BSP Tightens Rules on E-Money

The Bangko Sentral ng Pilipinas (BSP) has issued landmark guidelines formalizing the use of  electronic money in online transactions, reportedly the first of its kind of electronic innovation in the world.  The new rules sets a maximum monthly load limit of P100,000 (or $2,068) on any e-money instrument such as cash cards, e-wallets and similar products.  The Anti-money Laundering Law will also cover e-money transactions.

Source: Philstar

House Gives Go Signal for Social Security Condonation Bill

Congress has passed a bill that will give a one-time relief to employers on penalties for late or non-remittance of Social Security Services (SSS) premiums of their employees.

Authored by Quezon Rep. Lorenzo Tañada III, with Deputy speakers Amelita Villarosa and Raul del Mar, the Social Security Condonation Law of 2009 was unanimously approved before congress went on lenten break last week.

Tañada called the measure a 'Triple Stimulus Package' because it provides a strong incentive for companies in arrears on their principal payments for their employees' contribution to immediately settle what is due and overdue, gives troubled companies 'breathing space,' and will allow workers to obtain loans and other SSS benefits that would otherwise be denied due to to companie's non-remittance of contributions.

The bill, as promoted and defended by Camarines Sur Rep. Felix R. Alfelor Jr., is expected to encourage employers to be more prompt in paying their SSS obligations. He further said that  thousands of employers that are currently behind in their obligations are expected to take advantage of the opportunity to be freed from penalties.

This measure will help pump-prime the economy because part of the collection will go to the National Treasury.  Employers who will be  paying their arrears in cash or installment will be qualified upon execution of the proposed act.

PLDT Retirement Buys Meralco Shares

PLDT Retirement Fund buys board seats in meralco

Philippine Long Distance Telephone Company, PLDT, bought more than a 10% of the outstanding stock shares of MERALCO, Manila Electric Corporation, enough to bargain for a board seat in the country's biggest power distributor.

The Lopez-led utility firm, in an interview by the Philippine Stock Exchange, PSE, yesterday announced that the PLDT Beneficiary Trust Fund, together with a subsidiary holding firm abroad, bought about 11.3 M shares, which now makes their stake worth P 10.64 B based on March 9 closing prices.

PLDT has no immediate plans of buying more Meralco shares in the coming months, but plans to install its own choice of director to its board this May 26.

This acquisition sent prices skyrocketing to a record close of P 126 last friday. Yesterday's announcement ended weeks of speculation about further confrontation between Pangilinan-led PLDT and Cojuanco-led San Miguel Corporation, SMC, which owns 27% of the power distribution firm.

With the identity of the buyer of MERALCO shares now in the open, the next step is for companies to garner enough proxy votes, if it is indeed true that SMC wants to gain majority control over MERALCO.  But the market has yet to hear reports that SMC is gearing up for a proxy war.

MERALCO stock price dived down to 94 pesos yesterdat after surging more than 30% in the last two trading sessions.  Market talk pointed to a battle for control over PLDT between the Lopezes and Cojuanco, which is currently diversifying out of its core food and beverage business.

BSP Rumored to Cut Reserve Requirements

The Bangko Sentral ng Pilipinas (BSP) said it might be is open to the possibility of lowering down the reserve requirement of banks to increase local liquidity and boost consumer spending, and also to help bring back consumer confidence.  Current reserve requirements for banks remain at 19% of total deposit liabilities and initial cuts by the BSP from 21% last November 2008. They say that this 2% cut in rates helped raise P60 B worth of liquity in loanable funds that banks could infuse into the economic system.

Aside from the rate cut made last November, the BSP has also reduced its overnight borrow rate by 125 basis points last December.  Currently, the borrowing and lending rates stand at 4.5% and 6.75%.

SMPH and AC advance on China Outlook

SM Prime Holdings(SMPH) and Ayala Corp. (AC) stocks both went rising yesterday as news of China’s bright outlook for the rest of the year broke out.

SMPH, the largest shopping mall operator in the Philippines,  made the most of the forecasts starting a little over two months ago, further fueled by their own forecasts that their planned expansion into China will bring in more earnings for the group.  SMPH rose 4% in yesterday’s gain since December 15, with it’s stock being the biggest gainer with a gain of 2.1%.

Meanwhile, AC got the biggest gain on yesterday’s trading with an increase of 5.4% in price, closing at P196.  This, was their biggest gain since January this year.  Speculations attribute this gain to the uptrend market in the US where analysts say “the stimulus package’s effects will be felt in the long haul, but short-term investors welcome the news with open arms.