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Ceres-Negros gearing up for tough challenge in AFC Champions League

TOP local club football team Ceres-Negros FC begins its 2020 campaign next week, starting with the preliminary stage of the AFC Champions League (ACL).

Opening their ACL bid here at home against Myanmar’s Shan United on Jan. 14, the three-time Philippines Football League (PFL) champion said it is preparing the best way it can for what it expects to be a tough run in the tournament.

“We cannot promise anything, but we will represent the country in the best way possible. We are going to fight until the last minute to reach the next round. It’s a very hard competition. But we are going to try. We will give our best so I hope everyone will support us,” said Ceres coach Risto Vidakovic at the Philippine Sportswriters Association (PSA) Forum on Tuesday at the Amelie Hotel in Manila.

Ceres will face off with Shan United at 7:30 p.m. on Tuesday at the Rizal Memorial Stadium where it hopes to come away a winner to move to the next round of the preliminaries and continue to vie for a spot in the group stage of the ACL.

The team will parade staples like Bienvenido Maranon, Stephan Schrock and Rolland Muller in the contest, joined by newly signed players Mark Hartmann, Pika Minegishi, Josh Grommen and Arnie Pasinabo.

Mr. Maranon said they are very excited to get the year going and play in Rizal as their home turf of Panaad Park and Football Stadium in Bacolod City is being renovated.

Back in 2018, Ceres reached the third round of the preliminaries, which Mr. Vidakovic said they are looking to take cue from.

“Two years ago we made it to the third round so hopefully we can create a surprise again in the first two rounds,” said the Ceres head coach. — Michael Angelo S. Murillo

Thunder stay hot with OT win vs struggling Brooklyn Nets

NEW YORK — Chris Paul scored 28 points and hit two clutch shots in overtime as the surging Oklahoma City Thunder outlasted the slumping Brooklyn Nets 111-103 Tuesday night in New York in the second night of a back-to-back for both teams.

The Thunder won for the 10th time in their last 12 games and rebounded nicely from Monday’s loss in Philadelphia thanks to Paul’s dynamic performance.

Paul came within two of his season-high for points and shot 9 of 15 from the floor, including four of eight from 3-point range.

He snapped a 103-103 deadlock with a baseline 10-footer over Jarrett Allen with 3:36 remaining and then hit a 13-footer about a minute later for a 107-103 edge.

Shai Gilgeous-Alexander added 22 points and hit four free throws in the final minute to ice Oklahoma City’s win and send Brooklyn to its seventh consecutive loss.

Dennis Schroder added 14 points, while Steven Adams posted a double-double with 10 points and 18 rebounds as the Thunder shot 41.3% from the field.

Taurean Prince scored 21 points to lead the Nets, who missed seven of eight shots in overtime, shot 40.8% overall and are on their longest skid since dropping eight straight from Nov. 21–Dec. 5, 2018.

Caris LeVert added 18 of his 20 in the second half but did not play in overtime due to a minutes restriction. Spencer Dinwiddie was held to 14 points on 6-of-21 shooting

The Nets held a 94-89 lead on Dinwiddie’s reverse layup with 4:27 remaining, but Oklahoma City stormed back and tied the game in the final minute of regulation.

Paul forged a 101-101 deadlock with 47.4 seconds left when he went around a screen by Adams and hit a jumper from the right side of the paint before Allen could cover. After LeVert badly missed a contested short jumper, Paul had a chance to give the Thunder the lead, but he committed a turnover in the lane when the ball went off his right leg with 11.7 seconds left.

The Nets missed two chances at the win when Dinwiddie missed a free throw with 11.7 seconds left after Oklahoma City committed a foul before the ball was inbounded. Dinwiddie then missed a contested floater against Adams with seventh-tenths of a second left. — Reuters

Kenneth Chua claims rare five-straight Prima Bowler of the Year award

KENNETH Chua claimed an unprecedented five-straight Prima Pasta Bowler of the Year award recently during the 2019 Team Prima Annual Awards at the V Corporate Centre in Makati City.

Chua, 28, capped off last year with a silver medal in the men’s bowling team event of the recent 2019 Southeast Asian Games in Mandaluyong City after ruling several tournaments nationwide at the same year.

He also captured the last year’s titles in the open master division of SCTBA Open Championship, the first PBF National Matchplay Open Championships, last year’s TBAM Open Masters competition and the PBA Open Masters Champion.

“Champions work hard until they get it right,” said Chua after receiving the award in the annual event organized by Team Prima Chairman Alexander Lim who also gave special citation to some other Prima athletes who excelled in the last 2019 Southeast Asian Games hosting.

Special mentions were Prima cyclists Jerrick Farr and Lea Denise Belgira who won the gold in the cycling downhill competition men’s and women’s classes. Cue artist Rubilen Amit received citation also for winning the nine-ball singles gold, nine-ball doubles gold and 10-ball silver in the SEA Games.

Krizzah Tabora Macatula was awarded the female bowler of the year winner while the junior bowler of the year male and female winners were national youth member Merwin Tan and Dale Lazo. Senior bowler of the year male and female achievers were Bonnie Solis and Lou Laforteza.

