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Automation likely to impact 18 million PHL jobs

By Denise A. Valdez
Reporter

AT least 18.2 million jobs are expected to be impacted if the Philippines maximizes its potential for automation, according to management consultancy firm McKinsey & Company.

Kaushik Das, McKinsey managing partner for Southeast Asia, said on Wednesday the agriculture and retail & wholesale sectors are likely to take the biggest hit from the next wave of automation.

“We looked at all the major sectors in the Philippines that can actually employ (automation)… We see that on average, between 40-50% of jobs will get impacted in the Philippines because of what technology gives… Roughly about 18 million jobs will be impacted,” Mr. Das said at the Decoded Philippines forum at Shangri-La at the Fort, Taguig City.

Mr. Das said agriculture topped the list of sectors to be affected by automation. Out of the current 12.5 million agricultural workers, the potential for automation stands at 48% or 6 million workers.

For the retail & wholesale sector, he said the automation potential is 48% or 2.4 million jobs out of its employment base of 7.4 million.

The McKinsey official noted that some sectors have a bigger potential for automation, such as manufacturing where 61% of the existing jobs may be automated. This means 1.6 million jobs will be at risk, out of the sector’s 3.9 million jobs.

Another one is transportation, where automation potential is at 55%, or 1.6 million employees at risk out of its 2.9-million employment base.

Other sectors expected to be impacted by automation are administrative & support (41% or 1.1 million of 2.6 employees), construction (41% or 902,000 of 2.2 million employees), accommodation & food services (54% or 864,000 of 1.6 million employees), education (28% or 336,000 of 1.2 million employees), finance (35% or 245,000 of 700,000 employees) and health care (39% or 156,000 of 400,000 employees).

“This does not mean that all these people are going to lose their jobs, but a lot of their work is going to change. Some of these jobs will get impacted, some of these jobs will go away. And a lot of these jobs will stay but the definition of the work will change,” Mr. Das said.

Amid the huge risk on the future of jobs in several sectors in the Philippines, the Southeast Asia managing partner of McKinsey said this must be taken as a reminder of what the government and society must do to prepare for the transformation.

“This has potential to create significant social problems. The good news, of course, is that all these forces will also create new jobs,” Mr. Das said.

“Government and society have to get ahead on re-skilling their workers, on preparing their workers and employees for this future.”

Aside from preparing for the future of work, Mr. Das said companies must figure out how to keep the Philippines relevant in an Asia-for-Asia supply chain.

Mr. Das said 40% of the global trade currently flows within Asia, and a higher percentage of goods and services are produced locally.

He added McKinsey is expecting the Philippines to become a “very significant” part of Southeast Asia’s growing economy in the next 10-20 years, projecting it to become the second-biggest contributor to the region’s growth next to Indonesia.

“If you go back to history, that would have been Singapore, Malaysia. But now it’s probably going to be Philippines. And we think among the large economies, the Philippines will outgrow other ASEAN countries,” he said. “We think conditions are ripe for the Philippines to keep growing and accelerate.”

The Philippine government is currently considering a budget of around P5 billion for the upskilling of workers in the business process outsourcing industry, as stakeholders call for a program to prepare employees for the future of jobs.

The Department of Information and Communications Technology is also advocating for a Digital Philippines, where it envisions improved connectivity with and within the government across all regions. A budget of P32.63 billion for the department next year was already approved by the Senate last week, which it said will be used mainly for digital infrastructure buildout.

Water company says it asked SC to reconsider penalties

By Victor V. Saulon
Sub-Editor

MAYNILAD Water Services, Inc. is asking the Supreme Court (SC) to reconsider its decision to penalize the company, and Metro Manila’s other water concessionaire, for violating provisions of the Philippine Clean Water Act, its top official said.

“Today (Wednesday), we’re filing. We cannot yet comment on it until it’s filed. Our attention will be called,” said Maynilad President and Chief Executive Officer Ramoncito S. Fernandez in an interview on the sidelines of a water forum in Makati City.

“All of us are going to file separate motions for reconsideration,” he added, referring to Manila Water Co., Inc. and the corporate office of the Metropolitan Waterworks and Sewerage System (MWSS).

Mr. Fernandez said yesterday (Oct. 2) was the deadline for filing the motion, or 15 days after the receipt of the court ruling.

“[We] talked to each other, yes, casually, but formally, no,” he said.

Nestor Jeric T. Sevilla, Jr., Manila Water group head for corporate strategic affairs and head for corporate communications, confirmed in a text message that the company intends to file within the day.

MWSS Chief Regulator Patrick Lester N. Ty said he has yet to be informed by the agency’s corporate office whether it had filed a motion.

Asked about other options should the court reject the motion for reconsideration, Mr. Fernandez said: “We will just follow the law. If they insist that they are correct, wala naman kaming (we don’t have a) choice. We cannot fight city hall, we cannot fight the Supreme Court. But we have very clear arguments.”

