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Isuzu Philippines holds groundbreaking for new La Union dealership

ON TRACK for its “Road to 50 Dealerships,” Isuzu Philippines Corp. (IPC) formally held the groundbreaking ceremony for the new Isuzu dealership in La Union.

IPC led the ceremonial installation of the time capsule on the 7,300sqm lot along the national highway in Barrio Paringao in Bauang, La Union. The facility is expected to be completed mid-2020. The Isuzu La Union dealership features the new design guidelines for Isuzu dealerships, which has a cleaner and more streamlined interior and façade.

Benigno Garcia, chairman and president of One Maharlika Motor Sales and Services Corp., will oversee the operations of this contemporary designed dealership. He added that the 3,000sqm showroom can display four light commercial vehicles (LCVs) and two commercial vehicles (CVs), while the service area can accommodate up to five LCVs and four trucks in its service bays.

Isuzu La Union dealership also marks a new partnership between IPC and One Maharlika Motor Sales and Services Corp.

In his remarks during the groundbreaking ceremony, IPC President Hajime Koso welcomed the new partnership, as this would pave the way for IPC to reach more Filipinos.

“We at Isuzu always look for ways to connect and reach out to our customers. Today marks the construction of our new dealership as we aspire to serve our customers here in La Union. Isuzu La Union will be a place of finest Isuzu vehicles, genuine Isuzu parts, and exceptional services,” Mr. Koso said.

He further added, “La Union is known for its tourism industry, and its economy is diversified with service, manufacturing, and agricultural industries spread throughout the province; and we at Isuzu Philippines are very happy to establish our presence here in La Union, in response to its growing transportation requirements.”

Mr. Garcia announced that Isuzu La Union will offer the full roster of brand-new Isuzu LCVs and CVs. “By the time we open in mid-2020, we will offer Isuzu LCVs such as mu-X and the D-MAX, as well as our trucks like N-Series, F-Series, C&E-Series, and of course, the newly introduced Traviz, which is ideal for small and medium enterprises.”

In a prepared statement, La Union Governor Francisco Emmanuel “Pacoy” R. Ortega III declared that by 2025, La Union would become “the heart of agritourism in northern Luzon.”

He added, “The Isuzu La Union groundbreaking ceremony is a validation that, indeed, it’s great to do business in La Union. Isuzu La Union would bring forth a stronger presence in transportation technology in the northern Philippines. Ultimately, this would result to a more robust movement of people, goods and services, which would spark economic dynamism not only in La Union and northern Luzon but the whole Philippines.”

To know more about Isuzu’s full roster of LCVs and CVs, log on to www.isuzuphil.com or visit the nearest Isuzu dealer near you today.

Bunge sells stake in US ethanol plant as biofuel industry struggles

CHICAGO — Bunge Ltd. ended its 13-year ownership interest in an Iowa ethanol plant, the company said on Thursday, following industry struggles with thin margins and overproduction.

Southwest Iowa Renewable Energy, or SIRE, repurchased Bunge’s stake in the facility on Dec. 31, according to a statement.

US ethanol producers say the industry has suffered from the Trump administration’s expanded use of waivers to exempt oil refineries from blending ethanol into gasoline. As of last month, some 13 plants had shut since November 2018, while others had temporarily reduced production.

“As Bunge focuses our resources on our core businesses, selling our shares in SIRE, while maintaining a relationship, is an attractive opportunity,” said Andrés Martín, North America country manager for Bunge. Bunge had a 25% ownership interest in SIRE, which operates the ethanol plant near a Bunge oilseed processing facility in Council Bluffs, Iowa, according to an annual report Bunge filed last year with the US Securities and Exchange Commission. The plant’s other owners are primarily agricultural producers in southwest Iowa, the filing said.

SIRE is permitted to produce 140 million gallons per year and Bunge will continue to buy all of its ethanol under a revised commercial agreement, according to Thursday’s statement.

