Trust Banking Group
United Coconut Planters Bank
Weekly Market Commentary
03 March 2015
I
nfrastructure spending has always been a favored
option for the govt. to advance national development.
There are two main reasons to support this view. First,
the country badly needs to upgrade its infrastructure.
We need more and better roads, rails, seaports and
airports, among others. In addition we also need more
dams as a source of power, irrigation and potable
water. Ports are especially vital since we are an
archipelago and not a contiguous land mass.
capex (capital expenditure) intensive. Thus given the
govt.’s limited resources, it decided to invite the private
sector as a major partner in key infrastructure projects.
The participation of the private sector in public works is
not a new thing but the current administration is
pursuing this initiative in a more systematic and in a
much larger scale.
Second, infrastructure spending has a high multiplier
effect on the economy and is a major boost to growth.
An infrastructure project does not only create jobs but
generates demand for construction-related materials
and services. And when completed, an infrastructure
project enhances mobility, commerce, trade, tourism
and generally lifts productivity.
Since launching the Public Private Partnership (PPP)
program some four years ago, the govt. has awarded
nine projects worth PHP135 billion. Two other projects
worth close to PHP90 billion, approved under previous
administrations, are being implemented under a
scheme similar to the current PPP projects. All told,
eleven projects worth PHP225 billion have been
awarded and given the green light to proceed (Table
2).
What has been done so far?
Thus, not only do we need more and better
infrastructure but its implementation will help expand
the economy. This mindset has motivated and inspired
the govt. to focus more on infrastructure. If the plans
of the govt. will push through, infrastructure spending
will reach 5% of GDP by 2016 from 3% last year and
only 2.5% when the Aquino administration took over
(Table 1).
Table 2
Awarded PPP Projects
1
2
3
4
5
6
7
8
9
Table 1
Infra Spending as % of NG Budget & GDP
Infra
Year
(bn)
09
10
11
12
13
14f
15f
16f
Growth
252
228
233
270
295
399
587
824
-9.2%
2.1%
15.7%
9.2%
35.5%
47.0%
40.4%
NG
Budget
Infra/
Budget
Nominal
GDP
Infra/
GDP
(bn)
(%)
(bn)
(%)
17.6%
15.5%
14.2%
14.8%
14.7%
17.6%
22.5%
27.5%
8,026
9,003
9,706
10,565
11,548
12,623
13,872
15,412
1,426
1,473
1,645
1,829
2,006
2,265
2,604
2,995
Proponent
PHP mn
Winning Bidder
(As of 18 Feb. 2015)
Daang Hari - SLEX Link Road
School Infra Proj. I
NAIA Expressway (Phase 2)
School Infra Proj. II
Phil. Orthopedic Center Modernization
Automatic Fare Collection System
Mactan Terminal 2
LRT 1 Cavite Extension & O&M
Int. Transp. System (SW Terminal)
Sub-total
DPWH
DepEd
DPWH
DepEd
DOH
DOTC
DOTC
DOTC
DOTC
2,010
16,420
15,520
8,800
5,690
1,720
17,520
64,900
2,500
135,080
Ayala Corp.
Megawide, BF Corp.
26,656
63,000
89,656
224,736
SMC
SMC
SMC
Megawide, BSP/Lao
Megawide
AC & MPI
Megawide & GMR
AC & MPI
Megawide
Others
1 Skyway Stage 3 (SMC Connector Rd.)
2 MRT Line 7
Sub-total
Total
3.1%
2.5%
2.4%
2.6%
2.6%
3.2%
4.2%
5.3%
DPWH
DOTC
Aside from those that are being implemented, a
number of projects are under various stages of being
approved. It is safe to assume that the first fifteen
projects listed in Table 3 below will be awarded this
year.
Taken together, all PPP projects in the pipeline (as
listed in the website of the PPP Center), have an initial
aggregate amount of PHP890 billion. The final cost is
yet to be determined but conservatively, it could reach
up to PHP1.3 trillion.
