Soaring SUV sales keep carmakers on collision course with climate policy

January 13, 2020 | 12:02 am

FRANKFURT — Soaring demand for SUVs drove record sales for premium carmakers including BMW and Mercedes last year, leaving the industry on collision course with government efforts to tackle global warming despite big investments in electric vehicles.

BMW said on Friday deliveries by its main luxury brand rose 2% to a record 2,168,516 vehicles last year, thanks to a 21% jump in sales of its “X” branded sport-utility vehicles (SUV) which now make up 44% of the BMW brand’s global sales.

At Mercedes-Benz, the world’s best selling premium car brand, every third luxury car sold last year was an SUV.

Automakers across the world are investing billions in electric vehicles to try to meet tougher emissions regulations. But the jury is out on how many drivers will buy them.

“Consumer preferences for SUVs could offset the benefits from electric cars,” the International Energy Agency (IEA) warned in its November World Energy Outlook 2019 report.

The IEA said a doubling in market share had seen emissions from SUVs grow by nearly 0.55 gigatons of carbon dioxide (CO2) during the last decade to roughly 0.7 gigatons.

As a result, SUVs were the second-largest contributor to the increase in global CO2 emissions since 2010 after the power sector — ahead of heavy industry including iron and steel, cement, aluminium, as well as trucks and aviation, it said.

There are now more than 200 million SUVs around the world, up from about 35 million in 2010, accounting for 60% of the increase in the global car fleet since 2010, IEA data shows.

“If the popularity of SUVs continues to rise in line with recent trends, this could add another 2 million barrels per day to our projection for 2040 oil demand,” it said.

The German carmakers say their vehicles are among the most fuel efficient available, thanks to hybrid and other technologies, adding customers could also choose to buy smaller, more frugal cars instead of SUVs.

Both BMW and Mercedes-owner Daimler say they aim to achieve new sales records this year, and are preparing to launch fully electric SUVs — the BMW iX3 and Mercedes-Benz EQC — which they say shows a commitment to a cleaner future.

EFFICIENCY GAINS
While acknowledging the growing popularity of SUVs, Germany’s powerful VDA auto industry association said much of the demand was for more efficient models.

“Only just under 5% of SUVs are large luxury class vehicles. The market success of the SUV segment is mainly due to the model offensive in compact and medium-sized SUVs, with correspondingly lower fuel consumption,” VDA said on Thursday.

The newly registered SUVs of German group brands had reduced their CO2 emissions by 35% since 2008, it added.

European Union lawmakers agreed in December 2018 that automakers had to cut CO2 emissions from cars by 37.5% by 2030 from 2021 levels, in addition to a 40% cut between 2007 and 2021, or face fines.

Evercore ISI analysts say the average German auto fleet emission is still too high at around 124 grams per kilometer in Europe, compared with the average limit of 95 grams per kilometer for 2020.

“The current CO2 performance is simply not good enough and we continue to flag that carmakers run the risk of facing considerable fines if more is not done,” they said in a note.

Electric and hybrid vehicles made up only 3.9% of new European sales in the third quarter of 2019.

BMW plans to launch 25 hybrid and electric cars by 2023, with more than 12 models being fully electric versions.

By 2025, half of all its cars are expected to be hybrid or electric vehicles, it said.

Mercedes expects half of its sales to be hybrid or electric by 2030, with Europe reaching the 50% mark in 2025.

Peter Fuss, a partner at EY, said German carmakers pushed sales of higher-margin SUVs last year ahead of the introduction of the more stringent European clean air rules in 2020.

In the fourth quarter of 2019 there was an unusually large rise in commercial registrations in Germany, Italy and Britain compared with figures for private consumers, in a sign carmakers were pushing more polluting models into the market.

“We will not see the same growth rates in this segment as we did last year,” Fuss said.

Electric car registrations are expected to take off in mid 2020, he added.

But that will depend on drivers being prepared to buy them, and perhaps also on how cheaply manufacturers are prepared to sell them. — Reuters

Grain trader Cargill’s profits jump on rising global meat demand

January 13, 2020 | 12:02 am

CHICAGO/BENGALURU — Commodities trader Cargill Inc. [CARG.UL] on Tuesday posted a quarterly profit rise of more than 19%, as the animal nutrition and protein business unit tapped into rising global demand for meat untainted by the spread of African swine fever in Asia.

Cargill said it was prepared for the changing demand patterns and the shift in global protein flows caused by the disease that has killed up to half of China’s hog herd since August 2018 and pushed Chinese pork prices to record highs.

The global markets for pork, beef and chicken have been reshaped as China has been scouring the world for new sources of meat.

The largest privately held US company by revenue has seen both plant- and animal-based protein as crucial to its success in recent years. Cargill and other agricultural companies have been hit by a sour farm economy, adverse weather and the US-China trade war.

Those strains are still being felt. Cargill said some of its regional origination and processing businesses, particularly in North America, were hurt by trade uncertainty and weather disruptions.

Cargill said adjusted operating earnings rose to $1.02 billion in the second-quarter ended Nov. 30, from $853 million a year earlier.

Net earnings rose 61% to $1.19 billion from $741 million a year earlier.

Minnesota-based Cargill’s quarterly revenue rose 4% to $29.2 billion.

Dave MacLennan, chairman and chief executive officer, said Cargill’s financial performance also got a boost from ongoing restructuring, including the divestment of its malt business and financial subsidiary CarVal Investors.

Other global grain traders have also been trying to shed poor-performing assets and invest in businesses with the potential for higher profit margins, such as specialty ingredients or meat production.