But SIRE will assume responsibility for buying corn to produce ethanol and for selling a byproduct used for livestock feed, the statement said. SIRE will also continue to lease rail cars from Bunge, which named a new chief executive last year after being stung by slumping grain prices and a bruising US-China trade war.

Bunge and rival merchants Archer Daniels Midland Co, Cargill Inc. and Louis Dreyfus Co, known as the ABCD quartet of global grain traders, have restructured operations and cut costs after a years-long crop supply glut thinned margins and sapped profits.

ADM said last year it would move three dry ethanol mills into a wholly-owned subsidiary while the company evaluates strategic alternatives.

“While conditions in the ethanol industry are difficult, with Bunge’s capital support and strategic advice over the years, SIRE is and will continue to be a strong participant in the renewable energy industry,” said Mike Jerke, SIRE’s chief executive. — Reuters

The risk, despite the growth

The surveys show that the Filipino people are optimistic about the new year; that their lives will be better off in 2020.

The people’s perception is backed up by impressive growth statistics. It is most likely that Gross Domestic Product (GDP) growth in 2019 reached 6%. Growth would have been slightly higher if not for the squabble within the administration. Congress delayed the approval of the national budget, resulting in a dip in government spending in the first half of the year.

Underlying this growth are sound economic fundamentals. Inflation has been tamed. Interest rates have been slashed. The currency has stabilized. Revenue efforts, thanks to the series of tax reforms, have risen. Accordingly, the Philippine credit rating has secured investment grade, and the economic managers are aiming to get an A rating.

More importantly for development, unemployment and underemployment are at a historically low level. (In other words, jobless growth — a feature in the heyday of neoliberalism — is gone.) In the same vein, poverty reduction has accelerated — a decline in poverty incidence by more than six percentage points in a short period of three years, from 23.3% in 2015 to 16.6% in 2018.

Having a growth rate of 6% and above has been the norm since 2012. This is the longest high-growth streak that the Philippine economy has experienced. And we can expect better performance in the years to come, especially in light of the durable reforms that have been put in place.

It has become an axiom — for economists of whatever philosophical or ideological persuasion accept this — that what drives economic growth is having good institutions.

Which leads us to the question whether good institutions are present in the Philippines.

Quite a few are prone to conflating good institutions and good governance, which is imprecise.

Institutions are about rules — formal (e.g. laws) and informal (e.g. customs and traditions) — that shape the economic and political behavior of the members of society. Good institutions have the characteristics of being certain (or predictable and unarbitrary), being enforceable, and eliciting the whole society’s compliance.

On the other hand, good governance is actually difficult to pin down although buzzwords like “accountability” and “transparency” are associated with it. (In this particular respect, for liberals, the Duterte administration does not meet the standards of “good governance.”)

Authoritarian Singapore and China will differ with Western liberal countries on what constitutes good governance. Yet, in terms of economic performance over the years, Singapore and China are doing much better than many liberal democratic countries. The plainest definition of good governance is reduced to the conduct of leadership and management of public affairs. “Good governance” is but a catchword for “sounds good, feels good.”

So let’s stick to the rigor of institutions. The respect for property rights and concomitantly, the enforcement of contracts are at the heart of economic and political institutions. In other words, good institutions are about the supremacy of the rule of law. But such rule of law is indifferent as to whether it is applied by a political regime that is authoritarian (think Singapore) or not.

The point above become becomes highly relevant in the Philippines. On the one hand, it is under President Rodrigo Duterte’s rule, albeit authoritarian, that critical reforms — tax reforms, rice tariffication, universal health care, the easing of business rules, among others — have been passed. These reforms will bring us closer to achieving high middle income status in the medium term and enable sustained growth and development over the longer term

On the other hand, the President’s statements and behavior undermine the rule of law and run counter to strengthening good institutions. Recently, he said that the Philippine government would not comply with an international arbitral ruling that ordered the Philippine government to indemnify Manila Water the amount of P7.39 billion which the water concessionaire lost arising from the regulator’s pricing decision that violated the contract. Further, in an angry tone, the President threatened the two water concessionaires, Manila Water and Maynilad, to have their contracts stripped. Mr. Duterte’s anger is misguided, borne out of his simplistic populism and his ignorance of the complexity of the contracts.

