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Cars that are breaking the limits of performance

If there is to be one defining characteristic of the 21st century so far, it is speed. New technologies have given birth to new lifestyles and a society that encourages efficiency, performance, and capability.

On the road, most notably, this mind-set has taken shape in the innovative new designs made by the world’s top manufacturers. Vehicles today not only push the limits of form and function, but they also bear the hallmarks of unequaled performance that is standard in modern society.

Below is a list of the country’s top-performing vehicles that embody that standard.

Honda Civic Type R

Honda Cars Philippines recently introduced the fifth generation of the high-performance variant of its popular Civic hatchback to the market, the Civic Type R. Touted as the ‘pinnacle of performance’, the new variant carries Honda’s Earth Dreams Technology 2.0 liter VTEC Turbo engine, which produces 310 PS of power with peak torque of 400 N-m. Coupled with a smooth and precise 6-Speed Manual Transmission with Rev-Match Control System, this robust powertrain ensures an involving driving experience.

The Civic Type R is performance to a level on its own. Taking root from a solid foundation spanning six generations in the pursuit of the spirit of racing, the model has set the benchmark in the Nurburgring Nordschleife ‘Shrine of Speed’ with a record time of 7:43:80, making it the fastest production front-wheel drive car of its era.

Ford Ranger

Built to perform, Ford’s Ranger offers cutting-edge 10-speed automatic transmission and refined 2.0L Bi-Turbo diesel engine deliver all the power and torque you need for the biggest jobs, without compromising efficiency. The “Built Ford Tough” Ranger lineup in the Philippines has grown to 11 variants, including the recent addition of the Ranger XLS Sport which features striking design enhancements for the XLS variant that further strengthen its rugged, visual appeal.

The newest editions also come with Ford’s SYNC 3 in-car connectivity system with voice command and an 8-inch touchscreen LCD. To complement comfort with safety, driver-assistive features are also installed, such as Lane Keeping Alert and Lane Departure Warning with Lane Keeping Aid, Adaptive Cruise Control with Collision Warning and Forward Alert, front/rear Parking Assist, Electronic Stability Program, Hill Climb Assist, Hill Descent Control, Adaptive Load Control, and Emergency Brake Assistance.

Mazda3

Mazda is known for efficiency, with its car maker’s proprietary SKYACTIV Technology, the blanket term for all of the company’s innovations under the long-term vision for technology development, and includes highly efficient engines, transmissions, and crash safety measures.

The new Mazda3 sedan brings all of the company’s innovations in a sleek, classy package. Between the utilized KODO — Soul of Motion design philosophy to define the Mazda 3’s aggressive features and the front and rear bumper designs, as well as the SKYACTIV technology for the car maker’s signature performance, the car does not want for performance.

The Elite range of the 4-door Sedan and 5-door Sportback variants of the Mazda3 will come with the highly fuel-efficient 1.5-liter Skyactiv-G engine while the Premium models will feature the more powerful 2.0-liter engine along with additional safety and comfort features. Both engines are mated to highly efficient Skyactiv-Drive 6-speed automatic transmissions. The all-new Mazda3 pioneers the new era of Mazda Premium by elevating the brand’s renowned driving experience with even higher levels of design, craftsmanship, engineering, and safety.

Suzuki Ertiga

Combining practicability, reliability, and performance, Suzuki’s all-new Ertiga aims to please. Boasting an all-new exterior design featuring a taller and wider nose, a dynamic shoulder line, deeper curves, an aerodynamic body and refined chrome accents, the Ertiga’s exterior exudes elegance with a strong personality that clearly differentiates it from other MPVs. Not only that, the new model also comes with an elegant black interior upping the definition of style and luxury.

Refined aesthetics are fit with a smooth and powerful 1.5 petrol engine that combines response with efficiency, producing 103 hp and 138 Nm of torque. The new Ertiga’s performance is smooth with minimal noise and vibration for a pleasingly quiet ride. The heart of the Ertiga, meanwhile, is passenger safety. Its new smoothly curving frame is more integrated and rigid for enhanced driving performance and reduced noise and vibration. It also raises fuel efficiency by lowering weight, and disperses energy more efficiently for greater passenger protection.