He said should the court reject the motion, the impact on consumers’ water tariff would be immediate.

“If the Supreme Court wants to accelerate the implementation of the connections and building of all of those necessary waste water treatment plants, tariff ang impact (the impact is on tariff),” he said.

“We computed it at around P16 per cubic meter and immediate increase. The other one, which is more telling also, is traffic. We all very well know traffic is a huge problem, mayaman ka man o mahirap, nata-traffic ka (whether you’re rich or poor, you will be stuck in traffic),” Mr. Fernandez said.

“That will definitely impact traffic because simultaneous digging of roads will have to be done to comply,” he added.

On Sept. 18, the companies announced their receipt of the Supreme Court en ban decision on the case. The court found the companies liable for fines for violation of Section 8 of Republic Act No. 9275 or The Philippine Clean Water Act of 2004.

Maynilad, through the company’s main shareholders Metro Pacific Investments Corp. (MPIC) and DMCI Holdings, Inc., said last month that it would file a file a motion for reconsideration by Oct. 2. Ayala-led listed company Manila Water also said last month that it would file a similar motion.

Sec. 8 of the law mandates MWSS, as the government agency vested with the duty to provide water and sewerage services, and/or the concessionaires in Metro Manila and other highly urbanized cities — as defined in the Local Government Code — to connect all existing sewage lines to the available sewerage system within five years from the law’s effectivity, or from May 6, 2004.

In the court decision, they are jointly and severally liable with the MWSS for the total amount of P921,464,184 covering the period starting from May 7, 2009 to the date of promulgation of the decision last August to be paid within 15 days from finality of the decision.

The decision also enjoins all water supply and sewerage facilities and/or concessionaires in Metro Manila and other highly urbanized cities to comply strictly with Sec. 8 of the law.

From finality of the decision until full payment of the fine, the water concessionaires are to be fined in the initial amount of P322,102 per day, subject to a further 10% increase every two years as provided under Section 28 of the law, until full compliance with Section 8 of the same law.

The total amount of fines imposed by the decision is to earn legal interest of 6% per annum from finality and until its full satisfaction.

Asked if the motion for reconsideration is the only option after the court decision, Mr. Fernandez said: “I think this is the only avenue.”

ScentkoWorld, Brendahl ordered to halt operations

THE Securities and Exchange Commission (SEC) has ordered ScentkoWorld Corp. and its supposed parent Brendahl Cruz Holdings, Inc. to stop operations after it was found to be illegally soliciting investments from the public.

In a statement Wednesday, the country’s corporate regulator said the commission en banc has issued a cease and desist order (CDO) dated Sept. 24 against the two firms, their officers, directors, representatives, salesmen, agents, and all other persons involved with the group.

The CDO directs the group to stop transacting business involving funds in their depository accounts, as well as “transferring, disposing, or conveying in any other manner all related assets for the benefit of investors.”

The groups must also withdraw all online presence related to their unauthorized investment-taking activities.

“Based on the evidence presented, the selling or the offering for sale of securities whether directly or indirectly, in the form of investment contract, without the necessary license or permit will operate as a fraud on investors or is likely to cause grave or irreparable injury or prejudice to the investing public. Thus, they must be restrained,” the commission said.

The SEC Enforcement and Investor Protection Department found evidence showing that ScentkoWorld and Brendahl have sold and offered securities in the form of investment contracts without the necessary license from the commission.

The commission also found that ScentkoWorld had been claiming that Brendahl has a secondary license from the commission, although data from the SEC Corporate Governance and Finance Department and Markets and Securities Regulation Department showed otherwise.

ScentkoWorld’s scheme supposedly involves a “buy and earn program,” where members will have to buy perfume and beauty products in exchange for “cash sales rewards” equal to 400% of the purchase price. This means that a member buying P5,000 worth of products could get a return of P20,000 within 30 days, depending on how soon the group can recruit new members.

People can also earn by recruiting more people into the system.

“The “Buy & Earn Program” of ScentkoWorld satisfies all the elements of an investment contract, where there is investment of money in a common enterprise with expectation of profits derived primarily from the efforts of others,” the SEC said.

The SEC added that making their activities known through social media sites Facebook and Youtube constitutes a public offering by the two companies.

Under the Securities Regulation Code, those acting as salesman, broker, or agent of ScentkoWorld and Brendahl may face a fine of up to P5 million or imprisonment of up to 21 years, or both.

“The Commission will institute appropriate administrative and criminal action against any person/s or entities found to act as solicitors, information providers, salesmen, agents, brokers, dealers or the like for and in behalf of the subject corporations,” according to the CDO. — Arra B. Francia

Filipino kids using the internet to stream, download software

FILIPINO children are spending most of their time online streaming videos and music and downloading software, a report by Kaspersky Safe Kids said.