(Truth to tell, even the Benigno S. Aquino III administration did not have a deeper grasp of the complicated issue. Fellow columnists Romy Bernardo and Raul Fabella have done sober analyses on the issue, and I agree with them on the essential points. But the lesson here is: Do not oversell privatization, and be aware of the political consequences of prettifying this kind of privatization. The contract was made more appealing by exaggerating the reduction of prices through an optical illusion in which the decent return to investors is not reflected in the water distribution price but is realized in passing the corporate tax burden to the consumers. Next time, make the pricing straightforward and transparent.)

In the same breath, the President pronounced that he would not allow the renewal of the television franchise of ABS-CBN. This is personal spite, arising from how the local office of ABS-CBN in Davao failed to run an electoral campaign advertisement that the Duterte camp had already paid for.

No doubt about it, disregard for an arbitral ruling, breaking of contracts, arbitrariness, and spite all damn the rule of law and good institutions. The damaging effect of Duterte’s populism and arbitrariness might not be immediately felt, but this, if unchecked and extended, will threaten future growth (Venezuela serves as an example — it enjoyed high growth under the populist rule of Hugo Chavez, thanks in part to the windfall provided by high oil revenue, but its bad institutions have led to the current situation where living in Venezuela is like being in hell.)

The dangers in 2020 are formidable. The global risk is evident in light of the de facto war between the US and Iran as well as the trade wars initiated by US President Donald Trump. Although not insulated from the global developments, the biggest investor risk for the Philippines is domestic — the threat on the rule of law.

An executive of a top corporation, also a friend of mine, neatly summarizes the situation: We have a “push and pull right now. There are opportunities and risks. But the recent domestic events affecting large regulated businesses indicate the risks are on the rise.”

 

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

Astoria Hotels allots P650M for Palawan unit

THE Palawan unit of Astoria Hotels & Resorts (AHR) is investing P650 million to expand its operations to address the growing demand from Puerto Princesa tourists.

The hotel operator said in a statement over the weekend it is projecting a 20% growth in its occupancy rate in Astoria Palawan in the next three years, which it said would demand an upgrading of its facilities.

“In the next three years, our growth drivers will be the day-tour packages, the MICE (meetings, incentives, conference and exhibitions) market, European leisure travelers and weekend family staycations,” AHR Chief Operating Officer Vivian Ng said in the statement.

We are hoping to increase occupancy by 20% across the board by addressing these different market segments and targeting market by seasonal promotions,” she added.

AHR said it is expecting the development of the Puerto Princesa International Airport to drive more tourists to the site, along with the upgrading of the seaport, widening of city roads and lighting up of the streets.

As a response to the expected influx of tourists, AHR is building a new 52-room building with a private pool, children’s playroom and laundry room. It will also be opening a new seafood restaurant to be called “The Habitat.”

The company said the development works are scheduled for completion by mid-2020, in time for the opening of the new four-lane highway in Palawan.

“With the tremendous growth of the city, plus the completion of the Puerto Princesa International Airport, we expect more local and international tourist arrivals into Puerto Princesa. So we feel that 150 rooms is not enough,” AHR President and Chief Executive Officer Jeffrey T. Ng was quoted in the statement as saying, referring to Astoria Palawan’s current capacity.

“[W]e think…it’s just but necessary for us to expand now in time for completion probably mid of next year,” he added.

Aside from Palawan, AHR also has a presence in Metro Manila and Boracay. — Denise A. Valdez

Yields on gov’t securities end flat on fresh tensions

YIELDS ON government securities (GS) moved sideways last week amid renewed geopolitical tensions in the Middle East as well as market anticipation of local inflation data and further rate cuts from the central bank.