Rival Archer Daniels Midland Co. sold its palm business in Brazil, as part of a portfolio overhaul — and announced on Tuesday that it has acquired a plant-based extracts company in Brazil called Yerbalatina Phytoactives.

Earlier this month, Bunge Ltd said ended its 13-year ownership interest in an Iowa ethanol plant, following industry struggles with thin margins and overproduction. And Louis Dreyfus Co (LDC) has overhauled its executive team and launched a cost-cutting plan. — Reuters

Filipino shoe brand Annie & Lori takes a step in British Vogue

January 13, 2020 | 12:02 am

Annie & Lori shoes next to an iPad showing the British Vogue page that focuses on the brand.

IT’S NOT every day that a Filipino brand makes it into the pages of British Vogue, but here we are, talking about Annie & Lori, a homegrown brand featured in this month’s issue, under the Designer Profile section.

BusinessWorld reached Faith Mijares, the brand’s head designer and founder about the international recognition. The shoes aren’t easy to ignore. They’re lightweight leather sandals that have been worn by Miss Universe Catriona Gray, as well as Filipina Victoria’s Secret model Kelsey Merritt. The brand takes inspiration from local design, such as the country’s native bakya (wooden clog) and indigenous fabrics.

“Knowing how our artisans, our sapateros (shoe makers) have poured passion into creating quality shoes, I believe that it is but important to recognise them by highlighting that we are a Filipino brand,” said Ms. Mijares. “I’ve always wanted to showcase to the world how great Filipino craftsmanship [can be].”

The brand was launched in 2015, and Ms. Mijares recounts how it started. “The brand started out as a personal project. When my grandparents passed away, I knew I had to channel my sentiments to something productive and creative. I named the brand after my grandparents, Annie and Lori, two special people in my life who inspired me to start the business,” she said. “Before Annie & Lori, I was at the peak of my corporate career in a multinational company.”

Speaking about how a young brand can get international attention quite quickly, she said, “It has always been a dream — to be recognized and get featured on an international publication but I did not expect it to happen so soon hence it felt surreal. But it definitely inspired me and the brand to continue creating more beautiful shoes for the Filipina and for more women in other parts of the world.”

By being produced locally, Annie & Lori can tick off a box when it comes to sustainable measures, but Mr. Mijares takes it a step further. “We are aware of the impact of the fashion industry on our environment, hence it is but inevitable for us to think of sustainable and eco-conscious initiatives.”

The brand is known for using leather, but has now offered an alternative in the form of vegetable-tanned leather (leather processed by using plant-derived compounds, instead of other potentially harmful chemicals). “The vegetable tanned leather is lovely, but among all the things you’ll love about it most is that it leaves a minimal carbon footprint because of the use of organic materials and the natural tanning process,” she said. “The vegetable tanned leather collection is our most eco-friendly collection to-date but we are committed to discovering and using more eco-friendly materials in the future.”

It used to be that Filipino designer, in seeking international attention, would have had to hide behind more cosmopolitan names and designs, but times have changed. Ms. Mijares said, “Filipino elements are beautiful to begin with — which we do hope that more Filipinos get to appreciate someday. Aside from its beauty, some Filipino elements are unique, intricate and above all made with love and passion. Mixed with our brand’s modern and minimalist designs, those things perhaps make it translatable and relatable to the rest of the world.”

“Ours is a craftsmanship that is at par or sometimes even better [than] other global brands. If we will just continue to highlight the elements that are all uniquely Filipino (and that definitely includes high quality), the global market is definitely willing to embrace and recognise it.”

The brand is available through https://annielori.com/. — Joseph L. Garcia

The assassination of Qasem Soleimani

January 13, 2020 | 12:02 am

Iranian Major General Qasem Soleimani, Commander of the Quds Force of the Islamic Revolutionary Guard Corps. and acknowledged second most powerful man to Iran’s Supreme Leader Ayatollah Ali Khamenei, was killed by a US Air Force MQ-9 Reaper drone over the Baghdad International Airport Road in Iraq on Jan. 3.

Would “killed” be the right word on Soleimani’s death certificate? Most news reports have used “assassinated” or “liquidated” to accent the reputation and position of the deceased, and to insinuate the obvious political nuances of his demise at the hands of persons of interest — more than that, of nations-of-interest.

“The Pentagon launched an airstrike Thursday night that killed a powerful Iranian military leader, Gen. Qasem Soleimani, at Baghdad’s international airport,” USA TODAY announced on Jan. 3. It quoted that “the Defense Department said it conducted the attack at President Donald Trump’s direction as a ‘defensive action’ against Soleimani, who it said was planning further attacks on American diplomats and service members.”

“He was a monster. And he’s no longer a monster. He’s dead,” Mr. Trump said on the BBC on Jan. 7. “He was planning a big attack and bad attack for us. I don’t think anyone can complain about it.” But many all around the world, and even in the US, were complaining against what Trump did, for its repercussions on global politics and stability, and for the expected heightened security risks due to possible retaliatory and counter-retaliatory actions of interrelated states, according to their respective vulnerabilities.

Over one million people in Iran were part of mourning processions for Soleiman, reportedly the biggest since the 1989 funeral of the founder of the Islamic Republic, Ayatollah Ruhollah Khomeini. At least 56 people were killed and 213 injured in a stampede during Soleimani’s burial at Kerman, according to the BBC on Jan. 7. In Iraq, 2,000 protested in Basra and Nassiriyah on Jan. 10, with slogans saying “Neither America nor Iran, our revolution is a young revolution,” a feature in the Middle East Eye said on Jan. 11.