Vivian Padawan and Clarence Tiu won the female and male athlete of the year bowler for Cebu-Bacolod-Davao crowns, respectively. For the most improved bowler of the year winners, Grace Hernandez copped the female award and Nicco Agujo claimed the male award.

Other Team Prima Athlete of the Year winners were Jericho Rivera (cyclist of the year), Adrian Dionisio (multi-sports), David Lim (photographer of the year), Nephtali Pineda (male badminton of the year), Andrea Abalos (female badminton of the year), JR Pandi (boys’ badminton of the year) and Ghisel Bautista (girls’ badminton of the year).

Magnus is Blitz Champion

World Championship Blitz
Moscow, Russia
Dec. 29–30, 2019

Final Top Results

1–2. Magnus Carlsen NOR 2865, Hikaru Nakamura USA 2885, 16.5/21

3. Vladimir Kramnik RUS 2748, 15.0/21

4–5. Alexander Grischuk RUS 2741, Maxime Vachier-Lagrave FRA 2768, 14.0/21

6–20. Alireza Firouzja FIDE 2649, Vladislav Artemiev RUS 2793, Yu Yangyi CHN 2807, Maxim Matlakov RUS 2720, Jan-Krzysztof Duda POL 2796, Dmitry Andreikin RUS 2780, Vladiimir Fedoseev RUS 2714, Anish Giri NED 2769, Alexander Zubov UKR 2754, Levon Aronian ARM 2698, Wang Hao CHN 2714, Ernesto Inarkiev RUS 2556, Peter Svidler RUS 2805, Boris Gelfand ISR 2700, Ivan Cheparinov GEO 2647, 13.5/21

Playoff: Magnus Carlsen beat Hikaru Nakamura 1.5-0.5.

Total of 206 participants

Time Control: Three minutes for the entire game with two seconds added to your clock after every move starting move 1.

Venue: VIP Zone of the Luzhniki Football Stadium in Moscow, Russia.

Others: The prize fund is $350,000, with $60,000 for first place. Prize money is shared equally between players on the same number of points, with a playoff for first place that consists of two 3+2 games followed, if necessary, by Armageddon, where White has five minutes to Black’s four, with a draw for Black to be counted as a victory.

Five years ago Carlsen won both the Rapid and Blitz Chess Championships in the same year — this was in 2014 Dubai. Since he was also Classical World Champion at that time he became a “Triple Crown” winner. Garry Kasparov compared the feat to “winning tennis slams on clay, grass and hard court.” Well, he has done it again! Two days after winning the Rapid he tied with Hikaru Nakamura for the Blitz title and won the playoff. He is now the reigning World Champion in classical, Rapid and Blitz.

Baadur Jobava was doing very well with five wins and three draws in the first 8 rounds but this loss against Magnus in round 9 messed him up and he couldn’t recover. The theme of our article today is endgame play. Most people wouldn’t find Black’s endgame finesse, let alone under blitz conditions.

Jobava, Baadur (2604) — Carlsen, Magnus (2872) [A01]
World Blitz 2019 Moscow RUS (9.2), 29.12.2019

1.b3 g6 2.Bb2 Nf6 3.Bxf6 exf6 4.c4 d5 5.cxd5 Qxd5 6.Nc3 Qa5 7.a3 c6 8.e3 f5 9.g3 Bd6 10.Bg2 Nd7 11.Nge2 Nf6 12.0–0 0–0 13.b4 Qd8 14.d4 Qe7 15.Rb1 a5 16.b5 Bxa3 17.bxc6 bxc6 18.Bxc6 Ra6 19.Nd5 Nxd5 20.Bxd5 Bb4 21.Nf4 Bd6 22.Qf3 a4 23.Rfc1 a3 24.Ba2 Ra7 25.Nd5 Qd8 26.h4 Be6 27.Kg2 h5 28.Nc3 Bxa2 29.Nxa2 Rc7 30.Qd5 Qa8 31.Qxa8 Rxa8 32.Rxc7 Bxc7 33.Kf3 Kf8 34.Ke2 Bd6 35.Kd3 Ke7 36.Rb7+ Ke6 37.Rb6 Ra7 38.Kc2 Kd7 39.Kb1 Kc7 40.Rb3 Rb7 41.Kc2 Rxb3 42.Kxb3 Kc6 43.Nc3 f6 44.Kc4 g5 45.f4 g4 46.Kb3 Bf8

Jobava has fought Carlsen to a standstill but now makes a fatal mistake.

47.Nb1?

[47.Na2 was correct, but isn’t the text the most obvious move, winning the a3 pawn?]

47…Bb4! 48.Nc3

[48.Kxb4 a2 and the pawn queens]

48…a2 49.Nxa2 Be1

White’s kingside pawns fall.

50.Kc4 Bxg3 51.Nb4+ Kd6 52.Kd3 Bxh4 53.e4 fxe4+ 54.Kxe4 Bg3 55.f5 h4 56.Nd5 h3 0–1

Both Magnus and Hikaru Nakamura, the two highest rated blitz players in the world, finished with 16.5/21 and had to play an additional 2 blitz games as tie-break. Magnus cleaned up nicely:

Carlsen, Magnus (2865) — Nakamura, Hikaru (2885) [D02]
Wch Blitz tiebreak 2019 Moscow (2), 30.12.2019

1.d4 Nf6 2.Nf3 d5 3.Bf4

Lately Carlsen has been playing the London System every time he needs the full point.