Notes:
1/ 2015 - 2016 nominal GDP growth at 11.5% & 12.1%
2/ 2015 & 2016 NG budget to grow at 15%
3/ Infra spending @ 5% of GDP by 2016 (govt. target)
Sources: DBM, TBG estimates
But however ambitious the govt.’s plans are on
infrastructure, it is still not enough. There are still lots
of projects that need to be implemented. The main
limitation was, and still is, resources as infrastructure is
Note though that PPP projects in the pipeline are not
only limited to those listed by the PPP Center. Various
1
govt. agencies are currently studying other projects
which could eventually be added to the existing list.
The only thing left (aside from prompt project
implementation) is perhaps to institutionalize the PPP
initiative so that it will form part of the country’s
development agenda.
The emphasis on infrastructure has been a mantra of
all administrations. But lack of resources and
corruption have resulted to limited or sub-standard
facilities. Fortunately, the current administration may
be in a position to address our infrastructure deficit.
The govt. now has the wherewithal to realistically focus
on infrastructure development. It now has enough
funds to boost infrastructure spending. In addition, it is
also tapping the private sector as a major development
partner.
E
Banks. Local banks have reportedly passed the
BSP’s real estate stress test, which shows the banking
industry has enough capital to absorb severe shocks in
the property sector and does not reflect any imminent
vulnerability in banks’ real estate exposure.
Bank assets. Local banks continued to increase their
assets to a new peak in 2014, indicating the industry’s
strength and sound condition. The asset accounts of
the banking system climbed 12% to PHP11.16 trillion
in 2014 from PHP9.97 trillion in 2013, driven by a 19%
rise in banks’ total loan portfolio to PHP5.83 trillion last
year from PHP4.9 trillion in 2013.
The participation of the private sector cannot be
underestimated. First, private sector participation
increases the impact and success rate of the govt.’s
infrastructure initiative. Second, the govt. will now
have more funds to spend for other economic
programs, social services and national defense since
the private sector is now assuming a number of
infrastructure projects. Third, there is greater
diversification of financial and other risks away from
the govt. The bigger the participation of the private
sector, the greater the diversification of risks. Finally,
the private sector brings with it its inherent efficiencies
given its “for profit’ orientation. These efficiencies are
already reflected in the bid amounts and have resulted
to revenues and savings for the govt.
Corporation Code. The Securities and Exchange
Commission (SEC) has expressed support for
proposals in the Senate to raise the monetary penalties
for violators of the Corporation Code, which governs
the creation, activities and dissolution of corporations.
Under the current law, violators are fined PHP1,000 to
PHP10,000, or imprisoned 30 days to five years, or
both. Senate Bills No. 2194 and 2465, proposed by
Senators Sonny Angara and Bam Aquino, raise the
penalties to PHP200,000 to PHP2 million, or
imprisonment of two to 10 years, or both. If the
violations are deemed wilful, the proposed penalties
double.