Trump’s brazen offensive against Iran creates a further chilling global effect with death of Abu Mahdi al-Muhandis, deputy chairman of Iraq’s Popular Mobilization Forces (PMF) and commander of Kata’ib Hezbollah, alongside Qasem Soleimani. Al-Muhandis was with high-ranking Iraqi and Iranian military officers who were in Soleimani’s entourage as it arrived at the Baghdad International Airport that fateful day, and were under the open skies of the Baghdad highway when missiles pulverized them to almost indeterminable recognition.

The drone, which was probably launched from Al Udeid Air Base in Qatar, was controlled remotely by operators at the Creech Air Force Base, a United States Air Force (USAF) command and control facility in Clark County, Nevada according to Arab News on Jan 5. And the gory details of a brazen off-base attack of a state on another state from another state’s territory lead to a maze of questions and analyses on whether the US attack was legal under international laws. Iran sent a letter to the United Nations, calling it “[s]tate terrorism” and said it violated principles of international law, Reuters reported on Jan. 4.

The Charter of the United Nations generally prohibits the use of force against other states, if a country does not consent to it on its territory. The Government of Iraq did not grant a permission to the United States to target a military commander from another country on its soil. The Japan Times of Jan. 4 asked, “A question of laws: Was US killing of Iran’s Soleimani self-defense or assassination?” Some legal experts believe that a lack of consent from Iraq makes it difficult for the United States to justify the attack. In fact, a mutual agreement signed in 2008 prohibits the United States from launching attacks on other countries from Iraqi territory, the same Japan Times analysis sad.

Iraqi Prime Minister Adil Abdul-Mahdi publicly declared that the US attack was a “breach of the conditions for the presence of US forces in Iraq, (and) the liquidation of leading Iraqi figures or those from a brotherly country on Iraqi soil is a massive breach of sovereignty.” Abdul-Mahdi has asked the US to withdraw its troops and facilities from Iraq, the Associated Press reported on Jan. 10.

President Trump made a public statement, shown on CNN and other networks, on Jan. 4 saying he had authorized the strike because Soleimani was plotting “imminent and sinister attacks” on Americans. He added, “We took action last night to stop a war. We did not take action to start a war.” He also said that he did not seek a regime change in Iran. But he did not even consult or ask Congress before the Soleimani attack, some congressmen from both political parties, said.

On Jan. 6, House Speaker Nancy Pelosi announced plans to hold a vote within the week on limiting President Trump’s war powers concerning Iran. On Jan. 9, the US House of Representatives voted 224–194 to approve it.

“Think” opinion columnist David Mark thinks Pelosi “was reduced to complaining that the strike (on Iran) came without consulting Congress,” because “the episode has knocked out the media’s round-the-clock focus on his impending Senate charges of abuse of power and obstruction of Congress, and coverage for days and weeks ahead is likely to be consumed with the strike” (nbcnews.com, Jan. 5). As indeed it has.

But is inspiring worldwide fear over the possible escalation of war and terrorism the way for a democratic world leader to go, to save himself from impeachment and being ousted from his arrogant perch as top leader of the top country in the world?

Russia and China were blamed by the US for “blocking a resolution condemning the attack on Washington’s Baghdad embassy.” The Russian Ministry of Defense, reacted by announcing that “Russia has offered Iraq their S-400 air defense system to protect their airspace” (almasdarnews.com, Jan. 7, retrieved from Wikipedia). On Jan. 6, Zhang Tao, the Chinese Ambassador, said to Iraq’s caretaker Prime Minister al-Mahdi that “China is keen to increase security and military cooperation in Iraq” (CNN, Jan. 6).

Even the ordinary man-in-the-street could not have avoided knowing about the assassination of Soleimani et. al, and some would have shrugged the news off as it might concern them only remotely, if at all. In these times of political strongmen leading powerful nations, some might even laugh and say, not quite pejoratively but maybe with concealed admiration, “Tarantado talaga yang si Trump!”

“Tarantado” is Filipino slang which means rough, reckless, impulsive, to achieve instant gratification from bullying and wrestling with anyone, and most everyone. “Tarantado” is more pejorative than “barumbado” which means being rough, reckless, an impulsive character, but usually not aggressive but reactive.

Reactive is what can be said of the Philippines’ announcement that the Department of Defense will send “two battalions of soldiers, in one C-130 plane and one C-295 plane, along with air and naval assets, to assist in the repatriation of 1,600 Filipino workers in Iraq and 1,000 Iran,” as reported by the Philippine Star on Jan. 8, and likewise publicly announced on other media.

Cannot the Philippines just let the Philippine Overseas Employment Administration, with the help of the Departments of Foreign Affairs and Social Services work out the repatriation of OFWs wanting to return home from Iraq and Iran? Using commercial flights for so few (since many do not want to come home) will be cheaper and speedier, instead of the reported 22 days needed to mobilize the Armed Forces. Besides, why are our leaders salivating to participate as a “saling-pusa” (like a voluntary little-child participant in the big boys’ war)?

Barumbado lang ba talaga ang Pinoy? (Is the Filipino just foolhardy?).

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Hong Kong’s first digital bank offers 6% deposit rate that dwarfs HSBC’s

January 13, 2020 | 12:02 am

THE FIRST OF Hong Kong’s new generation of digital banks has announced its arrival with a 6% introductory rate for deposits.