3…c5 4.e3 e6 5.Nbd2 Bd6 6.Bxd6 Qxd6 7.dxc5 Qxc5 8.c4 dxc4 9.Bxc4 0–0 10.Rc1 Qe7 11.0–0 b6 12.Qe2 Bb7 13.Rfd1 Nbd7 14.Ba6 Nc5 15.Bxb7 Qxb7 16.Ne5 Ncd7 17.Qf3 Qa6

This is no time to go pawn-grabbing of course but Nakamura knows exactly what he is doing, being a veteran of hundreds of online blitz/bullet tournaments. He is provoking Magnus to stir up an attack under speed time controls while he gobbles up one or two pawns. If things go the way he wants it and, being the tactical monster that he is, Carlsen’s attack will run out of steam and Naka can then cash in with his extra material.

18.Nc6 Kh8 19.Nc4 Qxa2 20.g4 Nc5 21.Nd6 Nb3?

Nakamura starts getting nervous. He should have remained true to himself with 21…Qxb2 as White’s attack is still not clear.

22.Rc2 Qa4 23.Rc4

Black’s queen has been shut off the kingside — Nakamura is clearly in trouble.

23…Qa6 24.g5 Nd7 25.Rh4!

There is already forced mate.

25…Nbc5 26.Nxf7+

Magnus misses checkmate with 26.Rxh7+! Kxh7 27.Qh5+ Kg8 28.Ne7# but no matter as the text move wins as well.

26…Rxf7 27.Qxf7 Qe2 28.Rxd7 Nxd7 29.Qxd7 Rf8 30.Rf4 1–0

There was a bit of a controversy at the end. Alireza Firouzja, the one who left the Iranian Chess Federation because he badly wanted to play here in Moscow, and the very same one who got the silver medal in the Rapid section, was also doing very well in the blitz. Carlsen met him in the 3rd to the last round. Remember our theme for today? Endgame play, right?

Firouzja, Alireza (2649) — Carlsen, Magnus (2865) [C79]
FIDE World Blitz Championship (19.1), 30.12.2019

1.e4 e5 2.Nf3 Nc6 3.Bb5 a6 4.Ba4 d6 5.0–0 Bd7 6.c3 g6 7.d4 Bg7 8.h3 Nf6 9.Bc2 0–0 10.Re1 Re8 11.Nbd2 Qe7 12.Nf1 Qf8 13.Ng3 Bh6 14.Ng5 Nd8! 15.Bb3 Ne6 16.h4 Rad8 17.Be3 Bg7 18.h5 Bh6 19.Qc1 Ng4 20.Nxe6 fxe6 21.Rf1 Nxe3 22.fxe3 Qe7 23.hxg6 hxg6 24.Qd2 exd4 25.cxd4 Kg7 26.Rf3 Rf8 27.Raf1 Rxf3 28.Rxf3 Rf8 29.Qc3! c6 30.Nf1 e5 31.Rxf8 Kxf8 32.Qc4 Qf6?

[32…Kg7 33.Qg8+ Kf6 looks awkward but is the best defense]

33.dxe5 dxe5 34.Qb4+ c5 35.Qxb7

That’s one pawn.

35…Bb5 36.Qc8+ Ke7 37.Qxc5+

That’s two.

37…Qd6 38.Qxd6+ Kxd6 39.Bf7 Bxf1!

Black places his hopes on a bishops-of-opposite-color endgame.

40.Kxf1 g5 41.Ke2 Bf8 42.Kf3 Ke7 43.Bc4 a5 44.Ke2 Kd6 45.Bd5 Be7 46.Kf3 Bd8 47.Kg4 Be7 48.Kf5 Bd8 49.g4 Be7 50.a3 Bd8 51.b4 axb4 52.axb4 Be7 53.b5 Bd8 54.Kg6

The forcing 54.b6 does not work: 54…Bxb6 55.Kxg5 Ke7! 56.Kf5 Bxe3 57.Kxe5 is a draw. In order for White to win with his extra two pawns they should be farther apart (for example, if the e4 pawn were instead on c4) so that Black’s king and bishop cannot coordinate defense.

54…Kc5 55.Kf5 Kxb5!

Even in blitz rate Magnus is a phenomenal endgame player. This is the same principle as in the previous note — he destroys white’s pawn on b5 so that the remaining pawns will be close together. Besides, if he tries to defend his e5–pawn then 55…Kd6 56.Ba8! Be7 57.b6! wins.

56.Kxe5 Kc5 57.Ke6 Ba5 58.e5 Bd2 59.e4

Here Firouzja missed 59.Kf7! Kxd5 60.e6 Bb4 61.e7 Bxe7 62.Kxe7 Ke4 63.Kf6 but c’mon, both players had only seconds left on their clock.

59…Bc3! 60.Kf5 Kb6 61.e6?