At the secondary market, GS debt yields dipped by an average of 0.3 basis point (bp) on a week-on-week basis, according to data on the PHP Bloomberg Valuation (BVAL) Service Reference Rates published on the Philippine Dealing System’s website as of Jan. 3.

“Local yields generally declined over the week due to safe-haven demand over possible geopolitical news during the holidays, including the re-escalation of tensions in the Middle East [last] Friday,” a bond trader said in an e-mail interview.

“Yields also fell on expectations of further 50-basis-point policy rate cut from the BSP (Bangko Sentral ng Pilipinas) this year,” the bond trader added.

For ATRAM Trust Corp. Fixed Income Head Jose Miguel B. Liboro: “Yields on the longer-tenor securities dropped the most as investor sentiment firmed up amid benign inflation expectations and speculation that global bond yields would continue to adjust lower on flight-to-quality sentiment due to the recent escalation of US-Iran hostilities.”

Mr. Liboro also noted that the upcoming inflation print will continue to “trend higher” but is still expected to stay lower than two percent.

BSP Governor Benjamin E. Diokno said last month that the central bank will continue to reduce benchmark interest rates this year by at least 50 bps after successive hikes in 2018 to rein in multi-year high headline inflation.

Meanwhile, the BSP Department of Economic Research forecast inflation for December to range from 1.8% to 2.6% due to higher electricity rates and oil prices.

On the other hand, Reuters reported last week that Iranian major general Qassem Soleimani died at the Baghdad airport on a US airstrike ordered by US President Donald J. Trump to discourage future Iranian attacks.

“US military has taken decisive defensive action to protect US personnel abroad by killing Qassem Soleimani,” the Pentagon was quoted in the report.

Prime Minister Adel Abdul Mahdi of Iraq also said in a statement that legislation is necessary to protect Iraq’s sovereignty after the strike which was a violation of the conditions that kept US military forces in their country.

Another bond trader said in a phone message: “[L]ocal players await for the first auction of the year amid borrowing concerns given the aggressive infrastructure plan of the government.”

With a P4.1-trillion national budget for 2020, the government would also need to borrow from local and foreign markets to finance all of its programs. A memorandum released before Christmas showed that the government plans to borrow P420 billion in the first quarter of 2020 from the local market through short- and long-term debt papers.

The borrowing plan for this quarter is 17% higher than the P360 billion programmed in the first quarter of 2019.

At the secondary market, rates of the 91- and 182-day Treasury bills (T-bills) fell by 1.4 bp (to 3.190%) and 1.7 bp (3.356%), respectively. The 364-day T-bills went up by 1.5 bp, yielding 3.43%.

At the belly of the curve, yields on the two-, three-, and four-year Treasury bonds (T-bonds) also rose by 3.4 bps (3.772%), 2.6 bps (3.856%), and 1.2 bp (3.952%), respectively. On the other hand, the five- and seven-year T-bonds saw their rates decrease by 0.5 bp (4.056%) and 2.1 bps (4.258%).

Debt papers at the long end of the curve declined. Yields on the 10-, 20- and 25-year debt dropped 0.6 bp (4.455%), 2.3 bps (5.136%) and 3.6 bps (5.182%), respectively.

For the coming weeks, Mr. Liboro expects yields to stay within range due to a slew of factors: if the inflation print is within expectations of not more than two percent, continued investor appetite for longer tenor securities, and the easing of US Treasury yields.

On the other hand, the bond trader said “[y]ields could rebound higher next week amid likely stronger inflation readings from the Philippines, China, and the Eurozone which might reduce expectations of further monetary policy easing from various central banks.”

“However, the increase in yields might be tempered by potentially softer US labor reports for December 2019,” the bond trader added.

The other bond trader sees that yield curve will “flatten” this week given the new supply of shorter tenor bonds and higher inflation expectations.

“Lower US Treasury rates for the week should also influence government yields to trek lower. But uncertainty of new supply for the three-year auction next week should pressure government yields higher,” the second trader said. — E. C. Aruta, Jr.

