In 2023, Maya’s total depositors stood at 3 million, 2.1x more year-on-year, while depositor balance was at P25 billion, a 1.7x improvement. Meanwhile, cumulative loans disbursed reached P22 billion, which is 6.9x more compared to the same period a year ago.

“We already have created that dent by providing a solution, an alternative for the many Filipinos who are unbanked, underbanked, and unhappily banked,” Maya chief executive officer and founder Orlando Vea said in a recent briefing.

On the enterprise side, Maya reported that it currently has 44% of the total market share of QRPH processing and is the largest merchant acquirer.

PLDT chairman and CEO Manny Pangilinan said the board was “quite pleased” with the subsidiary’s performance in the first two months of 2024.

Without specifying numbers, Pangilinan said Segment EBITDA (earnings before interest, taxes, depreciation, and amortization) at the operating level “turned positive.”

“There’s still the overhead, the debt to be taken into account, but the good news is, while it’s negative, it’s half of the EBITDA loss consolidated compared to last year. Even the net loss is more than half reduced. The cash burn is also more than half,” he said.

Pangilinan added that Maya has been able to attract significant deposits, but noted that the lending side of the business needs to grow more.

“I think the problem is not always the deposits, but the lending side. It’s the asset side of the balance sheet, that they have to push their loans. Because, I mean, banks are supposed to lend,” he said.

The Inquirer recently quoted Bangko Sentral ng Pilipinas Director Melchor Plabasan as saying that only two of the six digital banks in the country were profitable. – Rappler.com

Just over the weekend, I had an engaging chat on stock investing and investor protection in the US with a balikbayan uncle of my wife. Her uncle and wife are now retirees with dual citizenship, to obviously spend here their hard-earned pension kitty, which grew comparatively larger than the retirement portfolio of their co-employees because of their preference for investing in stocks, nurtured by the better environment on investor protection in the US.  

As pointed out by them, despite the scandals on stock manipulation and insider-trading, the US capital market has remained robust and the biggest due to the firm and serious attitude of the regulators on investor protection.  Violators and perpetrators of irregular trading activities are assiduously pursued and made to face justice.

We had a grand time recalling the stories of the big heroes and villains in the turbulent times of the eighties and nineties that almost destroyed Wall Street. These were the legendary arbitrageur Ivan Bosky, junk bond king Michael Milken, and star investment banker Martin Siegel, to mention a few. 

Bosky was charged – and pleaded guilty – to insider trading and fined US$100 million. He served three years in prison and became an informant.

Must Read

[ANALYSIS] A soft and range-bound stock market that has not lost its luster

Michael Milken was known for developing the high-yield bond market, which earned him the nickname “Junk Bond King.” He was indicted for securities fraud and served 22 months in prison at the same time penalized a huge fine of $600 million. He was granted a full pardon on February 18, 2020 by then-president Donald Trump.

Star investment banker, Martin Siegel, was convicted along with Ivan Boesky and Michael Milken, for insider trading.

What about Abra Mining?

Abra Mining was “incorporated on September 28, 1964 to engage in the exploration, development, exploitation, processing, manufacture, extraction, milling and sale of cement and metal concentrate, marble, building materials and other minerals such as copper, gold, silver, iron and lead.” 

Purportedly, the company’s business lines consist of the commercial utilization of limestone, lime, shale, silica, sand, gold, silver, copper, zinc, magnetite iron sand and other mineral deposits existing within the contract area. The company has four approved mining claims covered by duly approved Mineral Production Sharing Agreements with the Department of Environment and Natural Resources, namely, Bucay Baticang Limestone and Alluvial Gold Magnetite Project, Capcapo Gold Copper Project, Patok Gold Silver Copper Project, and The Sanvig Alluvial Gold and Magnetite Iron Sand Deposits.  It is also purportedly “engaged in the processing and manufacture of non-metals for industrial and commercial purposes at wholesale only.”

In early January 2020, Abra Mining named a new president and chairman. In the company’s disclosure on January 7, 2020 to the PSE, it said that its board in a meeting held a meeting the week before, on January 4, and had elected 59-year-old James G. Beloy as the new president and chairman of the board. He replaced his 83-year-old father, Jeremias B. Beloy. The young Beloy is a registered mining engineer, who holds a Mining Engineering degree from the University of the Philippines.

Prior to his election as chair and president, James Beloy was executive vice president and member of the board of directors of the company since 1994.  He was also president of Jabel Corporation, and an associate realtor and consultant of Melie G. Beloy Realty.

Other officers elected or elevated to higher positions in the company based on the disclosure were Joel G. Beloy, who was elected as a director to replace the position vacated by the older Mr. Beloy.  Joel Beloy was also appointed executive vice-president and chairman of the compensation committee.