Why didn’t he take the g5 pawn? I believe 61.Kxg5! wins.

61…Kc7 62.Kg6 Kd8 63.Kxg5 Ke7

In contrast with the position on the 61st move, Black’s king has managed to make it back in front of the pawns. I couldn’t believe it but a look at the 7–man tablebase says that the position is drawn.

64.Kh5 Bd2 65.g5 Bf4

Actually the losing move. Correct is 65…Bc3! 66.Kg6 Bd2! 67.e5 Bc1 White cannot make progress

66.Kg4?

Throws away the win (66.g6!) but also… I will let GM Dejan Bojkov tell the story: “In this very complex position the unthinkable happened. Right after moving his king to g4, Firouzja tipped over his king and after first putting it back, Firouzja was just too late to hit the clock and he ran out of time, while Carlsen moved his bishop to d2. His position was declared a loss as theoretically speaking a mate is possible to happen with opposite-colored bishops on the board! What a dramatical finish of a spectacular game!”

66…Bd2 0–1 <D>

FINAL POSITION

Theoretically, the position on the board is a draw. In the video of the finish you can see Grischuk calling Magnus and telling him that he should get a win as there is the possibility of checkmate on the board. The arbiter on the scene agreed and awarded Magnus the point. Firouzja protested and the chief arbiter, the very well respected Takis Nikolopoulos, was summoned to make a ruling. He upheld the win and clarified that, yes, Black gets the win because the rule is that if checkmate is possible for Black, no matter how remote the possibility, then Black gets the win. Here is one possibility for checkmate: 66…Bd2 67.Kf5 Be3 68.Kg6 Bd2 69.Kh7 Be3 70.g6 Bd2 71.g7 Be3 72.g8N+ Kf8 73.Kh8 Bd2 74.e5 Be3 75.Be4 Bh6 76.Bh7 Bg7#

This is where there is a divergence between online and live play. In online chess you cannot win without mating material. Since Carlsen only had a king and bishop the game would have immediately been declared a draw.

After this very tough loss Firouzja lost again in the next round (to Kramnik) and drew in the final round to finish in 6th place. On the other hand Magnus Carlsen was also in a state of nervous exhaustion and drew his last two games and that is what allowed Nakamura to catch him.

As you can see, Carlsen versus Firouzja was not just another blitz game.

 

Bobby Ang is a founding member of the National Chess Federation of the Philippines (NCFP) and its first Executive Director. A Certified Public Accountant (CPA), he taught accounting in the University of Santo Tomas (UST) for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.

bobby@cpamd.net

On trading block

Kevin Love had an outstanding game yesterday. It was by far his most productive in recent memory, and the Cavaliers needed every single one of his 30 points on 15 shots (along with nine rebounds and four assists) to keep pace with the undermanned Pistons, who nonetheless managed to snatch victory from apparent defeat with resilient play. Needless to say, his elevated numbers vis-a-vis his season averages stemmed from an avowed desire to let his playing do the talking following a spate of events in which he displayed unprofessional behavior. “I wasn’t acting like a 31-year-old. I was acting like a 13-year-old,” he admitted. “That was not me.”

To those from the outside looking in, it was most certainly Love who showed ridiculously bad body language in the midst of four straight setbacks prior to yesterday’s homestand. Frustration over all the losing — and his seemingly diminished role in the offense — had set in, and he saw fit to direct his ire at coaches and teammates, and even general manager Koby Altman. For all his reasons, there was no defending his tantrums — and especially since he’s just in the first year of a contract extension set to pay him a whopping $120 million through 2023.

The Cavaliers had hoped to make Love their cornerstone in the aftermath of LeBron James’ departure in 2018, but their aim to accelerate a rebuild now puts him on the trading block. His salary and the length of time he’s tied up limit their options considerably, thus making him a de facto mentor to the younger set on the roster. And, taken in this context, his recalcitrance sent all the wrong signals to current and prospective parties. Whether or not he stays, he has rightly come to the conclusion that he needs to show up for work and be at his finest if he is to earn his keep.

Granted, National Basketball Association annals are replete with examples of stars who put themselves ahead of those around them. On the other hand, Love has been anything but egoistic; for all his gaudy stats, he has willingly made sacrifices for the collective whenever necessary. Which is why all and sundry are ready to move on. The wins will continue to be scarce, but the Cavaliers know the value he brings with his experience. They’re keen on tapping it for as long as he’ll be around, and, hopefully, he’s ready to share it as best he can.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

Duterte offers new water contracts

By Gillian M. Cortez Reporter
and Victor V. Saulon Sub-Editor

PRESIDENT Rodrigo R. Duterte is offering new contracts to Metro Manila’s two water concessionaires, but warned the government will take over water distribution services and pursue charges against Manila Water Co., Inc. and Maynilad Water Services, Inc. should they reject the new terms and conditions.

“It’s either they accept with no guarantee they will not be prosecuted or if they do not accept it, then I will nationalize the water system and prosecute them for plunder or estafa on a large scale,” Mr. Duterte said during a briefing in Malacañang on Tuesday afternoon.