Table 3
PPP Projects in the Pipeline
Proponent
Cost (mn)
Status
(as of 18 Feb. 2015)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Int. Transp. System (South Terminal)
Bulacan Bulk Water Supply
LRT 2 O&M
Laguna Lakeshore/Calamba-LB
New Centennial Water Source (Kaliwa Dam)
New Bohol Airport Dev. O&M
Laguindingan Airport O&M
Puerto Princesa Airport (O&M)
Davao Airport (O&M)
Bacolod Airport (O&M)
Iloilo Airport (O&M)
Davao Sasa Port
Regional Prison Facilities
CALA Expressway (Cavite & Laguna)
NLEX-SLEX Connector Road
North-South Commuter Railway (South Line)
Motor Vehicle Inspection System
Mass Transit System Loop
San Fernando Airport Project
LRT 1 Ext. to Dasmarinas
Batangas-Manila Nat Gas Pipeline
Manila Bay-Pasig-Laguna Lake Ferry
C-5 Transport Dev. Project
Clark Int'l. Airport Project (O&M)
Int. Transp. System (North Terminal)
NAIA Dev. Project
Tri-Medical Complex
Sta. Mesa-Ortigas-Angono Rail Line
Joint Sludge Treatment Plant
Plaridel Bypass Toll Road
Road Transp. Info. Tech. (Phase 2)
Total
DOTC
MWSS
DOTC
DPWH
MWSS
DOTC
DOTC
DOTC
DOTC
DOTC
DOTC
DOTC
DOJ
DPWH
DPWH
DOTC
DOTC
DOTC
BCDA
DOTC
PNOC
DOTC
DOTC
DOTC
DOTC
DOTC
DOH
DOTC
4,500
24,400
0
122,800
18,720
2,340
15,920
5,230
40,570
20,260
30,400
17,000
50,180
35,420
18,000
177,220
19,300
134,500
6,160
DPWH
DOTC
151,787
conomic News:
Pre-qual & bidding
Pre-qual & bidding
Pre-qual & bidding
Pre-qual & bidding
Pre-qual & bidding
Pre-qual & bidding
Pre-qual & bidding
Pre-qual & bidding
Pre-qual & bidding
Pre-qual & bidding
Pre-qual & bidding
For roll-out
For roll-out
For roll-out
For roll-out
For roll-out
For NEDA approval
For NEDA approval
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Feasibility Study
Policy Rates. The BSP said it can leave its policy rate
unchanged at 4% for most of the year. Likewise, the
timing and magnitude of possible interest rate hike will
not be determined by the actions of the US Federal
Reserve. Currently, the BSP believes monetary policy
is appropriate given easing inflation and sustained
economic strength.
Ports. The Philippine Ports Authority (PPA) has
declared Manila port congestion has already been
resolved, ahead of the target month of March. Yard
utilization of 75%-79% is near the 80% optimal rate,
while vessel waiting time has also normalized with the
number of vessels waiting at the ports declining to five,
from a high of 18 last April 2014.
Govt. spending rose by 5.1% to PHP1.76 trillion in
November 2014. The increase was due to higher
subsidies to state-run firms, as well as increased
capital spending and maintenance costs. Govt.
spending for infrastructure rose 6.3% to PHP237.3
billion in the first 11 months of 2014 with most of it
890,207
Sources: PPP Center, DPWH as of 01 March 2015
http://ppp.gov.ph/?page_id=5663
2
Energy Development Corp. (EDC) installed a new
Toshiba steam turbine and diaphragms for Bac-Man’s
Unit 1, which is now operating at 55 MW. Unit 1 is
currently on a 30-day reliability run.
going to reconstruction and rehabilitation efforts in
communities devastated by Super Typhoon Yolanda.
Table 4
Disbursements by Expense Class, 2014 vs. 2013
in billion pesos
As of Nov.
Increase/Decrease
2014
2013
Amount
%
Current Operating Exp.
Personal Services
MOOE/1
Subsidy to GOCC/2
Allotment to LGU
Interest Payments
Tax Expenditure Fund
Total
Capital Outlays
Infrastructure/2
Equity for GOCC
Capital Transfers to LGU
Total
Net Lending
Grand Total
541.5
274.4
66.3
250.5
292.3
17.6
1,442.6
538.0
254.2
39.1
221.7
296.7
21.8
1,371.5
3.5
20.2
27.2
28.8
(4.4)
(4.2)
71.1
0.7%
7.9%
69.6%
13.0%
-1.5%
-19.3%
5.2%
237.3
1.5
67.8
306.6
13.2
1,762.4
223.3
0.7
65.9
289.9
16.0
1,677.4
14.0
0.8
1.9
16.7
(2.8)
85.0
6.3%
114.3%
2.9%
5.8%
-17.5%
5.1%
International Container Terminal Services, Inc.
