Home Blog Page 10021

At the dawn of UHC, private hospitals brace for long struggle

By Denise A. Valdez, Reporter

THE HOSPITAL UNIT of Metro Pacific Investments Corp. (MPIC) came close to staging a massive initial public offering (IPO) this year worth P83.3 billion — right on the eve of implementing the Universal Health Care Law (UHC).

Asian Development Bank Senior Health Specialist Gerard Servais found it to be an indication of the health sector’s growth potential, as “it proves that the private sector is vibrant, because they need money.”

Metro Pacific Hospital Holdings, Inc. (MPHHI) was raising cash to invest in building additional hospitals, cancer centers, clinics and new health care businesses. It would have boosted the company’s network of 14 hospitals then (15 now) and several cancer care centers, clinics, laboratories and medical schools.

The offer was widely anticipated — up until it was cancelled. MPIC announced a month before the scheduled offer period that it is deferring the IPO and instead took in a P35.3-billion investment from Kohlberg Kravis Roberts & Co. (KKR) and Singapore’s GIC Pte Ltd., the city-state’s sovereign wealth fund. The deal was finalized in December.

Is the decision to postpone going public an indication of MPHHI’s concerns about cash flow on the eve of UHC — a landmark government program that would demand much from private hospitals?

Maria Corazon C. Consunji, president and chief executive officer of Makati Medical Center (Makati Med), which is part of the MPHHI network, said this was not exactly the case.

“It was always in the discussion with the investors that putting that aside was not because of UHC but because there was a nicer proposition,” she said in a Dec. 12 interview, referring to MPHHI’s IPO delay.

But she added that although MPHHI did not do the IPO, there are indeed worries about cash flow under UHC.

“It’s a little bit alarming for (investors) because there’s a lot of unknowns,” Ms. Consunji said. “They see your cash flows and everything, but they don’t know what will happen when UHC comes… That’s a big challenge for investors. So they just have to take the risk.”

Under UHC, the government would require private hospitals to allocate at least 10% of their beds for basic or ward accommodation, as indicated in Section 29.7 of the law.

It would also get rid of the “co-payment,” or the differential between a private hospital’s rate and what the government pays through Philippine Health Insurance Corp. (PhilHealth). Ms. Consunji said under UHC, private hospitals would have to absorb the co-payment costs.

The cash flow concern alarms other private hospitals too, such as St. Luke’s Medical Center. Senior Vice-President Benjamin S.A. Campomanes said UHC would increase the base of active PhilHealth members by about 80%, meaning the volume of bad debt may increase by a proportional amount.

“With an 80% increase in potential bad accounts, private hospital profits will likely fall, especially since healthcare providers generally have low margins,” he said at the Hospital CEO Forum in Makati City last Dec. 12.

Mr. Campomanes noted it also does not help that PhilHealth already has years worth of payables owed to private hospitals because of technical problems with its claims system.

According to the Private Hospitals Association of the Philippines, Inc. (PHAPi), 170 hospitals are owed P3.4 billion worth of receivables from PhilHealth as of Nov. 18, 2019. To some of these hospitals, the receivables date as far back as 2014.

PHAPi President Rustico A. Jimenez said this concern is what is prompting about 600 hospitals to withdraw their PhilHealth accreditations by 2020.

“During the last (PHAPi) convention (in November), about 600 hospitals were present and signified their intention not to accredit with PhilHealth pending the payment of receivables,” he said in a Nov. 26 interview.

Mr. Jimenez said unlike bigger hospitals such as Makati Med and St. Luke’s which can survive when unpaid by PhilHealth, smaller private hospitals run the risk of losing operating cash if receivables are delayed for months.

“We are not against Universal Health; we want to cover all patients. But they should consider that private hospitals do not have funding from the government. Where will we get the funds to support Universal Health if they will not pay us on time? Chances are these hospitals will go bankrupt,” he said.

UHC has an ambitious dream for free healthcare, from check-ups to accommodation. Ms. Consunji, Mr. Campomanes and Mr. Jimenez all agree the government is going in the right direction in wanting to increase access to healthcare.

But for them, timing is important for pursuing a big revolution such as UHC, as it would demand much from both the public and private sectors in terms of reshaping how healthcare works. Primarily, the law wants healthcare to be preventive rather than reactive by promoting primary care and assigning a primary care provider for every Filipino.

Yung prevention na sinasabi ng UHC (The promotion of prevention that UHC wants is) very good. But I think there are a lot of things that need to be changed. The only challenge is the quickness of this, because this is a few (months). February they signed (the law), then October (they released the implementing rules and regulations). You can’t change a system in six months or even one year,” Ms. Consunji said.

Mr. Jimenez added: “We are telling them, ‘Do not implement it immediately. Talk to us.’ Because all the amendments that were supplied by us were not included in the IRR. So what will happen to the implementation if you do not follow our suggestions? You will fail, definitely.”

Jeremy Lim, co-director of Leadership Institute for Global Health Transformation at the National University of Singapore School of Public Health, said there a “political price to pay” for UHC to be sustainable.

Speaking at the Hospital CEO Forum on lessons on UHC implementation in Asia, he said it is “unfortunately the karma of any funding agency like PhilHealth to struggle.”

“The first rule of health economics is scarcity. There will always be much more demand than there will be supply. And that, unfortunately, is the reality moving forward. The financier will always have this challenge of how to balance. We see almost everyone has stumbled here and there,” he said.