The Russia-based cybersecurity firm said in a statement that the number of children from the Philippines using the internet to access software, audio and video websites has grown to 49.12% this year from 25.41% in 2018.

This reflects a regional trend, as neighboring countries likewise recorded the same growth in changing internet behavior from children: in Indonesia, it rose to 60.33% from 38.72%; in Singapore to 42.32% from 25.03%; in Thailand to 37.23% from 11.28% and in Vietnam to 50.14% from 27.11%.

The findings of Kaspersky were from May 2018 to May 2019 data collected from computers using Windows and Mac OS. It did not cover statistics from children’s mobile use.

Aside from using the internet for streaming and downloading, children were also using their time online on e-commerce websites.

Kaspersky said in the Philippines, the number of children doing online shopping has grown to 13.21% in the January to July period from 2.39% in the same time frame last year.

For the rest of Southeast Asia, a similar rise in young online shoppers was observed: a 13.24-percentage point jump in Singapore, 8.32-percentage point growth in Malaysia, 4.8-percentage point climb in Indonesia and 1.62-percentage point increase in Thailand.

“It is an accepted fact that our children are better internet navigators than us, adults. With their curiosity and quickness in grasping or even making their own online trends, it is undoubtedly important for parents to know their interests and habits,” Kaspersky General Manager for Southeast Asia Yeo Siang Tiong said in the statement.

He said it is important to know that more children are using the internet for video, music and software downloading platforms as these sites are “plagued with malware, virus and dangerous content.”

“We hope these findings could help parents in understanding their kids better and in protecting them against the potential dangers in the digital world,” he added.

The report also highlighted positive online behavior from children in the past months, as there are fewer users that try to access adult content such as pornography and erotica. In Asia, the figure slid to 2.26% from 2.72% the previous year.

“It is encouraging to see that fewer children are interested in online adult content in the region. We credit the steps being done by SEA (Southeast Asian) governments to block easy access to such sites,” Mr. Yeo said.

But he noted the rising popularity of e-commerce sites must be watched by parents, as risks of online fraud, among others, are brought by this trend.

“…The shift of interest towards online shopping should mark a closer guidance between kids and parents. The risks in e-commerce such as fake sellers, fake products, malware-infected sites, compromised payment gateways, and more, pose a real and costly danger against the family’s financial details,” Mr. Yeo said. — Denise A. Valdez

Yields on term deposits drop on rate, RRR cuts

YIELDS on term deposits declined on Wednesday following the central bank’s decision to cut benchmark interest rates and lenders’ reserve requirement ratios (RRR).

The central bank received bids totalling P92.148 billion for its term deposit facility (TDF) yesterday, well above the P70 billion on offer.

Wednesday’s total was also higher than the P74.465 billion the Bangko Sentral ng Pilipinas (BSP) received last week for a P90-billion offering.

Broken down, bids for the seven-day papers amounted to P34.272 billion, higher than the P30 billion on offer and also surpassing last week’s P26.616 billion.

Accepted rates for this tenor ranged from 4.175% to 4.4%, lower than last week’s 4.25-4.65% margin. This caused the average rate to end at 4.2501%, 10.88 basis points (bps) lower than last week’s 4.3589%.

Meanwhile, the 14-day papers were met with tenders amounting to P30.834 billion, filling the P20 billion the BSP placed on the auction block yesterday. This is also more than the P23.07 billion in bids seen last week for the central bank’s P30-billion offering.

Banks sought returns between 4.125% and 4.3499%, also lower than the previous week’s 4.3-4.65% range, resulting in an average rate of 4.2547%, down 18.44 bps from last week’s 4.4391%.

On the other hand, the 28-day deposits attracted tenders worth P27.042 billion versus the P20 billion on offer, an increase from last week’s P24.779-billion bids for a P30-billion program.

Yields sought by lenders stood between 4.1% and 4.4%, down from last week’s 4.37-4.65% margin. This brought the one-month paper’s average rate to 4.3039%, 15.38 bps lower than last week’s 4.4577%.

Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said recent cuts in policy rates and banks’ RRR affected the TDF auction results for this week.

“TDF auction yields were lower to reflect the downward adjustments brought about by the cut in BSP key overnight/policy rates. Latest cut in banks’ RRR by 100 basis points also caused the lower TDF auction yields, as this would result to about P110 billion in additional…liquidity infused into the financial system effective November,” Mr. Ricafort said in an email.

The TDF is the central bank’s primary tool to shore up excess liquidity in the financial system and to better guide market interest rates.

The central bank’s policy-setting Monetary Board cut benchmark interest rates by another 25 bps at its meeting last Thursday, bringing the rates for overnight reverse repurchase, overnight deposit and lending to four percent, 3.5% and 4.5%, respectively, amid easing inflation.

