01:20.5
Meanwhile, stocks in South Korea and Australia are up.
01:27.4
Now here's what happened on Wall Street.
01:29.4
Overnight, the S&P and the Nasdaq ended lower anew, failing to regain ground from the previous session's tech-triggered sell-off.
01:37.6
Markets there are also reacting to the latest GDP report, showing the U.S. economy expanding by 2.8% in the second quarter.
01:46.7
This was slightly higher than the estimate of 2%.
01:49.7
The latest growth figure, coupled with cooler inflation, leaves bets of a Federal Reserve rate cutting by September intact.
01:59.4
We're having better-than-expected earnings growth this year.
02:03.7
We're having an economy that's more resilient than people thought.
02:08.5
In addition, inflation, and we'll get the PCE tomorrow morning.
02:12.0
And if that is in line or better, it's a sure thing.
02:16.2
We're getting cuts at the meeting in September.
02:20.9
And I think the July meeting, they may tee that up a little bit next week that we're going to have.
02:27.1
That is a great setup for markets.
02:29.4
So you have better-than-expected economic growth.
02:33.2
You have better-than-expected earnings.
02:35.3
And you have a Fed that's going to make money cheaper and cut interest rates, which will stimulate corporate America and the economies.
02:43.7
Taking a look at U.S. futures, all three major indices on Wall Street could see a positive end to the trading week.
02:54.1
The world's 20 largest economies agree to collaborate to ensure that the U.S. economy is a better place to be.
02:59.4
And all the ultra-rich are taxed effectively.
03:02.3
This commitment made Thursday during this year's G20 summit in Rio de Janeiro.
03:07.9
Brazil, which is leading the talks, has advocated for a 2% wealth tax on fortunes exceeding $1 billion,
03:15.8
which could generate up to $200 billion annually from around 3,000 individuals.
03:22.0
The move was generally supported by G20 members, but some had their skepticism about the feasibility
03:29.4
G20 members are expected to issue a declaration about the tax scheme later today.
03:39.2
Some local corporate headlines this morning.
03:41.8
Felix Mining further bleeds halfway into the year.
03:44.8
Its H1 core net income was down 42% to P410 million from the P702 million year-on-year.
03:53.8
Now EBITDA, also lower at P912 million from the P1.18 billion.
03:59.4
Also in the earnings stream, Concepcion Industrial Corporation sees its first half bottom line doubling
04:06.6
to over P720 million year-on-year.
04:11.4
The consumer lifestyle and enterprise firm attributes this to revenue growth and higher margins
04:17.2
brought by customer engagement and strong market demand from the hot weather conditions.
04:22.7
And finally, Jollibee Foods Corporation saying it's keeping its latest acquisition in Korea,
04:29.4
but for now, at least, CFO Mr. Richard Shin says they see a lot of growth potential
04:34.3
for compost coffee in Seoul.
04:37.6
JFC previously said compost coffee is over 2,000 franchise stores in South Korea.
04:43.4
JFC's acquisition of 70% stake in the coffee chain was pegged at around $340 million.
04:53.4
Now China issues a rare compliment to the Marcos administration following President Ferdinand
04:59.4
Marcos' order to ban offshore gaming in the country.
05:03.8
Beijing's embassy in Manila says the president's decision serves as the common interests of
05:09.4
the people of the two countries.
05:12.3
The embassy also reiterated its stance with Pogos, which says it breeds serious crimes.
05:18.7
The Chinese government, which prohibits all forms of gambling, helped the Philippines
05:22.6
shut down five Pogo hubs and repatriated nearly a thousand Chinese citizens.
05:33.8
On to more news, President Ferdinand Marcos Jr. pins the blame on climate change and poor
05:39.6
trash disposal for the deadly floods triggered by Typhoon Karina and the southwest monsoon.
05:46.1
He's also ordering a review of Metro Manila's flood control systems after torrential rains
05:51.2
left most of the capital region submerged.
05:54.1
Pia Gutierrez reports.
05:56.8
President Ferdinand Marcos Jr.
05:59.0
on Thursday said there is a need to re-examine the designs for Metro Manila's flood control
06:04.7
projects, as he noted that these were not as effective in preventing the widespread flooding
06:10.3
that happened Wednesday, even as the volume of rainfall dumped by the typhoon-enhanced
06:15.2
southwest monsoon was lower than 2009's Typhoon Ondoy.
06:19.7
The Philippine leader made a statement as he visited the flooded areas in Camanava to
06:24.5
check on the situation of affected residents.
06:26.9
Marcos, along with other Cabinet officials,
06:29.0
boarded a military truck to visit evacuation centers in Malanday National High School in Valenzuela and Barangay Tanza in Navotas.
06:38.6
Marcos says this is a clear manifestation of the effects of climate change.
06:43.0
Just a simple assessment.
06:44.6
The reason I did this was to really inspect because I wanted to see what the situation was.
06:53.3
It's really different reading a piece of paper than actually seeing it and saying,
06:59.0
you know, people have to go through.
07:00.7
So we have to re-look, we have to re-examine some of the designs of our flood control.
07:06.7
Dahil, for example, this was not, the amount of water was not as bad as Ondoy.
07:14.3
But the effect was greater than Ondoy.
07:16.8
Mas malaki ang baha.
07:18.1
Mas maraming na baha talaga kaysa sa panahon ng Ondoy.
07:21.7
Mas marami tayong flood control ngayon kaysa doon.
07:24.5
Pero, climate change.
07:26.9
This is what the effects of climate change.
07:29.0
The president also blaming the amount of garbage for the massive flooding,
07:34.0
which he says affected the capacity of the pumping stations.
07:37.7
Sana matuto naman ang tawag niya kung baka yung nagtatapon ng basura.
07:42.0
Dahil yung basura, yun ang nagbarat doon sa mga pump natin.
07:46.0
Kaya hindi kasing effective na pwede.
07:48.6
Lagi naman kasi yun, what, 81?