He also said hospital CEOs will have to figure out a way to deal with cash flow challenges and pricing pressures as “these will not go away.”

“No matter the economic volatility… UHC implementation and sustainability, from a political point of view, will always remain. There is no country in the world other than America that has walked into UHC and wanted to walk out… Every other country has embraced UHC and said it is morally and nationally the right thing to do,” Mr. Lim added.

PhilHealth acknowledges it has to work to repay private hospitals for the years of receivables it has not distributed to claimants.

Speaking at the Hospital CEO Forum, PhilHealth Area Vice-President for South Luzon and NCR Gregorio C. Rulloda said the agency is committed to “craft settlement of our obligations to our partner hospitals.”

But PhilHealth President Ricardo C. Morales, in a briefing in October, noted it is a “cheap stunt” to threaten withdrawing from accreditation as it is “putting the public in a predicament which they don’t deserve.”

Despite the uncertainty about what will happen once UHC is in full effect, some private sector entities are positive about how it will change healthcare in the Philippines. For instance, Ayala Healthcare Holdings, Inc. (AC Health) has become more bullish on the industry because of UHC.

“I think it’s made us more excited to invest in the space… Anytime there’s an industry that has enabling regulatory frameworks… when you’re opening up an industry for more awareness and more utilization, it’s always good for private sector participants,” AC Health President and Chief Executive Officer Paolo Maximo F. Borromeo said in a Nov. 21 interview.

Operating as the health unit of Ayala Corp. with 70 FamilyDoc clinics and pharmaceutical operations, AC Health is looking to increase its investments moving forward in light of UHC.

“It’s an industry that is very exciting for us as a group. We think it has very big long-term potential. And so I think we’ll look to continue investing where we can help address gaps in the system,” Mr. Borromeo said.

But it doesn’t ignore the fact that beyond just money, there’s a need for a lot more beds and medical professionals for UHC to take effect. PhilHealth’s Mr. Morales agrees with this, thus the government’s decision to do a “gradual rollout” for UHC to cover 33 sites first by 2020.

Mr. Campomanes of St. Luke’s believes the government has to work closely with the private sector for an efficient implementation of UHC. “There are few hospital beds. Some cities and towns would have only a private hospital. So what happens then if someone gets sick? You need to admit,” he said.

Makati Med’s Ms. Consunji also said what the private hospitals can do is rationalize expenses to increase absorptive capacity for bad debts. “Decrease your costs because there’s no other way… Then maybe in the future, capital expenditure in terms of machinery. Maybe you’ll have to be more careful in buying,” she said.

But to give stakeholders a sense of “solidarity” in the midst of all the uncertainty, Mr. Lim said almost all countries that implemented UHC are struggling with it, and that is the normal thing to happen.

“The good news about UHC is there are no real experts. Everyone is struggling. There is a lot of solidarity, a lot of comfort in that the whole world is struggling with you. And we will continue to struggle until the end of time because UHC will never be finished,” he said.

“It is a journey, and it is important to appreciate that in this journey, the secret is not to not fall, but to fall forward. Because we will definitely fail in some areas, but we have to fail quickly, learn, and move forward in the right direction.”

Alsons starts building small hydro-power plant, lines up more

THE power group of Alsons Consolidated Resources, Inc. (ACR) has started the construction of its 14.5-megawatt (MW) run-of-river hydroelectric power plant at the Siguil River basin in Maasim, Sarangani province, it said on Sunday.

Alsons expects the P4.5-billion project to begin operations in 2022 to provide power to Sarangani, South Cotabato, and General Santos City.

“In the next few years, in terms of the number of power facilities, renewable energy will constitute the largest segment in Alsons Power’s portfolio,” said ACR Chairman and President Tomas I. Alcantara in a statement.

Alsons, which claims to be Mindanao’s first and most experienced private sector power generator, plans to develop at least seven more run-of-river hydro-power facilities in different parts of Mindanao and Negros Occidental.

It said the next two hydro-power facilities in the group’s pipeline are the 38-MW Sindangan hydro-power plant in Zamboanga del Norte and the 42-MW Bago hydro-power plant in Negros Occidental.

Once completed and operational the hydro-power plants will make up the bulk of the company’s power facilities.

Aside from the hydro plants another project in Alsons power’s pipeline is the 105-MW San Ramon Power, Inc. baseload coal-fired power plant in Zamboanga City, which is set to begin operations in 2023.

“SRPI will soon select the plant’s engineering procurement and construction contractor,” the company said.

Alsons’ power group operates four power facilities in Mindanao with a total generating capacity of 468 MW serving more than 8 million people in 14 cities and 11 provinces. — VVS

MinDA taps Filipino-Americans for high value exports to US

DAVAO CITY — The Mindanao Development Authority (MinDA) is tapping Filipino-American communities in the US to help expand the market for Mindanao agricultural products.

MinDA, in a statement over the weekend, said the plan was hatched following a visit last week by representatives of the Davao Association USA (DAUSA), led by the group’s president, Fernandico Gonong Jr., and the Filipino-American Community of Los Angeles (FACLA).

“We have to identify potential MinDA coordinating officers based in LA (Los Angeles) who are willing to represent the interest of Mindanao, as well as to promote our products in various trade and business activities there,” MinDA Chair Emmanuel F. Piñol said.

