,
11:03.5
the MSCI All Country World Index has already dropped 2.1 percent
11:08.5
and is on track for its biggest weekly loss
11:11.5
since October of last year.
11:14.5
which is a fear gauge,
11:15.5
a gauge of market volatility,
11:17.5
has so far climbed to its highest this week
11:19.5
in more than five months.
11:24.5
Now, the sell-off in the world's biggest bond market continued
11:27.5
while U.S. stocks closed mixed on Thursday
11:29.5
as investors sifted through solid economic readings
11:32.5
and more hawkish Fed speak that reinforced speculation
11:36.5
the U.S. central bank will unlikely cut interest rates
11:39.5
in the near future.
11:40.5
An initial quarter point Federal Reserve rate cut
11:42.5
remained priced in for November,
11:44.5
instead of the initial expectation
11:46.5
that they will happen in March and then in June.
11:49.5
Weekly initial unemployment claims,
11:51.5
also unchanged from the prior week at 212,000,
11:54.5
while a gauge of manufacturing in the mid-Atlantic region
11:57.5
rose to a two-year high.
11:59.5
Treasuries fell across the U.S. curve
12:02.5
with two-year yields once again nearing that 5 percent mark.
12:07.5
the S&P 500 dropping for a fifth straight session,
12:09.5
its longest losing streak since October.
12:12.5
Of course, stocks are coming.
12:13.5
U.S. stocks are coming from a five-month long rally
12:16.5
that began last November.
12:21.5
I've heard as recently as today,
12:23.5
there might be some discussions with the Fed
12:25.5
about a potential rate increase at the end of the year.
12:27.5
And so that is a big delta for the markets to digest.
12:30.5
And I think a lot of that information has come
12:32.5
in the last couple of weeks.
12:34.5
And that's why we're seeing risk assets,
12:35.5
in particular things like technology stocks,
12:37.5
even high beta assets like Bitcoin and crypto, for example,
12:40.5
starting to reprice to this new reality.
12:42.5
So I think it's all eyes on the Fed
12:44.5
for the rest of this year in terms of,
12:46.5
you know, what did they do?
12:47.5
How did they respond to the data?
12:48.5
And of course, what does the data look like?
12:52.5
When asked about the possibility of hiking,
12:55.5
Fed Bank of New York President John Williams
12:57.5
had said that while it is not his baseline expectation,
13:00.5
it's possible if warranted.
13:02.5
While his Atlantic counterpart, Rafael Bostic, noted,
13:05.5
he doesn't think it will be appropriate
13:07.5
to ease until towards the end of this year.
13:09.5
Well, Minneapolis Fed Chief Neil Kashkari told me,
13:12.5
according to the old Fox News channel,
13:14.5
the Fed could potentially hold rates steady
13:21.5
Back here at home,
13:22.5
here's a look at the local corporate headlines
13:24.5
we're watching this morning.
13:25.5
DMCI Holdings says it has received from the SEC
13:29.5
a letter granting its request for exemptive relief
13:33.5
to file the definitive information statement
13:35.5
without the 2024 first quarter interim reports.
13:39.5
And the Lusotan Group reports its subsidiary,
13:42.5
the Philippine affiliate of Philip Morris International
13:45.5
has elected Mr. Gidge Lambert Johan de Best
13:48.5
as president of PMFTC Inc.,
13:51.5
or until he is duly qualified,
13:54.5
whichever comes later.
13:56.5
And for those who missed it,
13:57.5
Emery reports its sponsor, Megaworld,
14:00.5
has completed a secondary share sale
14:02.5
of 40.65 million Emery shares
14:05.5
through a block sale.
14:09.5
Internet provider Converge ICT Solutions
14:12.5
is targeting to expand its free Wi-Fi service
14:15.5
to other transport hubs in the Philippines
14:18.5
after the completion of installations
14:20.5
at the country's main gateway,
14:21.5
the Niño Aquino International Airport.
14:23.5
The company's chief operations officer,
14:25.5
Jesus Romero, says,
14:26.5
this service will come at no cost
14:28.5
to the government or the public.
14:30.5
Commuters simply need to register using their mobile number
14:33.5
to gain immediate internet access for two hours.
14:37.5
We're doing Bacolo, Duloilo, Cebu, Davao,
14:42.5
Zamboanga, Pagadian,
14:46.5
and I think two more.
14:47.5
We were also looking at that,
14:49.5
you know, like the seaports.
14:52.5
Definitely, when they finish,
14:55.5
the commuter lines,
14:57.5
if they allow us in,
14:58.5
Philippine National Railways, definitely.
15:01.5
So basically, anywhere there's a,
15:03.5
you know, a congregation of people
15:05.5
who are waiting for transportation.
15:07.5
Now, our first guest just bought Sugar House
15:10.5
in a sweet, sweet deal.