07:52.5
In Venezuela, I think they have 32.
07:55.3
So marami na yung pumping station.
07:57.1
Pero talaga, you have to...
07:59.0
The president also visited the navigational gate in Barangay Tanzay, Navotas,
08:05.0
which is seen to have aggravated floods in several barangays of Navotas and Malabon
08:09.3
after it was damaged by a barge that hit it last month.
08:13.8
The president has ordered the DPWH to undertake an engineering assessment of the structure.
08:19.5
Now, what we have seen is that one of the most important parts of the problem
08:28.0
was that navigation gate that we went to na nasira
08:33.7
because pinanggan ng isang barco,
08:37.1
kasi hindi sumunod sa instruction, sinira niya.
08:41.4
Navotas is still 80% under water.
08:45.8
Malabon, the same.
08:49.2
So we have to really look into that.
08:51.3
Prior to his visit, the president led a meeting in Malacanang
08:54.4
where he was briefed by cabinet officials
08:56.7
of the effects of the flood.
08:57.8
He was also briefed by cabinet officials of the effects of the flood.
08:57.9
He was briefed by cabinet officials of the effects of the flood.
08:58.0
He was also briefed by cabinet officials of the effects of the typhoon
08:58.6
and southwest monsoon.
09:00.1
We can see for ourselves that umaalis na yung typhoon system.
09:06.9
So where are we now?
09:09.1
What is the situation on the ground now?
09:12.3
Where is there still flooding?
09:14.9
Where are there still isolated communities?
09:18.5
That is what we need to know.
09:20.2
Because para gumalaw yung lahat ng ating mga agency,
09:23.8
we need to know where to go.
09:25.3
That's really what I need to hear from you.
09:27.9
Where do we go now?
09:28.5
Which are the places that need the most help immediately?
09:32.2
The Metro Manila Development Authority says
09:34.6
all of their 71 pumping stations were operational at the height of Carina.
09:39.5
Speaking to ANC's top story,
09:41.8
MMDA Chairman Armando Artes said
09:43.9
flood-affected local government units
09:46.1
reported that floods immediately receded after several hours.
09:50.8
Artes, however, admits
09:51.9
they need to put up more pumping stations in critical areas.
09:55.6
Aside from the National Capital Region,
09:57.8
the provinces of Oriental Mindoro, Batangas, Cavite, Bataan, and Bulacan
10:02.8
have also declared a state of calamity according to the DILG.
10:07.6
Data from the NDRRMC shows
10:09.8
21 individuals have died from the effects of Typhoon Carina and the Southwest Monsoon,
10:15.2
of which 7 are from NCR,
10:17.7
3 are from Region 3,
10:19.6
and 11 from Calabarzon.
10:21.7
15 were reported injured and 5 remain missing.
10:25.4
Meanwhile, almost 48,000 families,
10:27.8
or over 200,000 individuals,
10:30.6
are currently in evacuation centers.
10:33.5
The Department of Social Welfare and Development says
10:35.6
they have so far distributed 300,000 food packs to affected areas.
10:40.1
The agency is also calling on volunteers to help repack food supplies.
10:45.0
Pia Gutierrez, ABS-CBN News.
10:51.1
Property stocks at the local bourse were down early this week
10:54.6
on news of a total ban on offshore gaming operations.
10:57.8
By the end of the year.
10:59.8
Now, could the government's move, though, hurt the property market?
11:03.7
Joining us more on this is David Lichu.
11:06.3
He's the CEO of Lichu Property Consultants.
11:08.4
Hi, David. Welcome to Market Edge. Good morning.
11:11.2
Hello. Good morning. Thank you.
11:13.0
Thank you for having me on your show.
11:14.4
All right. Let's talk about Pogo property.
11:16.8
Now, we've seen the property sector in general really taking a beating
11:20.4
at the Philippine Stock Exchange following the president's pronouncement
11:23.3
at his SONA outlawing Pogo.
11:25.7
Now, the real estate counter,
11:27.8
dropped over 2% that day.
11:30.7
But realistically, at least that's as far as investor sentiment is concerned.
11:35.3
But realistically, how big an impact really would a ban have
11:38.8
on the entire real estate sector for investors to react that way?
11:43.9
Yeah, I think there's a natural overreaction to
11:47.7
as far as the public stocks are concerned
11:50.4
because the exposure that each of these companies have is quite minimal.
11:54.5
They're in the low single digits.
11:57.8
So, I think at least for many of the public listed companies, they're fine.
12:02.1
Where I think the ban of the Pogo will have a big impact is on the individual investors,
12:08.1
the secondary market investors in the residential space.
12:11.9
In particular, in the middle end of the market
12:16.4
because they're the ones who are leasing a lot to Pogo and Pogo-related tenants.
12:23.8
And I think the high-end market should be okay.
12:27.7
The low-end market should be okay.
12:29.1
It's really just the secondary market in the middle end.
12:33.0
You know, that kind of impact of a Pogo ban does not just apply to,
12:37.9
at least, we're talking about just three to four companies directly invested in it.
12:42.2
But the entire property sector, of course,
12:44.7
you talk about properties that host businesses such as residential.
12:49.3
You mentioned that already.
12:50.7
You have tourism, which may feel some significant impact.
12:54.7
Now, in the grand scheme of things, though,
12:57.7
how are you seeing recovery from these secondary market sectors that you mentioned?
13:03.0
Yeah, I think the secondary market will have a tough time
13:05.6
because their rents will come down by 50%
13:08.2
and it will take a longer time to get tenants.
13:11.8
And most of them will be local tenants as against the foreign tenants.
13:19.0
The other thing to consider is the office sector.
13:22.2
The office sector will be hit quite hard,
13:27.7
the Pogo sector occupies about a million square meters, more or less.
13:33.2
Maybe it's about 800,000 to a million square meters today.
13:37.8
And most of those office landlords will take a long time to find tenants or release tenants.
13:46.6
I'm talking about maybe two or three years.