MinDA’s International Relations and Investment Promotions team and the Department of Trade and Industry (DTI) will map out how carry out the plan.

Among the identified products that could be initially exported are frozen bangus, frozen durian, and tablea.

Among the Mindanao agricultural goods already being exported to the US are cacao products such as chocolate and coconut products.

“We have the largest concentration of Filipinos in the US and this bayanihan for Mindanao products is really promising,” Mr. Gonong was quoted as saying in the statement.

The export program, he said, will need to have “a strong e-business platform in addition to the house-to-house delivery.”

Mr. Piñol, in an earlier interview with BusinessWorld, said one of MinDA’s priority initiatives is helping farmers and manufacturers expand their markets.

“We need new markets that will welcome our products at premium prices,” he said. — Carmelito Q. Francisco

Celebrate Chinese New Year with the three-pointed star

STEP INTO the world of Chinese New Year, a world of generosity, festivity and family — and a world of amazing offers! Celebrate the Year of the Rat with a brand new Mercedes-Benz.

C-CLASS: BRIMMING WITH TECHNOLOGY, BOOMING WITH POWER
The Mercedes-Benz C-Class has been highly regarded as one of the iconic vehicles of Mercedes-Benz brand. The new C-Class boasts an impressive blend of style and smarts with an added dose of speed, with more horses, agility, strength and confidence to match the beauty of its well-toned body. The new C-Class is available in petrol guise and comes with a 9G-TRONIC 9-speed transmission providing exceptional response and sportiness.

On a visual level, the C-Class adopts a progressive approach with its clear, dynamic design and its high-class interior. It’s equipped with standard new multi-element LED headlamps that offer brighter, more natural illumination by night, and eye-catching design by day.

CLA: SEDUCTIVELY ENGINEERED COMPACT EXECUTIVE CAR
A dream car you can drive. The new CLA lets you express your style and impress everyone else. More intelligent, sportier and progressive than the predecessor, the seductive character is showcased not just in the shape but more so in its overall features.

The exterior shows off an exceptionally aerodynamic built packaged in a sleek and taut body further adorned with enticing curves from all angles. The modern look is sealed by the expressive sculpting, frameless door glass, and confident stance. With its brilliant diamond radiator grille, muscular shoulders and sculptured rear end, the CLA’s styling lets you shine.

Under the hood, its powerful engine generates more power even while consuming less fuel and incurring less emission. Furthermore, the CLA is equipped with the standard ECO Start/Stop that facilitates seamless shift to fuel economy. The DYNAMIC SELECT feature makes it possible for the driver to choose among three drivetrain modes to suit driving moods and requirements.

GLC: STRENGTH IN BEAUTIFUL FORM
The new GLC is beautifully sculpted and undeniably intelligent. Certainly a well-rounded SUV with its outstanding performance on city streets and off-road terrains, to its captivating shape and comfort within. The GLC is outfitted with the latest generation of intelligent driver assistance technology, including Adaptive Brake and ATTENTION Assist System.

The GLC also revels in the latest interactive technology with the Mercedes-Benz User Experience multimedia system (MBUX). The intelligent voice control allows you to explore its intuitive logic and state-of-the-art interface using the “Hey Mercedes” prompt, while the center console provides a multifaceted touchscreen elevating your convenience.

What a better way to welcome the new lunar year with a brand new Mercedes-Benz car? Head to any of the showrooms located at EDSA Greenhills, BGC, Alabang, and Cebu City to test-drive, and catch the smart offers exclusively available in celebration of the Chinese New Year.

T-bills, T-bonds to fetch higher rates on GDP data

YIELDS ON THE government securities on offer this week will likely inch up ahead of the fourth-quarter gross domestic product (GDP) data which will be released on Thursday.

The Bureau of the Treasury (BTr) will issue P20 billion worth of Treasury bills (T-bills) on Monday, broken down into P6 billion for 91- and 182-day papers and P8 billion for 364-day securities.

On Tuesday, the BTr will also attempt to raise P30 billion via seven-year reissued Treasury bonds (T-bonds) which have a remaining life of six years and 24 days.

Sought for comment, a bond trader said on Friday that the rates of the T-bills on offer will likely go up by around 10 to 15 basis points (bps), while the seven-year T-bonds may also fetch higher rates.

At the T-bill auction last week, high rates across the board prompted the Treasury to award just P16.875 billion out of the P20-billion program. Specifically, the three- and six-month papers fetched average rates of 3.328% and 3.587%, respectively, while the one-year securities’ yield was at 3.896%.

Meanwhile, the bond trader said the seven-year papers may fetch rates between 4.575% and 4.65%, higher compared to the 4.322% quoted when the tenor was last offered in Oct. 29.

“We think the rates (of T-bills) will go up by 10-15 bps ahead of the fourth quarter GDP for 2019. [For the T-bonds,] we see it at 4.575%-4.65%. [The market is pricing in the release of] fourth- quarter GDP [data] for now and also to take positions, hence the higher rates, so they can position themselves now, in January,” the trader said via phone.

At the secondary market on Friday, the three-month, six-month, and one-year T-bills fetched yields of 3.298%, 3.489% and 3.825%, respectively, according to the PHP Bloomberg Valuation Service Reference Rates. Meanwhile, the seven-year bonds were quoted at 4.626%

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort shared the same sentiment, saying the market will look out for the release of GDP data this week.