15:11.5
Frutas Holdings Director and Chief Financial Advisor,
15:15.5
Thank you so much for taking our call.
15:19.5
Thanks for having us.
15:21.5
So, Calvin, it's been a pretty busy
15:24.5
first quarter of the year.
15:26.5
You guys just bought Sugar House.
15:28.5
You reported record revenues from last year.
15:31.5
You just sold $290,000.
15:33.5
You just sold $1,000,000.
15:35.5
You just sold $1,000,000.
15:36.5
You just sold 200 million pesos
15:38.5
of corporate notes to institutional investors.
15:40.5
It's shaping up to be a busy 2024, huh?
15:43.5
Is it a banner year, you think?
15:45.5
I think it will be another banner year for us.
15:48.5
We want to continue our growth trajectory
15:54.5
We are looking at, you know,
15:58.5
further growing our acquisitions,
16:01.5
offering more products to our customers.
16:05.5
And gain loyalty of new customers.
16:08.5
Let's talk about acquisitions.
16:10.5
The most recent, Sugar House.
16:13.5
What do you plan to do with Sugar House?
16:16.5
The price tag was not disclosed.
16:18.5
So it's at less than 10% of the total assets
16:21.5
of Balay Pandesal,
16:23.5
which is around 500 plus million.
16:25.5
So it's 50 million below that 50 million price tag.
16:29.5
But what is the plan?
16:30.5
How long was this deal under wraps?
16:33.5
Who approached who?
16:34.5
And why does it make sense for you
16:36.5
to buy Sugar House?
16:39.5
We actually looked at the number of potential targets
16:42.5
in this segment for cakes.
16:47.5
We actually moved quite fast for this deal.
16:51.5
I think little under two months.
16:56.5
I won't discuss any more details
17:00.5
as to who approached who.
17:01.5
But yeah, needless to say,
17:03.5
it was a very good discussion
17:06.5
between the parties.
17:09.5
We think that there's a lot of synergies for us.
17:14.5
Of course, cakes is a low-hanging fruit.
17:18.5
So maybe looking at affordable cakes
17:21.5
through our Balay Pandesal network.
17:25.5
Also, using our Balay Pandesal network
17:32.5
as a digital store network
17:34.5
for Sugar House itself.
17:36.5
So those are key synergies
17:38.5
that we are looking at immediately.
17:41.5
So we heard that you guys plan
17:45.5
to bring this brand,
17:46.5
which is known in San Juan.
17:48.5
I think it started out in San Juan
17:50.5
And then there's a store in Rockwell.
17:52.5
And then there's the catering service.
17:54.5
Of course, you want to bring this to Cebu
17:56.5
by next year and more cities.
17:59.5
Talk to us about how you plan to grow it.
18:01.5
Because looking at your other acquisitions,
18:03.5
and I'm talking about Lingnam, for example,
18:05.5
you bought another legacy brand,
18:08.5
very famous among our grandparents, really.
18:11.5
And then you tried to rejig it a bit,
18:16.5
spice it up a bit.
18:17.5
And now you have the Lingnam Noodle Bar,
18:20.5
where you try to make it
18:21.5
a little bit more upscale.
18:22.5
So is this the same pattern
18:24.5
or template maybe that you have in mind
18:29.5
It will be pretty much the same.
18:31.5
So we will enhance the store.
18:35.5
We are looking at potentially,
18:38.5
you know, making fresh breads
18:41.5
and finishing cakes in store.
18:44.5
We are going to expand in major cities,
18:49.5
as you mentioned.
18:50.5
For Lingnam, for example,
18:52.5
we already have presence in Zamboanga,
18:55.5
Baguio, Urdaneta,
18:58.5
and looking at other potential cities.
19:00.5
Outside Metro Manila.
19:05.5
We will look at expanding formats.
19:08.5
So similar to Lingnam,
19:10.5
we actually have Lingnam fried sopaw
19:14.5
within a short period of time
19:17.5
after acquisition.
19:18.5
So we will look at how we can
19:21.5
play to our strengths.
19:23.5
We have been built on the kiosk mentality.
19:27.5
So on an asset-light,
19:30.5
basis, how we will grow,
19:32.5
how we will be able to grow Sugar House.
19:36.5
How many stores are you looking to have
19:39.5
Are you going to use the kiosk template
19:42.5
or is this going to be major stores?
19:44.5
The expansion won't be
19:47.5
anchored on store expansion.
19:50.5
We will, as mentioned,
19:53.5
leverage off the Balay Pandesal Network
19:57.5
to maybe offer digital stores
20:01.5
I think that's the most asset-light manner
20:06.5
that we think will be possible
20:09.5
and that should be down to higher returns
20:12.5
for our shareholders.
20:13.5
And when do you expect Sugar House
20:15.5
to start contributing to the bottom line significantly?