Toyota Vios

The Toyota Vios holds the title as the most popular vehicle in the country, and is one of Toyota’s successful creations, for good reason. Despite being in the market for more than a decade, the subcompact sedan has proven its caliber to countless of its drivers. The model maintains its relevance because of Toyota’s unique 1.3 and 1.5 Dual VVTi engines that provide speed, responsiveness, reliability and fuel economy unlike any other. The Vios also comes with either a five-speed manual or continuously variable transmission, alongside standard safety features like stability control, brake assist, and air bags.

New variants also expand and explore the capabilities of the Vios’ economical and performance-based design. The interiors provide a pleasurable, laid out dash and center console, with softer plastic panels and adequate storage spaces for comfort. Of course, safety is given priority, with Vios boasting of steadier and firmer steering alongside a suspension that smoothens out bumps and uneven surfaces on the road. The Vios also features electronic stability control, hill start assist and ISOFIX child seat anchors as standard. The effect is a comfortable, powerful driving experience. — Bjorn Biel M. Beltran

House starts crunching budget numbers

THE 18TH CONGRESS has begun hearings on the proposed P4.1-trillion national budget for 2020, with the House of Representatives targeting committee approval by Sept. 11 and final approval in plenary session by Oct. 4 before lawmakers take a month-long break.

The proposed spending plan for next year is 12% more than the P3.662-trillion 2019 budget and is 19.4% of gross domestic product (GDP), with planned infrastructure expenditure topping spending priorities at P972.5 billion, equivalent to 4.6% of GDP.

Top officials of the Development Budget Coordination Committee (DBCC) — made up of the Department of Budget and Management, National Economic and Development Authority, Department of Finance and the Bangko Sentral ng Pilipinas (BSP) — on Thursday briefed lawmakers on the proposed budget’s macroeconomic assumptions. The proposed budget is designed to propel overall economic expansion to a faster 6.5-7.5% in 2020 from a targeted 6-7% this year, with headline inflation supportive at a muted 2-4% after last year’s decade-high 5.2%.

Revenue collections are targeted at P3.573 trillion — about 16.9% of GDP — in order to help cover disbursements programmed at P4.21 trillion, equivalent to 19.9% of GDP. That will leave a P637.6-billion fiscal deficit equivalent to three percent of GDP.

Asked on the economic impact of another reenacted budget next year, Socioeconomic Planning Secretary Ernesto M. Pernia said GDP expansion could fall “probably below five percent,” recalling that in the nine years under former president Gloria M. Arroyo — who became House speaker in the last regular session of the 17th Congress that ended in June — that saw some national budgets reenacted, overall economic growth averaged just 4.6%.

Mr. Pernia said reenacting the budget again is “not going to be good because… government spending and even private spending on fixed capital formation will be hampered…”

Economic managers were also asked whether the proposed 2020 budget remains “cash-based” — a scheme started last year by former Budget chief and now Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno in order to ensure that state offices get only what they have proven they can spend within the fiscal year. The shift last year to that scheme led to a spat between the Budget department and the House, since it whittled down the proposed national budget for 2019 — an election year — to P3.757 trillion, compared to 2018’s P3.767 trillion. The spat left little time for the Senate to deliberate on the budget, and subsequent accusations by both legislative chambers that the other had made irregular fund insertions led to the four-month delay in national budget enactment.

House Speaker Alan Peter S. Cayetano had said in a press briefing on Tuesday that the House will be holding plenary sessions two hours later at 5 p.m. in order to give committees more time to work on the budget. The budget is supposed to be approved by the House first, but the Senate plans to hold parallel committee hearings — as practiced in the past — in order to speed up approval in that chamber.

The House Appropriations committee’s proposed budget calendar as of Aug. 14 — unchanged as of Thursday — targets committee approval on Sept. 11, second-reading approval on Sept. 20, third- and final-reading approval on Oct. 4, submission to the Senate on Oct. 8 and approval of the bicameral conference committee report on Dec. 9, in time for signing into law by President Rodrigo R. Duterte by Dec. 20.

The government operated on a reenacted 2018 budget from January to April 15, when Mr. Duterte signed this year’s national budget into law but vetoed P95.3 billion in funds that were not in sync with state priorities, slashing the total to P3.662 trillion.