“Government securities auction yields for this coming week could go up, after local benchmark yields in the secondary market mostly went up by as much as +0.10 week-on-week,” Mr. Ricafort added.

The Philippine Statistics Authority will report on Thursday fourth-quarter and 2019 GDP data.

Socioeconomic Planning Secretary Ernesto M. Pernia last week said the economy might have expanded by around “6.6-6.7%” in the fourth quarter to boost the full-year average and hit the 6-6.5% official target.

If realized, fourth quarter’s performance will outpace the previous quarter’s print of 6.2% and will also be faster than the 6.3% recorded in the last three months of 2018.

An at least 6.6% GDP growth print will be the fastest expansion rate in more than two years or since the seven percent logged in the third quarter of 2017.

The economy grew by 5.6%, 5.5% and 6.2% in the first, second and third quarters of 2019, respectively, bringing the average GDP growth to 5.8% for the nine-month period.

The Treasury has set a P420-billion local borrowing program this quarter, broken down into P240 billion in T-bills and P180 billion via T-bonds.

The government plans to raise P1.4 trillion this year from local and foreign lenders to plug its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — Beatrice M. Laforga

It takes a village — and more — to raise disaster resilience

IN UNDER a minute of the earth’s shaking, the people of Balutakay, a coffee-farming village at the foot of Mt. Apo, saw their homes, warehouse, and processing center sustain severe damage.

It was Oct. 31, 2019 and the magnitude 6.5 tremor that struck that day was the third strong one for the month after a 6.6 just two days prior and 6.3 on the 16th.

The 170 families in Balutakay, many of them members of the Balutakay Coffee Farmers Association (BACOFA), evacuated.

And there is no going back as their community has been declared by authorities as a no-live zone.

Among them is Marivic Dubria, the BACOFA manager who would have considered 2019 one of the best years ever as she represented the country in April at the Specialty Coffee Exposition in Boston after topping the Arabica Category of the year’s Philippine Coffee Quality Competition (PCQC). In 2018, she ranked 2nd.

At a media forum in Davao City after her PCQC award, Ms. Dubria talked excitedly about promoting the community’s coffee to a global audience, the value of contributing to local industry, and inspiring fellow farmers to aim for superior produce that will fetch higher prices.

Joji Felicitas B. Pantoja, founder and chief executive officer of social enterprise Coffee for Peace, Inc., which has been working with BANOFA since 2013, said the enterprise is as heartbroken as the people in the village that they have seen work hard and grow.

In an interview with BusinessWorld, Ms. Pantoja narrated the grief and worry of the families, who set up temporary shelters around the nearby Malipayon processing center of Coffee for Peace.

“Nanay Teresing, one of the community leaders and also among the top 10 champion farmers, looked really dazed and worried. They don’t know what will happen to them. Can they go back to the farm? Because the coffee (trees) are there,” she said, speaking in mixed English and Filipino.

Jobelyn Basas, field network director of Peacebuilders Community, Inc., a partner organization of Coffee for Peace, said local officials allow the BACOFA members, in small groups and only during daytime, to go back to the area to harvest as there are abundant quantities that are ripe for picking.

“So far they have not declared it a no-farm zone,” she said, although some of the farmers are too traumatized to take the risk.

Ms. Basas also noted that aside from the Balutakay residents, another 450 families from the neighboring Bagobo-Tagabawa indigenous community, mostly with members who are trained and involved in the coffee post-harvest process, have also been affected.

These over 600 families from Davao del Sur province are among the more than 71,000 affected by the October earthquakes, which were felt in most parts of Mindanao and left Cotabato province, the epicenter area, the hardest hit.

As of end-November, data from the national disaster management council show over 13,000 families are still in 107 evacuation centers while almost 25,000 others who have been displaced but are not in the temporary shelters are also being given assistance.

DISASTER DEPARTMENT
The Mindanao earthquakes —which came after similarly strong tremors last year in the Batanes islands in July and in Central Luzon in April, alongside the average 20 typhoons that sweep through the country every year — have prompted the Senate to make the proposal to create a Department of Disaster Resilience (DDR) a priority.

Lyndon L. Ancajas, administrative training chief of the Davao City Disaster Risk Reduction Management Council (CDRRMC), said whatever final version of the proposed law will be passed, what is crucial is improving access to national funding for local governments, particularly small towns.

“I read a few versions and it looks good… especially the funds in store for those municipalities that have a very small budget for DRRM,” he said.

In the case of a big city like Davao, which is also a pioneer in a centralized response system through its 911 hub, Mr. Ancajas said what the city has been working on is expanding and strengthening an even more localized response system to “ensure that all bases are covered.”

“Various offices of the city government are encouraged to create their own disaster action team… This is to enhance and intensify disaster preparedness,” he said.

Cotabato Vice-Governor Emmylou T. Mendoza, who previously served as governor for three terms and was acting governor when the earthquakes struck, said the creation of a DDR should mean having a “more focused approach for interventions and coordination.”

“In our experience, for as long as we follow the disaster protocol and line of command, there will be no overlap (in functions),” she said, citing how the various national agencies helped Cotabato through the National Disaster Risk Reduction Management Council (NDRRMC).