On Friday, the central bank announced it will reduce lenders’ RRR by another 100 bps, which will take effect in November. This will bring the reserve requirement of universal and commercial banks to 15% from 16%. The reserve ratios of thrift banks will also be cut to five percent from the current six percent, and to three percent from four percent for rural and cooperative banks. — Luz Wendy T. Noble

Behind a record $1.6-billion IPO, Metro Pacific’s plan to tame debt

PHILIPPINE businessman Manuel V. Pangilinan, who ran into trouble with a borrowing binge two decades ago, is pursuing the biggest-ever Philippine initial public offering (IPO) in order to reduce the risk of a repeat.

Mr. Pangilinan is attempting to pull off a giant share sale for Metro Pacific Investments Corp.’s hospital unit, one that could raise as much as $1.6 billion. The IPO, for which the unit has hired underwriters including a clutch of global banks, is awaiting regulatory approval.

If all goes to plan, the money will go out as quickly as it comes in, Mr. Pangilinan said in an interview in Manila. The company has billions of dollars in borrowings and faces large outlays for its toll-road, power-generation and light-rail projects over the next three years.

“We have crystallized a real tangible gain from this investment,” said Mr. Pangilinan, Metro Pacific’s chairman, who had to be persuaded to enter the hospital business in 2007 and went on to invest about $100 million in the sector. Most will go toward reduction of debt, he said.

Mr. Pangilinan, 73, who’s backed by Indonesian billionaire Anthoni Salim, has made major investments in the Philippines, including in telecoms giant PLDT, Inc. and power distributor Manila Electric Co. He also has a history with debt: At the turn of the century, he lost a fortune as the borrowings that funded an ambitious property development push in Manila spiraled out of control.

PREEMPTIVE MOVE
This time, Metro Pacific is addressing its debt preemptively before it becomes an issue, according to Chief Financial Officer David Nicol.

Metro Pacific and its subsidiaries have $4.73 billion in debt, according to data compiled by Bloomberg, as Mr. Pangilinan amassed toll road, power, water and hospital assets. They face $1.3 billion coming due from this year through 2023, the data show.

At the $1.6 billion top end of the IPO’s range, Metro Pacific would get about $970 million from selling down its 60% stake in Metro Pacific Hospital Holdings Inc. to about 20%, based on the IPO prospectus. The hospital would get about $125 million for expansion while Singapore sovereign wealth fund GIC Pte would get the balance from the sale of half of its 40% stake in the venture.

The IPO is attractive because it’s the first and only play on Philippine hospitals, which have good business prospects, said Noel Reyes, chief investment officer of Security Bank Corp. But the price is likely to be below the top end of the range following price cuts in two recent Philippine IPOs, he said.

INTEREST COSTS
Metro Pacific will save P2 billion in annual interest costs from the debt payment, giving it a better footing to fund a three-year expansion that includes toll roads, four waste-to-power projects and the extension of Manila’s light railway, Mr. Nicol said.

“The cash comes in but it will quickly go out to back projects,” Mr. Nicol said. “Over the next few years there is a lot of capital going out but it takes a while for payback time.”

“It is a home-run transaction,” George Ching, an analyst at COL Financial Inc., said of the IPO. “Debt will become more manageable,” he said. Still, “the fear is the businesses the money will go into will face regulatory risks.”

Metro Pacific’s toll road and water ventures in the Philippines have found it difficult to raise rates under their concession agreements with the government as regulators have delayed approval of the adjustments.

Mr. Pangilinan’s foray into hospitals started after one of his executives introduced him to an oncologist, who persuaded Mr. Pangilinan to become chairman of Makati Medical Center, which Mr. Pangilinan described as a money-losing hospital that was behind in its investments. He then decided the hospital business “wasn’t so bad” and went on a buying spree, nixing a promise that he would exit in two years.

HOSPITAL BUSINESS
Mr. Pangilinan has since built the largest Philippine private hospital group. The group served 3.8 million outpatients and 194,000 inpatients last year. It had more than 3,200 beds at 14 hospitals at the end of June, up from 1,095 beds in 2008. The group posted 829 million pesos in profit on P7.6 billion pesos in net sales in the first half of 2019.

Metro Pacific Hospital would be valued at about 29 times Ebitda at the top price of 182 pesos a share, based on annualized first-half numbers. Mr. Pangilinan says he counts the business as among his greatest hits. “It’s the fastest-growing business” in the group, he said.

“We have made good investments, we have made lousy ones, but on the whole we are ahead,” Mr. Pangilinan said. “It’s only in the course of time when we became more familiar with valuations of overseas health care institutions that we said ‘Oops, maybe we can get a similar level of valuation.’” — Bloomberg

Luxury according to chef Nobu Matsuhisa

IN A world where anybody with a huge bank account can afford anything, do we still know what true luxury is?