As far as I could remember, Abra Mining is a dormant company that the news did not create any ripple in the market. The share price of Abra Mining ended flat that Monday on January 7, 2020 at P0.0014 each.

Irregularity in AR shares

Failing to create any stir a year before being “with no revenue and zero analyst coverage,” as described in the news, Abra Mining suddenly became the superstar of the whole Philippine stock market exactly a year after. 

As reported, Abra Mining “accounted for almost 80% of the Philippine market’s average daily transaction volume through February 3, 2021. . . it’s year-to-date gain peaked at 279% on January 19, 2021 when it closed at 1.1 centavos, the highest since December 2007 and above its 1 centavo par value.”  

The surge in Abra Mining was fueled by speculation that a new investor will come in to develop its gold mines.  

All these times, too, Abra Mining claimed that “it wasn’t aware of any information nor could it speculate as to the reason for the stock’s unusual price movements,” in response to perfunctory inquiries made by the Philippine Stock Exchange (PSE). 

Abra Mining shares closed at P0.0046 a piece on March 3, 2021 before trading was suspended the following day, which left many retail investors hanging with empty bags.  

Trading was suspended by the PSE on account of serious violations on its listing and disclosure rules and also of the Revised Corporation Code.  The gravest of which, according to PSE President Ramon Monzon, was “the lodgment and trading of Abra Mining shares which are not yet issued and recorded in the books of the Company and for which no subscription payments were received by the Company.”

The shares lodged with the Philippine Depository & Trust Corp. (PDTC) exceeded the number of the company’s listed shares. Only securities approved for listing should be lodged with the PDTC for trading.

Likewise, the number of shares lodged with PDTC exceeded the number of issued and outstanding shares as reflected from Abra Mining’s audited financial statements.  This meant that the shares that are not yet recorded in the books of the company have been lodged with PDTC and are being traded, in contravention of the provisions of the Revised Corporation Code.

According to culled figures, Abra Mining abetted the trading of 250 billion shares though it only had 99 billion listed shares.

The latest SEC Form 17-A report available in the PSE website about the company is that of December 31, 2021.  The company was reported to have no commercial operations, wherein it also basically remained a family-held corporation.  

The list in the SEC report were, as follows: James G. Beloy, Charman & President; Joel G. Beloy, Director and EVP, Compliance Officer, Corporate Information Officer and Data Privacy Officer; Premy Ann G. Beloy, Director and Asst. Treasurer, Compliance Officer and Corporate Information Officer; Amelia G. Beloy, VP – Administration, Chief Financial Officer and Corporate Secretary; Armando L. Javilinar, VP – Operations. External Auditor, Valdes Abad & Company, CPAs; Transfer Agent, Asian Transfer & Registry Corporation.

The way it looks, it’s plain and simple that regulators need not look further or dig deeper as to who to talk to about the fiasco. The inaction is all the more flabbergasting. No wonder poor retail investors who were left with the empty bags are now seeking legislative investigation.  

The chair of the House ways and means committee, Albay 2nd District Representative Congressman Joey Sarte Salceda, who is also a champion of promoting the development of the capital market, may be called to the rescue. – Rappler.com

The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial instruments whether referred to herein or otherwise.  Moreover, the public should be aware that the writer or any investing parties mentioned in the column may have a conflict of interest that could affect the objectivity of their reported or mentioned investment activity. You may reach the writer at densomera@yahoo.com. 

Among Filipinos who actually tried to go cashless in 2023, the average number of days that they successfully managed not to use cash was 10 days, according to the findings of the Visa Consumer Payment Attitudes Study 2024.

Most Filipinos believe that they can go at least a week without using physical coins and bills. According to the study, 82% of Filipinos believe they can go cashless for a day, but that number drops to 68% for three days, and just 52% for a week.

This shouldn’t come as a surprise even for those living in the metro. If you’ve ever gone out to buy a snack from a nearby store – only to realize you forgot to bring any cash – you’ll find that you’re left at the mercy of mobile wallets that aren’t always online.

What about for public transportation? For those commuting by jeep, tricycle, or pedicab, it’s practically impossible to use anything other than cold, hard cash.

If you’re using trains, you might have some more luck going cashless. For instance, commuters using the Light Rail Transit Line 1 can buy single journey QR tickets through Maya. Eventually, you might also be able to tap your Mastercard card to pay for your fares in the Metro Rail Transit Line 3, as well as EDSA and Bonifacio Global City buses (READ: You can eventually tap your Mastercard to pay for MRT3, bus fares).

Likewise, Visa country head for the Phililippines Jeff Navarro said that “discussions are in place with the [Department of Transportation] and all other operator-participants” for a similar tap to pay function for Visa cards in transit stations.