“This is okay pa naman (so far), maybe we just need to strengthen it. But of course, I can’t speak for the experiences of the other LGUs (local government units) or areas hit by calamity,” Ms. Mendoza said.

Peacebuilders President and Chief Executive Officer Daniel A. Pantoja — who has been on the ground for the earthquake relief assessment and was involved in past post-calamity activities such as in super typhoon Haiyan in the Visayas, typhoon Pablo (Bopha) in Mindanao, and the Marawi City siege — said he can attest to how disasters are often “politicized,” usually at the local government level, which is at the front lines of emergency response.

“Hopefully the DDR will be able to transcend local politics,” he said.

“And hopefully the DDR will not lead to ‘disaster capitalism,’” he added, referring to how rehabilitation programs for both natural and man-made calamities, in many cases, leave the most vulnerable victims even more marginalized.

An official of the Department of National Defense’s Office of Civil Defense, which serves as the implementing arm of the NDRRMC, has cautioned legislators about a DDR that would end up with “overwhelming” functions.

OCD Undersecretary Ricardo B. Jalad, at a Nov. 11 Senate panel meeting on the proposed new department, noted that disaster management involves many aspects, from preparedness to response to reconstruction.

“That would be a very big function to be placed under one department,” Mr. Jalad said, and suggested that the DDR focus on the planning aspect.

“Lead role can be assigned to the department. For the implementation, it would still rely on the lead agencies,” he said.

DATA-BASED MODEL
The National Resilience Council (NRC), a private sector-led initiative launched in October 2017, recognizes the primary role of LGUs in overall disaster management.

The NRC, with its goal of strengthening public-private sector collaboration and building up LGU capacity, has named Iloilo City as its first model locality on developing disaster resilience.

NRC President Ma. Antonia Yulo-Loyzaga said Iloilo was chosen because of the existing strong collaboration between the LGU, the private sector, and the science and technology community.

“Iloilo has a very good foundation for how evidence-based risk governance can actually be part of the sustainability of the city,” she said in an interview in the city.

The three-year Adopt-a-City program for Iloilo is a multi-sector endeavor involving the academe, particularly various universities in the Visayas, national agencies, private companies, and foreign experts.

On Dec. 2, the city government signed a memorandum of cooperation with the NRC, Taiwan’s National Science and Technology Center for Disaster Reduction, and the Manila Observatory for the establishment of the first locally-based disaster information system.

On the same day, an agreement was also signed for the Smart Sensor Network, which also involves national agencies, alongside the universities, and private firms Alliance Global Group, Megaworld Iloilo, and SM City Iloilo.

“Today’s agreements are complementary to the science and technology as well as leadership and governance goals of our Local Government Systems Program for Iloilo City. What we’re trying to do is provide a system of environmental monitoring, a way to gather data through the networks and equipment both for climate, weather, and earthquake events,” Ms. Loyzaga said.

Manila Observatory Executive Director Gemma T. Narisma said data is important, especially for developing cities, to address the increasing risks of climate change and disasters.

“Things are changing not only in terms of the hazards but also in terms of hazards and vulnerabilities as the city continues to develop, so even now it is important to have this data… We should look at them, study them and try to see what development pathways should Iloilo do so that it will lead to a more resilient future,” she said.

Iloilo CDRRM Office head Donna P. Magno said the disaster resilience program is not just about the local government’s readiness and capacity, but having an informed and prepared population.

“We are frequently exposed to many hazards such as typhoon, flooding, fire, storm surge, and earthquakes; that is why we are stepping up our efforts to reduce the risk of the disasters and improve the competencies of the residents,” Ms. Magno told BusinessWorld.

Mayor Jerry P. Treñas said apart from residents, disaster resilience is also about protecting investments in the city.

“We need to be resilient not only to make sure that our people will be safe but also investors,” he said.

Ms. Magno said a DDR would be most welcome as another partner “to achieve our dream of becoming a resilience model,” and at the same time noted that disaster management ultimately starts with ‘self help.’”

“Since the first level of disaster management is ‘self-help’… we are really aggressive in terms of our community education programs,” she said.

BACOFA, a community proud of its achievements and full of optimism in the continued growth of the coffee venture, is getting sufficient relief and short-term help from private sector partners, including its network of foreign buyers, according to Ms. Pantoja.

But its future — where the residents will be relocated, the timeframe for setting up new houses, the fate of the farms, the site for rebuilding the coffee processing facilities — rests largely on decisions that will be made by the government.

Ms. Pantoja said given the public sector’s poor track record in implementing rehabilitation programs, the people of Balutakay feel insecure about what lies ahead.

“They ask, ‘Ano na (Now what)?’”

She said it is possible having a DDR would improve the system. And should there be one, she said it must be “pro-people” above anything else.

“Human dignity,” Ms. Pantoja said, must be at the core of disaster resilience. — Marifi S. Jara, Maya M. Padillo, and Emme Rose S. Santiagudo

Megaworld adding more office spaces in Iloilo’s business park

MEGAWORLD Corp. is building two new office towers in the Iloilo Business Park to expand its office portfolio in the urbanized city in Visayas.

The listed property developer said in a statement over the weekend it is adding 78,000 square meters to its office portfolio of almost 65,000 square meters in Iloilo.

This will be comprised of two buildings with 12 stories each, which will be called Enterprise One and Enterprise Two. Megaworld said it will be registered for a Leadership in Energy and Environmental Design (LEED) certification.