BusinessWorld had a bit of an idea of what true luxury was when Nobu Matsuhisa — you know, that guy whose first name is plastered across luxury hotels across the world — made us sushi.

“One, two, three, four, five, six,” counted Mr. Matsuhisa as he touched rice to fish. Mr. Matsuhisa’s prowess and innovation with Japanese food — combining traditional Japanese techniques with South American, and later, local flavors wherever his name goes — earned him a number of accolades, including the Lifetime Achievement Award at the 2017 British GQ Food & Drink Awards. He’s also quite well-known in Hollywood: even in that town, a meal in his restaurant is still a status symbol, and he counts Robert de Niro among his friends and business partners.

Nobu placed the rice ball on top of sliced fish with a touch of wasabi. He flipped it over, and shaped the sides with his thumb and index finger. He gently pressed the top with his index finger to ensure that the fish would stick to the rice, and then evened it out on both sides. After which, he gave one final press to shape the sushi. He then tried it out with something a bit more complicated, a bit of squid, which he conceded some people might find chewy. After his folding and stretching technique, he said that it would now be a dish more comfortable to eat, and “more tasty.”

In making sushi cups, meanwhile, he refrains from using too much soy sauce, and instead sprays it on with an atomizer. He decries waste, and said, “I’m not cheap, but I don’t want to waste anything.”

“Even a grain of rice takes up a whole year,” he said, discussing the effort to make one whole meal, if one counts the efforts of the people beyond the kitchen who made it possible.

His visit here is part of his Asia-Pacific tour, and on the weekend of his visit, he hosted two dinners: one for the public (for a fee), and a special one for VIP patrons.

He then taught a gathered audience in his namesake restaurant on Sept. 27 how to eat sushi. He tipped the sushi to its side, and dipped a tiny segment into some soy sauce. “Great,” he said, but then, he himself made it.

“This process, I always say, has more heart.”

Mr. Matsuhisa always finds a way to say that it is always important to cook with the heart. He compares the experience to when a mother cooks for her children. He then said that because he made his sushi with his own hands, a part of himself is now in it; literally leaving his fingerprint. “It means that when people eat it, ‘feel my heart,’” he said.

Asked him what luxury meant, when his gilded name has become associated with luxury. “It’s not money. It’s not high-end. Luxury means health, happiness, great family.” — Joseph L. Garcia

Sony CEO urges return to geeky engineering roots

IF you still remember Sony Corp. as the company that defined the cutting edge of technology in the 1990s, its chief executive officer has some good news for you.

The past two decades have seen the company drift further into the entertainment business and away from the hard edge of new tech, but CEO Kenichiro Yoshida is keen to rebalance that equation, sending out the message that Sony is once again a place where engineers can dream big.

Sony held its first ever research-and-development briefing two weeks ago, showcasing projects that most people wouldn’t expect from the maker of PlayStation consoles and Spider-Man movies: from a lightweight motion capture system to a remotely operated robotic arm capable of handling objects just milliliters in size. After a six-year absence, Sony also plans a return to the CEATEC consumer electronics show next month with a medical tech exhibit.

“Technology is the thing that unites and animates Sony’s various businesses,” Yoshida said. “Sony’s purpose is to fill the world with wonder through the power of technology and creativity.”

A number of exhibits at Sony’s R&D showcase seemed close to the brink of becoming real products, while others were manifestly long-term investments and investigations of how technology might develop in the future.

Sony is developing a technology that can map an individual’s unique ear shape with just a smartphone photo, which can then be used to program headphones with 360-degree audio.

In another demo, engineers showed how six matchbox-sized wearable devices can convert a person’s entire body into a game controller. Sony’s setup uses two off-the-shelf sensors found in every phone to track acceleration and rotation. The trick is to use deep learning networks to extrapolate the positions of knees and elbows for full-skeleton tracking. The company expects applications will range from gaming and movies to health care and augmented reality.

Sony also showed off some real-time ray-tracing graphics, which at a 4K resolution require keeping track of 597,196,800 trajectories for each frame of video. The unique Sony spin to this is that the company has developed a neural network engine to extract textures from nearby objects and render them instantly on the screen.

“When it comes to research, we have been guided by where we believe the world is heading and the things we want to build, not by Sony’s immediate needs,” said Hiroaki Kitano, director of Sony’s Computer Science Laboratories, in an interview.

Created in 1988 and modeled after Xerox Corp.’s Palo Alto Research Center and AT&T Inc.’s Bell Labs, the CSL is Sony’s tech innovation incubator. It survived even the worst of the company’s budget cuts by keeping its small staff focused on high-impact, long-term projects, and now the company’s CEO is leaning on the group to help it steer a new course.