13:50.0
And the conservation of this footprint is in the Bay Area, in Alabang, and some parts of Makati.
13:57.7
But it's a question now of how quickly can these landlords adapt to that market
14:02.9
so that they find tenants quickly.
14:04.6
And the only way to do that is to, number one, upgrade the building,
14:08.3
and number two, they've got to be realistic with rental expectations.
14:12.6
Okay, and correct me if I'm wrong,
14:14.6
but for Lichu Property Consultants,
14:16.7
I would imagine you have exposure, some exposure at least, in the secondary market.
14:22.7
What have you been hearing so far?
14:24.4
Are you really feeling some kind of exodus?
14:27.7
From these properties that you handle?
14:30.2
I can tell you that the market is flooded with second-hand alphards right now.
14:37.5
And I think a lot of landlords are in panic
14:42.7
because the secondary market in particular are anticipating that many of their tenants are going to be gone.
14:50.5
The office landlords who are housing Pogos are now very concerned,
14:56.8
and they're replanting.
14:57.7
They're planning their cash flows because many of these guys have debt.
15:01.5
I don't think there's going to be any distress in the system
15:05.0
because the exposure of the backing sector to Pogo-related landlords are limited,
15:11.2
very limited compared to the rest of the portfolio.
15:13.8
So I think where this really will have an effect is that, number one,
15:20.6
it will delay the equilibrium of supply and demand in the office sector by one year.
15:26.6
So instead of having equilibrium,
15:27.6
the equilibrium in 2028, sorry, in 2027, it will happen in 2028.
15:33.6
And the other thing is the pace of development in Manila and in the provinces will significantly slow down.
15:44.6
And that will have an impact on the construction sector
15:47.6
because building owners who wanted to build buildings are now saying,
15:52.6
Oops, wait a minute.
15:54.0
Let's see what happens to the market first.
15:57.2
I think a lot of the developers who would have built buildings in the provinces and especially in the provinces
16:05.2
will probably want to sit and wait for the next six to 12 months until things have more certainty in the market.
16:12.9
All right, David, you mentioned about a sizable dip in terms of property rates and even rental rates for a lot of these buildings hosted a secondary market for Pogos.
16:25.1
But that could be a knee-jerk reaction.
16:27.1
As of now, when do you expect things to really normalize?
16:30.8
I mean, for the industry to come to its senses and really take this squarely?
16:37.6
Yeah, I think for the office market in general, we should have seen a recovery in 2027.
16:46.1
But I think it's going to happen in 2028.
16:49.0
I have to stress that the office market in the Philippines is in a very good situation.
16:55.1
Yes, vacancies are atроcious.
16:57.1
18% today overall
16:58.9
throughout the country, but that's very
17:00.9
manageable and the demand numbers
17:02.9
are fairly healthy. The problem
17:05.1
with the Philippines is a supply problem, which
17:07.0
is a very simple problem to solve
17:09.2
and that's solved by time.
17:11.3
In just two or three years, we
17:13.0
should achieve equilibrium. Now,
17:15.9
we should have seen equilibrium
17:17.1
in 2027, we're going to see
17:19.1
that in 2028 instead.
17:21.2
Where I think it will take longer
17:22.8
will be in the residential mid-segment
17:25.4
market because right
17:27.2
now, Pogos are paying
17:31.0
50,000 pesos per month for a
17:33.0
unit, for a small unit
17:35.0
and now, those have to come down
17:37.2
by about 50%, maybe even
17:41.5
Slashed by half, really.
17:44.9
for the office rents. The capital
17:46.9
values are probably more resilient. People
17:52.7
what that means is that
17:57.0
to wait for one or two years
17:59.3
to get your unit leased out.
18:01.2
Depending on where it is, of course.
18:03.2
Alright. Now, David, we know that the ban
18:05.1
takes effect at the end of the year, which means
18:07.3
property owners have
18:09.2
a few months, really,
18:11.1
to think about how they will repurpose
18:13.0
former Pogo real estate.
18:15.0
What possibilities do you see for these properties
18:19.2
It's really just a waiting game.
18:21.6
You can't repurpose these office
18:24.6
at least 90% of them, you cannot
18:26.3
repurpose. It's too expensive
18:28.5
to repurpose. And even if you
18:30.6
repurposed it, you still have very
18:32.4
uncertain demand numbers.
18:34.6
So, it's just, my advice
18:36.4
to landlords is just sit and wait
18:42.3
those buildings will be leased out. And
18:44.4
of course, the other advice we can give
18:46.5
is, I hope, if they're looking for a broker,
18:48.4
they need to call.
18:49.8
Alright. And of course, this has a silver
18:52.2
lining, really. I mean, some see
18:53.8
a building that's not a real one.
18:54.0
So, I think, it's a good idea to
18:54.6
have a bit of hope in the Pogo ban.
18:56.9
We've had reports saying
18:58.6
that the easing of real estate
19:00.4
prices as a result of this
19:03.7
provide an increase
19:06.3
in terms of demand and
19:08.4
affordability, at least for the
19:10.4
residential market. How realistic is that assumption?
19:21.0
yes, okay, fine. The demand,
19:22.4
the people on the demand side will be
19:24.5
happy about it. But, come on.
19:30.3
these prices were very depressed already.
19:33.7
we can say that the investors
19:36.0
on the condo side had
19:42.3
short-lived four-year boom. And then after that,
19:44.6
it's back to normal.
19:46.6
And back to normal
19:48.4
means that instead of getting 5-6%
19:50.6
returns on your investment,
19:52.3
you're only going to get 1-2% return.
19:54.5
Which is fine, again, for the
19:56.5
consumers who want to
20:00.1
cheap space. But I have to stress that
20:02.3
the Philippines has been
20:04.5
doing cheap rents,
20:06.6
especially in the condo
20:08.1
already for decades.
20:12.4
Okay. So, you know,
20:14.7
David, what perspective
20:16.7
can you give us from the
20:18.5
property sector, given
20:20.2
that a lot of these investments
20:22.1
are really very volatile?