(ICT) formed a joint venture with Nippon Container
Terminals Company, Ltd., Transnational Diversified
Corporation and NYK-Fil-Japan Shipping Corporation
to establish the Laguna Gateway Inland Container
Terminal, Inc. (LGICT). LGICT will primarily operate as
an extension of the seaport operations of the Manila
International Container Terminal. It is located on a 21ha. property and located near various economic export
zones.
Manila Electric Co. (MER) is open to taking a foreign
partner for its USD2 billion, 1,200mw power plant in
Atimonan, Quezon. The Atimonan plant was planned
to run on LNG but was later changed to coal. MER is
eyeing a total of around 2,700mw of power generation
projects in its portfolio.
1/ Maintenance & Other Operating Expenses
2/ Subsidy to GOCC has infra component also
In another development, MER is in talks with Osaka
Gas of Japan for a USD2 billion integrated natural gas
facility in Luzon. Osaka Gas, a leading liquefied
natural gas supplier in Japan, wants to build a natural
gas power plant in the Philippines with around 1,200 to
1,500MW with MER. The planned power project would
likely include a regasification facility or terminal for
imported LNG. The regasification facility will convert
the imported LNG to natural gas for delivery to the
power plant.
Source: DBM @ http://http://www.dbm.gov.ph/?p=11934
Power. The govt. is bidding out four geothermal
projects in Davao Occidental, Compostela Valley,
Southern Leyte and Benguet, and 17 hydroelectric
power projects scattered throughout the country.
Deadline of submission deadline is on 04 May 2015
with awarding the contracts scheduled on 04
September 2015.
PPP. The govt. has lined up 97 projects worth
PHP1.39 trillion (USD31.42 billion), of which 81 are
critical infrastructure programs and projects, with a
total cost of PHP1.24 trillion (USD28.05 billion).
Economic Planning Secretary Arsenio M. Balisacan
said that 24 projects are funded through PPPs, 54 are
financed through official development assistance and
19 are for local financing.
C
Megaworld Corp. (MEG) plans to build 20 malls over
the next five to eight years, mostly within its existing
townships. MEG would also increase the number of
township projects to 20 this year from 15 in 2014.
These malls and commercial centers will primarily
cater to the residential and business process
outsourcing communities inside the townships. The 20
new malls are expected to boost the MEG’s gross
leasable space by 600,000 to 700,00sqm. MEG
announced last year it would spend PHP230 billion to
develop various existing townships until 2019. The
figure is expected to go up with the launching of five
new townships this year.
orporate News:
The Ayala group plans to bring its chain of private high
schools beyond Metro Manila next year. Ayala
Education, a joint venture between Ayala Corp. (AC)
and UK-based Pearson, initially rolled out the first 12
private high schools in Metro Manila for School Year
2014-2015. A dozen or more schools under the brand
Affordable Private Education Center, Inc. will open
mostly in the Greater Manila Area in the School Year
2015-2016 that may triple the school chain’s student
population from the 13,000 last year.
Metro Pacific Investments Corporation’s (MPI)
53%-owned subsidiary Maynilad Water Services, Inc.
wrote the Philippine govt. with regard to the
undertaking which the latter issued in favor of
Maynilad. Maynilad’s call on the undertaking comes
after regulator Metropolitan Waterworks and Sewerage
System decided to defer the implementation of the
arbitration panel. The undertaking provides that the
govt. will indemnify the concessionaire, Maynilad, with
3
regard to any losses from delay caused by the govt. in
implementing any increase in rates beyond the date for
its implementation.
R
Table 7.
Series
ROP 15
ROP 16
ROP 16
ROP 16
ROP 17
ROP 19
ROP 19
ROP 20
ROP 21
ROP 21
ROP 24
ROP 24
ROP 24
ROP 25
ROP 26
BSP 27
ROP 30
ROP 31
ROP 32
ROP 34
ROP 36
ROP 37
eference Tables:
Table 5.