CSL’s most visible contribution to date is probably the development of the operating system for Sony’s Aibo robotic dog, but almost all of the tech giant’s businesses have benefited from CSL research, Kitano said.

Other projects currently underway include a robotic leg prosthesis, AI-assisted music composition software and a portable 360-degree video system that allows remote users to “jack in” in real time. — Bloomberg

Visa, Mastercard reconsider backing Facebook’s Libra

VISA, Mastercard Inc. and other key financial partners may reconsider their involvement in Facebook Inc.’s cryptocurrency, Libra, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

The financial backers to Libra did not want to attract regulatory scrutiny and declined Facebook’s requests to publicly support the project, according to the Journal report.

Policy executives from Libra Association, the cryptocurrency’s two dozen backers, have been summoned to a meeting in Washington, DC, on Thursday, the WSJ reported.

Separately, Bloomberg reported that PayPal Holdings Inc. and Stripe Inc. are also undecided about formally signing onto Libra.

Reuters reported last week that Facebook could push back the launch of Libra to tackle regulatory concerns that have been raised around the world.

Facebook announced plans to launch the digital currency in June 2020, in partnership with other members of the Libra Association set up by the US tech giant to manage the project.

However, the attempt to drag cryptocurrencies into the mainstream has since met with regulatory and political skepticism globally, with France and Germany pledging to block Libra from operating in Europe.

The companies did not immediately respond to Reuters’ requests for comment.

Facebook’s David Marcus, overseeing the company’s Libra plans, said in a tweet in response to the Journal report that he wasn’t aware of any specific companies’ plans to “not step up”.

“I can tell you that we’re very calmly, and confidently working through the legitimate concerns that Libra has raised by bringing conversations about the value of digital currencies to the forefront,” he added. — Reuters

SM Prime set to open 3rd mall in Pangasinan

SM PRIME Holdings, Inc. will be opening SM Center Dagupan this Friday, marking the company’s third mall in the province of Pangasinan.

In a statement issued Wednesday, the listed property developer said SM Center Dagupan, located along M.H. Del Pilar Street, will have 23,000 square meters (sq.m.) of gross floor area (GFA).

About 90% of the mall’s leasable space has been awarded to tenants who will offer a mix of shopping, dining, and entertainment options. It will house several brands from the SM group’s retail arm such as SM Hypermarket, SM Appliance Center, Ace Hardware, Watsons, Surplus, Miniso, and Simply Shoes, among others.

“Dagupan City is considered as Pangasinan’s industrial hub and the most highly urbanized city. The addition of SM Center Dagupan in this progressive and vibrant city will attract more local and international tourists, further boosting the growth of the local economy,” SM Prime President Jeffrey C. Lim said in a statement.

The mall will also have over 400 carpark slots and bus terminal slots to accommodate guests. It will stand close to education, health, and government institutions in the city.

SM Center Dagupan will bring SM Prime’s total presence in Pangasinan to 145,000 sq.m in terms of GFA, given the operations of SM City Rosales and SM City Urdaneta Center. Overall, it is the company’s 74th mall in the country, adding to its current GFA of about 8.4 million sq.m.

SM Prime has two more mall openings lined up before the year ends, namely SM City Butuan and SM Mindpro Zamboanga, which will have a GFA of 48,000 sq.m and 36,000 sq.m., respectively.

The company is also expanding SM City Baguio with an additional GFA of 32,000 sq.m., as well as SM City Fairview in Quezon City with an added 116,000 sq.m.

SM Prime has committed to spend 39% of its P80-billion capital expenditure this year for its mall expansion, which is mostly targeted toward the provinces.

Another seven malls will be opened in 2020, namely SM City Roxas, SM Calamba Turbina, SM Tanza, SM San Fernando in La Union, SM Laoag, SM Zamboanga, and SM Malolos.

Aside from its mall business, SM Prime also has residential, commercial, and hotel and convention center segments. The company is the largest property developer in Southeast Asia in terms of market capitalization, which stood at P1.07 trillion at the end of Wednesday’s trading.

SM Prime’s net income attributable grew 16.1% to P19.3 billion in the first half of 2019, following a 14.6% surge in consolidated revenues to P57.05 billion.

Shares in SM Prime dropped 1.75% or 65 centavos to close at P36.45 each at the stock exchange on Wednesday. — Arra B. Francia

Big and Boring No More! Chile’s having a world-class wine revolution

By Elin McCoy
Bloomberg

QUICK, what’s your idea of Chilean wines? If you think they’re all ho-hum bar-wine cabernets and cheap sauvignon blancs with no taste thrills, you’re wrong.

Since the mid 2000s, the country has been in serious experimentation mode, from grape to glass. The quality and diversity of its top wines has never been better.

