Home Blog Page 10046

Farm road backlog estimated at 13,000 km

THE Philippines has a construction backlog of 13,000 kilometers (km) of farm-to-market roads (FMR) which needs to be addressed to bring down prices, according to Agriculture Secretary Emmanuel F. Piñol.
“The result is fewer products brought to the market and more expensive food items,” Mr. Piñol said in a Facebook post on the weekend.
“We have to build more farm to market roads now,” Mr. Piñol added.
According to the accomplishment report of the Department of Agriculture (DA) in 2018, the Philippine Rural Development Project (PRDP) conducted a Rapid Appraisal of Emerging Benefits (RAEB) for 21 completed FMRs from July 2016 to end of 2018, and results showed that the average income of farming households rose 15% over an average period of 10 months after completion of the FMRs as compared to the same period prior to the implementation.
The DA noted that livelihood opportunities increased along the road, area cultivated inside the road influence area (RIA) increased by 3.5%, transport losses reduced from 11% to 2%, hauling cost decreased by 3.3% (input) and 4.8% (output), and marketing of products improved.
“Last week, I listed the need for more rural roads leading to food production areas as the number one priority of the Department of Agriculture, “ Mr. Piñol said.
“By opening farm roads, government encourages farmers to produce more knowing that it is easier and less costly to bring their products to market,” Mr. Piñol added. — Reicelene Joy N. Ignacio

SEC issues advisory vs Angel Investor Group

THE COUNTRY’S corporate regulator has advised the public against investing in Angel Investor Group, Inc. (AIG), since the company has no license to do so.
In an advisory posted to its website, the Securities and Exchange Commission (SEC)’s Enforcement and Investor Protection Department said it has found Angel Investor Group to be soliciting investments with a promise of a 100% profit return after one month, in addition to “1,500 bonus share.”
“The public is hereby informed that Angel Investor Group, Inc. is registered with the Commission as a corporation in the year 2000 but is not authorized to offer, solicit, sell or distribute any investment or securities,” the SEC said.
Soliciting investments requires a secondary license from the commission, where the investment products and securities must also be registered before they are presented for sale to the public.
The commission warned people acting as salesmen, brokers, dealers or agents of AIG who convince people to investment in the firm, including those through the internet, that they may be prosecuted and held criminally liable under the Securities Regulation Code. This entails a fine of up to P5 million or up to 21 years in prison, or both.
People who merely invite or recruit other people to join may also be held liable or sanctioned accordingly.
“In view thereof, the public is hereby advised to exercise caution before investing in these kinds of activities and to take the necessary precaution in dealing with Angel Investor Group, Inc. or its representatives,” the SEC said.
The SEC has constantly been sending out advisories against illegal entities inviting people to invest, remind the public that if an investment is too good to be true, it most probably is.
The commission has previously warned the public against investing in entities named Orro Platta Manna Corp., Bioglow Laundry Shop, Kapa Community Ministry International, Inc., and Bibli Online Store, among others. — Arra B. Francia

