BUSINESS NEWS
12
Cheaper air fares loom
Philippine Airlines and Cebu Pa-
cific Inc. are set to lower their ticket
prices this summer following the drop
in fuel surcharge.
The Civil Aeronautics Board
(CAB) said in an advisory on Febru-
ary 15 fuel surcharge for domestic
and international flights will go down
from level 3 to level 2 for the period of
March 1 to April 30, 2019.
As required by the CAB, PAL
and CEB last week had filed separate
applications to impose lower fuel sur-
charge.
CAB said from December 2018
to January 2019, the price of jet fuel
average to $73.50 per barrel with the
US exchange rate of P52.60 to the
dollar for the same period. This is
equivalent to P24.32 per liter which
corresponds to level 2 of the passen-
ger fuel surcharge matrix.
Based on CAB’s fuel surcharge
matrix, level 2 fuel surcharge per pas-
senger per way for flights in the Phil-
ippines ranges from P45 to P171 for
domestic and P218 to P2,076 for in-
ternational.
Level 3 fuel surcharge being
imposed until this week by airlines
ranges from P74 to P291 for domes-
tic flights per passenger per way and
for international flights, from P381 to
P3,632.
The fuel surcharge matrix is pub-
PNT Foreign Exchange
$1.00 Cdn = P 39.41 Php
$1.00 US = P 51.79
€1.00 EUR = P 58.92
lished by the CAB every 12 months
and is revised as necessary.
Surcharges are suspended
once the average price of jet fuel falls
below P21 per liter.
The applicable fuel surcharge is
determined based on the two-month
average of Mean of Platts prices in jet
fuel in its peso per liter equivalent,
and is fixed for two months.
The applicable fuel surcharge is
evaluated every two months.
The jet fuel cost is the largest
expense by an airline operator.
Volatility in fuel costs culminat-
ing in recent price spikes prompted
airlines to adopt two actions: in-
creased revenues by applying fuel
surcharges and ironed out volatil-
ity by adopting increasingly complex
hedging mechanisms.
Fuel surcharge helps airlines
offset part of their operating cost in
which fuel bills contribute the most.
(Malaya)
SSS eyes overseas
investments this year
The Social Security System
(SSS) is eyeing to actively invest over-
seas this year, with the newly-signed
Social Security Act of 2018 enabling
the pension fund to double its allowed
asset allocations abroad.
Emmanuel Dooc, SSS presi-
dent and chief executive officer, said
the pension fund could previously al-
locate only 7.5 percent of its invest-
ible funds overseas. The new law has
increased this to 15 percent.
However, the pension fund does
not have any international investments
even though it is allowed to invest a
certain percentage abroad.
“We have not been doing that
because of lack of expertise, so we
will be engaging, hopefully, fund man-
agers and advisers. That is one thing
that we have to do in order to diversify
and also to get a higher yield,” Dooc
said.
The SSS had previously men-
PHILIPPINE ASIAN NEWS TODAY February 16 - 28, 2019
tioned it was looking into the possi-
bility of investing overseas to diversify
its portfolio and to take advantage of
possible good returns abroad, but its
plans have yet to push through.
The charter amendment redis-
tributed investment ceilings which al-
lowed the pension fund to set aside a
bigger percentage of its investments
in specific areas that are currently be-
ing limited.
Dooc said the new law gives the
commission more flexibility in pursu-
ing certain investment processes.
“Yes, (we have plans to invest
abroad) because the asset alloca-
tion for foreign investments has been
doubled. So that will translate to P75
billion. Under the old law... the maxi-
mum amount is around P37.5 bil-
lion,” Dooc said.
“If we can get a better yield, why
not? And (if it will provide) stability
and diversification. I will constitute a
D1.00 BHD= P 137.39
R1.00 SAR = P 13.81
¥1.00 JPY= P 0.47
study group to do that (to check if it
is a good time to invest abroad), and
we’ll be engaging consultants and
experts. There are many consultants
who are offering their services. So
what we will do is to accredit or bid it
out,” he added.
Dooc said the SSS also plans to
hold on to its properties and develop
them to provide the pension fund with
a steady stream of income over the
years, to match its long-term obliga-
tions.
“What we are doing is, we want
to bid them out either as a joint ven-
ture or as a long-term lease so we can
benefit from utilizing these proper-
ties,” he said.
Dooc said he is hopeful the
pension fund’s return-of-investment
will hit seven percent in 2020, and by
2022, nine percent.
In June last year, the pen-
sion fund invested P1 billion each
in PhilEquity Fund Inc. as managed
by Philequity Management Inc.; Sun
Life of Canada Prosperity Balanced
Fund Inc. as managed by Sunlife As-
set Management Company Inc.; and
Philippine Stock Index Fund Corp. as
managed by BPI Investment Manage-
ment Inc.
It was the first time in 61 years
that the pension fund invested in mu-
tual funds.
Dooc said SSS has also chosen
nine local fund managers who will
each manage a P1-billion fund. (Ma-
laya)
PLDT moves to improve gov’t hotline after Duterte complaint
PLDT Inc said Tuesday it was
taking steps to “improve” the govern-
ment’s 8888 public complaints hot-
line after President Rodrigo Duterte
complained that it was inaccessible at
times.
Speaking in Cebuano during
a campaign sortie in Cebu City last
Sunday, Duterte said could shut PLDT
unless the telco took action.
“Dili kaya sa present setup. Sige
busy. Ingnang PLDT. Og dili, sila may
akong sirhan. [laughter] Oo. Tinuod
na. Di lang ko gustong manghambog.
Naay utang sa gobyerno eight billion.
Sukad pa na niadto. Way presidente
nakapaningil... “ Duterte said.
(The present setup can’t ac-
commodate all the calls. It’s always
busy. Tell PLDT. If not, I’ll shut down
their business. Oo, that’s true. I don’t
want to brag, but they owe govern-
ment eight billion. No President has
ever asked for payment)
Responding to the President’s
remarks, PLDT spokesman Ramon
Isberto said: “We are currently tak-
WWW.PHILIPPINEASIANNEWSTODAY.COM
ing steps to address the concern ex-
pressed by the President to improve
the public’s access to the Citizen’s
Complaint Center 8888 hotline num-
ber.”
Shares of PLDT were down 1.35
percent late on Tuesday compared to
a 0.4-percent advance in the main in-
dex. (abs-cbn news)