ZA Bank Ltd., one of eight firms preparing to start digital-only banks in Hong Kong, has begun a trial run that pays a select group of depositors over 3 percentage points more than banks such as HSBC Holdings Plc and Standard Chartered Plc. Though many doubt the new banks well be able to maintain such rates, the offer is a warning of upcoming competition for the city’s $410-billion local currency time-deposit business.

“This is more of a gimmick, which shouldn’t become a norm,” said Terry Siu, treasurer at CMB Wing Lung Bank Ltd., which pays 3.8% to new savers for two-month Hong Kong dollar deposits. “But competition for funds is indeed getting higher as eight more banks are coming out.”

ZA began a pilot last month for the city’s first digital-only bank. It’s offering the 6% rate for three-month Hong Kong dollar deposits capped at HK$200,000 ($25,000), according to a person with knowledge of the matter. The accounts are set at a 2% rate, but offer a top up of as much as 4% to select clients, the person said. Standard Chartered, HSBC and BOC Hong Kong Holdings Ltd. pay 1.9% to 2.3% for the maturity.

Groups of companies including Chinese giants Ant Financial and Tencent Holdings Ltd. were granted licenses to operate virtual banks last year by the Hong Kong Monetary Authority (HKMA). The launch is now approaching at a time when tensions stoked by pro-democracy protests in the former British colony show few signs of abating.

Deposit rates could stay elevated as the unrest persists amid concerns over money outflows. So far there haven’t been any signs cash is fleeing the city though banks have said some clients are inquiring about opening accounts elsewhere as a precaution. The Monetary Authority — the de facto central bank — steers the economy and maintains stability by pegging the city’s dollar to its US counterpart.

The rates stand in stark contrast to parts of the developed world, where central banks have slashed key rates below zero, forcing banks in some cases to pass negative rates onto retail customers. In Denmark, where rates have been negative the longest, a bevy of banks now charge depositors.

Deposit rates are also lower among other Internet banks globally. Monzo in the UK offers deposits of about 1.3%, while Australia’s uniquely named 86400 pays 2.25% on some deposits. In the US, Ally boasts of accounts with a 1.6% rate and three-month CDs at 0.75%, while Goldman Sachs Group, Inc.’s Marcus venture offers a savings account with a 1.7% rate.

A spokeswoman for ZA, a unit of ZhongAn Technologies International Group Ltd., declined to comment on the rate, but said that it will roll out new offerings in stages. ZA has said it will provide users with a “full suite of services 24/7,” allowing customers to open an account in five minutes with just a Hong Kong identity card.

An HKMA spokeswoman said in a comment to Bloomberg on Friday that it “notes” that some banks may offer “promotional” rates to some customers, while emphasizing that banking products are commercial decisions.

“While the Monetary Authority will not interfere with the commercial decisions of individual institutions, it would be a concern if a virtual bank planned to aggressively build market share at the expense of recording substantial losses in the initial years of operation without any credible plan for profitability in the medium term,” she said.

Virtual banks are similar to traditional retail banking services in that they will be able to accept deposits and give out loans. But they aren’t expected to set up physical branches, which will keep costs down.

Bloomberg Intelligence anticipates the new banks will find it difficult to make inroads into the city’s loan market, grabbing just a 1.5% share by 2025, since they will be held back by challenges in attracting deposits and high costs for interbank funding.

Alan Yip, a senior foreign-exchange strategist at Bank of East Asia Ltd., is also skeptical about the fat rate being offered by ZA becoming a trend.

“Traditional banks are only taking a wait-and-see approach now as the virtual banking business has yet to make a splash,” he said. “The market impact shouldn’t be very significant yet as they will need time to develop, therefore, the higher rate may not become a trend soon.”

Nevertheless, competition is heating up for a rich vein of the financial hub’s banking industry. Goldman Sachs estimated in 2018 that $15 billion, or 30% of the city’s total banking revenue, is up for grabs. — Bloomberg

Shares to rise on signing of US-China trade deal

January 13, 2020 | 12:01 am

By Denise A. Valdez
Reporter

THE MAIN INDEX is seen to be buoyed by global events in the coming week as eyes are focused on the scheduled signing of the Sino-US trade deal on Wednesday.

The 30-member Philippine Stock Exchange index (PSEi) ended last week’s trading lower by 20.87 points or 0.26% at 7,776.77 on Friday. On a weekly basis, the PSEi was down 80% amid its hot-and-cold performance during the first full week of trading for 2019.

Average value turnover last week inched up to P5.6 billion from P5 billion in the week prior, as foreign selling increased to P624 million from P505 million.

Online brokerage 2TradeAsia.com said the local market’s performance is a reflection of last week’s headlines, which was filled with news on the US-Iran tension overseas, and back home, on the signing of the national budget and data showing that headline inflation averaged at 2.5% last year.

“Local shares fell, pulled by geopolitical tensions in the Middle East following a US air strike that led to the death of Iran’s top military official, and a subsequent retaliation from Iran. Losses were trimmed, however, on President Duterte’s approval of the 2020 budget, plus 2019 inflation of 2.5% printing within BSP’s (the Bangko Sentral ng Pilipinas) target,” it said in a market note.

Heading into this week, the brokerage said one of the biggest catalysts will be the signing of the phase one trade deal between US and China in Washington on Jan. 15.

“2020 fired off with an emotional first full week of trading (albeit with forgettable turnout), with interest likely to spillover [this] week (US-China trade deal phase one signing + timetable for phase two),” 2TradeAsia.com said.

“Monitor turnover buildup on fundamentally well-revered stocks, as (fourth quarter) earnings reporting season nears, historically opening early February,” it added.