20:24.5
In terms of, for instance, you have
20:26.4
Pogos, which is really under
20:28.3
government regulation.
20:30.3
It could be, you know, it could be
20:32.1
terminated in a few years. So,
20:34.1
what perspective can you give us about
20:36.3
property investments in the very
20:42.7
you know, in good times, everyone thinks
20:44.5
that it's never going to end.
20:46.3
And in bad times,
20:48.1
everyone thinks the bad times will never end.
20:54.5
you know, he says,
20:55.3
today is bad, tomorrow will be worse, but the day after tomorrow
20:58.2
will be sunshine. And I think
21:00.5
we just have to, again, just sit
21:02.6
and wait and also
21:04.5
be very realistic.
21:06.3
Because, okay, in the bad times,
21:08.8
like in 2020, a lot
21:10.5
of buyers could have
21:12.5
bought really prime property
21:14.0
at the few windows that
21:16.2
sellers were realistic.
21:18.2
But because they thought that things will go
21:20.3
bad, bad, bad to worse,
21:22.8
they kept negotiating
21:24.5
downwards to the point where they
21:28.2
opportunities. At the same time,
21:30.9
in the good times,
21:32.4
many people could have cashed out
21:34.3
and got in a windfall.
21:36.4
But because they thought that
21:38.2
good times will never end, they kept
21:40.2
pushing prices up. So,
21:42.5
I would say, in times
21:50.1
moderation is always
21:52.2
a healthy position.
21:56.7
and I'm sure the stock market
21:58.1
investors would agree
22:00.2
that when there's cash
22:02.4
on the table, there's no downside
22:04.5
to having cash on the table.
22:07.1
Okay, and speaking of
22:08.5
more challenges, both in the supply
22:10.6
and even the demand side,
22:12.3
talking about the entire property
22:14.3
industry now, you have one
22:16.3
major challenge. This has been
22:18.3
posing a challenge in the last two years.
22:20.5
You have prohibitive borrowing rates,
22:22.4
putting the brakes on post-pricing,
22:24.5
pandemic expansion, and I'm talking about
22:26.4
putting the brakes on both
22:28.4
developers and even consumers
22:30.6
because interest rates for property
22:32.4
has not gone down.
22:34.7
How has the industry been dealing
22:36.5
with the challenges associated with
22:38.5
high borrowing rates in the past few years?
22:41.9
incredible because
22:43.8
despite, so this is what I
22:46.2
tell people, okay, despite
22:48.3
COVID plus hyperinflation
22:51.5
high interest rates,
22:56.6
and the property market in general
22:58.8
has been very resilient.
23:02.7
Please, let us all take a moment
23:04.8
to appreciate that, the public of the Philippines
23:07.3
the office markets
23:10.6
all around the world, outside of India,
23:12.5
Philippines, South Korea, Singapore, all of those
23:14.8
office markets are being destroyed.
23:17.3
By destroyed meaning
23:18.5
a lot of people are losing dramatic wealth
23:20.9
and apart from, let's say,
23:22.6
the high-end U.S. housing market,
23:24.5
most property markets in
23:26.8
the U.S. are being destroyed right now.
23:29.0
And you've got the credit crisis,
23:31.0
credit card crisis happening in the U.S.
23:33.0
All those things are destroying
23:35.0
wealth right now in the U.S.
23:37.0
and in China and in Japan
23:38.7
and in Western Europe. Philippines,
23:42.6
all the hardship,
23:44.8
all the challenges,
23:46.9
we have been very resilient. It's a testament
23:48.9
to the high savings rate
23:50.3
and the low debt levels in the Philippines,
23:53.0
especially in the high-end market.
23:54.5
And especially in the private sector.
23:57.5
And if you look at the
24:00.5
COVID drove us to borrow
24:02.6
a lot of money, as did
24:04.6
every country in the world,
24:06.9
it still is one of the lowest
24:13.3
GDP-to-debt ratios in
24:18.2
let us be thankful, but also
24:20.3
if you're a buyer
24:22.5
and you're waiting for prices to fall,
24:24.5
despite all of these challenges,
24:28.9
other disaster are you waiting for
24:31.2
before you become reasonable with
24:33.2
your bids on buying property?
24:36.9
what kind of disaster do you want
24:38.9
on the Filipino people? What more
24:41.1
do you want, despite COVID,
24:43.2
hyperinflation, hyper-interest rates,
24:49.1
for even more disasters
24:51.2
before you can say, wow, the price is good
24:53.1
enough, let's go buy?
24:57.8
I think that is probably
25:00.2
the most important thing, that
25:01.9
we have to be thankful and we have to act
25:05.6
So, and that goes with
25:08.3
being thankful with your,
25:10.2
for example, all the people that help you in your
25:12.1
household, whether it's your helpers or
25:14.1
drivers or staff,
25:16.9
you just have to be very
25:18.1
thankful and act appropriately.
25:20.6
Okay, that's quite an optimistic
25:22.2
view, really, and they're very
25:24.1
challenging times.
25:26.0
David Lee Chu, again, thank you so much for this
25:28.0
conversation, for joining us
25:29.8
this morning. Have a great day. Have a great
25:32.0
weekend. Thank you, and have a great day, everyone.
25:34.4
Take care. Alright,
25:36.0
moving on. Philippine lawmakers are now
25:38.0
calling for better flood control measures
25:40.1
in Metro Manila in the wake of
25:42.0
the devastation caused by recent storms.
25:44.7
Rafael Bosano with the story.
25:50.0
Congress are keen on investigating the
25:52.0
country's flood control systems,
25:54.1
following the devastation caused by
25:56.0
Super Typhoon Karina. One
25:58.0
Senator laments, flooding has worsened
26:00.2
in his hometown of Bulacan Province
26:02.2
as well as other parts of the country
26:04.0
despite substantial government
26:14.3
Francis Escudero points out,
26:18.1
was allocated for flood control
26:20.5
under the government's 2024
26:22.0
national budget, which,
26:24.1
bypassed the budgets of entire departments
26:26.0
such as the Department of National Defense
26:28.3
and the Department of Social Welfare
26:30.4
and Development. The Metropolitan
26:32.1
Manila Development Authority for its
26:34.1
part says, projects such as
26:36.3
flood pumping stations are already
26:38.2
in place to mitigate flooding.