Megaworld Premier Offices First Vice-President Roland Tiongson said the demand for office spaces in Iloilo Business Park kept “steadily growing” over the past years, pushing the company to continue investing in this type of development.

“Most of the companies that want to set up operations in Iloilo prefer the township concept that we offer because it helps ensure convenience and comfort necessary for the retention of their employees,” Mr. Tiongson was quoted as saying.

Megaworld currently has office spaces in eight fully operational buildings in Iloilo: One Global Center, Two Global Center, Richmonde Tower, One Techno Place, Two Techno Place, Three Techno Place and Festive Walk Office 1 and 2.

However, it said all its office spaces are fully leased out at the moment, thus it is constructing an additional 35,000 square meters of office space through One Fintech Place A, One Fintech Place B and Two Fintech Place. These buildings are scheduled for completion in 2021.

“By 2022, we expect our office stocks to reach around 175,000 square meters, the biggest for a single developer in Iloilo City. These office towers are able to generate approximately 62,000 jobs in the BPO (business process outsourcing) sector,” Mr. Tiongson said.

A robust growth in its office leasing business pushed Megaworld’s revenues 17% up to P48.12 billion in the first nine months of 2019, resulting in an attributable net income of P11.3 billion or 14% higher from a year ago.

Shares in Megaworld at the stock exchange slipped 1 centavo or 0.23% to P4.30 apiece on Friday. — Denise A. Valdez

Halal slaughterhouse in Davao City expected to be ready by March

DAVAO CITY — A halal slaughterhouse located in the city’s Baguio District is expected to be ready by March, while a new pig abattoir in the same area will also be opened within the year.

The halal slaughterhouse will be a “box-type” manual facility for goats, cows, and carabaos, according to Joseph L. Gabut, officer-in-charge of the city’s current slaughterhouse.

He said the facility will give “legitimacy” to meat vendors who claim to sell halal meat to the Muslim community.

“The meat vendors who claim to offer halal are being questioned over the legitimacy of their meat. Once we have that, we can produce authentic halal meats,” Mr. Gabut, speaking in mixed English and Filipino, said in an interview.

The slaughterhouse was funded by P5 million from the Department of Agriculture-Region 11 and P1 million counterpart funds from the local government.

Meanwhile, the P76 million modern slaughterhouse for hogs with food processing facilities is also targeted for completion within the year.

Mr. Gabut said the original plan was to have this facility ready also by March, but the equipment for waste water treatment has yet to be bid out.

The abattoir, with a floor area of 1,250 square meters, will have hog pens, manual and mechanized slaughtering areas, a blast freezer, storage, and processing equipment.

“You can also process meats, such as chorizo, tocino, bacon,” he said.

Minimal fees will be imposed for the use of the slaughterhouses, which will be managed by the city government for one year, after which it will be offered for a public-private partnership contract.

Mr. Gabut said the current slaughterhouse in the Ma-a area will likely be closed and relocated. — Maya M. Padillo

Kia Philippines posts 124% sales growth in 2019

A YEAR after the Kia brand’s relaunch under new distributor AC Industrials, an Ayala company, the Korean car maker once again showed that it has the Power to Surprise as it reported a record-breaking 124% year-on-year growth in the Philippine market.

Driving the strong performance were the Soluto subcompact sedan, the K2500 light-duty truck, the Grand Carnival minivan, and the newly launched Seltos subcompact crossover.

The Soluto led the increase, capturing 51% of sales volume, followed by the K2500 with 21%, Grand Carnival with 13%, and 7% for the Seltos.

The Soluto with its 1.4-liter motor with Dual CVVT technology producing 95ps and 132Nm of torque, spacious interior, 7-inch Touchscreen Audio system with Apple CarPlay and Android Auto connectivity, rearview camera, and steering wheel controls as standard provide a value-for-money proposition for its class. The higher-spec EX variant adds leatherette seats, alloy wheels and rear park distance sensors. It is the perfect car for first-time car buyers looking for a feature-packed offering.

The K2500, meanwhile, is a light-duty truck that’s heavy on features and flexible according to your needs. It is equipped with a 2.5-liter turbocharged diesel engine that produces 130ps and 255Nm of torque, mated to a 6-speed manual gearbox. It is available in the following configurations: Karga, Kargo, Closed Van and Dropside. The K2500 is the ideal logistics partner of budding entrepreneurs and businessmen.

The Grand Carnival has been Kia’s people carrier since its introduction two decades ago. The latest-generation is powered by a 2.2-liter CRDI diesel engine delivering 200ps and 441Nm, paired with an 8-speed automatic. Boasting luxury car features, the Grand Carnival in its EX 7–seater variant is equipped with window sunshades, dual moonroof, power sliding doors and tail gate, full auto air-conditioning with three-zone capability, an 8-inch Touchscreen Audio with Apple Carplay and Android Auto, and a versatile cabin with various seating configurations. It is the minivan for accomplished executives who can use it as a family-friendly ride or a daily mobile office.