It also noted there is a “mispricing” in the market at present, as the country’s economy is supposedly projected to grow yet it does not translate to the PSEi’s performance.

Referring to the P4.1-trillion 2020 budget and the 6.5-7.5% gross domestic product growth forecast of the government, 2TradeAsia.com said: “An amalgamation of these will likely bring the local economy to historically unprecedented levels — and yet the PSEi trades at a mere 14x forward PE (price–to-earnings ratio), versus its 10-year average of 18x, and five-year average of 19x.”

“This is mispricing — at least to mean reversion advocates and/or seasoned players that can stomach and wait,” it added.

Considering all things, the brokerage said it expects immediate support for the week at 7,600-7,700 and resistance at 7,900.

Smart, savvy and strategic cyber risk management

January 13, 2020 | 12:01 am

We regularly hear and read about hacks, security breaches and similar cybersecurity incidents that expose vulnerabilities in corporate and government digital security systems. The reality is that most companies and organizations lack the internal cybersecurity expertise and capability to combat external threats, which lead them to seek external solutions.

While this may be necessary, effective cybersecurity efforts should be anchored on a clear digital risk management strategy, as discussed in a recent EY article, “Making digital risk management strategic.” Digital risk management is the next stage in enterprise risk and security for companies and entities that are incorporating digital processes and technologies into their business. It includes new and unexpected challenges that may arise as a result of digital transformation. Digital risk is a business and not a technology issue, making it a C-suite level concern instead of just an IT matter.

Organizations need to take on a holistic approach when creating a digital risk management strategy, one that supports risk-based decisions and improved cybersecurity that reduces costs related to managing security risk. This approach considers the entire organization’s digital assets and relationships since some vulnerabilities can come from the most unlikely of sources. An example would be an incident where the customer information of a local remittance company was leaked through a data breach on a separate system used for marketing purposes.

The latest EY Global Information Security Survey showed that 37% of organizations stated they would not be able to detect a sophisticated system breach, despite 53% of respondents claiming that they increased their cybersecurity budgets in prior years. This paints a bleak picture, although the situation may be due to the blurring of organizational boundaries resulting from the emergence of more interconnected devices. With the “Internet of Things” (IoT), or the increased connectivity between systems and the growing online presence of many organizations, any company may become a potential victim.

Addressing these risks requires a combination of strategic elements such as identifying risks; monitoring and predicting potential cyber threats; having a ready response protocol to any incidents; and a plan to restore operations. These are considerations that all organizations, regardless of size, need to consider within the limits of their financial and human capital resources. Whether it is a large organization or a smaller one with fewer resources, the key to building an effective digital risk management strategy lies in a few significant steps.

FIND YOUR WEAK SPOTS
Organizations need to actively and thoroughly review their existing processes, digital platform and operations to identify areas where risks can be minimized or addressed early on.

One example of taking bold steps to implement a digital risk management strategy was undertaken by the Singapore Ministry of Defence (MINDEF) in 2018. The government agency decided to invite about 300 ethical (or white hat) hackers from around the world to a first-ever bug bounty event. The challenge was to attempt to hack into the agency’s internet connected system to find vulnerabilities and be rewarded for finding vulnerabilities.

This innovative action helped generate nearly 100 vulnerability reports, 35% of which were considered valid security vulnerabilities that the government agency addressed immediately. While this may have been a first for a government agency, it has actually become a common practice for some multinational entities. They now hire white hat hackers to test their security systems for flaws and vulnerabilities by replicating the tactics, techniques, tools and procedures that a malicious hacker would utilize in an actual cyberattack.

PROTECT THE CROWN JEWELS
Companies need to quantify their risk appetite and identify the digital operations that require greater resources, competencies and capabilities to protect. These are usually the most vital operations such as infrastructure, cloud applications, managed operations or security services. Organizations also need to consider investing in intelligent technology solutions that can automate the process of monitoring and managing digital assets that are most at risk or have the greatest impact on operations.

There has been a trend for larger organizations to move their digital risk management and cybersecurity functions outside of traditional IT or technology departments and put them directly under the oversight of top management. This highlights the reality that cybersecurity and digital risk management are larger business issues and not simply IT problems.

PREPARE FOR THE WORST
Organizations should prepare an incident response plan ahead of time and undertake drills and practices to ensure that all stakeholders know what to do in the event of a breach. This plan, naturally, needs to be one that is continually studied and enhanced as threats evolve.

Following the initial response to any breach and the measures taken to minimize the damage, companies should have contingency plans in place to restore business-as-usual operations in the shortest time possible while also managing any operational and reputational damage that may occur.

GET YOUR PEOPLE UP TO SPEED
As with most programs, people are both the first line of defense and often the greatest point of vulnerability. The EY survey found that 34% of organizations consider careless and untrained employees as their greatest vulnerability. Based on our experience, about one out of five employees fall victim to social engineering techniques in the campaigns we conducted for our clients. This is the reason why organizations need to ensure that all their people are adequately trained in a cyber resilient risk culture.

People, in this context, refer to more than just employees. They also include the people engaged by an organization’s vendors, third-party stakeholders and internal/external systems providers. Cyber-savvy organizations need to ascertain that proper access controls, policies and technologies are in place to reduce possible unauthorized access to vital systems or confidential data.

A thorough evaluation of the cybersecurity knowledge, exposure and competencies of an organization’s people can also help identify possible human single-point-of-failures, which can significantly hamper an organization’s response time and effectivity in case of a breach. For example, say a breach happens and the cyber-security team swings into action. Part of their containment solution is to block all access to vital databases, but before they can do so, permission from the CIO is required. If for some reason the CIO cannot be readily contacted, it would cause a delay in implementing the security protocols.