Randolph Clet, head of the Department of Transportation’s automatic fare collection system (AFCS), told Rappler that the goal is to go contactless and cashless for transportation “soon” by enabling commuters to pay for fares using bank cards, QR codes, and mobile payments through near-field communications or NFC. For comparison, other Southeast Asian cities, such as Singapore and Bangkok, have had tap-to-pay functions in their trains for several years now.

But although the Philippines may be lagging behind some of its neighbors, Visa’s country head is confident that we’re headed in the right direction.

“[In] Singapore, you can see there that practically everyone is already using mobile pay. Apple Pay is there. Google Pay is there,” Navarro said. “So, they’re very much ahead when it comes to real penetration and usage already.”

“What we’re seeing in Philippines is directionally it’s already going to that place. The momentum is there. We have critical mass in terms of consumers already adopting this new technology,” he added. “We’re really in a good positive place towards going cashless by 2030.”

Filipinos seem optimistic as one in three believe that the Philippines can become cashless by 2030. In fact, plenty are already trying to drop cash. In 2023, 83% of Filipino consumers attempted to go cashless, which actually places the Philippines second in ASEAN. Vietnam (89%) leads the region while Thailand (81%) is third and Malaysia (76%) is fourth. Singapore (67%) places fifth only because many Singaporeans have already fully embraced cashless payments.

Going digital: 1 in 3 believe Philippines will be a cashless society by 2030

Internet, fraud are still problems

The first step to achieving a cashless society would be to have more Filipinos set up transactional accounts that can be used to pay digitally. This could be by bringing them into the formal banking system through bank accounts or by having them set up mobile wallet accounts.

Navarro said that while the Bangko Sentral ng Pilipinas has yet to release official figures, he estimates that close to 70% of Filipinos now have a bank or e-wallet account.

To reach the remaining 30% of “unbanked” Filipinos, the Visa country head said that banks, fintech companies, and even remittance and currency exchange companies must take the lead in creating “products and services that will allow them to be part of that economy.”

There is still the problem of infrastructure. In 2023, the Philippines’ internet penetration rate stood at only 73.1% of the total population, with some geographically-isolated communities having no internet access. The country’s internet speed also trails others in the region (READ: 91% of PH workers believe internet infrastructure needs to improve faster – survey)

“It’s difficult to do a digital payment if there’s no internet, there’s no Wi-Fi, there’s no nothing. So, that has a natural cycle that will fix itself. So, as to when that becomes available, then definitely digital payments becomes part of the community,” Navarro said, adding that Visa is also exploring possible offline payments solutions.

“We’re trying to work with some of our issuers and acquirers to see if we can do something that’s offline. These are very early discussions. There’s still no concrete solution. But it’s really one of those that we want to do because it again supports the national agenda of the government for financial inclusion.”

There is also the problem of digital fraud. Navarro said that over the last five years, Visa as a whole has invested close to $10 billion in terms of improving its fraud, risk, and identity and cybersecurity solutions. That includes having three dedicated cybersecurity centers that monitors transactions 24/7. Visa, along with other financial institutions, have also turned to artificial intelligence in the fight against fraud. (READ: EXPLAINER: What is digital fraud and how do you protect yourself from scams?)

“This has translated to roughly a prevention of $27 – $28 billion in terms of fraud,” Navarro said. “Whatever solutions that we’re implementing [elsewhere] is also the same platform that’s implemented in the Philippines.” – Rappler.com

Practical tips to keep yourself safe from bank fraud

While it might seem like a tall order to transform from a cash-dominant society to a digital savvy one by 2030, there are already signs of the cashless wave growing. In 2023, 43% of Filipinos said they carried less cash in their wallet now than they did a year ago, according to the findings of the Visa Consumer Payment Attitudes Study 2024.

In fact, the percentage of Filipinos who use cash as a payment method has already dropped significantly from the previous year, now down to 87% in 2024 from 96% in 2023.

As cash began to decline in popularity, other modern payment methods rose in its place. In 2023, many Filipinos (87%) used mobile wallets as cash when it came to payment options, with 70% of Filipinos surveyed saying they used cards.

“In the past, it’s always been cash that’s been very dominant in terms of usage. Pero (But) now, what we’re seeing is mobile payments have already matched the level of cash and also on the card side,” said Jeff Navarro, Visa country manager in the Philippines.

Generally, it was the younger age group and affluent segment that was driving the push for a cashless society, with 87% of Gen Zs attempting to go cashless in 2023, along with 86% of those in the Gen Y and affluent groups.

What’s driving the change?

In the Philippines, it’s the rise of mobile wallets – and not more traditional financial products, like cards – leading the shift away from cash.