The Seltos, Kia’s latest model launched in November 2019, packs a 2.0-liter Dual CVVT engine with 149ps and 179Nm. This powerplant is mated to a new Intelligent Variable Transmission (IVT) with Drive Mode Select that allows the driver to switch between different modes to suit one’s driving preference. Its standard features include: 8-inch Touchscreen Audio system with Android Auto and Apple CarPlay connectivity, rear view camera and full fold rear seats with the top-of-the-line SX offering full LED head and tail lights, LED daytime running lamps and signature position lamps, automatic climate control, smart entry with push button and remote start, Electronic Stability Control, and 6 air bags. The new Seltos is the crossover of choice for high-achieving young professionals and couples starting a family looking for a stylish and flexible ride.

The Stinger, Sorento, Sportage, Forte, Rio and Picanto complete the entire Kia lineup that sold a total of 5,019 vehicles in 2019 — a 124% jump from the 2,238 vehicles sold during the previous year.

“We are pleased with the strong performance of Kia Philippines in 2019,” expressed Manny Aligada, president of Kia Philippines. “As we enter 2020, Kia Philippines looks forward to surpassing its record with new vehicle introductions, the opening of new dealerships, and better after-sales services,” Mr. Aligada added.

Kia gave the public a taste of things to come during the brand re-launch in January last year with the Soluto unboxing, highlighted by a teaser of two additional new vehicles it would be bringing in the market. Kia delivered with the debut of the Stinger and the Seltos, as well as refreshed offerings in its vehicle range throughout 2019.

Gucci revisits an ugly childhood

By Joseph L. Garcia
Reporter

THE INTERNET was abuzz with Gucci’s Fall/Winter 2020 collection, launched last week at Milan Men’s Fashion Week, and BusinessWorld had to take a look. An article from Vogue about the collection says that the brand’s look revolves around “the characteristics of masculinity through an allegorical journey in clothing back to childhood.” A giant swinging pendulum dominated the runway, which BusinessWorld takes to mean a sort of hypnotic regression to childhood. Allesando Michele’s vision of childhood seems to revolve around the following interpretations: androgyny, thrift shop and schoolboy/schoolgirl chic, plus the uncool part of the 1970s.

THRIFT SHOP CHIC
I’ve always been uncomfortable with distressed clothing, and this discomfort is best summarized by Muriel Barbery in a quote from the novel The Elegance of the Hedgehog. A concierge character, Renee, was criticizing the shabby-chic look of one of her building’s residents: “If there is one thing I despise, it is the perverse affectation of rich people who go around dressing as if they were poor, in secondhand clothes, ill-fitting gray wool bonnets, socks full of holes, and flowered shirts under threadbare sweaters. Not only is it ugly, it is also insulting: nothing is more despicable than a rich man’s scorn for a poor man’s longing.”

Reading the quote also summarizes the grungier aspects of this collection: there were wool bonnets and flowered scarves (not shirts) under threadbare sweaters (a particularly ugly one was made with a faux badly-knit cat). Oversized shirts (one printed with the words “impatient” and “impotent” in distorted letters), baggy, ripped jeans, ugly sneakers, and drab coats were seen on the runway.

These were paired with some of the brand’s most famous bags, such as the Gucci Dionysus GG Supreme, and masculine interpretations of the Gucci Bouvier bag. Some bags were emblazoned with the words “Fake” on one side, and “Not” on the other. On one hand, it’s a middle-finger to the concept of trickle-down economics, showing that at least in fashion, trickling up is the way to go. On the other hand, you’re paying top dollar for things that look as if they’ve been rummaged out of a thrift store bin. A lot of eggs could be on a lot of faces.

SCHOOLBOY/SCHOOLGIRL CHIC
Gucci’s interpretation of someone quite sleek might refer to someone who went to either an English or Swiss boarding school. There were wonderful coats in pink tweed, green, and navy; then there were suits in puce. Well and good, until the shorts started coming out of the runway.

Some of the elements are unmistakably chic: think rich velvet blazers in rich jeweled tones, and even an interpretation of this clean, innocent aesthetic in corrupt black leather. These were paired with khaki and navy shorts, loafers, knee-high socks, and what seems to be Gucci lunchboxes. It was like watching a movie about preppies in the 1980s, except the scowling models make them all look unhappy.

We’re here for the T-bar schoolgirl shoes though. As for the look with schoolgirl chic, androgynous models were pushed into dresses with prints from Liberty London (also seen in a floral bag that said “Liberty Gucci”), with one red dress with a white Peter Pan collar looking as if it had been plucked straight out of the musical Annie.

THE 1970S
Shimmering suits in raspberry. Bell-bottom pants in every color, plus the fact that they were shimmery. While the 1970s-inspired outfits had a whisper of disco, it looks like a moment of indecision (checking back on the collection’s coming-of-age theme, this might have been deliberate).

The shimmering garments were paired with the pastels and plains of suburbia, and a certain discomfort comes from the outfits from the ’70s seeming to step from a haze of television image noise.

Yields on government debt rise on inflation concerns

By Mark T. Amoguis
Senior Researcher

YIELDS ON benchmark government securities (GS) increased last week, fueled heavily by inflation concerns amid the still-ongoing Taal Volcano eruption.

GS yields inched up by a week-on-week average of six basis points (bps), based on the PHP Bloomberg Valuation Service Reference Rates as of Jan. 17 published on the Philippine Dealing System’s website.

“Local yields were generally higher this week amid local inflation concerns from possible increase in prices following the Taal Volcano’s eruption,” a bond trader said in an e-mail interview last Friday.