AN AGILE, HOLISTIC APPROACH TO CYBERSECURITY
In the digital environment and ecosystem we operate in today, cyber threats will continue to exist and will constantly evolve to present new risks. Some analysts believe that a breach is inevitable for any organization.

However, what matters is how the organization will respond to such an incident. Hopefully, it will be carried out with an agile, scalable, well-designed digital risk management strategy that integrates processes, systems, people and technical competence into a holistic cyber defense system.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.

Nathaniel F. Dizon is an Advisory Manager of SGV & Co.

Maynilad spending for pipe replacement placed at P17B

January 13, 2020 | 12:01 am

SINCE its re-privatization in 2007, west zone concessionaire Maynilad Water Services, Inc. has spent about P17.3 billion to replace almost 2,600 kilometers of old and leaky pipes, the company said on Sunday.

“There is a need to sustain investments in the rehabilitation and replacement of the deteriorated pipes that Maynilad inherited. This is essential to prevent further loss of water, avoid water contamination, and increase water pressure for our customers,” said Ramoncito S. Fernandez, Maynilad president and chief executive officer, said in a statement.

The replaced pipe’s length accounts for 64% of the water distribution network that Maynilad inherited when it took over. The company described the replaced pipe’s length to be about the same as the distance between Manila and Seoul, South Korea.

The pipe network in the west zone is said to be the oldest water system in Asia, some portions of which date back to the Spanish era.

Last year alone, the company replaced 314 kilometers of old pipes in portions of Caloocan, Quezon City, Parañaque, Muntinlupa, and Imus in Cavite. The replacement projects involved an investment of P2.4 billion, allowing it to recover some 35 million liters of water per day, which is enough to supply around 60,000 households.

Pipe replacement is a component of Maynilad’s non-revenue water reduction program, which include activities such as active leakage control, network diagnostics, meter replacements, and district meter area management.

Maynilad is the country’s largest private water concessionaire in terms of customer base. It is the agent and contractor of state-led Metropolitan Waterworks and Sewerage System (MWSS) for greater Metro Manila’s west zone.

The company serves certain portions of the cities of Manila and Quezon, the side of Makati City west of South Super Highway, and other Metro Manila towns Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon.

Maynilad also supplies water to the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in Cavite province.

Metro Pacific Investments Corp., which has majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.

Learning to love pre-owned clothing even when there’s been sweat

January 13, 2020 | 12:01 am

By Karen Toulon
Bloomberg

MY FONDNESS for pre-owned fashion goes back decades. Apparently, in picking through musty piles in search of dresses spun from angel wings, I’ve been doing my part to save the planet.

America’s secondhand apparel market is expected to grow to $32 billion in 2020, according to an industry report. That’s up from $28 billion last year.

In recent months, internet consignment sites have been touting how much they’re unlike traditional retailers by highlighting the amount of waste they save by recycling clothing. At the same time, the companies stress how much they’re exactly like traditional retailers when it comes to basic shopping practices. Need something for yourself? Visit a secondhand store. Need a gift? Check out a consignment site. Not sure what to buy that special someone? No worries. They have gift cards!

Some websites, like industry leader ThredUP, focus on brands that shoppers can find at malls. Others, like The RealReal and Poshmark, offer high-end designer labels and vintage pieces, which usually means they’re at least 20 years old.

This past Christmas season, I got to thinking. Could I actually do some of my Christmas shopping on a resale site, like I might cruise the Mall at Short Hills? And if I were to buy for other people, would it matter to them that the clothing had been worn by others?

It’s not a huge, huge concern. But it’s not nothing either. Where do these clothes come from? It’s not like that’s on the label. Is it as simple as “in with the new and out with the old?” Perhaps weight gain or loss? Migrating fashion tastes? Did the former owners move on to the great consignment shop in the sky?

I needed a test subject to shop for. Someone who appreciated well-made clothes. Someone who might or might not feel squeamish about donning a shirt someone else had sweated into. Or worse.

That would be my unwitting husband.

Clothing is somehow different from purses and jewelry. It’s more intimate and grows older less gracefully. Unless they’re deeply soiled or badly damaged, well-made leather and precious metal goods can actually improve over time. Try to think about “aged leather” or “burnished gold” without smiling.

My reasons for loving “pre-loved” are personal. I like items that have some history. I also appreciate the possibility that by going pre-worn I won’t run into my sartorial doppelgänger, which is increasingly an issue as global brands and retail chains proliferate.

Sporting the current “it” carry-all handbag doesn’t make me feel particularly “in the know.” At least in the horror movie Us, the otherworldly twins had the decency to not match their body doubles’ attire once they ventured above ground. Lupita Nyong’o never once thought “I have that purse” as she fought for her life.

I conquered any hesitancy about wearing pre-owned clothing years ago. My most memorable purchase was a tan suede frock coat with decorative embroidery, trimmed with long Mongolian lamb fur along the cuffs, front opening and bottom hem. I found it somewhere in France while on a Dartmouth semester abroad. I remember having to part the fur in my palm whenever I put out my hand to accept change. I never ran into anyone dressed remotely like me.

So when I first heard of online consignment stores in early 2015, I was ready. While shopping online lacked the charm of rummaging through racks in overseas villages, it was much more efficient. I found the vintage black lambskin Chanel evening purse of my dreams in 2015, and its mate in white with a swinging gold chain a few months later. With some patience I secured a black lambskin Chanel for day, with gently twinkling rhodium-colored chains and then a patent leather Chanel with mixed metal hardware. The latter two are just large enough to hold a pair of heels in a pinch.