PDST-F
1 Month
PDST-F Rates
YIELD (%)
20-Feb-15 27-Feb-15
2.39
2.31
Change
(bps)
(8.00)
3 Months
2.13
1.89
(24.09)
6 Months
2.52
2.20
(32.05)
1 Year
2.63
2.43
(19.55)
2 Years
3.10
3.08
(2.73)
3 Years
3.53
3.44
(8.64)
4 Years
3.72
3.69
(3.63)
5 Years
3.75
3.63
(12.05)
7 Years
3.82
3.75
(6.41)
10 Years
4.01
3.95
(5.23)
20 Years
4.91
4.90
(0.82)
25 Years
4.47
4.58
11.36
Tenor
1 Month
14 Days
SDA Rates
YIELD (%)
20-Feb-15 27-Feb-15
2.50000%
2.50000%
2.50000%
2.50000%
Change
(bps)
0.00
0.00
Source: BSP
Table 8.
UITF
(PhP)
UPBF
U$MMF
UCMF
UBF
UHDF
UEF
UPBF
U$MMF
UCMF
UBF
UHDF
UEF
Coupon
8.875
8.000
6.250
8.750
9.375
9.875
8.375
6.500
4.000
4.950
7.500
9.500
4.200
10.625
5.500
8.600
9.500
7.750
6.375
6.375
6.250
5.000
Source: Bloomberg
Source: Bloomberg
Table 6.
Indicative ROP Prices
UITF Performance
31-Dec-14
20-Feb-15
27-Feb-15
1.9241
1.2918
1.2380
2.6632
1.0630
3.8541
1.9285
1.2931
1.2407
2.7667
1.1296
4.0818
1.9178
1.2933
1.2410
2.7371
1.1197
4.0287
Change
Wk-on-Wk Yr-to-Date
-0.55%
0.02%
0.03%
-1.07%
-0.88%
-1.30%
-0.32%
0.12%
0.25%
2.77%
5.33%
4.53%
UCPB Peso Bond Fund
UCPB USD Money Market Fund
UCPB Cash Management Fund
UCPB Balanced Fund
UCPB High Dividend Fund (Inception Date: April 8, 2014)
UCPB Equity Fund
4
Maturity
17-Mar-15
15-Jan-16
15-Mar-16
07-Oct-16
18-Jan-18
15-Jan-19
17-Jun-19
20-Jan-20
15-Jan-21
15-Jan-21
25-Sep-24
21-Oct-24
21-Jan-24
16-Mar-25
30-Mar-26
15-Jun-27
02-Feb-30
14-Jan-31
15-Jan-32
23-Oct-34
14-Jan-36
13-Jan-37
PRICE
Yrs to
Maturity
02-Mar-15
1.1
2.0
2.1
2.7
4.0
5.0
5.4
6.0
7.0
7.0
10.7
10.7
10.0
11.1
12.2
13.4
16.0
17.0
18.0
20.8
22.0
23.0
100.30
106.00
105.95
112.13
114.63
128.50
125.50
119.50
109.50
106.17
132.50
149.75
111.25
163.00
122.50
142.00
167.75
150.25
134.50
138.50
117.00
120.75
Yield to
Maturity
1.6%
1.0%
0.5%
1.1%
3.9%
2.2%
2.1%
2.3%
2.3%
3.8%
3.5%
3.4%
2.8%
3.2%
3.1%
4.2%
3.6%
3.6%
3.6%
3.6%
4.9%
3.6%
Table 9.