Why the Mazda MX-5 remains loved for 30 years

Text and photos by Ulysses Ang

SIGNS pointed out, “Welcome home [to] Hiroshima” around Mazda’s Miyoshi Proving Ground, sometime late last year. Here, around 2,300 MX-5’s descended onto the track in celebration of the roadster’s 30th anniversary; also in attendance were 102 members from the Miata Club of the Philippines and the MX-5 Club of Malaysia. There were other countries in attendance as well from Australia to Thailand to Italy to the United Kingdom, but none as big as the contingent from the Philippines.

This comes as a surprise since the MX-5 was deemed “impossible to sell” when the Japanese brand was handled by Columbian Autocar Corp. in the 1990s. It came to a point that if you bought a Mazda MPV, you’ll get an MX-5 for free. Literally, it was like they were telling you, “buy a car for your family, and you can reward yourself with a car for the weekends.”

This two-for-one scheme helped flush out the MPV and MX-5’s remaining inventory then, but little would anyone know that it will also sow the seeds for a strong and loyal MX-5 fanbase in the country. A year after the MX-5’s local market introduction, the Miata Club of the Philippines was founded.

Fast-forward to 2014, just as the world saw the newly introduced fourth-generation “ND” model, Mazda Philippines managed to snag 25 units of the outgoing “NC” decked out in special 25th Anniversary Edition garb. Limited to just 1,000 units worldwide, the Philippines accounted for 2.5% of the total run. At that point, everyone thought its distributor, Bermaz Auto Philippines, was crazy to gamble getting so much of these. It sold out in just three months.

Today, the fourth-generation model or “ND” is the best-selling MX-5 ever in the Philippines. With more than 650 units finding homes, it’s managed to outsell the first- (NA), second- (NB), and third- (NC) generations combined. It’s also made the Philippines the largest market of MX-5 in Asia outside Japan.

The number is still smaller than the likes of the Ford Mustang which sells an average of 400 units a year, but it’s nonetheless impressive considering its niche market. And with two body styles — a traditional soft top and a retractable fastback, and two transmission options, there’s an MX-5 for just about everyone.

Through all four generations of the MX-5 though, there’s its universality that’s made it such a successful sportscar for Mazda. Look at each and every MX-5, and it can trace its lineage directly to the first model that debuted in 1989. Since then, Mazda has produced more than one million examples while its competitors have all come and gone.

Also, by sticking to its basic formula, there’s no contempt that a generation is “less” MX-5 than another. The changes are borne out of improvements — more power, more rigid platform — but the same ingredients remain. By keeping it close to its founding ethos (even being produced at the same site in Hiroshima), there’s no debate if fancy electronics or a subcontracted car justify the storied badge. This is the reason why owners, young or old, men or women, can sit down together as family.

And Mazda will not be messing with the formula any time soon. What can everyone expect with the fifth-generation roadster, the “NE”? Something that stays true to the formula according to Mazda Motor Corp. Vice-President Kiyoshi Fujiwara. It’s something echoed by the MX-5 Chief Designer Masashi Nakayama who says it’ll be an evolution of the fourth-generation ND. With that, they introduced the fifth-generation MX-5’s Program Manager: Shigeki Saito. He has his work cut out for him, having to satisfy over 30 years of history. MX-5 fans around the world will surely like to see what he comes up with next, but for as long as he continues to celebrate driving, the roadster will be in very good hands.

China eases customs curbs for soy imports through northern border

BEIJING — China has eased customs regulations on imports of soybean through some northern border checkpoints, the commerce ministry said, a move that could smooth the way for shipments from neighbors such as Kazakhstan, Russia and perhaps Ukraine.

The changes come as China looks to diversify soybean imports amid trade tension with the United States, its second largest supplier of the oilseed, and could facilitate trade with the neighboring countries, traders said.