I’ve gifted my daughters resale-site vintage purses and skinny gold necklaces with teeny gemstones that were pretty and unique. But I’d never gotten anything secondhand for my husband.

I decided on a suit. I know my husband’s measurements. I searched by those specifics, by price — under $400 — and landed on some Paul Smith options. With an offer for 20% off, I selected a blue wool-and-mohair suit for $225, or $180 after the discount. Condition: Very Good. I checked the Paul Smith site. New Paul Smith suits clocked in at $1,560 for starters. So far, so good.

RealReal tells me that the suit saved 241 liters of water and 43.49 driving miles.

I added a Hermes Silk Abstract print tie with an estimated retail value of $195. It was listed at $75 but cost $60 after the 20% off. Its condition was described as pristine, with no obvious signs of wear.

Within a week, my packages arrived.

The suit’s shipping literature included a Christian Dior quote: “Don’t buy much, but be sure what you buy is good.” The tie seemed to have other ideas: “Anything worth doing is worth overdoing.” Attributed to Mick Jagger.

Both items were as advertised, in look and feel. The suit was handsome. The jacket could be worn right out of the box; the trousers needed a pressing. The tie was flawless.

Christmas Day, my husband Eric admired my wrapping and started The Opening.

The suit was first. He slipped on the size 40 jacket. It was a hit. Perhaps Eric was won over because it fit like a glove. Perhaps he’d remembered who he was married to and was hardwired to approve. Perhaps the slate-blue wool against the royal purple silk lining made him giddy. I know it made me giddy. Perhaps you simply cannot argue with excellent tailoring.

“Does it concern you that the jacket, and more specifically, the trousers, belonged to someone else?” Nothing quite says “Merry Christmas” like interrogating your husband.

“Not at all,” Eric said. He isn’t a clothes junkie, but as a trained painter, he does respect proportion, craft, and color.

“Do you think you’re less concerned because you assume a certain social class of the former owner?” I ask.

Lovely sentiment to insert into the middle of this season of selfless giving. I think the crackling fire actually paused for a moment as it, too, digested the question. These sites do present upscale items with upscale service. This is as far from rooting around in a secondhand bin as you can get.

“Absolutely not,” he said.

Modeling his new clothing, he worked in some poses. He did a passable approximation of a mannequin, arms awkwardly akimbo. And, inexplicably, he executed a goofy forward lunge, like a mannequin suddenly embroiled in a sword fight.

The trousers are a bit snug. Luckily we have an excellent tailor one town over. For $45 he’ll work his magic. Sadly I am on my own when it comes to the forward lunge.

Yields on gov’t debt up on inflation, US-Iran tensions

January 13, 2020 | 12:01 am

By Marissa Mae M. Ramos
Researcher

YIELDS ON government securities (GS) increased across-the-board last week amid developments abroad and at home, namely the escalation of tensions in the Middle East and faster domestic inflation.

GS yields went up by an average of 21.9 basis points (bps) week on week, based on the PHP Bloomberg Valuation Service Reference Rates as of Jan. 10 published on the Philippine Dealing System’s website.

“Local yields rose on inflation concerns amid a potential uptick in oil prices from escalating tensions in the Middle East following the release of stronger-than-expected Philippine inflation report for Dec. 2019,” a bond trader said in an e-mail interview.

For Security Bank Corp. First Vice-President and Head of Institutional Sales Carlyn Therese X. Dulay, debt yields were higher “mainly due to a wide risk-off tone in the global markets that spilled over to the GS [market]. “

“This was exacerbated by banks trimming positions, thus the exaggerated move,” Ms. Dulay said in a separate e-mail.

Headline inflation clocked in at 2.5% in December, which is the fastest in six months or since June’s 2.7%.

The December reading brought the 2019 average to 2.5%, which is well within the central bank’s 2-4% target band for the year but was faster than the full-year forecast of 2.4%.

Economists interviewed last week noted that the government’s inflation target of 2-4% may be breached if tensions in the Middle East continue to escalate and would lead to an increase in the global price of oil.

Tensions between Washington and Tehran escalated after US President Donald J. Trump authorized a drone attack at Baghdad airport that killed the Iranian military commander Qassem Soleimani earlier this month.

In retaliation, Iran responded last week through a missile attack on two Iraqi military bases that housed US coalition troops. Mr. Trump and the Iraqi military initially claimed zero casualties from the attack.

Yields went up across-the-board at the secondary market last Friday. In the short end of the curve, yields on the 91-, 182-, and 364-day Treasury bills increased by 7.4 bps (3.264%), 7.1 bps (3.427%) and 31.9 bps (3.749%), respectively.

At the belly, the rates of the two-, three-, four-, five- and seven-year Treasury bonds (T-bond) climbed by 27.6 bps, 32.2 bps, 33 bps, 31.9 bps and 27.4 bps, respectively, to 4.048%, 4.178%, 4.282%, 4.375% and 4.532%.

At the long end, the yield on the 10-year debt paper rose by 22 bps to 4.675%. The rate of the 20-year T-bond also went up 10.8 bps to 5.244%, while the 25-year paper increased 10 bps to 5.282%.

Moving forward, Security Bank’s Ms. Dulay said yields “will likely move range-bound” as banks continue to trim positions given a “sustained geopolitical noise.”

For the bond trader, yields are seen to further increase this week “as possible strong US inflation and retail sales data might heighten bets of steady US policy rates this year.”