The use of mobile wallets has already become behavioral as four out of five Filipinos said they paid using their mobile wallet every week, while 34% said they prefer using a mobile wallet “out of habit.”

Meanwhile, 37% of Filipinos said that they are now more comfortable using their mobile wallets to pay for bigger purchases.

“In the past, it used to be on small ticket items, the cheaper ones. But now, because they use it more frequently, and they’re more confident in cashless, even higher ticket items, they’re already comfortable using mobile wallets. And for them, because it doesn’t have any cost – there are no fees – it becomes very convenient,” Navarro said on Thursday, February 29.

The study showed that 34% of Filipinos said having no fees for usage drove them to use mobile wallets. However, some mobile wallets and banks have begun to raise their fees for loading or transferring funds to their wallet. For instance, GCash added a P5-convenience fee for every cash-in transaction for linked BPI and UnionBank accounts in October 2023, while those loading their GCash wallet through the BPI add will also have to pay a P10 fee starting March 1, 2024.

But how confident are Filipinos in going cashless? Most believe that they can go at least a week without paying using physical coins and bills. According to the survey, 82% believe they can go cashless for a day, 68% for three days, and 52% for a week. Among consumers who actually tried to go cashless, the average number of days that they successfully managed not to use cash was 10 days.

That confidence comes from a growing acceptance of cashless forms of payment in the market. The study found that according to 87% of Filipinos, they have seen an increase in acceptance points for mobile wallets, while 63% said the same for card swipes and inserts, and 52% for contactless cards.

Here are the merchant categories where Filipinos saw the most increase in acceptance of cashless payments:

• Supermarket (88%)
• Food & dining (86%)
• Bill payments (82%)
• Retail shopping (80%)
• Convenience stores (75%)

EXPLAINER: What is digital fraud and how do you protect yourself from scams?

– Rappler.com

In its first rate-setting meeting of 2024 on Thursday, February 15, the BSP’s Monetary Board announced that its benchmark interest rate will stay at 6.5%, a 16-year high.

Raising or lowering the key policy rate, which in turn affects the interest rates that banks charge consumers and businesses, is the BSP’s way of controlling inflation. Theoretically, increasing interest rates or maintaining them at an elevated level can discourage people from borrowing and spending, slowing down economic growth and the rise of prices.

The effect of key policy rate decisions on inflation and the economy can take months to show. Changes in interest rates take time to work their way through the banking system, consumers, and businesses.

In relation to this, the BSP said “recent indicators also suggest that economic activity could moderate in the near term as the full impact of the BSP’s prior monetary policy tightening continues to manifest.”

Nevertheless, the central bank expects domestic economic activity to “remain intact over the medium term.”

The BSP’s counterpart in the United States – the Federal Reserve – has signaled that it intends to keep interest rates “higher for longer” in a bid to keep inflation under control.

“Our view then is that any expectation of an early rate cut is optimistic. It is more likely that the Fed will keep its policy rates elevated over a longer period than expected by the market. Progress has been made, and by extension, the spillover pressures are not as pronounced. But the task of calibrating the economy with policy rates is also not yet complete. This is why most central banks do not take off the table the possibility of yet another rate hike,” the BSP wrote in its recently released 2023 Financial Stability Report.

BSP Governor Eli Remolona Jr. has also previously said that the Monetary Board will only consider cutting rates once inflation settles within the government’s target range of 2% to 4%.

“We want to be sure we stay comfortably within the target range. And then when we’re comfortable about that, then we can start to think about easing,” Remolona said on December 6, 2023.

Must Read

What Bangko Sentral’s interest rate hike means for consumers and the economy

How is inflation?

Inflation has already begun to cool as it went down for the fourth straight month in January, falling to 2.8%. It was the second consecutive month that inflation fell within the government’s target range.

Looking ahead, the BSP’s latest baseline and risk-adjusted inflation forecasts also show the inflation rate settling within the government’s 2% to 4% target range. The latest baseline inflation projection is 3.6% for 2024 and 3.2% for 2025, while the risk-adjusted inflation forecast is 3.9% for 2024 and 3.5% for 2025.

While risks to the inflation outlook have eased, they remain tilted toward the upside. In particular, the BSP mentioned that the government is taking a “step in the right direction” to control rice prices by entering into a five-year supply agreement with Vietnam and by directing efforts toward boosting the rice sector’s productivity.

BSP Monetary and Economic Sector head Iluminada Sicat affirmed that although there seems to be “some improvements” in inflation, the central bank doesn’t see rate hikes coming just yet.

“We still consider taking a more prudent monetary policy stance at this moment,” Sicat said during Thursday’s press conference. – Rappler.com

The reasons that have been offered to explain why this is so are more technical than fundamental in nature. Moreover, the market’s fundamentals are intact and remain positive.  