That wasn’t what I found a couple of decades ago on my first visit to this skinny, 2,600-mile-long country with great surfing along one of the world’s longest coastlines. The few so-called “icon” cuvées I tasted, such as Seña, Clos Apalta, Almaviva, and the top wines from Montes, were marketed internationally as cutting-edge and surprising. But I found they were mostly over-hyped beefy cabernets created to show that Chile could make big deal wines.

I wasn’t impressed with their oaky flavors and heavy handed winemaking. Most lacked flash, style, energy, and complexity and weren’t worth the high prices asked.

And sadly, almost all the country’s wines came from large, risk-averse wine companies with vineyards in the center of the country. They were churning out vats and vats of bland bargain wine.

Now all that’s changed — big-time.

STRENGTH IN DIVERSITY
The style of many icon wines started to change in the last decade amid criticism from wine critics and consumers, says Max Morales of wine marketing firm Andes Wines. Eduardo Chadwick, the owner of Viña Errazuriz, is one of those leading the transformation. His five top, or “icon,” wines now shine with bright, intense New World fruit and also subtlety, elegance, freshness, and finesse, rivaling big names in Napa and Bordeaux. In the past couple of years, he’s even branched out to top quality chardonnay and pinot noir.

At the same time, the country’s wine scene has grown way more diverse, inspiring dozens of new, delicious icons-in-the-making. Risk-taking young winemakers with boutique wineries are behind experiments with new grape varieties, new wine styles, and new zones in the far south, in Bio Bio and Itata along the cool Pacific coast, and in far north desert spots such as Elqui Valley, famous for star gazing, the grape brandy pisco, and New Age mysticism.

The retail-level image of the country’s wines, though, has yet to catch up to this exciting reality.

Here’s the backstory.

Chadwick, who helped bring his great-great-great grandfather’s 19th century winery back to life, was a poster boy for those initial icon wines. Among them are Seña, his joint venture with Robert Mondavi that Chadwick now owns, and Vinedo Chadwick, the most expensive wine in Chile, made from vines he planted in his father’s favorite polo field.

To prove how good the country’s wines could be, Chadwick began staging blind competitions of his cabernet-based icons against top Napa, Bordeaux, and Tuscan examples around the world. First came Berlin in 2004, then 21 other cities, including Tokyo, Beijing, and New York. To his surprise — or so he says — his came out tops.

A MORE MODERN WINE
But in 2008, his French winemaker started pushing to shift the style of the wines. The vines for Seña, from the vineyard in Aconcagua, are now grown biodynamically. Grapes are picked nearly a month earlier, and in 2014 they began using 2,500-liter wooden vats (instead of smaller barrels) to age Vinedo Chadwick, so the flavor profile of the wine is less oaky. They hunted land near the cool Pacific coast for their new high-end pinot noir and chardonnay, looking for the bright acidity that cool climates preserve.

“Yes, icons were once exercises in excess, and today they’re more elegant,” says Canadian expatriate Derek Mossman Knapp, co-owner of Garage Wine Co. Still, he insists, “the real revolution in Chile is in southern regions like Maule and Itata, where people are beginning to make serious wines from recently discovered old vineyards of carignan, grenache, and cinsault and focusing on the terroir of individual sites.” In the 2016 vintage, Mossman made wines from 11 different vineyard parcels.

WORKING IN TANDEM
He’s a driving force behind the Alt-Chile movement that’s creating a different kind of icon wine. Small producers like him have banded together in impassioned movements with such names as “MOVI,” “VIGNO,” “Chancho Deslenguados,” and “Brutall” to champion organic and biodynamic farming,

The top vineyards were once clustered primarily in the center of the country near Santiago, often chosen for their convenience. As winemakers focused more on terroir and where specific grapes grow best, the country’s 350 wineries spread out over 2,000 miles, from north to south. It helps that one of the world’s great soil scientists, Pedro Parra, is Chilean.

In a land where cabernet used to be king (it still accounts for the majority of plantings), 88 other varieties are thriving, and the hot ones are cinsault, carignan, and grenache. (I was never a fan of carmenere, the grape Chileans once thought was merlot and then tried to push as the country’s national grape, but more and more producers have managed to tame its hard, green flavors.)

CASE FOR FANCIER WINE
The country exports 80% of its production. To be sustainable, wineries need to charge more per bottle, which is why they have to upgrade the image of Chilean vino. Asia generally has embraced high-end Chilean wines, says Chadwick, who sells 50% of his production there, mostly cabernet and Bordeaux-style blends. The 2005 free trade agreement between Chile and China made it cheaper for Chilean wineries to sell there, and now it’s their No. 1 export destination. And the wines are wildly popular in Japan and South Korea.

Will the US, the biggest wine market in the world, fall for the country’s new-style icon wines? I hope so. Here are nine to whet your appetite.