The DBCC in its March 13 meeting slashed GDP expansion targets for this year (to 6-7% from 7-8% originally) and 2020 (to 6.5-7.5% also from 7-8%), citing constraints from the delayed enactment of the national budget.

Actual GDP expansion clocked in at a disappointing 5.5% last semester against this year’s 6-7% goal, a performance blamed largely on the four-month delay in budget enactment that aggravated the impact of the 45-day public works ban ahead of the May 13 midterm polls. — V. A. C. Ferreras

Manila slashes maximum realty tax hike by 20%

MANILA CITY Mayor Francisco “Isko” M. Domagoso has approved a local law that reduces by 20% the maximum increase in real property tax rates next year.

City Ordinance No. 8567, which cuts “incremental real property taxes due all classes of real properties,” takes effect on Jan. 1.

“… [T]here is a need to adopt a more progressive, equitable revenue system to help our taxpayers from [sic] the detrimental effects of economic downturn,” the ordinance read. “This may be achieved through a further reduction in the ceiling on the corresponding increase in the tax levy from 60% by 20% based on the incremental values of real properties under Ordinance No. 8330 (2014 General Revision of Real Property Assessments).”

Hence, the ordinance read, “any tax increase… shall be at the rate of 48%…” provided that “total amount of tax to be paid on land, buildings and other structures and machineries used for residential, commercial, industrial and special classes shall, in no case, be more than double the tax imposed in 2013 over the same real property.”

Mr. Moreno said on Aug. 9 that the ceiling will be cut further by 10% yearly till 2022.

“The City of Manila will lose about a billion pesos pero hindi… natalo ang Manila. Bakit? Nakinabang taga-Maynila (but Manila will not lose. Why? Because citizens of the city will benefit),” he said on Thursday.

RA 7160, or the Local Government Code of 1991, requires real property tax rate adjustments every three years. This requirement is largely ignored, as local officials are elected very three years as well. — Vann Marlo M. Villegas

Economic officials seek closer coordination with lawmakers on priority bills

STATE economic managers have formalized the Executive branch’s request for closer coordination with the 18th Congress to speed up approval of President Rodrigo R. Duterte’s legislative priorities.

The Department of Finance (DoF), Department of Budget and Management (DBM) and the National Economic and Development Authority (NEDA) made the proposal in a joint letter to Senate President Vicente C. Sotto III and Speaker Alan Peter S. Cayetano.

“The DoF, DBM and NEDA look forward to working more closely with the 18th Congress, under your leadership, to better align the priorities of the legislature with the President’s development agenda,” a DoF statement on Thursday quoted the letter as saying. “This is to ensure that we can move our country forward and achieve our Ambisyon Natin 2040 objective of becoming a high-income country where poverty is eradicated.”

They proposed to hold regular informal or technical meetings of the Legislative-Executive Development Advisory Council (LEDAC).

The DoF said it has reorganized its office and assigned directors and staff tasked to regularly coordinate with Congress.

Economic managers noted in their statement that closer engagement with lawmakers should help ensure approval of more reforms that will bag for the Philippines more credit rating upgrades.

The Philippines on April 30 attained a higher investment-grade credit rating of “BBB+” from S&P Global, which the DoF attributed to key economic reforms such as the Tax Reform for Acceleration and Inclusion (TRAIN) Law, estate tax amnesty, tobacco tax reform, rice trade liberalization, National ID System, as well as the ease of doing business and universal health care laws.

Attaining an “A” credit rating “means that the government, businesses and ordinary Filipinos can borrow more cheaply to invest, create jobs, and improve their lives,” the economic team also said.

The press release comes ahead of a LEDAC preparatory meeting on Aug. 27, during which the House of Representatives and the Senate are expected to harmonize their legislative agenda for the first regular session of the 18th Congress. The full council LEDAC, meanwhile, may convene in September after President Rodrigo R. Duterte’s visit to China.

Mr. Sotto on Aug. 5 said that the small LEDAC will convene monthly, while the full council will meet quarterly.

WISH LIST
Just last Wednesday, Cabinet Secretary Karlo Alexei B. Nograles said that Cabinet clusters have identified bills — targeted for approval in this session — that will increase competitiveness of the Philippines in Southeast Asia. The 18th Congress’ first regular session ends on June 5 next year.