20:18.5
You're giving it one to use?
20:19.5
Quite immediately.
20:20.5
Quite immediately.
20:21.5
We are very, very disciplined
20:23.5
in our acquisitions.
20:27.5
And our acquisitions,
20:29.5
always contribute to our bottom line immediately.
20:32.5
Alright, that's good.
20:33.5
So any more sweet deals
20:35.5
you're holding up close to your heart?
20:38.5
How many more serious deals
20:41.5
are you looking at today?
20:43.5
Without giving away too much.
20:45.5
We are looking at a number of segments,
20:50.5
both food and food-ingredient-related segments.
20:55.5
We are looking at potential targets.
20:57.5
We may also look at
20:59.5
building them by ourselves.
21:01.5
So that's as much as I can disclose at this time.
21:04.5
So when we talk again by the end of this year,
21:07.5
how many new brands do you imagine you'll be carrying?
21:11.5
At least another two.
21:13.5
I think that's a safe assumption for us.
21:17.5
Alright, at least another two.
21:19.5
And where are you going to get the money?
21:21.5
Is it all internally generated cash?
21:23.5
Because you just sold 200 million
21:25.5
in corporate notes to institutional investors.
21:27.5
Is that enough, you think,
21:28.5
to take you far enough until at least two
21:30.5
and until the end of the year?
21:32.5
Or are you looking to tap the capital markets more?
21:35.5
A lot of it will still be internal cash generation.
21:39.5
We will supplement it with funds
21:43.5
from our relationship banks
21:45.5
and capital markets as necessary.
21:48.5
Calvin, you're sounding very bullish
21:52.5
and very optimistic considering
21:54.5
what many executives fear
21:56.5
that this year we will see slowing down.
21:58.5
Consumption taking a hit.
22:01.5
Inflation proving to be stickier
22:03.5
than initially expected.
22:05.5
And rates staying elevated for longer.
22:07.5
What is the sense that you're getting
22:09.5
when you talk to Lester, for example,
22:11.5
when you guys are in the boardroom
22:13.5
with your other directors?
22:15.5
What's the sense there?
22:16.5
Where are you getting this optimism?
22:18.5
We are, as much as I am optimistic
22:24.5
we are very cautious as well.
22:26.5
We have looked at various scenarios
22:28.5
so a large part of it
22:31.5
would be cost control.
22:33.5
While we are going to push a lot of it,
22:36.5
a lot of our revenues,
22:39.5
we will continue to control costs.
22:43.5
In terms of capex,
22:45.5
we will, as mentioned in our reports,
22:49.5
in our disclosures,
22:51.5
we will only selectively grow our network.
22:53.5
But what we won't save on
22:57.5
and we will really go all out on
23:02.5
really growing our e-commerce platform.
23:05.5
Because right now your e-commerce platform
23:07.5
accounts for how much of sales?
23:09.5
That's around 10%.
23:12.5
But it actually grew
23:14.5
more than 70% last year.
23:18.5
And what is the goal?
23:19.5
Do you have a mix in mind?
23:23.5
I think for specific segments,
23:29.5
we are looking at maybe 30-40%
23:33.5
through e-commerce.
23:36.5
Certain products are really more
23:39.5
attuned to physical or brick and mortar.
23:42.5
But certain segments,
23:44.5
we will really try to push it
23:45.5
all the way up to 30-40%.
23:48.5
And we did start this conversation
23:50.5
saying that the parent Frutas Holdings
23:53.5
reported a 37% jump in net income
23:57.5
on the back of record revenues.
23:59.5
Are you confident
24:00.5
you can keep up the momentum this year?
24:07.5
we will look at around 30% growth
24:13.5
If the economic environment is better,
24:18.5
we might be talking again next year
24:24.5
with much better results.
24:29.5
Because last year,
24:30.5
Frutas also ended with 817 stores,
24:33.5
including the 44 new stores.
24:35.5
The expansion plan is also aligned with that.
24:38.5
So you're looking at adding around 40-50 new stores?
24:43.5
I think around 40-50 stores
24:46.5
is what our comfort zone is.
24:49.5
But if there are acquisitions
24:52.5
that will require
24:54.5
a number of physical stores,
24:58.5
then that would increase the number.
25:03.5
So we talked about Lingnam earlier.
25:05.5
We're getting a phone-in question here.
25:07.5
Someone's very interested to know
25:08.5
what has happened to Fly Kitchen.
25:11.5
you also bought this recently.
25:15.5
What's the latest on Fly Kitchen?
25:20.5
we will grow our number of cloud kitchens.
25:27.5
we already had a cloud kitchen business
25:29.5
prior to that acquisition.
25:31.5
We will add more.