“I said I’m proposing a new contract, you accept it and if it’s to your liking, sign it. If you don’t, then there is no water. I will order the military to take over and I will nationalize the water….and then I will file the corresponding charges.”

Presidential Spokesperson Salvador S. Panelo said earlier on Tuesday the new contracts will not have the “onerous” provisions raised by Mr. Duterte and “without any guarantee of [them not] being criminally prosecuted together with those who conspired to craft the very onerous contracts.”

Representatives of Maynilad and Manila Water did not immediately respond when asked to comment, but they had said late last year that they would want to sit down with state agencies to come up with new deals.

“Should Maynilad and Manila Water refuse to accept the new agreements, the President will order the cancellation of their present water contracts, order the nationalization of water services in their respective areas of operation, and prosecute all those involved directly or indirectly in the arrangement that led to the present suffering of the Filipino people,” Mr. Panelo added.

Mr. Panelo said the new water contracts will replace what he called a constitutionally flawed concession agreements that violated the provisions of the anti-graft law.

The new contracts were prepared by the Office of the Solicitor General (OSG) together with the Department of Justice, and presented to Mr. Duterte during a Cabinet meeting on Monday, the presidential spokesperson said.

Mr. Duterte was quoted as saying that water is a natural resource “and therefore cannot be used merely as a commercial commodity and exploited to rake in billions of pesos in profits at the expense of the consumers.”

Mr. Panelo, however, said the new contracts had yet to be sent to the concessionaires, and a meeting with officials of the two companies may not be necessary. A deadline was not discussed during the Cabinet meeting.

The market welcomed the news that Manila Water and Maynilad would be able to continue its operations if they accept the new deals.

Shares in Manila Water jumped 12.29%, parent company Ayala Corp.’s shares rose 1.91%. On the other hand, shares in Maynilad’s shareholders Metro Pacific Investments Corp. (MPIC) and DMCI Holdings, Inc. went up 4% and 4.33%, respectively.

SURPRISE
Sought for comment, the regulatory office of the Metropolitan Waterworks and Sewerage System (MWSS) was surprised at Malacañang’s announcement, including the threat of criminal prosecution against those that prepared the old contracts.

“We were consulted but the final version, as far as I know, will be prepared by the OSG (Office of the Solicitor General),” said MWSS Chief Regulator Patrick Lester N. Ty in phone interview.

“I don’t know what the final decision of Malacañang will be. I haven’t seen a formal copy,” he added.

He said nationalization of water services had previously been brought up by the government. On the question of prosecution, Mr. Ty said this would be best answered by those who prepared the contracts.

The concession agreements were first signed in 1997 during the administration of former President Fidel V. Ramos. Their validity is until 2022, but in 2009 then-President Gloria Macapagal-Arroyo approved the contracts’ extension to 2037, a move questioned by Mr. Duterte.

Justice Secretary Menardo I. Guevarra told BusinessWorld on Tuesday that the new contracts were still being finalized ahead of more dialogue on the economic aspects and implications.

“Wala pang (there is still no) consolidated draft. The DoF (Department of Finance) input and economic aspects will have to be discussed further and integrated later,” he said.

Late last year, the water concessionaires were accused of economic sabotage by Mr. Duterte after Manila Water disclosed on Nov. 29 that it had won P7.39 billion in an arbitration case with the government.

The international arbitration came after the Ayala-led company called on the government to honor its pledge to reimburse foregone operating revenues arising from a significant reduction in the rate of return committed in its concession contract.

Separately, Maynilad was granted by a Singapore tribunal on July 24, 2017 an arbitral award of at least P3.42 billion for losses resulting from the refusal of the MWSS to implement the concessionaire’s water tariffs.

Both companies during congressional hearings late last year said they would not collect the amount awarded by the arbitration court.

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

Headline inflation rates in the Philippines (December 2019)

THE OVERALL year-on-year increase in prices of widely used goods picked up for the second straight month in December by its fastest pace in six months, the government reported on Tuesday. Read the full story.

Headline inflation rates in the Philippines (December 2019)

December inflation fastest in six months

By Marissa Mae M. Ramos
Researcher

THE OVERALL year-on-year increase in prices of widely used goods picked up for the second straight month in December by its fastest pace in six months, the government reported on Tuesday.

Despite last year’s steady inflation, economists flagged risks to the inflation trend this year, most notably geopolitical tensions in the Middle East that may send global oil prices soaring.

Headline inflation rates in the Philippines (December 2019)

Preliminary data from the Philippine Statistics Authority (PSA) showed headline inflation at 2.5% last month, marking the fastest pace since June’s 2.7%, albeit still slower than the 5.1% in December 2018.

The December figure is higher than the 2.1% median in a BusinessWorld poll conducted late last week and falls near the high end of the 1.8-2.6% estimate given by the Bangko Sentral ng Pilipinas (BSP).

Full-year inflation came in at 2.5% against the BSP’s 2-4% target range for 2019 and its full-year forecast of 2.4%. This was slower than the 5.2% average inflation rate posted in 2018 and marked the slowest since 2016’s 1.3%

Core inflation, which discounted volatile prices of food and fuel, stood at 3.1% in December, picking up from 2.6% the previous month and the fastest since the 3.2% in July 2019.