6 Questions with Longchamp’s Philippe Cassegrain


FRENCH FASHION luxury brand Longchamp celebrated its 70th anniversary in 2018. Philippe Cassegrain, son of the founder Jean Cassegrain, witnessed the beginning of Longchamp and has actively participated in developing the brand worldwide.
Unlike many luxury brands which have been swallowed up by conglomerates, the Cassegrain family has maintained Longchamp’s independent family origins. Today it has more than 300 boutiques across 80 countries.
Here Philippe Cassegrain talks about growing up in a family business, going international, and gilding leather cases.
1. Do you remember your father founding the company?
70 years may sound like a long time ago, yet it feels like yesterday. In 1948, my father, Jean Cassegrain, founded Longchamp. I was 11 at the time, and when I didn’t have school on Thursdays, I remember that I would help him by gilding leather cases. A few years later, I started doing some of the deliveries around Paris, before having the chance to travel across the world to meet our customers.
2. Did your father know from the beginning he was starting an international luxury brand?
Indeed he did, he had a vision from the start! He even commissioned Turenne Chevallereau to design the brand’s symbol — the Longchamp horse, with its fiery movement. He also created the “Smoke the Longchamp Pipe” advert used during those years, which we had displayed on our Citroën 2CV delivery car. All of Paris could see the symbol of our fiery stallion stretching out like a liana. It was so new!
3. Was the company international since the beginning?
Our showroom was located in the heart of Paris, where it received a great amount of exposure. It was situated at Boulevard Poissonnière, in the second arrondissement, and at the foot of the building was the civette. It was the place to be back then! It was a busy shopping area. My father welcomed customers from all over the world, curious to discover the latest novelties and up-and–coming fashion styles. At age 16, my father sent me on a trip around the world with travels across Africa before exploring Asia and the United States.
Upon my return, I officially joined Longchamp and assisted my father in running the business, from creation, manufacturing and marketing to sales development.
4. What does family business means for Longchamp?
Since the very early years all the members of the family contributed: my mother helped my father by hosting customers at the Paris Fair, she ran the boutique and looked after everything with him. And we (the children) would help make cigarette cases or passport cases. I had a small gilding machine that I would use to mark “Longchamp” in gold leaf. When I turned 15, I got a Vespa so I could deliver on the Boulevard Haussmann, home to many luxury hotels: the Commodore, the Ambassador, the Cabarets, the Crillon… I delivered the orders of smokers’ goods and orders to be displayed in storefronts. Tourists loved our collections! Jean-François and Dominique, my two brothers, joined in too: they did supplementary deliveries that I could not take charge of. We were four children and all of us grow up working for the family company. We were trained from an early age to run Longchamp. I was the eldest of my siblings, and since my brothers and sister had other professional plans, it was for me obvious to continue to run the business. I didn’t even consider any other career, Longchamp chose me and I chose Longchamp!
5. What ideas and insights were going through your mind when you first designed the Le Pliage in 1993?
During a trip to the US, I took with me a prototype for a collapsible travel bag. The result of my experimentation was the “Xtra bag,” which was made of a single piece of fabric. The fabric I selected was nylon, a strong yet light material that nobody had previously used for bags; it was light and resistant. In 1993, we reworked the idea to create Le Pliage. More playful and modern, Le Pliage shook up convention with its unique design and color palette introduced from the very first collection. Upon its arrival in stores, it was an instant success! Its trapezoidal structure, zip closure, two ears, two handles and flap teamed up with original new colors each season, and as always trimmed with “Russian Leather,” was a recipe for success. I think a brand needs to constantly reinvent itself and its products, that is why we change colors each season. All while keeping the same values!
6. Is the company that celebrated 70 years still the same company that your father founded in 1948?
We have grown tremendously since 1948. Today, my father’s vision of a global enterprise with high quality offerings and wide product ranges continues to guide and inspire us on this adventure. This has been accomplished with the continuous engagement and tenacity of all our teams, across the world. It has been a remarkable journey and I am proud that Longchamp is nowadays a luxury French family brand with the same core values. I’m happy to have raised my children within the firm and to have given them the desire to continue on this journey….
In 2018, we celebrated 70 years of Longchamp; 1948 marks the year Jean Cassegrain imparted his unique vision of French elegance and rewrote the rules of modern luxury under the Longchamp brand. A leather pipe maker channeling his craftsmanship into travel accessories, handbags and lifestyle fashion, the Longchamp brand now extends across the globe. His founding entrepreneurial spirit, penchant for excellence and romance with French art-de-vivre spur our adventure in innovative craftsmanship, creativity and unite us as we continue the Longchamp story.
In the Philippines, Longchamp is exclusively available at Rustan’s Makati, Rustan’s Shangri-La, Rustan’s Cebu, and Greenbelt 5.

Peso may strengthen vs dollar

THE PESO is expected to strengthen this week as the dollar declined against the other currencies due to weaker-than-expected economic data as well as declining government bond yields.
Last Friday, the peso ended the week at P52.51 versus the greenback, surging by 14 centavos from the P52.65-per-dollar finish last Thursday, following the release of the December inflation data, which came slower than expected.
Week-on-week, the peso strengthened a tad from its P52.58 finish last Dec. 28.
In a text message, Rizal Commercial Banking Corp. economist Michael L. Ricafort said the peso-dollar exchange rate could range between P52.30 and P52.60 this week as the greenback was weaker against other units.
“The US dollar was weaker versus major and emerging market currencies after [the release of the] weaker manufacturing data (biggest drop since 2008) to two-year lows,” Mr. Ricafort said on Friday.
The US Manufacturing Purchasing Managers’ Index was at 53.8 last month, down from the 55.3 recorded in November, amid a “weaker rise in new business and the joint-softest expansion in output since September 2017,” according to IHS Markit.
Mr. Ricafort added that the dollar was also lower compared with major global currencies after the benchmark 10-year US bond yield declined to 2.5%.
“This reduced the interest rate returns on US dollar-denominated bonds as well as the attractiveness of the US currency.”
For this week, he said the market will price in any developments in the US government shutdown as well as the upcoming talks between Washington and Beijing on their trade relations.
On the local front, investors will look at the latest gross international reserves data which will be released today, as well as the trade figures to be released on Jan. 10.
Meanwhile, a foreign exchange trader said the peso could trade stronger against the greenback should the dollar index continue to trade lower amid increased risk appetite among investors.
For this week, the trader expects the peso to trade between P52.45 and P52.65. — Karl Angelo N. Vidal