For instance, our full-year average inflation rate for 2023 was still at 6.0%, but in December this slowed down to 3.9% from 4.1% the previous month of November. And this further eased to 2.8% in January this year.

Inflation rate may not yet stabilize this low, but it is expected not to go beyond last year’s average considering previous measures done here and abroad to curb it. The US Federal Reserve has already expressed plans to cut interest rates by March, which was initially received negatively last week by equity markets like ours considering that this was anticipated to happen sooner. 

Likewise, the economy’s GDP for 2023 was positive at 5.95%, which is more less close to the lower range of the government’s growth target of 6.5% to 7.5%.  

It is worth to mention, though, that critics are not satisfied. They find it not as significant as it is. 

The GDP for the 4^th quarter was only 5.6%. This is way below the 7.1% record posted in the same period in 2022. Furthermore, this is much lower than the 7.6% record of the economy in 2022.  It is, by far, “the lowest since 2011, excluding the contraction posted during the pandemic,” according to one comment.   

Comparatively, the Philippines’s growth rate of 5.95% is more robust than China’s initial reported growth data of 5.0%, Vietnam’s 5.0%, and Malaysia’s 3.8%. This makes the Philippine as one of the fastest-growing economies in the region.

Growth boosters for 2024

Government projections show that remittance inflows from workers abroad will be sustained.  The IT-BPO sector, which is growing the fastest among our neighboring competitors, will continue to grow as well.  

Export is another: Trade and Industry Secretary Fred Pascual has expressed optimism that increased demand for Philippine exports will be a driving force behind the country’s economic growth in 2024.  This is in addition to factors such as falling oil prices, robust public spending, investment-grade credit ratings, and structural reforms contributing to growth, he added.

Recently, the US recognized the potential of the Philippines’ role to support semiconductor supply chain requirements and in addressing global shortages caused by the pandemic and trade tensions.  Along with 6 other countries, the Philippines was designated to receive funding aimed at strengthening and diversifying the semiconductor supply chain as part of the CHIPS and Science Act passed by the US Congress in 2022.  

Likewise, the US is exploring the use of its Development Finance Corporation to fund RE and infrastructure projects in the PH, to enhance power supply, reduce electricity rates, and attract more investors.  

According to National Economic and Development Authority Secretary Arsenio Balisacan, construction and tourism will be a big factor in the economy’s growth for 2024, too.  

International visitor arrivals doubled in 2023 compared to that of 2022. This is likely to continue as we open up to foreign visitors and increase international tourism revenues significantly. The same is likely to be expected in the construction industry as the private and public sectors step up with their projects in 2024. 

Investment areas

Due to the foregoing developments, investments in power, telecommunications, construction, tourism, services and exports are likely to primarily benefit in the country’s economic growth projections. The Maharlika Investment Corporation, which is the entity managing the Maharlika Investment Fund, also added agroforestry and industrial urbanization, mineral processing, transportation and aviation to benefit in the process.

You may choose any stock favorites in these investment areas.  But if I were to make a recommendation, initially confine your selection to companies with proven record of stability and consistent operating performances of profitability, together with records of dividend-plays.  

Must Read

[ANALYSIS] Welcoming 2024 with more hope than fear in the stock market

In other words, start with companies that have established intrinsic values and good capitalization.  Compliment it with some growth stocks.  

To mention some of the stocks that could stand up to the said standards, together with good liquidity and trading record, are the likes of GT Capital Holdings, Inc. (GTCAP), Manila Electric Company (MER), Ayala Corp. (AC), Aboitiz Power Corporation (AP), DMCI Holdings, Inc. (DMC), Megaworld Corporation (MEG), Robinsons Land Corporation, International Container Terminal Services, Inc., and Philippine Long Distance Telephone Company (TEL).  There a lot more, though, if you look closer to companies with strong growth prospects.   

You can buy them now any time, too, considering their current prices.  For instance, Jofer Gaite, president and chief trader of Westlink Global Equities, Inc., says the following stocks have a lower price earnings multiple (P/E) of 13.75x of the PSEi:  GTCAP is 6.0x P/E with a Price to Book Value (P/B) of 0.61x; ICTS with 13.51x P/E and P/B of 4.58x; MEG with 3.61x P/E and P/B of 0.27x; and RLC with 6.71x P/E and P/B of 0.57x.

There are more stocks in the various investment areas recommended with good value and trading performance.  All you need to do is spend a little time browsing PSE and related market websites.  

Another strategy, according to Joel de la Peña, market strategist and chief trader of H.E. Bennett Securities, Inc. is to revisit some stock favorites that continue to trade at a discount to their historical prices.  They could be good candidates for quick trading positions.  