For the entire year, core inflation averaged 3.2%, slower than 2018’s 4.2%.

In a statement, the PSA attributed the December inflation uptrend mainly to the 1.7% year-on-year increase in the heavily weighted food and non-alcoholic beverages index from zero percent.

The transport index posted an annual increase of 2.2% in December versus the 2.4% contraction in November.

Other indices with faster annual markups include alcoholic beverages and tobacco (to 18.4% from 17.6%); furnishing, household equipment and routine maintenance of the house (3.1% from 2.8%); and housing, water, electricity, gas and other fuels (1.9% from 1.2%).

The food-alone index posted a 1.7% inflation rate, a reversal from November’s 0.2% decline, albeit slower than the 6.3% a year ago.

Driving food inflation were fish and vegetables, which saw higher annual rate increases of 7.4% in December (from 2.5% in November), and 8.2% (from one percent), respectively. Other food commodities that accelerated during the period were milk, cheese and egg (3.3% from 3.2%), and food products “not elsewhere classified” (6.3% from 5.6%).

Notably, rice posted an annual decline of 6.8% in December — its eighth straight month of contraction even as this was slower than November’s 8.3% decline.

“Base effects from the 2018 price spike have all but faded out, pushing December headline inflation well-past market expectations…,” said ING Bank NV-Manila Senior Economist Nicholas Antonio T. Mapa in a note to reporters.

For Security Bank Corp. Chief Economist Robert Dan J. Roces: “The uptick means two things, namely that the 2018 base effects have dissipated and second, that household consumption is strong and this bodes well for the fourth-quarter growth in 2019,” he said in an e-mail to BusinessWorld.

In a separate e-mail, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said seasonal demand, higher utility costs, recent weather disturbances, and rising demand of alternatives to pork products due to the African Swine Fever (ASF) scare have “magnified the higher-than-expected inflation uptick” in December.

RISKS AND OUTLOOK
In a statement, the BSP noted the latest inflation result was “consistent” with its assessment of inflation approaching the midpoint of the 2-4% target range in 2020 until 2022.

The central bank added that the risks to the inflation outlook are “on the upside” for this year, but are “tilted to the downside” in 2021, citing volatility in global prices and the potential impact of the ASF outbreak as the main upside risks to inflation.

“Meanwhile, the impact of global trade and policy uncertainty as well as geopolitical tensions continue to be the main downside risks to inflation,” the BSP statement further read.

In a statement by the National Economic and Development Authority, Socioeconomic Planning Secretary Ernesto M. Pernia said that despite the last year’s steady inflation, the government must “remain vigilant and proactive” in managing the impact of “potential price pressures” this year.

Mr. Pernia also noted the escalating tension in the Middle East may disrupt global oil supply, which could lead to a surge in overall inflation.

“Though considered benign, recent geopolitical developments in Iran and Iraq may have warranted a re-evaluation as Middle East tensions continue to rise,” UnionBank’s Mr. Asuncion said.

Mr. Asuncion said that UnionBank’s Economic Research Unit expects 2020 inflation at 2.8%, but noted the government’s inflation forecast of 2-4% may be breached if these geopolitical issues persist and push prices higher than the government’s Dubai crude oil price assumption of $55-70 per barrel for 2020.

“Although it seems that inflation in 2019 has settled at 2.5% and well-within the government’s current inflation target, the Monetary Board may have to let these volatile situations simmer down… and until then, evaluate again if easing further is indeed the way to go,” he added.

ING Bank’s Mr. Mapa expects inflation to “edge higher in 2020” as “reverse base effects” kick in along with the scheduled excise tax of fuel products sometime early this year.

“This moves in line with our expectation for inflation to ‘bounce then settle’ with headline inflation rising back to the 3% handle and remain stable for the rest of 2020. Factoring the reverse base effects, we expect inflation to average 3.2% and as high as 3.4% should oil prices edge higher due to possible supply-side disruptions,” he added.

“We continue to believe that the BSP will have the scope to ease monetary policy further in 2020 with the first rate cut slated for the February [policy] meeting,” he said.

For Security Bank’s Mr. Roces: “[W]e think the BSP will resume monetary easing within the first quarter and probably near the end of the quarter.”

“The data-dependent BSP will want to gauge first and foremost developments in the Middle East, see where it’s headed, and proceed from there. But considering inflation levels, benign price growth will spur a cut,” he said.

The Monetary Board will meet on Feb. 6 to discuss policy.

Factory output extends slump to 12th straight month in November

FACTORY output declined for the 12th straight month in November, the Philippine Statistics Authority (PSA) reported yesterday.

Preliminary results from the PSA’s Monthly Integrated Survey of Selected Industries (MISSI) showed that the November factory output — as measured by the volume of production index — contracted by 6.1%. The recent figure was wider than the revised four-percent decline in October and a reversal of the 1.9% growth in November 2018.

The November figure marked the steepest decline since the 10.1% drop in August 2019.

Year to date, the factory output decline averaged 7.6% compared to the 9.1% growth average in 2018’s comparable 11 months.