Calamities driving workers away from agriculture

THE CONTRACTION in agricultural employment accelerated to more than 11% in 2018, the Bureau of Local Employment (BLE) said.
BLE Director Dominique R. Tutay told BusinessWorld last week that natural calamities have been depressing employment in agriculture.
“Given the calamities over the last three years, employment is really negative in agriculture,” Ms. Tutay said.
On Friday, the BLE reported that growth in Agricultural employment was minus 11.4% in 2018 compared with minus 2.0% in 2015.
The Agriculture sector includes Agriculture, Hunting, and Forestry; and Fishing and Aquaculture. The contraction in Agriculture, Hunting, and Forestry was 11.0% in 2018 compared to 2015. For Fishing and Aquaculture, the contraction was 14.7%.
Employment in the Agriculture sector was 10,002,000 in 2018, against 11,294,000 in 2015.
The Jobsfit 2022 Labor Market Information report classifies Agribusiness, or commercial agriculture, as a key employment generator for most regions. — Gillian M. Cortez

Rustan’s End of Season Sale

RUSTAN’s is kicking off 2019 with a sale, offering discounts of up to 70% on fashion, home, fine jewelry and children’s brands until Jan. 31.
Among the fashion brands on sale are Kurt Geiger, Hackett London, Faconnable, Pedro del Hierro, Ricardo Preto, Tadashi Shoji, Longchamp, Anne Klein and Sergio Rossi. For the home, the following brands will take part in the sale: Kate Spade New York Home, Rosenthal, Rustan’s Filipiniana Our Very Own, and Dome Deco.
There are special offers on jewelry labels Mikimoto, Marco Bicego and Carrera y Carrera. For children, Kiddos, Rustanette, Gund, and Sugarbooger are offering discounts.

PT&T partners with cybersecurity firm

PHILIPPINE TELEGRAPH and Telephone Corp. (PT&T) is boosting its enterprise business by teaming up with security solutions firm 5G Security, Inc. (5GS) to offer cybersecurity services to its customers.
In a statement over the weekend, the listed company said it recently signed a partnership with the solutions provider in support of the government’s National Cybersecurity Plan 2022.
“The DICT’s (Department of Information and Communications Technology) Cybersecurity Plan of 2022 outlined the need to make government, business and individual information secure and available. A true end-to-end security setup is realized with the 100% fiber network of PT&T and the cybersecurity expertise of 5GS,” it said.
One of the goals of the government’s cybersecurity plan is to establish cyber resiliency measures that would prepare the country for any cyber attack.
PT&T named a few of the hardware and software solutions 5GS offers, such as a multi-dimensional security system, ground security, medium and low airspace protection, computer network and online protection, security visualization and security operations center.
“PT&T’s partnership with 5GS couldn’t be more timely. Cybersecurity is essential in today’s world where the number of transactions in the web are increasing,” PT&T President and Chief Executive Officer James G. Velasquez said in the statement.
For 5GS, its senior vice-president and chief operations officer, Leuvino Valencia, was quoted as saying, “The strength and reliability of our services will complement PT&T’s products and services.”
Last year, PT&T announced it wants to transform into a digital services provider that offers telecommunications and information technology (IT) services.
In line with this objective, the company appointed last week Ella Mae Ortega as new General Manager for IT Services. Ms. Ortega was country manager of Teradata Philippines for five years prior to joining PT&T.
The listed firm posted a 193% increase in net income at P25 million for the full year ending June, driven by a 62% growth in revenue to P201 million. — Denise A. Valdez

PSBank sees better loan growth in 2019

PHILIPPINE Savings Bank (PSBank) sees better loan growth for this year as decelerating inflation coupled with other economic conditions translate to softer loan rates.
PSBank President Jose Vicente L. Alde said the thrift banking arm of Metropolitan Bank & Trust Co. expects its consumer loan growth to “be better than last year’s” as price increases are expected to taper off.
“Based on analysts’ projections, inflation for 2019 is expected to trend lower,” Mr. Alde said in a text message. “If lower inflation, combined with other factors affecting the financial markets, translates to softer loan rates, then we can expect consumer loan growth to be better than last year’s.”
Inflation eased for a second consecutive month in December to print at 5.1%, as food and transportation prices increased at a slower pace.
The inflation print last month was slower than the 6% recorded in November and fell below the 5.2-6% forecast band of the Bangko Sentral ng Pilipinas.
Mr. Alde added that car, home and small business loans will drive its lending growth this year.
PSBank is set to raise P8 billion through a stock rights offer today until Jan. 11, issuing 184.7 million common shares.
In a previous e-mail, Mr. Alde said proceeds from the stock rights issuance will “support the projected growth of the bank.”
PSBank booked a P2.03-billion net income in the first nine months of 2018, 8.1% higher than the P1.88 billion booked in the comparable year-ago period.
Its shares closed at P57.50 each on Friday, down P3.50 or 5.74% from the previous close. — Karl Angelo N. Vidal