THE BEST OLDER ICONS
2016 Don Melchor Puente Alto ($100) — Concha y Toro’s top red was the first icon wine in the Chilean industry, and this vintage is the 30th anniversary of its debut. Plush and concentrated, with velvety layers of mineral and fresh red-fruit flavors, this polished cabernet blend has a finish that lingers for more than a minute. It’s a lighter year, but decant it for a few hours before drinking.

2016 Vina Almaviva Puente Alto ($145) — This cabernet blend, a collaboration between the Rothschilds of Bordeaux first-growth Mouton Rothschild and Concha y Toro, first debuted with the 1996 vintage, but has hit its stride in the past few vintages. Rich and spicy, with suave, silky tannins, it’s broader and riper than Bordeaux and more balanced and elegant than many Napa cabs.

2016 Seña ($150) — Founded in 1995 by Robert Mondavi and Eduardo Chadwick — and now owned by Chadwick — this is a complex blend of cabernet sauvignon, carmenere, merlot, cabernet franc, and petit verdot planted 60 miles north of Santiago in the Aconcagua Valley. For many years, it seemed to be trying to find its style. Now it has: This vintage from a cool year is soft, silky, and spicy, with chocolate-y notes.

2016 Vinedo Chadwick Maipo Valley ($325) — This 100% cabernet sauvignon is Chile’s most expensive and elegant cabernet, and one of the two best. It’s much purer and more balanced than it used to be. Just outside Santiago, this 15-acre vineyard is near Almaviva’s and Don Melchor’s plantings.

NEW ICONS
2014 Garage Wine Co. Carignan Truquilemu Vineyard ($37) — Canadian expat Derek Mossman Knapp is behind this revolutionary winery. He was among the first to see the potential of 100-year-plus dry-farmed vineyards of varieties such as carignan. This one, from a cold corner of Maule, has floral and herb aromas.

2017 Pedro Parra y Familia Wines Monk Cru ($45) — Pedro Parra is a famous soil consultant, with clients all over the world. This is the first vintage of his new label, and he’s named the top wines, made from old vine cinsault, for his favorite jazz musicians — in this case, Thelonius Monk. Brimming with minerality, plus aromas of herbs and spices, this is an icon wine in the making.

2014 Vinedos do Alcohuaz Rhu ($50) — At 2,200 meters high in Elqui Valley, an area in northern Chile popular with stargazers and New Agers, the winery was founded in 2005. The blend is syrah, grenache, and petite syrah, fermented in stone lagars and crushed by foot. Spicy and intense, with notes of minerals, black olives, and dark plummy fruits, this is a wine that grabs you with the first sip.

2017 Errazuriz Les Pizarras Chardonnay ($80) — The vineyard for Chadwick’s new, stunning white is six miles from the coast in Aconcagua Valley. This is the best chardonnay I’ve ever tasted from Chile. It has fresh mineral and lemon flavors and the depth of white Burgundy, with New World pizzazz.

2013 VIK ($150) — Founded in 2006 by a Norwegian entrepreneur, this ambitious winery in the Millahue Valley is a mix of cabernet sauvignon, carmenere, cabernet franc, and merlot. This vintage has more freshness and balance than earlier ones, as well as depth, power, and sophistication. It’s like a seductive mix of Napa and Bordeaux.

Sophos partners with Wordtext to widen Philippine customer base

CYBERSECURITY firm Sophos wants to grow its customer base in the country through a new partnership with a Filipino distributor.

In a statement on Thursday last week, the United Kingdom-based company said it had tapped Wordtext Systems, Inc. (WSI) to help it widen its reach in the Philippines.

“The Philippines is a growing market for Sophos and we need a business partner that can help us quickly scale this growth,” Sophos Managing Director for ASEAN and Korea Sumit Bansal said in the statement.

“With WSI’s experience in the local market, excellent technical support group, aggressive sales and marketing, and its professional and experienced management team, we believe it will play a key role in developing our broader channel ecosystem strategy,” he added.

Sophos offers several cybersecurity and public cloud products for business and home clients. Its partner, WSI, is a hardware and software product distributor that has around 2,000 dealers in its network which are located across 18 key provinces in the country.

“Sophos is the perfect security partner to supplement our existing product lineup,” WSI Special Assistant to the President Oliver Co was quoted in the Sophos statement as saying.

WSI said having Sophos products as among its offers would help its small- and medium-sized enterprise clients gain access to first-class security solutions.

“Sophos offers best-in-class endpoint solutions as well as firewall products for organizations of all sizes, and we’re excited to offer existing WSI customers the opportunity to cross-sell and strengthen their IT positioning with market-leading security offerings from Sophos,” Mr. Co said.

Sophos currently serves about 400,000 organizations globally coming from more than 150 countries. In 2018, the company said there are more targeted attacks emerging in the market this year, which would require more advanced cybersecurity solutions to ensure network and data security. — Denise A. Valdez

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