25:33.5
We are looking at
25:35.5
potentially working with
25:37.5
a number of brands
25:39.5
to co-locate into our cloud kitchens.
25:43.5
how many cloud kitchens do you have
25:46.5
And what's the target?
25:52.5
I think to cover Manila,
25:54.5
you probably need another three to five more.
25:57.5
Three to five more.
25:58.5
But as mentioned,
26:00.5
we will leverage off Frutas Network.
26:04.5
It may not be building new locations.
26:12.5
repurpose some locations of Frutas.
26:19.5
for its very rich portfolio,
26:23.5
Frutas Fresh from Babots Farm,
26:33.5
And you earlier said
26:35.5
that you are going to expand selectively
26:38.5
Will there be brands to drop this year?
26:42.5
Are you planning on dropping
26:43.5
any of the weaker performing brands?
26:47.5
It may not be dropping.
26:50.5
We may actually just
26:53.5
push them in certain geographical locations.
26:59.5
We believe some of those brands
27:02.5
will be able to allow,
27:04.5
will allow us to penetrate
27:07.5
certain white spaces
27:10.5
where our competitors are not in.
27:16.5
always a pleasure to speak with you.
27:17.5
I love it how every time we have you on the show,
27:20.5
there's a breaking news.
27:21.5
Thank you so much for sharing.
27:23.5
Exciting developments from Frutas.
27:25.5
We look forward to your
27:26.5
at least two new brands this year.
27:29.5
Thank you, thank you.
27:30.5
Another record year for the next time we speak.
27:35.5
here's a look at the other stories
27:36.5
we're tracking in the newsroom today.
27:38.5
Happening within the hour
27:39.5
is an Ibon Commuters Forum
27:41.5
tackling the PUV modernization program.
27:44.5
Then at around 10 a.m.,
27:46.5
the President will attend
27:48.5
the 45th commencement exercises
27:50.5
for the Layag Diocese.
27:51.5
For the Layag Diocese Class of 2024,
27:53.5
a PNP school in Silangkavite.
27:56.5
Also happening within that hour at 10,
27:58.5
a press conference
27:59.5
by the Metropolitan Manila Development Authority
28:02.5
And the Energy Department
28:04.5
will also be holding a press briefing
28:06.5
at around that time
28:07.5
to give us the status of the power grids
28:11.5
we have been in alternating yellow-red alerts
28:13.5
because of thinning reserves
28:14.5
and very high demand
28:16.5
given everyone's efforts
28:17.5
to try to beat the heat during the summer.
28:19.5
So we're going to be watching out
28:20.5
for this while at 11,
28:23.5
we will cover the BDO stockholders meeting.
28:26.5
the country's largest bank
28:27.5
just fired the opening salvo
28:28.5
for the first quarter earnings season yesterday,
28:30.5
posting a 12% growth in bottom line
28:32.5
at 18.5 billion pesos
28:34.5
as net interest income and total loans
28:40.5
we're also covering the SSS
28:43.5
holding a ceremonial signing ceremony
28:45.5
with 17 Tricycle Operators and Drivers Association
28:49.5
or TODA Presidents.
28:54.5
the opening numbers
28:55.5
at the Philippine Stock Exchange
28:56.5
with Regina Capital's Luis Limlingan.
29:00.5
We'll be right back.
29:19.5
We'll be right back.
29:37.5
You're still watching Market Edge.
29:40.5
12 New Yorkers have been selected
29:42.5
to decide on Donald Trump's hush money case.
29:46.5
First Lady Liza Adaneta Marcos speaks up about her strained relationship with Vice President Sala Duterte.
29:56.4
And the U.S. blocks a resolution backing a full United Nations membership for Palestine.
30:04.3
Philippine shares extended their rebound on bargain hunting on Thursday with a PSE index adding about 1.1% or 73 points to close at,
30:14.4
let's see, 65.23.
30:18.7
Or for more on the markets, let's bring in Luis Limningan, Head of Sales for Gina Capital Development.
30:24.1
Luis, hi, good to see you. Welcome back to Market Edge.
30:27.9
Hi, good morning, Mimi. Happy Friday and thank you again for having me.
30:31.0
Happy Friday. You know, Luis, there's a saying, April showers could bring May flowers.
30:36.2
You think after that bloodbath we saw earlier this week that we could see this market ramp back up by next month?
30:44.4
Or do you think this is the start of something, you know, a more sustainable, significant downtrend?
30:51.7
Well, unfortunately, I can't make any call on the geopolitical tension because that really was a black swan.
30:59.0
And that was the main reason for the cost of the sell-off Monday and Tuesday this week.
31:06.2
All things being equal, if, you know, if there really is going to be a ceasefire, it is a buying opportunity.
31:14.4
Unfortunately, we don't know.
31:16.0
I mean, I was just reading the news.