Factory output has been declining since December 2018. This losing streak also matched the 12-month slump between November 2008 and October 2009.

In comparison, the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI)dropped to 51.4 in November from 52.1 in October — its slowest in five months.

A PMI reading above 50 signals improvement in purchasing, which is a leading indicator for future manufacturing activity as factories order raw materials for processing. A score below 50 indicates deterioration.

The MISSI reported declines in eight out of 20 major industry groups in November. Of these, six were in double-digits: furniture and fixtures (-41.2%); basic metals (-29.5%); miscellaneous manufactures (-22.1%); petroleum products (-21.8%); transport equipment (-16.7%); and electrical machinery (-13%).

Average capacity utilization — the extent by which industry resources are used in the production of goods — was estimated at 84.5% with 12 of the 20 sectors registering capacity utilization rates of at least 80%.

In an e-mail, UnionBank of the Philippines Chief Economist Ruben Carlo O. Asuncion attributed the manufacturing decline to a “confluence” of the weakness in global manufacturing, the uncertainty in global trade brought by the US-China trade war, and the delayed national budget last year “that may have affected capital formation crucial to the expansion of domestic manufacturing and indirectly impacting export development.”

“These manufacturing indices have fallen to the lowest levels since September 2016, and the Philippines, as part of the global manufacturing and trading network… was not spared, together with Asia’s export-oriented economies such as China, Taiwan, Malaysia, and South Korea,” Mr. Asuncion said.

With last year’s disappointment, Mr. Asuncion said the country’s manufacturing growth may turn around this year.

“With the certainty that the ‘phase one’ trade deal between the US and China will be signed this January 15 and… eventually to a ‘phase two’ [deal that would] support trade certainty between the world’s two largest economies, manufacturing growth may recover,” Mr. Asuncion said.

The economist, however, noted the outlook is also hinged on the de-escalation of recent tensions between the US and Iran.

“If and when cooler heads prevail, this specific geopolitical heightened risk may well diminish and fast track a potential global manufacturing recovery, which incidentally has started in European economies and the US with their currencies strengthening as prospects toward the end of 2019 seemed to have largely improved,” said Mr. Asuncion.

In a statement by the National Economic and Development Authority, Socioeconomic Planning Secretary Ernesto M. Pernia stressed the need for an “innovation-driven industrial policy” in order to strengthen the country’s manufacturing sector.

“Industries need to be encouraged to innovate and adopt efficient technologies. This is a key strategy to entice more investments, similar to the experiences of the country’s ASEAN (Association of Southeast Asian Nations) peers such as Thailand, Malaysia and Vietnam,” Mr. Pernia was quoted in the statement as saying. — E. C. Aruta

Baguio prepares to reopen city’s airport

THE Baguio City government is looking to reopen the Loakan Airport for commercial flights by the second quarter of the year, its top official said on Tuesday.

“Before the holiday break ay nag-usap na kami ng CAAP (Civil Aviation Authority of the Philippines) and then nagkaroon na kami ng survey sa airport. So kahapon tini-text ko ulit ‘yung deputy head ng CAAP at sinabi niya na magpapadala siya ng isang team for a joint ocular inspection,” Baguio City Mayor Benjamin B. Magalong told reporters on Tuesday on the sidelines of the Low Carbon Transport Forum at Novotel Hotel in Quezon City.

(Before the holiday break, I talked with CAAP, then we had a survey on the airport. So yesterday, I texted the deputy head and I was told that a team will be sent for a joint ocular inspection.)

“I am hoping na sana second quarter ng year na ito ay ma-open na namin (I am hoping that we can re-open the airport in the second quarter of the year),” he said.

He also said Systra Philippines, Inc., a transportation system and infrastructure consulting and design company, had submitted a feasibility study for the planned cable car system in the city.

“After that, i-evaluate namin (we will evaluate), then we will give the original proponent status, then we [will] subject it to Swiss challenge,” he added.

He said two more firms are interested in the project.

As for Baguio City’s airport, which has been closed to commercial flights for more than a decade, he said San Miguel Corp. (SMC) President and Chief Operating Officer Ramon S. Ang had expressed interest to operate and manage it.

Asked if Mr. Ang has already submitted a formal proposal, he said: “Wala pa, hinihintay pa lang naming matapos namin itong talks namin (None yet, we are waiting to finalize the talks) with the Department of Transportation (DoTr).”

“Kung papayagan na kami ng DoTr na i-manage ‘yun, then kami ang maghahanap ng third party,” he added.

(Once DoTr allows us to manage it, then we will look for a third party.)

He said that the city government still has to clear the airport’s buffer zone, which has been occupied by informal settlers.

“For the meantime, pinapadalhan na namin ng notices ‘yung mga tao na nag-occupy ng (we sent notices to those who occupy the) buffer zone,” he said.

SMC is also the proponent of the P734-billion Bulacan airport project, which will be officially called the New Manila International Airport.