Whatever your investment intentions are, stick to companies within the investment areas that both have short-term and long-term potentials. That way you don’t get stuck with stocks with no fundamental value or growth potential.

In the meantime, there is a likelihood the market may soon break its longtime resistance level of 6,700 considering unfolding developments especially in the US.  

However, the market may experience a setback by what is happening in the local political front. This is not as much by the essential issues of the charter change but by the use of it as an excuse in the power struggle that is brewing between the Marcos and the Duterte camps. As it is, it is getting dangerous and discouraging to foreign investors, to say the least.

We’ll continue with more stock pick recommendations next time. Don’t miss it. – Rappler.com

The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial instruments whether referred to herein or otherwise. Moreover, the public should be aware that the writer or any investing parties mentioned in the column may have a conflict of interest that could affect the objectivity of their reported or mentioned investment activity. You may reach the writer at densomera@yahoo.com.

Traditionally, every new credit card is made from five grams of virgin plastic. And if you multiply that with the amount of credit cards in the country – around 11.8 million as of March 2023 – it comes out to 59 metric tons of plastic.

That’s the equivalent of 1.5 million plastic bottles. And remember, a credit card only has a lifespan of three years, meaning more cards issued and more plastic made every year. (READ: Philippines dominates global ocean plastic pollution chart at 36%, shows study)

Security Bank is hoping to buck that trend with its newly launched “sustainable” Wave Mastercard credit card. The Wave Mastercard is made from 100% recycled PVC waste as certified by the ICMA Ecolabel Standard.

“The Philippines is actually one of the top polluters of plastic waste, and most of our waste ends up really in the ocean. Now, as one of the largest retail banks in the Philippines, we are mindful of our plastic footprint as well, especially as regards to our credit card,” said Nikki Lizares, Security Bank’s sustainability head, during the card’s launch.

With their newly launched card, Security Bank is the first local bank to issue a credit card made of 100% recycled PVC. The cards are made by Idemia, one of the select card manufacturers that uses green materials and has complied with Mastercard’s stringent approval process.

Lizares, who has a background as an environmental scientist, told Rappler that the decision to shift to sustainable credit cards reflects the bank’s effort to “integrate sustainability principles into their operations.”

“One of our most material footprint is the credit cards, so it’s a small step, but it was significant because it’s really a big part of our business. When you say sustainability, it doesn’t just mean that we’re avoiding a certain kind of pollution,” Lizares told Rappler. “We want to change the ‘business as usual.’ Hopefully, this was a signal to shift into that new kind of normal.”

Security Bank is targeting to issue at least 8,000 new Wave Mastercards in 2024, which could increase in the following years, according to Security Bank’s unsecured lending head Christian Quiros. This is only a fraction of the bank’s total cards in force of nearly 507,000, but Security Bank could slowly transition more of its customers to its sustainable cards as they renew their cards after five years.

“We did some pencil pushing in terms of profitability. Of course, it’s more expensive than the usual plastic, but what’s important is we’re able to help the environment,” Quiros said. “Our direction is to continue it. Most probably, our next card that we launch will be on recycled [plastic] again.”

How about other banks?

Before Security Bank launched its new card, other banks had also began going green with their retail operations.

Earlier in 2021, Zalora and RCBC Bankard teamed up to issue a co-branded credit card made from “84% bio-sourced polylactic acid from non-edible corn,” which they claimed made it the first “eco-friendly credit card in the Philippines.” HSBC also touted that its Premier Visa Debit Card is now made of 85% recycled PVC.

But beyond Security Bank and others with a relatively small footprint in local retail banking, most major players have yet to cut down on the plastics used for their cards.

Although both the Bangko Sentral ng Pilipinas (BSP) and Credit Card Association of the Philippines (CCAP) have urged banks to start making their cards more sustainable, there are no hard rules or regulations enforced on the industry. In fact, when Rappler asked whether they had any list of credit card issuers using recycled plastic materials, both the BSP and CCAP said they had none.

Still, in recent years, banks have begun to think more sustainably when evaluating their loan books. For instance, RCBC has pledged to cut all its loans to coal plants by 2031 while Security Bank has also promised to exit from direct financing of coal plants by 2033. As banks begin to shy away from funding dirty fossil fuel projects, the hope is that they will now dole out loans to businesses blooming in the renewable energy industry.

“It’s a first step,” Lizares told Rappler. “We want to help these clients to transition to the low carbon economy.” – Rappler.com

Citicore Renewable Energy Corporation (CREC), headed by construction tycoon Edgar Saavedra, is set to be the first company to go public in 2024. The solar power firm’s offer period is tentatively scheduled from March 11 to 15, with the listing date on March 22, according to the Philippine Stock Exchange (PSE).