The Cabinet’s proposed reforms include the Corporate Income Tax and Incentives Reform Act (CITIRA) that will reduce the corporate income tax rate gradually to 20% by 2029 from 30% currently and remove redundant fiscal incentives; as well as proposed amendments to Republic Act No. 7042, or the Foreign Investments Act of 1991, which will remove restrictions on foreigners from practicing their profession in the Philippines.

The Cabinet will also push amendments to the 82-year-old Commonwealth Act No. 146, or the Public Service Act, which will lift foreign ownership limits in utilities; and RA 8762, or the Retail Trade Liberalization Act, which will reduce the required minimum paid-up capital for foreign entrants to the country’s retail sector.

LEDAC, as provided by RA 7640, is chaired by the President and includes among its members the Vice-President, the Speaker, seven Cabinet members designated by the President, three senators designated by the Senate President, three members of the House designated by the Speaker, as well as a representative each from local government, the youth and the private sectors. It held its last meeting in September 2017, based on its Web site.

The small LEDAC, meanwhile, is composed of Senate President Sotto, Senate President Pro Tempore Ralph G. Recto, Majority Leader Juan Miguel F. Zubiri, Minority Leader Franklin M. Drilon and Finance committee chair Senator Juan Edgardo M. Angara, on the part of the Senate.The House will be represented by Speaker Cayetano (Taguig City 1st district), Deputy Speaker Luis Raymund F. Villafuerte (Camarines Sur 2nd district), Majority Leader Ferdinand Martin G. Romualdez (Leyte 1st district), Minority Leader Bienvenido M. Abante Jr. (Manila 6th district), Appropriations committee chair Isidro T. Ungab (Davao City 3rd district) and Ways and Means chair Jose Ma. Clemente S. Salceda (Albay 2nd district).

Mr. Salceda on August 5 said the House will prioritize the proposed increase in excise tax on alcohol products, Public Service Act amendments, establishment of the Department of Overseas Filipino Workers, proposed CITIRA, and establishment of Malasakit Centers; on top of the P4.1-trillion national budget for 2020. — Charmaine A. Tadalan

Experts caution as Duterte pushes shift to gross-based corporate income tax by 2022

REUTERS

PRESIDENT Rodrigo R. Duterte wants a shift to gross earnings as base for businesses’ income tax, but experts were cautious, saying such a base may make the tax simpler to enforce but unfair.

“You know what, I suggest to you — in all honesty — let us go to sa ating taxation gross. Maski sinong tanungin mo walang daya sa gross (Anyone will tell you it is more difficult to cheat when computations are based on gross revenues),” Mr. Duterte said in his speech on Wednesday night at the inauguration of the P550-million Tumingad Solar Power Project in Romblon.

“Pag mag-gross ka… nandiyan na lahat. Magkano ang binebenta mo? Magkanong kinita mo sa araw na ‘yan? Wala ‘yung minus na sweldo ng tao mo. Dito tayo sa gross (When you use gross revenues as base, everything is there. How much did you sell and earn in a day? No more deductions of your workers’ salaries. Let us shift to gross),” he added.

“Before I leave, gross tayo (Let us shift to gross earnings as base).”

Sought for comment, Albay 2nd District Rep. Joey S. Salceda, who heads the House of Representatives ways and means committee, said in a mobile phone message: “A flat tax on business looks tempting for its simplicity but is unfair to low-margin businesses and favors firms with high gross margins.”

“The next feasible option to a flat tax is tax on gross income earned. But even this may tilt against some that have high big indirect expenses on marketing and advertising,” he explained.

“Thus, the only way to do a flat tax is to use different rates per sector or industry, but that would be messy and would be an open arms, open legs invitation to lobbying in its most dysfunctional aspects,” he added.

“The current tax system is not perfect, but the way forward is to reduce tax rates, expand the tax base and run after tax cheats.”

For Alexander B. Cabrera, chairman and senior partner at PwC Philippines, the proposal could hit personal income tax collections since businesses will not have any incentive to report salaries of their employees as part of the withholding tax system which makes them collectors of this levy.