31:18.4
I, you know, I probably have a more basic understanding of the, you know, of the tension between Iran and Israel.
31:29.8
Abraham Raisi was already reiterating that if Israel attacks, they're also going to have a massive response.
31:38.0
I hope it's just rhetoric and they're, you know, it's just them trying to threaten each other after that.
31:44.4
But everyone is just, you know, erring on the side of caution right now.
31:50.3
So, that one, it really is hard for me, you know, since I'm not really a political analyst.
31:59.0
Economically, the data in the U.S., even with the relatively high inflation rate, has been very encouraging.
32:09.7
For example, the unemployment benefits were actually lower than expected.
32:14.4
Manufacturing in the Atlantic region has actually been picking up.
32:19.4
And then, U.S. home sales have not actually slowed down as previously expected.
32:25.4
In the Philippines, for example, BDO already released preliminary earnings.
32:31.4
Yeah, what do you make of that, BDO?
32:33.4
You know, the suspicion is whoever fires the opening salvo is probably reporting one of the best numbers in town.
32:41.4
It used to be BPI all the time.
32:44.9
And now, it's BDO.
32:47.9
Well, you know, I don't want to read into too much about who is reporting first so long as it's in line or above expectations.
32:57.4
And I like it so far for BDO.
32:59.4
The preliminary figures were good.
33:04.4
13% growth in their income.
33:09.4
Teens growth for the net interest income.
33:12.4
What I was concerned about was the non-performing loans.
33:17.4
It was still, I think, 1.9%.
33:22.4
Still quite impressive given that, you know, they already had an impressive performance last year.
33:28.4
I thought it would be hard to replicate this year.
33:32.4
But so far, they've done it for the first quarter.
33:35.4
Now, I don't know what will happen in the second quarter because, remember, in the first quarter, expectations were low.
33:41.4
Expectations were that rates would be cut.
33:44.4
So, what are the banks' strategies going to be moving forward?
33:48.4
Will they be locking in to these fixed income instruments?
33:57.4
Or will they change their strategy and probably try to be accelerating their lending business?
34:05.4
That's for the banks.
34:06.4
But overall, are you expecting pretty stellar numbers for Q1?
34:11.4
Across segments? Across industries?
34:14.4
Well, inflation is a main concern.
34:18.4
But I'm hoping, at least for the first quarter, it has been less of a headwind compared to last year.
34:24.4
Remember, last year, we were dealing with inflation at 7%.
34:30.4
And, of course, everyone was still adjusting to this high interest rate environment.
34:34.4
Now, you know, it is within the BSP's range.
34:38.4
The problem is that,
34:40.4
are we going to see rate cuts happening sooner or later?
34:44.4
So, I would think that at least the first quarter is, you know, going...
34:49.4
We won't see any negative...
34:51.4
Hopefully, we won't see any negative surprises in terms of...
34:54.4
And again, BD already set the tone of what we might be able to expect for the other corporates reporting in the next following weeks.
35:03.4
I just wanted to bring in, we're 10 minutes into trade for the day.
35:05.4
The PSE index is up by a fifth of 1%.
35:09.4
Points were at 65.36.
35:11.4
Luis, when you talk to clients, I wonder, do you tell them, you know, that there is a need to react quickly to every market plunge or pop at this point?
35:20.4
Or do you tell them, you know, steady hands eventually win?
35:24.4
Keep calm and just stay there.
35:26.4
Definitely, Mimi, it's a latter.
35:28.4
I don't think there's...
35:29.4
At this point, there's any need to be rushing.
35:33.4
It's especially after what we saw last week.
35:37.4
I'd rather that they miss an opportunity versus buying immediately and then they get it at a price and they're stuck for that price for the long term.
35:50.4
I think there are many opportunities for us to be bottom fishing.
35:54.4
If this was one of them, then I think, you know, you just have to be patient, wait for the next opportunity.
36:01.4
There's always going to be one.
36:03.4
We saw that last year.
36:05.4
And the market dipped, you know, close to 6,000.
36:08.4
Now we're seeing it this year at 6,400.
36:10.4
So just be patient.
36:12.4
I think people are very, I think, anxious because they are watching the developments in the Middle East.
36:24.4
So I think any concerns might trigger them to be selling.
36:32.4
So just be patient.
36:34.4
And in this environment, elevated rates, I wanted to ask you about dividends.
36:40.4
You know, you want to be patient and you also want to be paid while you wait patiently.
36:44.4
What stocks do you think people need to own if they want to be paid to wait?
36:50.4
Well, even just within the index, there are a lot of names that pay 6 or up 7%, even double digits.
37:01.4
If we just go by the sector, for example,
37:03.4
power sector, you have Aboitis, Meralco, and Semerara.
37:09.4
Telco sector, you have Globe and PLDT.
37:13.4
Surprisingly, even in the banking sector, there's Metrobank.