26:40.4
But the rain dumped the past days
26:42.0
was just excessive.
26:44.2
To avoid severe flooding, the MMDA
26:46.1
says a comprehensive drainage
26:47.9
master plan is now in the works.
27:06.2
Senators, meanwhile, blame the Manila
27:08.2
Bay reclamation for the massive
27:10.3
flooding at the Senate premises in
27:14.1
geologist Mahagnag May explains,
27:16.7
the area is already prone to flooding
27:18.3
even without the reclamation projects.
27:22.1
reclamation, because of the
27:24.1
delay of the ground there, when we
27:26.1
simulated it, flooding
27:27.9
is possible in that area.
27:32.0
Magtasa of the UP Institute of
27:34.2
Environmental Science and Meteorology,
27:36.7
the public must also understand
27:38.2
that Metro Manila lies on
27:41.7
The rain, when it falls on the land,
27:44.2
it will find a way to return
27:46.0
to the sea. So those who fell
27:48.0
in Rizal, their way to return
27:50.2
to the sea is through Pasig River,
27:52.5
through Metro Manila, to Manila.
27:54.1
Manila Bay. Maraming nagsasabi ngayon
27:56.1
yung sa reclamation, alimbawa.
27:58.6
So, mahirap i-quantify
28:00.3
for now, but generally
28:02.3
speaking, gusto mong palabasin
28:04.6
yung tubig papuntang Manila
28:06.2
Bay. Kung naglagay ka ng lupa sa Manila
28:08.1
Bay, hihina yung pagdaloy.
28:10.8
Quezon City, one of the
28:12.2
most heavily affected areas in the
28:14.0
NCR, admits it is high
28:16.1
time to work on improving different types of
28:18.1
infrastructure that would help prevent
28:20.1
floods. Ang problema ngayon
28:22.1
is our pipes are narrow and
28:24.0
small, and they cannot
28:25.3
absorb the capacity of the
28:27.9
volume of rainwater that is
28:29.8
coming. So we really have to keep changing
28:32.2
our drainage, enlarge the
28:35.3
so that they can absorb the capacity
28:37.9
of the rain. With future typhoons
28:40.4
predicted to be stronger and
28:42.0
more devastating, experts
28:43.9
stress the importance of everyone's
28:45.9
cooperation in mitigating climate
28:48.1
disasters and ensuring that
28:50.1
casualties are kept to a minimum.
28:54.0
ng pahamahalaan, to keep
28:56.0
them safe. Pero in the equation,
28:57.8
meron silang share. Yung pag-recycle
29:01.8
trust management natin,
29:03.4
pagkatanim ng puno, yung mga ganyan,
29:05.8
yung back to basics.
29:07.2
Rafael Bosano, ABS-CBN News.
29:12.3
The Philippine government moves
29:14.0
to assist schools damaged by
29:15.9
Typhoon Karina. The Treasury Bureau
29:17.9
says it will file a claim
29:19.5
under the National Indemnity Insurance
29:21.9
Program for the Repairs and Construction
29:24.0
of 45 public schools
29:25.9
in 8 regions. For its
29:27.9
pilot run, the Bureau has already
29:29.8
secured coverage for over a thousand
29:31.9
or a hundred thousand school
29:33.8
buildings nationwide, with
29:35.8
an insured value of over
29:37.2
843 billion pesos.
29:39.9
This will help the Education Department
29:41.6
as damage to public schools already
29:49.5
The opening of classes in areas
29:51.8
hit by Typhoon Karina and the Southwest
29:53.9
Monsoon postponed to make
29:55.9
way for cleanup and repairs.
29:58.0
Education Secretary Sonny Angara
29:59.7
saying he will soon issue
30:01.8
a list of schools that will move the opening
30:03.9
of classes. But he notes
30:05.7
classes with areas with minimal
30:08.0
to no damage will push
30:09.8
through on Monday, that's July 29.
30:13.7
are being used as evacuation centers
30:15.7
in the aftermath of the deadly
30:17.8
storm. Some 90 more
30:23.7
remain suspended as communities
30:25.6
reel from the effects of Typhoon Karina.
30:27.8
Here's a look at class suspensions today,
30:53.7
Now here's a look at the other stories
31:05.4
we're tracking today. At 10 in the morning
31:07.5
there will be a ceremonial signing
31:09.3
of the implementing rules and regulations
31:12.8
progression system that is
31:15.3
for teachers. Now within the same
31:17.5
hour, PLDT will hold a job
31:19.5
fair in a mall in Ortigas.
31:23.5
welfare chief Rex Gatchalian will
31:25.4
hold a press briefing on the agency's
31:27.4
relief operations for Filipinos
31:29.6
affected by the wrath of Typhoon Karina
31:31.6
and the southwest monsoon.
31:36.6
Time for a quick break.
31:37.7
Coming up, a market chat with Aaron
31:39.3
Tsai of First Metro Securities Market Edge.
31:41.9
We'll be right back.
31:53.5
We'll be right back.
32:23.5
We'll be right back.
32:53.5
We'll be right back.
33:23.5
We'll be right back.
33:53.5
We'll be right back.
34:23.5
As producers seek alternative
34:25.3
markets amid falling demand
34:27.1
from China. And from
34:29.4
the Philippine Star, the Intellectual Property
34:31.3
Office of the Philippines calls for higher
34:33.3
penalties on counterfeiting
34:35.4
and piracy as part of
34:37.3
proposed amendments to the
34:39.4
Intellectual Property Code.