“Pag ginawa mo ’yang taxation based on gross, lalo lang hindi magde-declare ’yung mga companies (If you shift to taxation based on gross, all the more that companies will not declare salaries),” Mr. Cabrera said by phone.

“Kailangan talaga ng deductions kasi maaring lugi ka, tapos pinababayad ka pa ng tax, so that’s confiscatory di ba? (You really need to make deductions because it would be confiscatory if you are taxed even if you are unprofitable, wouldn’t it?)” he added, saying it would increase cost of doing business especially for those just starting out.

He also said that it could make the Philippines less competitive, noting that “[s]o far, no ASEAN country is based on gross, all on net income.”

For Eleanore L. Roque, principal and head of Tax Advisory and Compliance Division at P&A Grant Thornton, “[t]he problem with putting gross taxation for corporations is that not all corporations have the same gross margin or net margin.”

“It’s doable, but you have to calibrate the rate, because some corporations would be earning income at a much higher… rate than others… so you cannot impose one tax rate on all types of corporations and then impose it on gross,” she explained.

And while the change could “probably make it easier for administrative purposes because you don’t have to check expenses anymore” it “may not be fair for most corporations because corporations are not created equal.” — Arjay L. Balinbin

Emirates wants more weekly flights from Manila

EMIRATES is hoping to expand its flights to the Philippines. — COMPANY HANDOUT

By Arra B. Francia, Senior Reporter

DUBAI-BASED carrier Emirates Airline looks to add at least three more flights a week from Manila in the future, in a bid to further grow passenger volumes as its local operations nears full capacity.

The airline currently services 25 flights in the country, 18 of which depart from the Ninoy Aquino International Airport (NAIA). The rest are circular flights from Cebu and Clark.

“We have requested for at least three more flights a week. We would like to move to 21 (in Manila) as starters,” Emirates Country Manager for the Philippines Sathish Sethi said in a roundtable discussion in Taguig Thursday.

Mr. Sethi said Emirates carried more than one million passengers in and out of the Philippines in 2018 alone, 15% higher year on year. He added that seat load factor — the number of passengers on a flight divided by the number of available seats — is already around mid-90%.

“Our immediate request is for more frequencies. Our loads are pretty high. Our seat factors are running in mid-90s, a year-round average, which means little room for growth,” he said.

The growth in 2018 mostly came from the number of flights going to Dubai, given the large population of overseas Filipino workers in the area. Emirates also saw growth in the number of passengers heading to European destinations such as Portugal, Spain, and Italy via Dubai international airport.

Mr. Sethi said they are requesting to resume air services talks between the United Arab Emirates government and the Philippines in order to allow them to expand flights here.

“There are no commitments right now, but there are very healthy discussions going on with the entire Department of Transportation and CAB (Civil Aeronautics Board) have been very supportive of our operations,” Mr. Sethi said.

Emirates’ technical team is also talking with the DoTr and CAB to see what needs to be done at the NAIA so the gateway can accommodate its Airbus 380 (A380) aircraft.

The A380 is considered the largest commercial passenger aircraft in the world, as it can accommodate up to 500 passengers. Emirates first flew the A380 from Dubai to the Philippines in 2014 to test whether NAIA can service the jumbo jet.

“A380 has been the pillar of our fleet, we have a strong technical team that looks at all the safety standards. We have flown an A380 once here… It’s not impossible, but we understand that there are concerns over technical aspects,” Mr. Sethi said.

Without room for further expansion at its current capacity, Mr. Sethi said passenger volumes in the airline are unlikely to increase by a large percentage.

“It will have to be additional capacity. Not just for our growth…Our belief is that tourism cannot grow without growth in aviation,” Mr. Sethi said, citing how most tourists enter the country via flights because of its archipelagic nature.

Gotianun’s Filinvest forays into water business

FILINVEST Development Corp. (FDC) is venturing into the water business through a partnership with Singapore-based Hitachi Aqua-Tech Engineering Pte. Ltd.

In a disclosure to the stock exchange Thursday, the Gotianun-led conglomerate said it has signed an agreement with Hitachi Aqua-Tech for the formation of a joint venture firm that will engage in the distribution, supply, and sale of potable water to customers in the country.