37:19.4
And because everyone was positively taken aback by this, the price jumped more than 10%.
37:29.4
I think from the time of announcement,
37:31.4
from 58 pesos, it already closed well above 70 pesos last week.
37:40.4
Because everyone is implying that if you're going to be paying close to 5 pesos every year,
37:47.4
that's already giving you a yield of 7 to 8% depending on the price that you got it.
37:53.4
All right, all right.
37:55.4
Pretty quiet on the disclosures front today.
37:58.4
I think we are now ready for your blind item.
38:00.4
Talk to us about the stock that you're monitoring closely and that you like.
38:03.4
Don't tell us, just describe.
38:04.4
We're going to leave our viewers to guess what this is.
38:06.4
What do you have for us today?
38:10.4
This stock, we actually, originally, we had a hold recommendation on this
38:15.4
given that it was already close to our target price.
38:19.4
But because of the sell-off last Monday and Tuesday,
38:25.4
the stock price, I think, fell close.
38:28.4
I think 12 to 14%.
38:30.4
And we think it's a buying opportunity.
38:33.4
One, the financial performance in 2023 was quite impressive.
38:38.4
The core net income was up 82%.
38:42.4
Solding companies, banking unit was also quite impressive
38:48.4
given that there has been enhanced margins and robust expansion.
38:54.4
And I think this is going to be the kicker clue,
38:56.4
which is the auto unit of here,
38:58.4
the auto unit of...
39:01.4
Now you're giving it away.
39:03.4
The company which has a lion's share in the Philippines.
39:06.4
So I think that's...
39:07.4
I want to give them a lot of clues on this Friday.
39:10.4
But what sort of upside in share price are you seeing for this stock?
39:14.4
Well, if it just returns to the price it was trading before the sell-off,
39:20.4
you're already looking at an upside of 15 to 18%.
39:27.4
On that note, thank you so much, Luis, for joining us this morning.
39:31.4
Always a pleasure to speak with you.
39:32.4
We'll see you in a month.
39:36.4
Happy Friday again.
39:38.4
Have a profitable week next week.
39:43.4
Heads up, travelers.
39:44.4
There could be more flight delays in the coming months
39:46.4
with a looming red lightning alert season.
39:49.4
Airlines and airport authorities say while they are ready,
39:52.4
they're also appealing for the public's understanding.
39:55.4
Jackie Pasquale reports.
39:57.4
Airlines warn passengers of the coming red lightning alert season
40:02.4
which is expected to begin in May.
40:04.4
Budget carrier Cebu Pacific says last year,
40:07.4
there were four red lightning alerts or RLA in April.
40:11.4
But it jumped to 20 in May and 27 in June.
40:15.4
In total, over 1,000 flights of Cebu Pacific alone were disrupted by RLA in 2023.
40:22.4
The airline has now installed additional lightning shelters at Naia.
40:26.4
For the safety of ground and ramp workers.
40:30.4
If a lightning strikes, whether it strikes close to that shelter,
40:34.4
whether it strikes actually on that shelter, they're protected.
40:37.4
But on the second hour, if you're at the boarding gates, we provide meals na kagad.
40:41.4
We have spare provisions, very generous spare provisions
40:47.4
to ensure operational resilience of our, like even for things that are beyond our control.
40:54.4
RLA could take a few minutes.
40:56.4
And even an hour or two.
40:58.4
And this had an economic impact on the airline.
41:01.4
Cebu Pacific estimates they lose around 5 to 10 million pesos per month
41:06.4
because of lightning alerts, which affect flights as well as fuel and power consumption.
41:12.4
Philippine Airlines says RLA is declared by the government
41:15.4
as a safety measure to prevent untoward incidents to passengers and personnel.
41:20.4
AirAsia Philippines appeals to passengers for patience during an RLA,
41:26.4
as it can cause a one-hour delay.
41:28.4
For Transportation Secretary Jaime Bautista, the airport is ready in case more RLA's are issued.
41:35.4
We conform to all these procedures and policies for the safety not only of the aircraft
41:43.4
but the personnel that are handling flights.
41:47.4
We're working closely to see to it na mabawasan yung inconvenience
41:52.4
kung sakaling magkaroon ng tinatawag na red lightning alert.
41:56.4
Bautista also guarantees NAIA will not be underwater
41:59.4
in case a heavy downpour hits the area, similar to what happened at Dubai International Airport.
42:05.4
Maganda naman yung ating drainage system dito.
42:08.4
Ang pagkakaiba sa Dubai.
42:11.4
Ang Dubai kasi hindi umuulan eh.
42:13.4
So mukhang hindi naisama doon sa kanilang plano yung paggawa
42:19.4
or pagkakaroon ng magandang drainage system.
42:22.4
Bautista also asserts that NAIA is ready for any power outages.