34:43.5
Philippine Stock Exchange off to a
34:45.5
positive start on Friday. The PSE's
34:47.5
main index up two-tenths of a percent
34:49.5
opening at 66.84.
34:51.9
Yesterday, the local boars
34:53.5
dropped over a percent in what
34:55.2
analysts said was due to renewed
34:57.1
inflation concerns in the aftermath
34:59.3
of the enhanced southwest monsoon.
35:01.9
Aaron Tsai of First Metro
35:03.2
Securities joins us now for
35:05.2
market chat this morning. Good morning,
35:09.5
Hi, good morning, Saldi. Thank you for
35:11.2
having me here. Thanks for joining us now.
35:13.1
Local investors yesterday, a digested
35:15.4
week showing of U.S. markets
35:17.3
and priced-in Karina effects as well
35:19.2
for both inflation and
35:21.0
potential selective
35:22.8
sectoral losses. Now, we have put
35:25.0
this out of the way,
35:27.1
I hope, because we lost
35:28.5
several percentage points
35:31.0
in the past two trades, but are you expecting
35:33.0
more corrections closing the
35:35.0
trading week now, Aaron?
35:38.9
the PSEI actually rose
35:40.9
about 10% from the 6158
35:43.6
low in June. Prior
35:45.0
to that recent drop, we saw
35:46.9
weakening momentum already in the
35:49.0
RD chart when the market was trading
35:50.8
around the 6-8 support.
35:52.8
Of the February to March consolidation.
35:55.3
So, in terms of the anticipation
35:57.2
for further correction, again,
35:59.0
within the context of the guidance
36:01.1
that we have been giving since the
36:03.0
beginning of the year, if you remember,
36:05.8
we shared our expectation
36:09.1
end its sideways consolidation
36:10.8
at around 616661.
36:13.2
And in June, we had the 6158
36:16.8
the rally from the June low looks
36:18.8
impulsive, informed. So,
36:20.8
based on those, my expectation is,
36:22.8
for a partial retracement of the
36:24.8
recent rally, maybe around
36:26.4
64 to 65. At worst,
36:28.9
maybe around 63. And then the PSEI
36:31.1
to move higher from
36:32.8
there. But, of course, the market
36:34.8
may negate our expectation. So,
36:36.9
just for guidance, if the market
36:39.0
proceeds to break, proceeds
36:40.9
lower and break below 5920,
36:43.7
then the very scenario
36:44.7
is probably more in play.
36:47.0
Alright. So, so many things to look
36:49.0
out for in the next couple
36:50.8
of weeks, really. But we do have,
36:52.8
of course, catalysts. Aaron, I just want
36:54.8
to bring your attention to a specific
36:56.7
sector in our property. We were talking to David
36:58.6
Leach of Leach Properties a while ago.
37:01.1
We were discussing about how
37:03.9
priced in the recent
37:06.8
developments of the Pogo
37:08.3
ban in the Philippines. Now, the
37:10.6
sentiment-driven property dip,
37:12.8
as a lot of our analysts have been saying
37:14.7
in the past few days, are you expecting
37:17.0
more of this today as well?
37:20.4
really affecting just a handful
37:22.8
of property names. But
37:24.4
why are investors unforgiving
37:26.5
for the entire counter?
37:30.6
first and foremost, I admire the
37:32.4
optimism of David.
37:36.7
maybe the pragmatism
37:38.4
about this, the recent
37:40.7
issue about the Pogos. Again,
37:42.7
if you look at the portfolio of the
37:44.6
property stocks, including
37:46.7
the REITs, including the REITs, the
37:48.5
exposure to Pogos have become
37:50.9
very much lower than
37:52.7
where it was in the previous
37:54.8
administration in the recent years.
37:56.7
I think there were already
37:58.7
feelers about the
38:03.3
facing out of Pogos
38:06.6
in the country. So, I think
38:08.3
the risk management of
38:10.7
these units, of these companies,
38:12.7
especially the bigger ones,
38:14.3
especially those who have options,
38:16.4
unlike those who have only
38:18.3
concentrated operations in the Bay Area
38:20.6
like Double Dragon, they are really heavy.
38:22.7
But for other companies
38:26.7
who have a bigger portfolio
38:28.1
relative to the size
38:29.8
and exposure, as well as
38:32.6
and I agree again,
38:34.4
the banking system,
38:36.6
I think the regulators
38:38.3
have already learned about this,
38:40.5
which again, I think, puts
38:42.4
some cap on the risk-taking
38:44.3
for both the banks and the property alike.
38:46.8
So, I think, well,
38:49.5
determine for sure when
38:52.7
poor sentiment towards this
38:54.5
property companies would stop.
38:56.7
Although, I'm seeing the quotes now,
38:59.6
developers are actually trading in the
39:02.7
green now. So, Ali, Megaworld,
39:04.5
Yeah, in fact, in the first six minutes
39:08.9
we were already, I mean, property was already
39:10.6
up half a percent,
39:12.8
which spells a bit of recovery.
39:14.8
Now, Aaron, from the
39:16.4
investor, stock investor's perspective,
39:19.4
since we know for a fact
39:20.8
that the sentiment,
39:22.7
has been affecting
39:23.5
unilaterally, I mean, the entire
39:26.7
counter, is it good to take
39:28.6
advantage of the lower
39:30.6
prices of property now, at least for sectors
39:32.8
that are not as exposed
39:36.3
those names that you mentioned?
39:38.7
Can we take advantage of those dips
39:42.2
I think we can, but then again,
39:44.7
we cannot go against the trend
39:46.6
with all our budget.
39:48.4
So, I think we can be
39:50.4
adventurous about this. We can
39:52.7
take the longer view. We have seen it
39:54.5
before. We have seen it before at the property
39:56.5
companies. Again, just as
39:58.5
how David put it,
40:00.8
they just waited it out. The inventory
40:02.8
continues to be there, and when
40:04.6
the demand comes back,
40:07.8
pricing and the value that
40:12.7
from those properties and those portfolios
40:14.6
were really a good
40:16.8
source of return for
40:18.5
investors. So, I think as of
40:20.5
now, especially the
40:22.7
as far as the stock price
40:24.8
and valuation of big property
40:26.6
developers are concerned, I think that
40:28.6
this has not really
40:30.3
recovered that much since
40:32.5
pandemic. So, we are seeing
40:34.6
SM Prime, we are seeing Ayal
40:36.3
and Robinson's Land, for example,
40:40.5
value for what it is
40:42.4
selling currently in the market.