Soybean importers can use one import license to clear cargoes up to six times, if the shipments go through some checkpoints in Heilongjiang, Inner Mongolia, and Xinjiang, the ministry said in a statement dated Dec. 31 and released on its website on Thursday. “I think this policy aims to facilitate soybean trade with Russia,” said an industry source based in China’s northeastern region, who sought anonymity as he was not authorized to talk to media.

“But the volume (Russian shipments) is too small.”

One of the checkpoints, Alataw Pass, is on the border with central Asian neighbor Kazakhstan, while the other five border Russia. These are Heihe, Suifenhe, Fuyuan, and Tongjiang in Heilongjiang and Manzhouli in Inner Mongolia.

Chinese soybean importers now require an automatic import license for shipments. Current policy allows each permit to be used once to clear one batch of shipments through customs. The permit lasts for six months and can be renewed.

China has taken measures to increase farm goods purchases from Russia, amid warm diplomatic ties, aiming to cut reliance on US imports.

On Tuesday, US President Donald Trump said the first phase of a trade deal with China would be signed on Jan. 15 at the White House, which could see removal of Beijing’s hefty tariffs on US farm products, including soybeans.

China has imported 631,320 tonnes of soybeans from Russia in the first eleven months of 2019, when shipments from Kazakhstan amounted to 14,262 tonnes, official data show. — Reuters

The 1920s in the 2020s

By Joseph L. Garcia
Reporter

IT’S EXACTLY 100 years since the 1920s began. The “Roaring ’20s” came in a few years after the end of the First World War (allegedly “the war to end all wars,” but who knew then?). The Western world was in an extended period of mourning for the lives and the way of life lost after the war, and were eager for something the world had never seen before. And fashion, art, music, theater, dance — all aspects of cultural life — went for it.

On a connected note, James Laver, an English author, art historian, and curator who focused on fashion came out with “Laver’s Law” which tried at that time to summarize the cycles of fashion.

• Indecent — 10 years before its time

• Shameless — five years before its time

• Outré (Daring) — one year before its time

• Smart — “Current Fashion”

• Dowdy — 1 year after its time

• Hideous — 10 years after its time

• Ridiculous — 20 years after its time

• Amusing — 30 years after its time

• Quaint — 50 years after its time

• Charming — 70 years after its time

• Romantic — 100 years after its time

• Beautiful — 150 years after its time

The list had foresight when it appeared in Taste and Fashion in 1937, but we suppose the faster pace of our world has put a rest to this trend cycle guide’s hum. While “Laver’s Law” states that fashions 20 to 30 years since they first appeared would be considered “ridiculous” and “amusing” at the least, Mr. Laver had no way of knowing that the 1990s would adopt 1970s style quite aggressively, moving on to the 1980s making a comeback in the early 2000s. Twenty-somethings were surprised and amused when fashions they discarded in the 1990s came back from the dead, reincarnated on the bodies of their younger friends and relatives in the 2010s, and this reporter saw the excess of the 2000s reflected in the fashions of the closing years of the 2010s — the gap between cycles has become smaller.

Laver’s Law predicting that fashions from 100 years ago would be considered “romantic” did prove to be correct when we consider one of the cultural touchpoints of the 2010s: Downton Abbey, a television program featuring the lives of aristocrats in England in the 1910s (corresponding to the Edwardian Era), which spawned a huge fanbase and a motion picture released last year. The world separated by 100 years from the world of Downton fell in love with the clothes, so who’s to say we aren’t about to do the same with the clothes from the 1920s? Granted, the ’20s have always had their moments, thanks to The Great Gatsby and Chicago, but we’re going to predict that the 1920s are going to have even bigger moments in this decade, thanks to nostalgia, parallel circumstances, and Laver’s Law. Here we present some trends that we’d like to see come back from 100 years ago.