“The signing of the first phase US-China trade deal this week might also support higher yields,” the trader added.

Business leader says parking space owners responsible for security

January 13, 2020 | 12:01 am

BUSINESS SECTOR leader Sergio R. Ortiz-Luis Jr., president of the Employers Confederation of the Philippine (ECOP), said parking space owners should be made liable for security breaches in vehicles after a lawmaker announced she will hold a probe on car break-ins. In a radio interview on Sunday, Mr. Ortiz-Luis said his personal position is that those who collect fees for parking lots should be held responsible in ensuring the security in that space. “Naniniwala kami na dapat ‘yung parking area, responsibilidad ‘yan ng may malls….may responsibilidad sila d’yan sa pumupunta d’yan. Ang dami nang security guards, at ang CCTV nandun sa mga strategic area para protektado ang pumapasok sa kanila (We believe that parking areas should be the responsibility of the mall owners…they are responsible for those who go to their establishments. There are many guards and the CCTV should be put in strategic areas so customers will be safe),” he said. “If they’re not liable, who’s liable?” he said. ACT-CIS Party-list Representative Rowena Niña O. Taduran said last week that she will hold an inquiry in Congress over parking security after she herself was victimized at a shopping mall in Quezon City. Her parked vehicle was broken in, and the perpetrators took with them hundreds of thousands worth of items, including a government-issued laptop. A pending bill in the House of Representatives, numbered 3262, proposes to regulate parking fees and make parking lot owners liable for any loss or damage. Valenzuela 1^st District Rep. Weslie T. Gatchalian, who introduced the bill, said police data show there were more than 1,000 parking lot incidents from 2016 to 2019, yet no establishment owner or parking operator was held responsible. — Gillian M. Cortez

Nissan brings Ariya Concept, Japanese hospitality to CES

January 13, 2020 | 12:01 am

LAS VEGAS — Nissan is bringing a touch of Japanese hospitality to CES 2020 with exhibits that show the brand’s vision for the future of mobility, from the Ariya Concept electric crossover to a zero-emission ice cream van and a self-sinking golf ball.

The Nissan Ariya Concept is making its North American debut at the Las Vegas trade show. Bringing together advanced technologies on an all-new EV platform, the zero-emission crossover embodies Nissan Intelligent Mobility, an expansive lineup of vehicle technologies and services that deliver an innovative, future-thinking driving and ownership experience for the customer, today and tomorrow.

“The Ariya Concept highlights Nissan’s promise of an entirely new driving experience that’s just on the horizon,” said Takao Asami, senior vice-president for research and advanced engineering at Nissan. “This zero-emission crossover isn’t a concept car based on far-off ideas; it’s a showcase of technologies available in the very near term.”

To show they’re real, Nissan has also taken these technologies out of the car and developed new, creative uses for them. Nissan is showing these at CES so our guests can experience them through fun, everyday activities.

To welcome CES visitors, the design and layout of Nissan’s booth — and even the fragrance (a subtle scent of bergamot and green tea) — reflect traditional Japanese hospitality and attention to detail.

“Omotenashi is a Japanese philosophy of hospitality that manifests in careful attention to detail that may be undetectable to guests, but contributes to the most memorable experience possible,” explained Alfonso Albaisa, senior vice-president for global design at Nissan. “That’s what we want to offer our customers, and of course our guests at our booth. We’ve tried to create an immersive experience that gives you the same feeling of hospitality, excitement and Japanese craftsmanship that you will feel behind the wheel of our latest vehicles and technologies that bring the future to life today!”

Highlights of Nissan’s CES exhibit include:

• The Nissan Ariya Concept electric crossover. At the Nissan Intelligent Mobility Corner, technology experts will give demonstrations of Ariya Concept features such as the ProPILOT 2.0 advanced driver assistance system, twin-motor allwheel-control system, acoustic meta-material and Smart Route Planner.

• Nissan’s zero-emission ice cream van: Chill out with ice cream served from a concept van that combines an all-electric drivetrain, second-life battery storage and renewable solar energy generation. Based on the 100% electric e-NV200 light commercial vehicle, the ice cream van’s motor is driven by a 40 kilowatt-hour battery. A portable power pack, which uses lithium-ion cells recovered from early first-generation Nissan electric vehicles, powers the on-board equipment.

• The ProPILOT golf ball: Inspired by the ProPILOT 2.0 advanced driver assistance system, Nissan has created a golf ball that always manages to find the hole. At the booth’s putting green, an overhead camera will detect the position of the golf ball and hole. Sensing technology and an internal electric motor will ensure the putt stays on course until reaching the cup — just as Nissan cars equipped with ProPILOT 2.0 can maneuver along a predefined highway route.

• Power Selfie: CES visitors won’t be able to drive the Formula E race car on display at Nissan’s booth, but they can recreate the exhilarating experience. With the help of high-powered fans and special effects, the Power Selfie booth records a short video to mimic the acceleration of the 100% electric race car from 0 to 100 kph in a mere 2.8 seconds. Guests will be able to create a GIF that looks as if they’re racing down the track.

• Formula E race car: Nissan, the first Japanese car maker to join the all-electric Formula E street racing championship, will show its new, Japan-inspired livery for the new season.

• The Nissan LEAF e+: Nissan LEAF e+ electric vehicle features a powerful motor, long range, advanced technologies including the ProPILOT driver assistance system and the innovative e-Pedal mode for one-pedal driving.

1...10,02010,02110,022...14,238 Page 10,021 of 14,238