40:44.0
But for others who
40:46.0
have been habitual
40:50.7
in REITs, I think there's a good case to
40:52.7
cross-average the REITs.
40:54.2
ARI, RCR, and MREIT
40:56.2
take advantage of the negative sentiment,
40:58.5
but again, faced. So, we can
41:00.7
accumulate at a good average cost
41:02.8
translating to good yields, even
41:04.7
if distributable income actually becomes
41:06.9
negatively effective moving
41:08.5
forward. We do have rate cuts
41:10.5
upcoming though. I mean, don't you think that's a
41:12.7
good development at least to arrest
41:14.5
whatever dip in the property sector
41:18.7
result of the BOGO ban? Because
41:20.2
we know for a fact that those
41:22.7
prohibitive borrowing rates are also
41:24.7
a factor in why the property
41:26.7
sector is performing in this way
41:30.6
definitely. Definitely, that
41:32.7
would be a good factor to look at.
41:34.5
But then again, there's a stickiness in the system.
41:38.5
the loan rates to go as fast
41:40.6
as the cut in policy
41:42.6
rates would be. But even
41:44.5
if we see those policy rates
41:46.5
go down, even if it
41:48.3
effectively guides the long
41:50.0
dated bonds, say the US
41:52.4
10-year benchmark to go lower,
41:54.5
which we do expect to happen moving forward,
41:58.2
business decision from banks
42:02.3
flexible. It would
42:04.5
take time to be channeled
42:06.6
and to be communicated in the system.
42:09.0
And of course, we have to consider
42:10.7
that some of the borrowers have already
42:12.4
locked in for several
42:14.4
years already at this rate.
42:17.5
if the system would continue to be
42:20.6
awash with cash, and of course,
42:22.4
if inflation doesn't go in the way
42:24.6
again, then maybe we can see
42:26.6
some help from that
42:27.9
lower borrowing cost moving forward.
42:30.6
What do you think of inflation in the next
42:32.5
reading, given that
42:34.2
we just experienced Carina, and
42:36.3
it might have impacts on both
42:38.2
supply and even the prices of
42:40.4
goods, especially in
42:42.3
storm-devastated areas? Do you think
42:44.4
it will be significant?
42:48.2
unfortunate. I've been seeing a lot of
42:54.1
it is natural to anticipate
42:56.4
some uptick in prices. Now, good thing
42:58.6
there are regulators guarding
43:04.7
of the situation. But the good thing
43:06.6
is, I think the damage
43:08.8
was not much on the
43:14.0
regions. So, I think
43:16.6
the damage is more limited on the metro.
43:18.6
Not to say that it is not
43:22.4
but in terms of food prices,
43:24.8
which again is the biggest
43:28.6
CPI basket, I think if
43:30.5
there would be an uptick, maybe it's
43:36.6
uptick, large enough to maybe
43:38.5
affect the current trajectory
43:40.7
of inflation. Right, because really
43:44.2
this is a matter that a lot of local
43:46.4
investors are factoring into
43:48.2
their trading decisions right now. And then you
43:50.4
have developments in the US,
43:52.4
I'd like to talk about the US
43:54.1
rally in tech stocks
43:57.8
and the fact that it has been losing
44:00.3
steam for two reasons now.
44:02.4
You have disappointing earnings,
44:04.3
of course, from the likes of Alphabet and Tesla
44:06.4
and the uncertainty
44:07.8
in US politics moving
44:10.3
forward. Now, what near-term benefits
44:12.3
do these developments
44:13.7
have on emerging markets, at least
44:16.4
Aaron, at least for us? How will they
44:21.0
think there will be migration of
44:22.4
capital now from the developed markets.
44:24.3
So not in that sense?
44:25.9
Not in that sense.
44:28.4
Again, for me, as long as
44:30.3
the yields are offering
44:32.5
US investors or investors
44:34.5
in the US a good deal
44:36.2
compared to the risky
44:37.9
investments elsewhere, I think they would
44:40.4
still stick to the
44:42.3
safer market that are
44:44.3
offering them good yields, even at the fixed
44:46.4
income level. I think
44:48.5
what's happening in the
44:50.4
US market now, especially for tech
44:52.4
stocks, are just the market
44:54.2
taking a breather. They have
44:56.4
been very, very bullish
44:57.9
in the recent months. But I think
45:00.6
moving forward, if
45:04.0
any very disastrous
45:08.3
bullish sentiment
45:16.2
the tech-heavy indices would
45:18.1
continue. But of course, with some corrections
45:20.4
along the way. Okay. And of course,
45:22.3
US politics, I think this
45:24.0
is somehow a factor
45:26.4
in the way that it might affect
45:28.1
Federal Reserve decisions
45:29.9
in the near future. Now, what do you make of the
45:32.3
timing, though, of the
45:33.9
projected Fed rate cuts
45:36.0
in the US elections? Any complication
45:38.3
you're seeing there?
45:42.0
US election, especially the presidential
45:44.3
election, always poses a risk
45:48.3
possible direction, especially
45:50.2
as far as the Federal Reserve
45:52.3
chairman is appointed
45:54.1
by the president. But as we know,
45:56.3
I think the current chairman
46:02.1
in the previous administration.
46:03.9
So, if they were still in that good
46:10.2
I think there should be
46:15.4
the current administration
46:17.4
to the next possible, more
46:20.2
probable administration. But again,
46:22.3
as far as the investors
46:24.1
are concerned, I think the market
46:26.4
has already discounted this already.