42:26.4
Land of power interruptions if and when power supply dwindles amid the high heat index.
42:31.4
Last month, NAIA suffered a power failure in one terminal affecting the air conditioning system.
42:36.4
Jackie Pascual, ABS-CBN News.
42:41.4
Now the ongoing El Niño phenomenon now impacting egg production and quality in the country.
42:46.4
This is according to the Philippine Egg Board Association, which says,
42:49.4
the intense heat reduces chicken feed intake and therefore increases the risk of heat stroke,
42:54.4
resulting in decreasing favorite heat.
42:55.4
resulting in decreased egg production and smaller egg sizes.
42:59.1
Despite these challenges, the Egg Board assures the public,
43:01.5
egg supply in the country remains sufficient.
43:06.3
Shifting gears, the Philippine Business for Education, or PBED,
43:09.4
vows to improve the employability of young Filipinos,
43:12.4
especially amid the threat of digitalization on jobs.
43:16.0
Citing a study by the International Labor Organization,
43:19.1
PBED says about 18 million Filipinos are at risk of losing their jobs to automation.
43:24.6
One of the ways the group plans to address this is through its Jobs Next program,
43:29.4
which aims to future-proof young entrants to the workforce by digitally upskilling them.
43:54.6
Then it could even go onto specifics like cyber security, cloud computing.
44:00.8
When we train the youth for this certain job, or for this certain skills,
44:06.9
there are jobs waiting for them.
44:08.9
So technically, it's making sure that we address the skills gap.
44:13.7
If we expose our, let's say, senior high school students that there are job opportunities in this area or in this sector,
44:23.1
it would, let's say,
44:24.6
encourage them to build up a career in this, in the sector.
44:32.5
The Philippine Amusement and Gaming Corporation has a new president and COO,
44:37.7
Attorney Wilma Aismah, who took her oath of office in Malacanang yesterday.
44:41.8
Aismah was a member of the Board of Directors of the Development Bank of the Philippines
44:45.5
before joining the state gaming firm.
44:48.1
Prior to that, she also served as the first woman administrator and chairman
44:51.9
of the Subic Bay Metropolitan Authority, or SBA.
44:54.6
While her private sector stints include leadership roles in PMFTC,
44:59.8
that is the Philippine affiliate of Philip Morris International,
45:02.7
she is replacing Attorney Juanito Sanosa Jr., who resigned last January.
45:11.1
The social security system is targeting to increase the number of informal workers
45:15.8
onboarded into the system through its e-wheels program.
45:20.2
Lady Vicencia tells us more about this in this report.
45:24.6
Of the 43 million members of the social security system, or SSS,
45:31.2
not even half belong to the informal sector,
45:34.0
which comprises most of the labor force in the country.
45:37.6
This sector includes vendors, domestic and transport workers,
45:41.6
and even those working for family members.
45:44.1
To be able to provide social protection to more informal workers,
45:48.6
SSS launched its e-wheels program in one of the known textile markets
45:52.9
located in the town of Taytay,
45:54.6
in Rizal Province.
45:56.6
An informal sector na kailangan bigyan ng pansin.
46:01.1
Kasi yung mga employed sector, like for example,
46:04.8
yung mga nasa kumpanya, opisina,
46:08.2
it's already given na before they are being hired,
46:12.1
kailangan may SSS na sila at kailangan maayos ang hulog.
46:15.1
So ito yung sector na dapat tuunan natin ng pansin
46:17.7
kasi ito yung pinaka-importante sa lahat,
46:20.3
ang informal sector.
46:22.0
SSS is looking to onboard around 2021,
46:24.6
1,500 informal workers,
46:26.9
and give access to benefits for disability,
46:33.1
and unemployment.
46:34.3
These off-site booths facilitate an array of services
46:37.2
such as membership application,
46:39.5
issuance of social security number and payment reference number,
46:42.7
and updating of membership data.
46:45.2
Members filing for benefit claims may also be assisted.
46:48.6
Kasi busy na ako sa pagtitindihan ng sampagita dito sa Taytay,
46:53.9
Matagal lang hindi.
46:54.6
Hindi ko nabiri pa eh.
46:56.1
Kaya gusto kong malaman kung ilan ang ano ko dito sa hulog.
47:01.9
SSS said e-wheel services can also be availed by residents from nearby towns
47:06.6
with no SSS branch near them.
47:09.0
The agency is also tying up with other local government units
47:12.5
in hopes to bring social protection to the grassroots.
47:16.1
Lady Vicencio, ABS-CBN News.
47:21.9
The Energy Department expects a mixed bag of prices.
47:24.6
Adjustments in petroleum products next week.
47:27.3
Gasoline prices seen going up by as much as 60 centavos per liter.