The project involves the construction of a 2,400-hectare airport with four parallel runways, which are expandable to six runways, eight taxiways and three passenger terminal buildings. It will have an annual capacity of 100 million travelers, which the government hopes will help decongest Ninoy Aquino International Airport in Pasay City. — Arjay L. Balinbin

Rates on 3-year bonds rise on inflation report

THE GOVERNMENT partially awarded the reissued three-year Treasury bonds (T-bonds) it offered on Tuesday as rates climbed due to faster-than-expected inflation data.

The Bureau of the Treasury raised just P16.586 billion yesterday via the three-year T-bonds, failing to fill the P30-billion program even as the tenor attracted bids worth P37.35 billion.

The average rate for the three-year papers jumped by 27.2 basis points (bps) to 4.014% against the 3.742% fetched when the tenor was last offered on Dec. 10.

At the secondary market, the three-year bonds were quoted at 3.997%, based on the PHP Bloomberg Valuation Service Reference Rates.

Deputy Treasurer Erwin D. Sta Ana said the market is taking a “wait-and-see” approach as the headline inflation rate for December last year picked up and amid rising geopolitical tensions between US and the Middle East.

“[With] the inflation rate today for December at 2.5% and of course the developing geopolitical tension in the Middle East, we felt that the market is still at a ‘wait-and-see’ at this time, considering that these are developing as we speak, hence the turnout,” Mr. Sta Ana told reporters after the auction on Tuesday.

The Philippine Statistics Authority (PSA) reported on Tuesday that inflation in December picked up to 2.5%, taking the full-year average to 2.5%.

The December pace was higher than the median estimate of 2.1% in a BusinessWorld poll of 13 economists last week.

Still, the 2019 print was well within the 2-4% official target range for the year, even as it was a tad higher than the Bangko Sentral ng Pilipinas’ (BSP) full-year forecast of 2.4%.

Sought for comment, a bond trader said the auction result — even as it was only a partial award — was “within market expectations” since the tenor was already trading within secondary market rates.

Reuters reported that oil prices in the global market slipped by 1.5% on Tuesday, reversing the two-percent hike on Monday, “as investors reconsidered the likelihood of Middle East supply disruptions in the wake of the United States killing a top Iranian military commander.”

Yesterday, Reuters reported that Brent crude fell 1.5% to $67.86 a barrel, leaving the $70-per-barrel level it reached the previous day.

Meanwhile, Mr. Sta Ana said the market is on wait-and-see mode despite the announcement of BSP Governor Benjamin E. Diokno of a possible 25-bp rate cut this year “so maybe, inflation expectations would come into play.”

Amid developments here and abroad, he said they feel the market is “still holding off from bidding aggressively.”

“Usually, [investors are] risk-off, especially if major economies are involved. Before with the US-China trade tension [and] every time that there is a an issue in the Middle East on oil, so we could expect a risk-off attitude is actually being observed [currently],” he explained.

The Treasury has set a P420-billion local borrowing program this quarter, broken down into P240 billion in Treasury 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. — B.M. Laforga

Gokongwei’s JG Summit buys more shares in PLDT

JG SUMMIT Holdings, Inc. has acquired a bigger stake in PLDT, Inc. to give it at least a 10th of the shares in the telecommunications services provider, the Gokongwei-led firm told the stock exchange on Tuesday.

“As a result of such acquisition, the shareholdings of JGS (the holding firm’s stock symbol) in PLDT, Inc. will be 11.23%,” it said.

The holding firm placed the total price of the acquired shares at around $138.83 million, which it paid in full. The common shares, amounting to 7,046,979, were priced at $19.70 apiece or about P1,003 each through the purchase and conversion of 7,046,979 American Depositary Receipts (ADRs) of PLDT.

The company considers the shares as a “valuable investment” given the service provider’s good history of paying dividends. The shares account for 3.26% of the total outstanding shares of PLDT. The deal took place on Jan. 6, 2020.

“The acquisition of the common shares of PLDT will not have any adverse effect on the financial condition of JG Summit,” it noted.

PLDT is one of the country’s telecommunications service provider through its three business categories, namely: wireless services through the brands Smart, TNT, and Sun Cellular; fixed line named under PLDT Home; and PLDT Enterprise, and others.

PLDT previously said that it would increase its capital expenditure for 2020 from P78.4 billion this year as it continues to expand its network infrastructure through fifth-generation (5G) network, which will be launched early this year.

A big portion of the capex will be used by the company to fund the continuous rollout of its 5G technology.

In the first nine months of 2019, the company reported a 2% decline in its attributable net income to P6 billion due to higher expenses and lower gains from Rocket Internet sales. For the third quarter, attributable net income fell 16% to P3.79 billion due to lower earnings from its fixed-line and other businesses.

JG Summit reported 50% increase in its attributable net income as of September 2019 to P22.23 billion due to double-digit growth in its airline business Cebu Air, Inc. and real estate arm Robinsons Land Corp. backed by foreign exchange translation gains and higher equity in net earnings of associates, specifically from United Industrial Corp. Ltd.

However, a 2.4% drop was reported in its attributable net income in the third quarter last year to P4.8 billion due to lower revenues from its petrochemicals business and higher expenses.

Shares in JG summit fell a centavo or 0.12% to close at P81.80 apiece at the stock exchange on Tuesday.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Vincent Mariel Galang

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