The company could sell up to 2.90 billion primary shares, with an overallotment option of 435 million secondary shares. Although the final offer price will be set on March 6, shares could be sold for up to P3.88 each.

In December 2023, CREC said that it would use P9.15 billion of its expected P10.75 billion net proceeds for the capital expenditure of its solar farms in 2024 and 2025. The rest will go to the development of its battery energy storage systems.

“I welcome the decision of CREC to tap the equities market to raise capital since [renewable energy] projects are very much needed these days given that we are racing against time to address climate issues,” PSE president and chief executive offer Ramon Monzon said.

More IPOs in 2024?

The listing of CREC could signal renewed vigor in a sleepy PSE, which saw just three companies going public in 2023.

The local bourse initially targeted having 14 IPOs in 2023, but that never materialized after challenging market conditions and elevated interest rates spoiled investor appetite.

But things could change in 2024.

In a report, First Metro Investment Corporation (FMIC) noted that Philippine equity investors “launched 2024 with more optimism, sending the PSEi higher by 3.6% to 6,680.45 by mid-January.” With better macroeconomic conditions, softer inflation, and policy rate cuts on the horizon, FMIC said that the PSE index could hit as high as 7,500 in 2024.

Does a brighter market outlook mean more IPOs are on the way? FMIC’s research head Cristina Ulang said that it’s complicated.

“Hard to predict,” Ulang told Rappler on Friday, February 2. “IPOs are hugely dependent on market conditions. Big issuers will move only when value turnover improves, which is still low now.”

Still, the PSE is dreaming big as it expects to launch six IPOs in 2024 – double what it had in 2023 – which could collectively raise about P40 billion in capital.

Rise of renewables

There’s also another trend to look out for: the growth of renewable energy.

Just look at the sector in the PSE. Two of the three companies that went public in 2023 were focused on renewable energy – Alternergy and Repower Energy Development Corporation. Alternergy kicked off the IPO season in 2023, and now Citicore Renewable is set to do the same in 2024.

Overall, the Philippines has already become the fourth most attractive emerging market for renewable energy investment, according to BloombergNEF’s 2023 Climatescope report. Investment in clean energy rose more than 40% between 2021 and 2022, hitting $1.2946 billion.

So what does the Philippines renewable energy transition have going for it?

“The market stands out as one of the few that have implemented auctions, feed-in tariffs, net-metering schemes, tax incentives, and a strong target for renewable energy,” BloombergNEF said in its report.

Meanwhile, FMIC’s Ulang told Rappler that three factors are also among the key drivers of the green energy auction count in the Philippines:

• Entry of foreign players
• Partnerships given full liberalization of the industry and funding
• Investment opportunities under the energy transition mechanism framework pioneered by Ayala Corporation Energy

The government has made strides in these areas. For instance, it has lifted ownership restrictions around clean energy, welcoming 100% foreign-owned renewable energy projects. Newly appointed Finance Secretary Ralph Recto also eyes setting up carbon taxes that could accelerate the shift to green energy.

All these efforts, a 2024 report by FMIC said, have gone towards the government’s goal of “attracting 3 gigawatts of new renewable energy investment from the private sector, a level that is more than the total clean energy installed over the past seven years.”

And if you ask Filipinos, the overwhelming majority – 85% – agree that it is “truly important” to increase the use of renewable energy sources, a sentiment that cuts across social classes.

“This is a sentiment in terms of favoring renewable energy sources, a sentiment that is shared by many Filipinos,” Pulse Asia president Ronald Holmes said last November 13, 2023.

The government put up the framework, and the people support the cause. Now, the ball is in the court of big businesses to go green. – Rappler.com

“My goal has always been, from day one, in Coins is basically, we’re going to take what we build here, and we’re going to want to bring that back to not just Filipino users here in the Philippines, but potentially Filipino users outside of the Philippines,” said Wei Zhou, chief executive officer of Coins.ph and former chief finance officer of rival cryptocurrency exchange Binance.

“With some of our innovations that we’re building here, we want to take Coins.ph global, and be one of the first Filipino companies that have a real global footprint – servicing, not just Filipinos, but other people across the world,” he added.

Currently, Coins.ph has already obtained licenses to operate in Europe, Latin America, Australia, and Africa. Coins.ph country manager Jen Bilango told Rappler that the company will be operating in three out of five continents by the end of the first half of 2024 and in all five before the end of the year.

This expansion means that the app will be accessible and downloadable in countries outside of the Philippines. Aside from local communities in other countries using the app for retail trade, Coins.ph is eyeing another big target market – overseas Filipinos sending remittances.

“With remittances being a vital contributor to the economy, we’ve made strategic partnerships that can provide better solutions for sending and receiving money abroad,” Bilango said during a roundtable on Thursday, January 25.