The partnership will specifically be involved in “the business of owning, constructing, operating, managing, maintaining, or rehabilitating waterworks, sewerage and sanitation systems and services for the distribution, supply, and sale of potable water to domestic, commercial, and industrial users within the Philippines.”

Founded in 1977, Hitachi Aqua-Tech provides water treatment solutions as well as design and engineering works for pools, fountains, water theme parks, irrigation systems, and water features, according to its website.

This comes after Metro Manila suffered a water crisis last summer. The absence of rains during the summer season caused water levels at Angat Dam to fall below critical level, resulting to more than 16-hour interruptions in water services in the metro.

Other groups have also come forward with a solution to increase water sources in Metro Manila in the future. Tycoon Enrique K. Razon, Jr.’s Prime Metroline Infrastructure Holdings, Inc. earlier secured approval to start building the Wawa Bulk Water Supply project that can supply up to 500 million liters per day by 2025.

FDC’s core interests currently include property, banking, power, sugar, and infrastructure. The conglomerate has three subsidiaries in real estate, namely Filinvest Land, Inc., Filinvest Alabang, Inc., and Filinvest Hospitality Corp. The group develops a combination of residential, office, commercial, and hospitality projects across the country.

Under banking, the company has East West Banking Corp., while FDC Utilities, Inc. handles the power business. It also fully owns Pacific Sugar Holdings Corp., which operates three Mindanao-based sugar firms.

FDC’s net income attributable to the parent slipped 2% to P3.35 billion in the second quarter of 2019, as higher costs outweighed the 8% increase in revenues to P20.6 billion.

For the first half, the company’s attributable net income was up 19% to P6.13 billion, following a 15% increase in total revenues and other income to P41.61 billion.

The group has committed to spend P39 billion in capital expenditures this year, mostly to expand its properties in New Clark City.

Shares in FDC went down 1.45% or 20 centavos to close at P13.60 each at the stock exchange on Thursday. — Arra B. Francia

Axelum sees growing demand for coconut milk powder

THERE is a growing demand for coconut products, particularly coconut milk powder. — BW FILE PHOTO

COCONUT PRODUCTS manufacturer Axelum Resources Corp. hopes to take advantage of the growing demand for coconut milk powder as more people turn to healthier dairy milk alternatives.

In a statement issued Thursday, Axelum said it plans to develop the market for coconut milk powder since it has one of the highest margins among its product offerings.

“In particular, the company is exploring the introduction and production of more gluten-free, dairy-free, and organic variants of existing product offerings,” Axelum President Henry J. Raperoga said in a statement.

Citing a study by the University of Asia & the Pacific, Axelum said that coconut milk powder exports have grown by 38% per year on volume and 60% per year on value. The Netherlands, Japan, the United States, France, and Australia are among the main markets for the products.

Axelum hopes to capitalize on this demand since it still has the capacity to produce more products.

“As of end 2018, our manufacturing plant is not fully utilized, which means there is room to scale up our manufacturing and distribution capabilities to address the growing demand of our clientele,” Mr. Raperoga said.

The company’s main production facility is located in Medina, Misamis Oriental. It also owns two manufacturing and distribution facilities in the US and Australia, and has distribution agents in key cities in the world.

To-date, Axelum is one of the major suppliers of coconut water firm Vita Coco, exporting 25 million liters of coconut water in 2018. It also supplies to several global brands such as The Hershey Co., Nestlé, Unilever, Ferrero, General Mills, Campbell’s, ConAgra Foods, among others.

Aside from coconut milk powder, Axelum also manufactures fat coconut, sweetened/toasted/roasted desiccated coconut, and coconut cooking oil.

Axelum has recently secured clearance from the Securities and Exchange Commission for its P7.695-billion initial public offering consisting of up to 1.13 billion common shares priced at up to P6.81 apiece.

It is now awaiting final approval from the Philippine Stock Exchange, Inc. to proceed with the issuance. First Metro Investment Corp. has been tapped to be the issue manager, bookrunner, and lead underwriter for the transaction.

If approved, Axelum looks to list its shares on the local bourse by Oct. 4.