Market Indicators
Indicator
Peso
Stocks
3-mo. PDSTF (ch in bps)
Peso Bonds
3-mo. USD LIBOR (ch in bps)
Crude Oil (USD/bbl)
Gold (USD/troy oz)
DXY (USD Index)
ADXY (Asian Currencies)
VIX
V2X
2014 Yr. End
1
2
3
4
5
7
8
9
10
11
12
44.72
7,230.57
2.54
424.50
0.26
53.27
1,184.86
90.27
112.80
19.20
26.19
Level
20-Feb-15
44.25
7,825.39
2.13
430.94
0.26
50.81
1,201.95
94.25
111.70
14.30
24.20
27-Feb-15
44.10
7,730.57
1.89
432.36
0.26
49.76
1,213.22
95.29
111.98
13.34
17.75
Wk-on-Wk
(0.15)
(94.82)
(0.24)
1.42
(0.00)
(1.05)
11.27
1.04
0.28
(0.96)
(6.45)
Change
% Ch
YTD
-0.34%
-1.21%
(24.09)
0.33%
(0.07)
-2.07%
0.94%
1.10%
0.25%
-6.71%
-26.65%
(0.63)
500.00
(0.65)
7.86
0.01
(3.51)
28.36
5.02
(0.82)
(5.86)
(8.43)
% YTD
-1.40%
6.92%
(65.23)
1.85%
0.63
-6.59%
2.39%
5.57%
-0.73%
-30.52%
-32.21%
Sources:
1/ Phil. Dealing System
5/ Bloomberg; change in basis points
9/ DXY = USD spot index
2/ Phil Stock Exchange Index
6/ JP Morgan Asia Credit Index
10/ ADXY = Asian currencies vs. USD index
3/ Phil. Deal. & Exch. Corp.; change in basis points
7/ West Texas Intermediate
11/ CBOE volatility index
4/ HSBC Local Bond Index
8/ Bloomberg
12/ Eurozone volatility index
Annex A
Explanatory notes on our Market Indicators.
In general, market indicators are used to assess the pulse and health of our economy. It is very similar to how
doctors check our heartbeat, the color of our eyes, our cholesterol level or the sugar content of our blood to initially
assess how healthy (or unhealthy) we are.
Since we are generally concerned with investments, the appropriate measures to look at are economic and market
indicators. As investors, we want to know where these indicators are headed so we can make the appropriate
decisions. These indicators are as follows:
Peso. This is our currency and its current level and direction normally indicate the general health of the economy.
Stocks. A strong or robust stock market reflects a strong and growing economy or vice versa. Our stock market
cannot be strong if our economy is weak. And the opposite is equally true. After all, corporate earnings and
prospects reflect the overall outlook of the economy. The index we are using is the Phil. Stock Exchange Index
(PSEi).
3-month PDSTF Rate. This is the indicator we use for domestic interest rates. It used to be the 90-day Treasury
Bill rate but this instrument has lost its appeal since it is not very liquid and may not truly reflect market levels.
PDSTF rates are better indicators of where interest rates are since these are based on actual rates of highly liquid
instruments.
Peso Bonds. The HSBC Local Bond Index (Phil.) tracks the average price movements of local bonds and is a
good indicator of how expensive (or cheap) bonds are. The index should also provide an indication of where bond
yields are headed since bond prices and bond yields move in the opposite direction.
3-month USD LIBOR. This is the US dollar counterpart of the 3-month PDSTF rate. LIBOR means London
Interbank Offer Rate, the rate at which banks lend to each other and used as a benchmark for commercial lending.
USD Bonds (ROPs). This index tracks the price movements of Phil. bonds denominated in US dollars. The index
we are using is the JPMorgan Asia Credit Index (Phil.).
Since the indices we use for stocks, peso bonds and USD bonds (ROPs) are based on price movements, the
higher the level of the index, the better it is for investors.
Crude Oil. At least in our lifetime, oil will always be one of the most important economic indicators since it is a
basic feedstock of economies worldwide. The benchmark that we are using is the West Texas Intermediate (WTI)
as it is the most common and widely used crude oil index.
5
Gold. This is our proxy for uncertainty. The price of gold normally goes up during uncertain or difficult times. This
is because gold is the ultimate store of value. Paper currencies could lose their value but gold will always retain
its value whether as an ornament or as a unit of exchange.