For instance, an overseas Filipino in another country may convert their earnings into a stablecoin – a non-volatile cryptocurrency whose value is usually pegged 1:1 to the US dollar – which can then be sent to a crypto wallet in the Philippines.

Because crypto transactions happen quickly, cheaply, and digitally, crypto could be key for Filipinos to avoid longer wait times and high fees in traditional financial institutions like banks and “pera padala” centers.

Until Coins.ph is officially launched in their country of work, overseas Filipinos looking to use it for remittances should download and install the app first in the Philippines, as the app will not be downloadable in other areas. However, once installed, Filipinos can use the app for transactions even outside the Philippines.

The company is also eyeing other countries to expand to, such as the Middle East, which has millions of overseas Filipino workers that remit back billions of pesos every year.

However, to tap big overseas Filipino markets in the United States and other nearby Asian countries, the Philippine-based cryptocurrency exchange may turn to partnerships rather than holding a direct license.

“Getting licenses in the US costs millions of dollars. The same is true of Japan, Korea, Hong Kong,” said the company’s CEO. “In those regions, we hope to be able to build partnerships. We hope to be able to leverage off of their licenses and their partnerships in those regions to provide our services.”

No Binance? Opportunities await

Binance, the largest crypto trading platform in the world, has been blocked in the Philippines by the Securities and Exchange Commission (SEC), which points out that the company is not authorized to sell or offer securities here. The order also came after Binance’s CEO pleaded guilty to breaking anti-money laundering laws in the US.

Filipinos using Binance still have some time to close their positions and bring out their investments. But if you ask Coins.ph’s Zhou, the shutdown of his former company’s operations in the Philippines presents opportunities.

“We will have more opportunities. We will be able to onboard users onto our platform,” he said. “But I think it also creates challenges…for the existing users that may have been trading on the offshore exchanges.”

The home-grown cryptocurrency exchange plans to pull in those Binance users with zero trade fees to make the transition “seamless.” Coins.ph is also attempting to ramp up their product offering to match the range of sophisticated financial products that offshore – but unregulated – crypto exchanges like Binance have.

Zhou said that they want to achieve as much product parity with offshore exchanges by “maybe 2025,” pointing out that as a regulated exchange, Coins.ph has to obtain approval for each type of product.

Coins.ph is regulated by the Bangko Sentral ng Pilipinas (BPS) and the SEC. It holds licenses as an electronic money issuer and as a virtual asset service provider, which is the license that the BSP requires for crypto-based companies. – Rappler.com

Recto took his oath on Monday, January 22, in a ceremony administered by Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr.

The finance secretary, whose appointment to the Cabinet was announced on January 11, is the latest and final addition to the board. Benjamin Diokno, a former BSP governor and the finance secretary before Recto, also joined the MB days earlier on Tuesday, January 16.

From left to right in the image below, the Monetary Board now includes:

1. Romeo Bernardo, sitting as a private sector representative
2. Anita Aquino, sitting as a private sector representative
3. Former finance secretary and BSP governor Benjamin Diokno, sitting as a private sector representative
4. BSP Governor Eli Remolona Jr., sitting as chairperson
5. Finance Secretary Ralph Recto, sitting as the government sector representative
6. Bruce Tolentino, sitting as a private sector representative
7. Former treasurer of the Philippines Rosalia de Leon, sitting as a private sector representative

Before Monday’s official announcement, BSP officials were hesitant to confirm that Recto would sit as the government sector representative on the MB. Although a finance secretary often takes the seat of the government representative on the board, officials pointed out this wasn’t a hard rule. For instance, BSP officials said, secretaries from the Department of Trade and Industry and the National Economic and Development Authority have served as the board’s government representative in the past.

“For now, there’s an appointed secretary of finance but me personally, I’m not sure if the secretary of finance will sit as a member of the Monetary Board because the provision says representative from the government,” BSP Deputy Governor of the Corporate Services Sector Eduardo Bobier said during a media information session on Friday, January 19.

Recto’s own appointment as finance secretary was preceded by months of rumors that Diokno was on his way out of the Cabinet. (READ: LIST: Signs that Recto was replacing Diokno as finance chief)

Now, his current seat at the MB comes with the responsibility of helping steer the country’s monetary policy and supervising its financial institutions. This includes raising, lowering, or maintaining its key policy rate in a bid to limit inflation.

The position also comes with a fat purse. MB members are consistently among the highest-paid officials in the government every year. In 2022, the list of top paid officials was dominated by MB members, such as then-BSP governor Felipe Medalla (P34.172 million) and Diokno (P28.781 million), as well as Anita Aquino (P26.362 million), Bruce Tolentino (P25.679 million), Peter Favila (P24.389 million), and Antonio Abacan Jr. (P24.026 million). – Rappler.com