Proceeds from the offering will be used to finance Axelum’s target acquisitions that will allow it to further expand to the United States, Europe, Middle East, and major countries in Asia. — Arra B. Francia

Hot money returns in July

By Mark T. Amoguis, Senior Researcher

MORE foreign capital went into the country in July to yield a net inflow, snapping four consecutive months of outflows, the central bank reported on Thursday.

Foreign portfolio investments — also known as “hot money” because of the ease by which these funds enter and leave the economy — saw a net inflow of $15.02 million last month, reversing June’s $35.72-million net outflow but lower than the net $53.29 million that entered the country in July last year, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

This brought the seven-month tally to a net outflow of $671.50 million, a turnaround from last year’s $458.55-million net inflow.

The central bank sees $4 billion in hot money net inflows this year.

In July alone, inflows reached $1.681 billion, higher than last year’s $959.44 million and June’s $1.412-billion inflow.

Meanwhile, outflows for that month totalled $1.666 billion versus $906.15 million a year ago and the $1.448 billion that left in June.

The bulk or 76.5% of the total investments registered in July were in companies listed on the local bourse, while the 23.5% of the total were captured by local government securities, the central bank said in a press release.

The United Kingdom, Hong Kong, the United States, Norway, and Malaysia were the top investors last month as they accounted for a combined 75.6% of the total inflows.

Meanwhile, the US cornered 77.8% of the total outflows.

The BSP said the $15.02-million net inflow for July was due to “better-than-expected inflation data for the month of June coupled with easing domestic inflation for the second quarter” this year as well as a “stronger” peso forecast.

Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc., said the net inflows logged last month was due to the local bourse breaking into the bull market territory.

“This particular breakout was said to have been driven by US Fed Chairman [Jerome] Powell’s talk of an interest rate cut by the end of July, which did happen eventually,” Mr. Asuncion said in an e-mail. “However, this mid-July euphoria did not last as the US-China trade war escalation news overwhelmed positive market perception.”

Robert Dan J. Roces, economist at Security Bank Corp., said the July data “validated the trend that market players were cautiously optimistic with the sustained strength of the peso for July, as well as the continued downtrend in inflation while looking out for developments in the trade war.”

“Moving forward, the worsening trade tensions between the US and China might keep foreign investors wary about placing their money not just in the Philippines, but with the region as well,” he said in an e-mail.

Hogan to open at Luxe Duty Free

A HIGH-END Italian streetwear brand Hogan is set to open its first store in the Philippines in October, according to Duty Free Philippines Chief Operating Officer Vicente Pelagio A. Angala.

In a statement, Mr. Angala said the Hogan store will open at Luxe Duty Free, the company’s outlet within the Mall of Asia complex in Pasy City.

“We are extremely honored and proud to welcome Hogan into our Luxury offer,” he was quoted as saying.

Luxe Duty Free houses top fashion brands such as Furla, Kate Spade, Coach, Longchamp, Hugo Boss and Michael Kors.

“Luxe Duty Free was developed to house the most upscale travel retail offer in the country through its luxury ambiance for prestige beauty, fashion, and luxury brands,” Mr. Angala said.

Hogan, which is part of global luxury goods group Tod’s, is known for its high quality, stylish footwear. Aside from Hogan, Tod’s also owns a namesake brand, as well as Roger Vivier and Fay.

“It is surely a momentous occasion for Hogan to be opening its very first travel retail store at Luxe Duty Free. We are proud to be serving the international travelers and customers of Luxe with our Made In Italy sneakers, making their traveling effortlessly cool and a comfortable one,” Suh-hee Park, Tod’s group head of sales for Asia Pacific, was quoted as saying.

Hogan’s new store will feature the autumn/winter collection, which was inspired by the North Pole.

Fed divided on rate cut, wanted to avoid hinting on more easing

WASHINGTON — Federal Reserve policy makers were deeply divided over whether to cut interest rates last month but were united in wanting to signal they were not on a preset path to more cuts, a message not likely to sit well with US President Donald Trump.

Minutes from the two-day meeting released on Wednesday showed policy makers’ ultimate decision to lower the central bank’s benchmark interest rate by a quarter percentage point drew more opposition than was reflected in the rate-setting panel’s 8-2 vote, announced after the meeting adjourned on July 31.

While a “couple” of participants favored a deeper cut of half a percentage point to help lift inflation toward the Fed’s target and thwart fallout from global trade tensions, a larger number — characterized in the minutes as “several” — favored no change at all.