How PSEi member stocks performed — January 4, 2019

Here’s a quick glance at how PSEi stocks fared on Friday, January 4, 2019.
psei010419
 
Philippine Stock Exchange’s most active stocks by value turnover — January 4, 2019
pseiactive010419

GOCC dividends rise 32% in 2018 to over P40B

GOVERNMENT-OWNED and -controlled corporations (GOCCs) remitted a record P40.18 billion worth of dividends to the national government in 2018, the Department of Finance (DoF) said in a statement over the weekend.
The 2018 dividend rose 32% from 2017.
The total was remitted by 55 GOCCs.
The DOF-Corporate Affairs Group (CAG) said the GOCC dividends for 2018 were a record, despite an exemption won by Land Bank of the Philippines (LANDBANK) from remitting dividends.
With LANDBANK’s share of P7.82 billion, the dividend total would have risen to P48 billion.
The national government waived LANDBANK‘s dividend obligation in 2017 to help it comply with the 10% capital adequacy ratio imposed by the Bangko Sentral ng Pilipinas, which is higher than the Basel 3 framework international standard of 8%, according to the DoF.
The DoF said that GOCC dividends in 2018 comprised 15.72% of the total non-tax revenue.
“This is unprecedented. The record amount demonstrates the effectivity of Undersecretary [Antonette C.] Tionko and her team in instilling fiscal discipline among the GOCCs since the Duterte administration took over in 2016,” Finance Secretary Carlos G. Dominguez III was quoted as saying.
Republic Act No. 7656 requires state firms to remit half of their annual earnings to the national government.
The Philippine Deposit Insurance Corp. was the top contributor in 2018, generating P8.844 billion worth of dividends in 2018.
Other top dividend contributors were the Civil Aviation Authority of the Philippines (CAAP) with P6.224 billion; Bangko Sentral ng Pilipinas (BSP), P3.637 billion; Philippine Ports Authority (PPA), P3.103 billion; Philippine Amusement and Gaming Corp. (PAGCOR), P2.593 billion; Philippine Charity Sweepstakes Office (PCSO), P2.535 billion; Manila International Airport Authority (MIAA), P2.251 billion; and the National Power Corp. (NPC), P1.410 billion.
Mr. Dominguez attributed dividend growth to the “efficient monitoring of GOCCs by the DOF-CAG as well as by finance officials sitting on the boards of these state-run firms.” — Elijah Joseph C. Tubayan

DoE to require transparency on markups charged by oil firms

THE Department of Energy (DoE) hopes to issue by the first quarter a circular that will require oil companies to submit a breakdown of the costs that go into the pricing of petroleum products, including the so-called “industry take” that discloses their mark ups.
In a draft circular, the DoE said it will also impose a penalty on those that fail to comply with the provisions of the circular, which include a timely announcement of oil price adjustments.
Rino E. Abad, director of the DoE’s Oil Industry Management Bureau (OIMB), told reporters last week that the agency would schedule a second public consultation to discuss the draft circular.
“So we will really do this process within the first quarter,” he said. “Lahat naman ng items (All the items) there will be debated thus the second public consultation.”
Mr. Abad said the proposed circular has eight major components. He said the DoE had obtained the consensus of the oil companies on seven of them.
“What we are discussing is only industry take,” he said.
He said industry take is a contentious issue for the companies as this covers their profit margin and operational costs.
Based on the draft circular, the oil firms are required to “strictly comply with the submission of the formal notice of price adjustments per liter for liquid fuels and per kilogram for LPG (liquefied petroleum gas).”
The submissions should contain the computation and the corresponding explanation of the unbundled cost items of all products subject for sale.
The required computation covers the price movement for both the international content and the local content of the fuel products. International content covers the product cost, freight cost, insurance and foreign exchange rate. Local content should enumerate taxes, biofuel cost and the industry take.
The fuel products included in the circular are gasoline, automotive and industrial diesel, kerosene, jet fuel, bunker fuel oil, and household and automotive LPG.
The DoE may require retail outlets to submit to the OIMB an unbundled computation with corresponding explanation of the retailers’ price of all petroleum products sold in a specified period.
The draft circular also calls for oil companies to notify the DoE not later than 3:00 p.m. of every Monday of the week for any price adjustment — increase, decrease or no adjustment — and prior to any public announcement and implementation.
For LPG, they are to notify the department not later than the end of every month for any price adjustment before any public announcement and implementation.
“For the purpose of establishing uniformity in the timing of price adjustment across the whole industry thereby avoiding any confusion among the stakeholders and consumers, the price adjustment for liquid fuel shall be implemented beginning every Tuesday of the week, and applicable for the whole week (from Tuesday to the next Monday) and for LPG, beginning every first day of the month and applicable for the whole month,” the proposed circular states. — Victor V. Saulon

