URC EXITS CHINESE MARKET

Listed Universal Robina Corporation (URC) of the Gokongweis has ceased manufacturing and sales operation in China, and is aiming to fully exit China next year.

In a disclosure to the Philippine Stock Exchange on August 2, URC said this is a strategic move that will allow the company to reallocate its resources to faster-growing markets in Asia.

“This will allow URC to redeploy resources to higher-growth markets across the region,” URC said.

The Filipino company is also present in Hong Kong, Indonesia, Malaysia, Myanmar, Singapore, Thailand, and Vietnam.

Meanwhile, URC reported sales of P80.7 billion for the January to June period this year, an increase of 3% from the same period last year, with all business units showing higher sales volumes.

Net income from continuing operations rose 8% to P7.6 billion, and  core net income increased by 5% to P6.7 billion.

BSP RECORDS NET OUTFLOWS IN JUNE FOREIGN PORTFOLIO INVESTMENTS 

The Bangko Sentral ng Pilipinas (BSP) recorded in June net outflows of $27 million in foreign portfolio investments through its authorized banks.

The BSP on August 1 that the net outflows resulted from the $1.1 billion gross outflows and the gross inflows of $1.0 billion for June. It added that the net outflow in June was also a reversal from the $43 million inflows recorded in May this year and the less than $1 million net inflows posted in June 2023. .

Foreign portfolio investments are referred to as hot money due because these can come in and out of the economy fast.

During the month, 52.8% or $551 million of registered investments were in peso government securities, while the remaining 47.2% ($492 million) were in Philippine Stock Exchange (PSE)-listed securities.

COUNTRY STARTING TO ATTACT HEALTHCARE INVESTMENTS

The country is gaining the attention of global pharmaceutical companies and related industries to set up their facilities here,  the Philippine Economic Zone Authority (PEZA) said, citing improvement on the ease of doing business and construction of the first ecozone exclusive for healthcare products.

On July 31, PEZA signed a registration agreement for the Victoria Industrial Park, which is the country’s first pharmaceutical ecozone, and a memorandum of agreement with the Food and Drug Administration (FDA).

“This twin event could be regarded as a pivotal moment to create a pharmaceutical economic zone, making basic medicines more affordable and accessible for all Filipinos,” PEZA Director General Tereso Panga said at the signing ceremony in Pasay City.

“These agreements aligned with President Ferdinand Marcos Jr.’s directive to reduce cost of medicines by fostering an environment where pharmaceutical companies can manufacture and supply the domestic market efficiently,” he added.

Panga also met nine Indian pharmaceutical companies, five of which expressed their interest to put up facilities in the country.

PRODUCER PRICE INDEX DOWN IN JUNE

The producer price index (PPI) for manufacturing continued to go down in June this year but at a slower pace than the downtrend logged in May, according to the Philippine Statistics Authority (PSA) on July 30.

PSA data released on July 30 showed the PPI in June went down by 0.1% from the -0.8% logged in May.

“The slower annual decline of PPI in June 2024 compared with its annual drop in May 2024 was primarily due to the acceleration in the annual rate of the PPI for manufacture of computer, electronic and optical products industry division at 3.6% in June 2024 from 1.6% in May 2024,” the PSA said. 

It said that the manufacture of computer, electronic and optical products contributed 49.1% to the slower decline in the annual rate of PPI for manufacturing in June.

Other contributors to the slower annual decline of PPI last month were the acceleration in the annual rate of manufacture of transport equipment at 2.8% from the 1.6% increase in May, and the slower decline in the manufacture of basic metals at 0.02% from -0.7% a month earlier.

MERALCO SEES NEED FOR MORE NUCLEAR ENERGY TECHNOLOGIES

Manila Electric Company (Meralco) sees the urgent need to diversify technology beyond micro modular reactors (MMRs) as the country races to meet the target of generating 1,200 megawatts (MW) of nuclear energy by 2032.

Meralco executive vice president and chief operations officer Ronnie Aperocho said in a press briefing in Pasig City on July 29 that a broader approach encompassing other nuclear technologies like small modular reactors (SMR) and conventional reactors would be crucial to meet the government’s energy target by 2032.

“If the government has this plan to have 1,200 MW of nuclear (power) by 2032, micro modular (reactor) is not enough. We need to look into SMR and maybe conventional nuclear,” Aperocho said.

Under the Department of Energy’s Clean Energy Scenario (CES) 1, the country is projected to have installed 1,200 MW nuclear capacity by 2032, and additional 1,200 MW capacity by 2035 and another 2,400 MW by 2050.

MCDONALD’S GLOBAL SALES DOWN IN SECOND QUARTER

The global sales of fastfood giant McDonald’s declined in the second quarter of this year for the first time in almost four years, according to its financial results released on June 29.

“Global comparable sales decreased 1.0%, reflecting negative comparable sales across all segments,” it said, marking the first decline since the fourth quarter of 2020.

“The continued impact of the war in the Middle East and negative comparable sales in China more than offset positive comparable sales in Latin America and Japan,” it added.

Sales in the US declined 0.7% and the internationally operated markets segment fell 1.1%. Meanwhile, the international developmental licensed markets segment decreased 1.3%, it added.

Net income was recorded at $2.02 billion in the April-June period, declining 12.5% from the $2.31 billion in the same period of last year.

“The continued impact of the war in the Middle East and negative comparable sales in China more than offset positive comparable sales in Latin America and Japan,” the statement said.

YOKOHAMA PHILIPPINE STARTS CONSTRUCTION OF NEW PLANT

Yokohama Tire Philippines, Inc. (YTPI) has started the construction of its P3.5-billion manufacturing plant at Clark Freeport Zone in Pampanga that will increase the company’s production capacity by 5 percent, or an additional 500,000 tires annually.

YTPI, which is the country’s lone tire manufacturer, is currently producing 10 million tires a year, and 94% of its output will be for export.

The new plant will also create additional 500 jobs for Filipinos.

The Department of Trade and Industry (DTI) said with the YTPI’s expansion in the country, the company can aim to increase its company’s local rubber sourcing from the current 51% to 100%. The DTI said this would mean an annual domestic sourcing of 30,000 metric tons of raw rubber valued around P1 billion, which will be an income boost for Filipino farmers.

ECONOMIST SEES 25-BASIS POINTS REDUCTION IN INTEREST RATES

An economist said on July 29 that a 25 basis points (bps) reduction in the key policy rate is still possible this month despite the projected slight uptick in consumer prices caused by Super Typhoon Carina and the heavy rainfalls.

“Realistically, there may be some temporary pick up in prices in hard hit areas until logistics normalize, also in view on some damage on agriculture that could lead to some temporary spike in vegetable [and] other produce prices that could lead to some transitory pick up in food prices,” Rizal Commercial Banking Corporation chief economist Michael Ricafort said in a statement.

The Department of Agriculture earlier said that the damage caused by Carina to the agriculture sector was estimated at P696.87 million as of July 28.

However, Ricafort said the prize freeze would temper price increases in areas declared under state of calamity. Headline inflation already eased to 3.7% in June, from 3.9% in May.

(Photo from PNA shows state workers access the Government Service Insurance System kiosk at the Philippine Information Agency building in Visayas Avenue, Diliman, Quezon City on July 26, 2024.)