47:31.8
While diesel and kerosene could see a sizable rollback,
47:34.5
energy officials say despite heightened geopolitical conflict in the Middle East,
47:38.4
demand from the U.S. went down due to a build-up in inventory,
47:42.1
plus of course weaker demand from China.
47:46.5
Time now to zip through the top headlines from major business papers from Business World.
47:51.1
The Agriculture Department will propose a $500,000,
47:54.6
14 billion peso infrastructure-heavy budget for 2025
47:59.0
to help it address shortcomings in farm infrastructure.
48:03.1
That figure is going to be more than double its current budget of just 209 billion pesos.
48:08.5
From Business Mirror, Korean Air Country Manager Byung Kwon Lee is confident
48:12.3
tourists from South Korea will likely revert to their pre-pandemic numbers
48:16.6
by the fourth quarter of this year.
48:18.2
Government data show last year there were some 1.44 million arrivals from Seoul.
48:23.6
Accounting for 26%.
48:24.6
of the total inbound arrivals into the Philippines.
48:28.0
Pre-pandemic, in the year 2019, there were almost 2 million arrivals from South Korea.
48:34.0
And from the Philippine Star, the Customs Bureau reports confiscating
48:37.6
18 billion pesos worth of smuggled goods in the first quarter.
48:41.8
That figure is slightly lower than the record 19.2 billion peso haul
48:46.2
in the same period of last year.
48:50.2
Now here's a quick look at the flash business headlines from overseas.
48:55.8
Streaming giant Netflix added 9.33 million customers in the first quarter of this year,
49:01.0
posting its best start to the year since 2020 as it attracted new customers,
49:05.3
particularly in the U.S. and Canada, helped in part by the crackdown on password sharing.
49:10.7
Despite the growth, though, Netflix shares still fell nearly 5% to just $582.7
49:16.5
following unimpressive forecasts for the quarter and the announcement
49:20.4
that it will stop reporting quarterly subscribers by next year.
49:24.6
And a Florida jury on Thursday concluded that Johnson & Johnson's baby powder talc product
49:30.8
did not, again, did not cause the ovarian cancer of a Florida woman who died in 2019.
49:38.6
The lawsuit was brought by family members of Patricia Maffei, a Sarasota County resident
49:42.9
who used Johnson's baby powder daily from 1965 until August 2016
49:47.8
when she was diagnosed with ovarian cancer.
49:52.5
Meanwhile, Tesla shares fell to their lowest.
49:54.6
It was listed more than a year on Thursday after Deutsche Bank raised concerns
49:57.7
over the EV maker's increasing focus on its autonomous vehicle products
50:03.4
when profit is under pressure.
50:05.6
The Elon Musk-led company's shares fell 2.7% to $151.26
50:11.7
after the brokerage downgraded the stock to hold and cut its price target to $123 from $189.
50:19.9
Seattle-based retail giant Nordstrom says the founding family behind the department's store chain
50:24.6
has shown an interest in pursuing a potential go-private deal
50:28.7
prompting the company's board to form a special committee of independent directors
50:32.7
to evaluate any proposal.
50:34.8
The move comes at a time when department store chains across the U.S. are grappling
50:38.8
with weak sales as sticky inflation and elevated borrowing costs
50:42.3
have led customers to rethink their discretionary spending.
50:47.3
And finally, the International Monetary Fund cautions Asian central banks
50:50.8
against prioritizing what they think the U.S. Federal Reserve will do,
50:54.6
and following that as they lay out their own policy paths.
50:58.4
Instead, the IMF says Asian central banks should focus on their own domestic inflation
51:03.6
and avoid making their policy decisions overly dependent on anticipated moves by other central banks,
51:09.7
warning doing the latter could undermine price stability in their own countries.
51:16.7
Switching gears, the era of the tortured poets department has finally arrived.
51:21.8
In just a few hours, global pop superstar Taylor Swift,
51:24.6
will be dropping her new album and
51:27.7
Fortnite featuring Post Malone
51:30.0
has been chosen by the chairwoman of the department as its first single.
51:34.1
Taylor's 11th album will feature 16 tracks and 4 bonus songs.
51:39.0
The lead-up to the release day has been littered with puzzles and Easter eggs,
51:42.9
much to the delight of her dedicated and sleuthing fanbase.
51:48.1
And before we go, for those who tried to guess her blind item,
51:50.8
not so blind today, it's actually a giveaway with its auto unit,
51:54.6
having an alliance share in the Philippine market.
51:57.2
This stock is, drumroll please,
52:00.9
Duelets, if you got that, do tweet us at ANC Alerts.
52:03.8
In the meantime, that's it for the show.
52:05.3
I'm Michelle Long.
52:06.2
Thank you all so much for watching.
52:08.4
Stay safe and stay with ANC.
52:10.2
Have a great weekend, everybody.