46:32.4
yield going lower already
46:40.2
in the federal funds rate. So, I think
46:42.2
the markets can be a
46:44.0
leading indicator as far as this
46:46.2
is concerned. And of course, we do
46:48.2
have our own concerns, our own rate
46:50.3
cutting timeline, BSP
46:52.1
meeting is happening just
46:53.5
a little less than three weeks if you really think
46:56.2
about it, Aaron. Do you and the
46:58.1
Monetary Board announce a cut
46:59.7
this time given what we know?
47:02.2
Inflation threats, maybe?
47:06.4
know what they will do, but
47:11.7
rather lean towards
47:15.9
and not cut ahead of the
47:18.1
Federal Reserve. The
47:19.8
strong showing of the US economy,
47:24.0
actually influence some
47:30.1
to maybe reassess
47:38.1
good showing of the US
47:40.0
economy somehow produce
47:42.2
a higher inflation again moving
47:44.1
forward, then the Fed would again
47:48.1
would have their hands tied again
47:52.1
rates and maybe have the higher
47:54.2
rates for longer. But then again,
47:56.3
inflation trajectory that we have
48:00.2
been seeing recently
48:01.5
continues moving forward,
48:04.3
then there would be a case. But for
48:06.2
our local central banks, it would be very
48:10.2
ahead of the Fed. Although,
48:12.2
as far as reputation
48:16.2
might help their reputation if they
48:18.2
cut in August and
48:19.9
the Fed cuts in September.
48:22.1
Then they can be viewed
48:24.2
as ahead of the curve. But that
48:26.0
would be a very risky move if
48:28.1
they cut in August and the Fed
48:30.1
doesn't cut in September.
48:31.7
I was thinking about that as well because
48:33.7
the possibility of cutting ahead of the
48:36.0
Federal Reserve by a month, at least
48:38.2
if you talk about BSP cutting
48:40.0
in August and September, the
48:42.0
Fed will also ease its policy.
48:44.1
But given peso weakness
48:45.9
now and the fact that
48:47.6
the Fed might not cut right
48:52.1
a result of those indicators that you mentioned,
48:54.0
better U.S. economy and
48:57.6
easing those rates,
48:60.0
bad timing, if you will.
49:02.0
So what scenario are you looking
49:03.9
at for the Philippines when it
49:06.0
cuts rates in August?
49:08.4
Well, again, definitely, if
49:09.8
that risk becomes an actual
49:11.9
event that they cut in August
49:13.9
and Federal Reserve does not cut
49:18.1
definitely the peso would be adversely
49:20.0
affected. And look
49:22.1
and seeing it going higher
49:24.0
than the 5920 high
49:25.7
in the recent high
49:28.1
would be not unimaginable.
49:30.7
But for now, the charts
49:31.7
actually showing us
49:33.9
some possibility of appreciation
49:36.2
for the peso or the USDPHP
49:45.6
or depreciating against
49:48.0
the U.S. dollar. But as of early trading
49:52.1
I think we have seen some retreat
49:53.8
already in the USDPHP. So
49:55.5
for now, the bias, at least
49:57.8
from what I see in the chart, is
49:59.3
peso appreciation in the coming
50:03.1
Alright, on that note, Aaron Sai, again, thank you so much
50:05.6
for this conversation. It's been interesting.
50:08.3
Have a great weekend.
50:10.2
Thank you, Stanley.
50:11.6
Moving on, Filipino authorities recover the remains
50:13.9
of the missing crew member from a
50:15.8
capsized oil tanker off the coast of
50:17.8
Bataan. The vessel, MT
50:19.7
Terranova, carrying 1.4
50:21.8
million liters of oil, sank Thursday
50:23.9
morning with all but one
50:25.9
of 17 crew rescued.
50:28.1
Investigation on the cause of the incident
50:29.9
is underway. President
50:31.9
Marcos ordered an assessment on the impact
50:34.1
of the oil spill.
50:35.9
The fuel on board Terranova is nearly
50:37.9
double the amount compared to the
50:39.9
800,000 liters of oil
50:41.7
from the tanker which capsized in
50:43.9
Oriental Mindoro last year.
50:48.0
Can we please add an
50:49.8
instruction to the DNR?
50:51.8
To make already an assessment
50:54.0
on the environmental impact
50:55.8
of this, basically
50:57.7
what we need to assess is where
50:59.8
was the, where is the capsized
51:03.4
The fuel that's being released,
51:05.4
what are the tides, what are the winds,
51:08.5
where is it headed?
51:09.5
Maybe we can also make some
51:11.7
determinations on that.
51:14.1
Kung naalala nyo, yung incident
51:18.8
masyadong malalim
51:19.9
at nagsakom sa pressure,
51:23.2
tanki niya, at talagang
51:25.6
lumabas yung oil. Ito hindi naman masyadong
51:27.6
malalim eh. Pinachicheck ko nga, kasi
51:29.6
nung una, half submerged lang siya.
51:32.7
Pakasakaling mababaw lang
51:35.6
na hindi maapektuhan
51:37.8
yung water integrity ng mga tanks niya.
51:43.6
A leading environment group urges
51:46.0
the owner of the MV Terranova
51:47.8
to come forward and pay
51:49.7
for any environmental damage cost.
51:51.8
By the sinking of the ship,
51:53.7
Greenpeace also demands that the owner
51:55.4
provide compensation to affected communities.
51:59.5
this tragedy underscores the need for the
52:01.7
government to reduce its dependence
52:05.5
Greenpeace now calls on the administration
52:07.5
to hold the firm behind the sunken tanker
52:09.7
accountable to prevent a repeat
52:11.8
of last year's oil spill
52:13.4
in Oriental Mindoro.
52:17.5
And that's it for the show. I'm Stanley Palisada.
52:19.9
Thank you so much for watching. You can listen
52:21.6
to our interviews again on the ANC
52:23.5
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52:25.1
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52:27.4
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52:29.4
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52:31.2
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52:33.5
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52:35.8
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