PCC studying valuation method for data assets in mergers

THE Philippine Competition Commission (PCC) is considering the possibility of taking into account the valuation of data assets in mergers or acquisitions.
In a phone interview, PCC Commissioner Johannes Benjamin R. Bernabe said the anti-trust body has recently dealt with mergers where the physical assets of the parties were less significant than the value of their data.
The PCC’s data valuation practices may affect the reporting threshold of merger deals — the point at which transactions need to be cleared by the commission — involving technology firms whose value is determined largely by the data they collect.
Citing the Grab acquisition of Uber’s Southeast Asian operations last year, Mr. Bernabe said the commission took note that the parties did not provide a valuation of their data in calculating their transaction’s value, which did not fall within the agency’s notification threshold.
“If you have a value of physical assets at $500,000, and in exchange you give up 27.5% of your equity when your market valuation is upwards $6 billion, what does that tell you? You are purchasing data which is not being valued properly. What is that data? It’s data of the drivers, whatever rider information is embedded in the systems that would have been transferred to Grab,” Mr. Bernabe said.
However, he noted that capturing data-driven transactions will need an adjustment to the PCC’s valuation method.
Mr. Bernabe cited an example from Germany, which factors in the transaction’s purchase price, as a viable model.
“Germany has adopted a valuation method that takes into account the purchase price because they realized that there are so many transactions going on in the members of the EU (European Union) where simply looking at the revenues generated would be misleading because the revenues may be minimal but the market valuation of these social media businesses are going through the roof. And why is it so? Because of the data that goes with the acquisition,” the PCC commissioner said.
“While we have only preliminarily discussed it, one issue that we will have to reexamine moving into the future is whether we can do what Germany did… because that would give input to the value of data that is being transferred,” he added.
Mr. Bernabe said the PCC has not come to a firm decision on the matter.
However, he said drafting the guidelines to notification rules is only a “fraction of the bigger picture” in assessing the impact of data on mergers and acquisitions.
“The more interesting exercise is really conducting an analysis on the substance of what happens once the data is in the hands of the merged entity,” he said.
He said he has been pushing other commissioners and the PCC’s Enforcement Office to analyze whether there will be substantial reduction of competition in the market not only in terms of the impact of the sharing or transfer of goods or services between companies but also at the data that will be controlled by the merged entity.
Mr. Bernabe said he first urged for the broadening of analytical scope particularly after Bayer AG’s $66 billion acquisition of Monsanto Co. in 2017.
“Maybe they’re not going to have significant share insofar as the products are concerned. But what about the research and development, information, that they have which are subject to patent? If they will not provide access to other users to these patented products, then our world will be poorer because R&d will not be facilitated,” Mr. Bernabe said.
The commissioner is also hoping to extend the post-merger review beyond the two-to-five-year period, noting that other jurisdictions have recently realized the longer timeframe that data takes to be made applicable and useful to a business.
Mr. Bernabe pointed out that for patents, for instance, the lifecycle of data that leads to the development of a patented product, including the research and development that goes with it, is much longer than the PCC’s post-merger analysis timetable.
“We have to look at how data will affect the way business will work 10 years from now. It requires more far-sighted analysis. Of course, questions arise [as to] how can you really predict how markets will evolve in 10 years but this is where… really more intensive interviews with market participants come into play,” he added.
In terms of how other commissioners are reacting to this push, Mr. Bernabe said “it’s a slow grind”, as the commissioners are from various disciplines.
However, Mr. Bernabe believes “the commission will be more compelled to face the situation sooner rather than later,” as big-data driven businesses are on the rise.
“I guess that’s the trend in new businesses coming up, based on the use of big data application of data science and data analytics. So we have to prepare for that,” he added. — Janina C. Lim