DXY. It is a spot index of the USD based on a basket of six currencies, Euro (57.6%), Japanese Yen (13.6%),
British Pound Sterling (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%) and Swiss Franc (3.6%). The DXY
does not reflect the trade position of the US in the global economy. It is being used for convenience as its value
is updated on a daily basis.
ADXY. It is a spot index of emerging Asian currencies versus the USD. It is composed of ten currencies, Renminbi
(38.66%), South Korean Won (13.00%), Hong Kong Dollar (10.48%), Singapore Dollar (10.27%), Taiwan Dollar
(5.11%), Indian Rupee (8.57%), Malaysian Ringgit (4.60%), Thai Baht (4.98%), Indonesian Rupiah (2.69%) and
Phil. Peso (1.64%). The index is constructed based on two considerations, trade performance (75%) and liquidity
(25%).
VIX. The Chicago Options Exchange Volatility Index reflects a market estimate of future volatility. The value of
this index normally rises whenever uncertainty is high.
Finally, note that there will always be a speculative element in the movement of these indicators. But speculation
is not their main driver. The most important driver that normally sustains the movement of an indicator over the
long-run is its fundamentals. For example the movement of the peso is dictated, among others, by the following
fundamental factors: (a) the health of our economy; (b) the amount of US dollars remitted by Filipinos working and
living abroad; (c) the level of our exports; and (d) the amount of foreign direct investments we receive.
------------------------------------------DISCLAIMER:
The opinions and intentions expressed herein by the United Coconut Planters Bank – Trust Banking Group (UCPB-TBG) are held or have been
reached after considering all relevant circumstances and based on reasonable assumptions, and that all reasonable inquiries have been made
by UCPB-TBG to verify the accuracy of such information. However, please bear in mind that other external and/or internal factors, present,
future or otherwise, such as, but not limited to, adverse or unanticipated market, financial or political developments or risk of default or settlement
risk, may affect UCPB-TBG’s opinion and analysis, and the recipient of this document should conduct his own independent analysis of the issues
and the Issuers, and investment(s) therein should solely be the recipient’s decision and risk.
In the event any investment decision shall be made, the recipient of this document must rely on his examination of the Issuer(s) and the terms
of the issue(s), including the merits and risks involved. By receiving this document, the recipient acknowledges that (1) he is aware that he is
expected to rely on his own independent investigation and evaluation of the Issuer and the terms of the Issue and consult his own professional
adviser in passing upon the risks and merits thereof, (2) he has not solely relied on UCPB-TBG or any person affiliated with it, in connection with
his investigation of the accuracy of any of the information contained herein or his consequent investment decision, and (3) no person has been
authorized to give any information or to make any representation concerning the Issuer(s), other than what is contained in this document and, if
given or made, such information or representation should not be relied upon as having been made or authorized by the Issuer(s) and UCPBTBG.
No representation or warranty, express or implied, is made by UCPB-TBG as to the accuracy, completeness or adequacy of the information
contained in this document. Neither the delivery of this document, under any circumstance, constitute a representation or create any implication
that there has been no change, material or otherwise, in the condition, operations, or affairs of the Issuer(s) or that any information contained
herein is correct as of any date subsequent to the date hereof.
Finally, this document does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized,
or to any person to whom it is unlawful to make any such offer or solicitation. In the event a decision shall be made to invest in any of the
Issue(s), such potential investor must (1) comply with all applicable laws and regulations in force in the jurisdiction in which it invests or offers to
invest in such security(ies) or issue(s), and (2) obtain the necessary consent, approval or permission for its funding, or offer to fund such
investments under the laws and regulations in force in any jurisdiction in which it is subject or in which it makes such funding, and neither the
Issuer(s) or UCPB-TBG shall have any responsibility thereof.
The information and data contained herein are confidential and may not be divulged to any person or entity, reproduced, disseminated or
disclosed, in whole or in part, unless expressly allowed by the United Coconut Planters Bank -Trust Banking Group.
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