“Risk-off sentiment has also driven yields higher ahead of the mutual signing of the first phase bilateral US-China trade agreement in Washington DC [last] week,” the trader added.

For his part, ATRAM Trust Corp. Head of Fixed Income Jose Miguel B. Liboro said: “Investors have switched to a more cautious mindset and have been trimming positions, pushing yields higher [last week],” on the back of “still-unknown” inflationary implications of the Taal Volcano eruption as well as the market speculation on the possibility of a retail Treasury bond issuance in the first quarter of this year.

Mr. Liboro also said the partial awarding of Treasury bills (T-bills) during last Tuesday’s auction provided initial catalyst for the upward movement of yields last week.

The Taal Volcano in Batangas has been erupting since Jan. 12 and over 82,000 people have been evacuated. A 14-kilometer exclusion zone around Taal remains in place.

Socioeconomic Planning Secretary Ernesto M. Pernia estimated that Taal’s eruption is projected to book P7.63 billion worth of economic losses in Batangas alone as of Monday last week, which translates to 0.3% of total output of the Calabarzon Region — comprised by the provinces of Cavite, Laguna, Batangas, Rizal and Quezon.

Calabarzon had the second-largest contribution to the country’s gross domestic product (GDP) with a 17% share in 2018, after National Capital Region’s 36% share.

However, Department of Finance Secretary Carlos G. Dominguez said on Thursday that the inflationary impact of Taal Volcano’s activity will be minimal and manageable.

Meanwhile, the Bureau of the Treasury (BTr) raised P16.875 billion in T-bills out of its P20-billion program last Tuesday despite strong demand as rates went up across-the-board.

National Treasurer Rosalia V. de Leon said the government plans $3.7 billion in external borrowings this year, but has yet to secure approvals from the regulators.

She also said that the BTr will still consider selling retail Treasury bonds, as the sale of the debt papers will always be an option.

Offshore, the United States and China signed last Wednesday the “phase one” of its trade deal, inching closer to resolving its ongoing conflict over tit-for-tat tariffs.

Following the signing of the trade deal, US Vice-President Mike Pence said the discussions about the second phase of the pact between the world’s two largest economies are already on track, Reuters reported.

At the close of trading last Friday, bond yields rose across-the-board with 91-, 182- and 364-day T-bills increasing by 3.4 bps, 6.2 bps, 7.6 bps, respectively, to 3.298%, 3.489% and 3.825%.

Yields on the two-, three-, four-, five- and seven-year Treasury bonds (T-bond) went up 4.4 bps, 6.6 bps, 8.5 bps, 9.7 bps and 9.4 bps, respectively, to 4.092%, 4.244%, 4.367%, 4.472% and 4.626%.

At the long end of the curve, the 10-, 20- and 25-year T-bonds went up 6.9 bps, 2.4 bps and 0.7 bp, respectively, to yield 4.744%, 5.268% and 5.289%.

“For [this] week, local yields are still expected to increase due to optimism ahead of likely stronger Philippine economic growth report for the last quarter of 2019,” the bond trader said.

The Philippine Statistics Authority will report official fourth-quarter and 2019 GDP data on Jan. 23.

A BusinessWorld poll of 20 economists late last week bared a GDP growth median estimate of 6.4% for the fourth quarter and 5.9% for full-year 2019 amid strong household consumption and a rebound in government spending.

If realized, the estimate will be below the 6.2% growth recorded in 2018 and will miss the downward-revised 6-6.5% target set by the government.

For his part, Mr. Liboro said the outcome of the reissuance of seven-year bonds on Tuesday will determine market action this week.

“Given the cautious tone at present, investors are likely to bid at higher levels. The yield curve will reprice depending on where the auction clears,” he said.

“Should the BTr opt to reject the auction, we could see yields stabilize in the short-term and a slight move lower off the highs.”

The Treasury will auction off reissued seven-year debt worth P30 billion on Tuesday. The bond has a remaining life of six years and 24 days and has a coupon rate of 6.25%.

The government is looking to raise P1.4 trillion this year both from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of the country’s total output. — with Reuters

Brokers, dealers told to register with AMLC

THE Securities and Exchange Commission (SEC) is reminding its covered persons that have not registered with the Anti-Money Laundering Council (AMLC) to start doing so.

In a notice posted on its website, the country’s corporate regulator told covered persons that are supervised or regulated by the SEC to sign up with AMLC through its online registration system.

Compliance officers of the covered persons are also told to update their user account information in the AMLC system every two years.

The SEC said among the covered persons who must comply with the requirement are securities dealers, brokers, salesmen, investment houses and other similar persons managing securities or rendering services as investment agent, advisor or consultant.

Also included are mutual funds, close-end investment companies, common trust funds and similar persons.

Entities dealing with currency, commodities or financial derivatives based on valuable objects, cash substitutes and other similar monetary instruments or property are likewise part of the covered persons.

The SEC issued last year its anti-money laundering module, which aims to guide covered persons in abiding by the Anti-Money Laundering Act, its revised implementing rules and regulations, the recommendations of the Financial Action Task Force and other regulatory issuances of the AMLC and the SEC.

The AMLC was formed through the Anti-Money Laundering Act of 2001, tasked to ensure the confidentiality of bank accounts to prohibit any instance of money laundering in the country.

The council is formed by the governor of the central bank, the commissioner of the Insurance Commission and the chairman of the SEC. — Denise A. Valdez