The depth of the debate raises the stakes for the signal that Chairman Jerome Powell is set to deliver on Friday at the Fed’s annual policy retreat in Jackson Hole, Wyoming. It also shows a Federal Reserve not eager to give Trump the larger rate reductions he is demanding.

“I think the thing that surprised me was how divided they were,” said Mary Ann Hurley, vice president for fixed income trading at D.A. Davidson in Seattle. “We’re really in uncharted territory. They are really concerned about doing or not doing the right thing.”

The divisions revealed in the minutes indicate there might have been more dissents if all participants had a vote. While Fed board governors are permanent voters, only five of the 12 regional reserve bank presidents have a vote at each meeting.

At the same time, the minutes also showed broad concern among policy makers over a global economic slowdown, trade tensions and sluggish inflation.

Since that meeting, the Fed has come under increasing pressure to cut borrowing costs more, including a call by Trump on Wednesday for the Fed to slash its benchmark rate.

However, Fed policy makers agreed at their July 30-31 meeting that they did not want to give the impression they were planning more rate cuts.

“Participants generally favored an approach in which policy would be guided by incoming information … and that avoided any appearance of following a preset course,” according to the minutes.

KEEPING FLEXIBLE
US stocks held on to session gains after the minutes were released, with the benchmark S&P 500 Index up about 0.77% on the day.

“The Fed clearly wants to be flexible. They are clearly worried about some of the global tensions that are out there, whether it is trade or Brexit or some of those international developments,” said Willie Delwiche, investment strategist at Baird in Milwaukee.

Yields on longer-dated US Treasury securities rose after the minutes were published. The 10-year note yield climbed to 1.58%, while the 30-year bond rose further above the key 2% level, last trading at 2.06%. It fell below 2% for the first time ever last week as diminishing expectations for US economic growth fueled demand for safe assets.

The dollar strengthened against the safe-have yen and Swiss franc.

The comments on Wednesday by Trump, who has repeatedly criticized the Federal Reserve’s policies, come as he seeks to downplay worries that a trade war between the United States and China could weigh on the US economy and trigger a possible recession before the November 2020 presidential election.

Minneapolis Federal Reserve Bank President Neel Kashkari, who does not have a vote on the Fed’s monetary policy committee this year but participates in policy discussions, urged the Fed on Wednesday to use pledges about future policy, known in central banking as “forward guidance,” to boost the economy.

The July 30-31 policy meeting also included discussion of the Fed’s research into potential changes to its approach to setting policy. A number of policy makers said the Fed could have been more aggressive in using bond purchases to fight the 2007-09 recession.

However, policy makers also said tools like bond purchases and forward guidance might not be enough to eliminate the risk of policy being hampered in the future when the Fed’s benchmark rate gets close to zero. — Reuters

PRC expanding training programs eligible for CPD license renewal

THE PROFESSIONAL Regulation Commission (PRC) is increasing the number of programs that can be accredited under the Continuing Professional Development (CPD) Law in order to facilitate compliance by professionals.

Speaking with BusinessWorld, PRC Chairman Teofilo S. Pilando said that the expansion comes as it seeks to expand its training facilities during the law’s transitory period. Part of the program is decentralizing sites that offer CPD units away from Metro Manila.

“There are more providers being accredited and more programs being accredited… We’re improving systems and technologies so that programs can be facilitated,” he said.

PRC Resolution No. 2019-1146, which was released Feb. 13, relaxed the requirements for professionals to renew their professional licenses during the transitory period. It also amends the law’s Implementing Rules and Regulations (IRR), reducing the minimum CPD units for license renewal to 15 units from 45.

Also during the transitory period, professionals located overseas and professionals who are newly licensed are exempt from renewing their licenses during the first renewal cycle. Professions governed by Professional Regulatory Laws are also not covered by the guidelines.

The PRC is also using the period to boost the capability of CPD Councils in each regulated profession. Mr. Pilando added, “We’re also building the capacity of the CPD Council.”

Mr. Pilando said that the PRC is improving services outside Metro Manila, adding, “We are enhancing our regional offices and setting up service centers all over the country.” — Gillian M. Cortez

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