RISING HEMLINES
“As the skirts went up, morals went down,” said author Harriett Worsley in Decades of Fashion, describing the moral panic building up behind flapper dresses. Because we’ve seen the shortest of skirts possible, I don’t think this applies to daily dress as we enter the 2020s. Shorter skirts, however, might be seen on evening attire — we’ll tell you after Paris Couture Week (which begins Jan. 20).

ANDROGYNOUS CLOTHING
This was the formula that made Chanel a household name back in the 1920s: she took materials usually reserved for men’s clothing and made clothes that hid the curves a corset then would accentuate. Who knew freer movement would lead to freer women? The idea won’t be far-fetched: last year’s fashion shows showed jumpsuits and trouser suits for women, but what we’re really looking for is for nice, straight-cut skirt suits to come back to the mainstream.

SHOES
Oh, this should be wonderful. The long gowns of the eras preceding the 1920s did not give much allowance to the enjoyment of shoes as part of an outfit, as they were always hidden underneath voluminous skirts. The 1920s changed that, and began a trend for highly embellished shoes because they were finally going to be seen. Very popular styles during that era were T-strap shoes and Mary Janes. The 2010s went through a cycle of shoe heel heights, namely: platform pumps, kitten heels, stilettos, cone heels, and so on. Slip-on styles were more popular for shoes in the 2010s, so women might not be eager to make the transition to buckles again. I will ask you, however: if you could stomach gladiator sandals, you can spare the few seconds to fasten a Mary Jane buckle.

EASE IN MOVEMENT
While the latter part of the 2010s saw seams easing up on waists and the lower part of the body (the skinny pants trend died sometime around this period), we’re yet to see a true revival of drop-waist, square-cut clothing, which gave maximum freedom in walking and dancing for the 1920s girl. The silhouettes of the last few years, however loosely, remained cinched, and we’re hoping the trend will be reversed in time for the 2020s.

HAIRSTYLES
Coco Chanel once said, “A woman who cuts her hair is about to change her life.” She lived in the early days of the bob haircut, and enduring style that’s still popular today, and was one of the most popular hairstyles of the last decade. It’s not going out anytime soon, and it will prove to be popular with the return of bangs and shag haircuts in the 2020s.

FABRICS
The 1920s saw a surge in the wearing of synthetic fabrics like nylon and rayon, mainly because they were new, and the methods of producing them were finally perfected by factories after years of experimentation to find substitutes for expensive fabrics like silk. Who knew the environmental disaster the textile industry would wreak on the Earth? Fur and feathers, all the rage in the 1920s, are officially dead, thanks to fashion brands finally taking a stand in their use, in light of dwindling animal populations. We see a parallelism with the 1920s here: as designers then pushed the boundaries on synthetics, designers now are pushing the boundaries on sustainable fabrics and naturally sourced materials.

20/20 vision in 2020

The traffic problem is real — we have seen it with 20/20 vision and experienced it in hours spent in the slow movement from home to work to home or to wherever in Metro Manila and in major cities. They say it is because of the lack of planning by generations of lazy politicians and bureaucrats with no vision.

Doesn’t everyone wish to have 20/20 vision all the time, if that were possible? In our human frailty we want to be invulnerable — we want to survive and live. At the very least, we want to be safe, and 20/20 vision stands for having ready information for quick evaluation of one’s situation and confident action or reaction. Stock knowledge and past experience reinforce decisions. That is why deception and lies, betrayal and rejection by others are sins that are hard to forgive and even harder to forget. That would be tantamount to blurring vision or, at worst, blinding — being hurt or being killed off.

In our social-civic milieu, deception and lies by our government and by influential actors in society would be the utmost betrayal of collective faith and trust.

“There was no intention to deceive nor to lie,” Philippine Army public affairs chief Lt. Col. Ramon Zagala told ANC’s Headstart on Dec. 30. The surrender of 306 former communist rebels along with their firearms to the Army’s 9th Infantry Division in Masbate on Dec. 28 was real, he said. But the eagle eyes of social media saw in painful detail that the photo released by the 9th Infantry Division to showcase the surrender was doctored — in other words, fake. The issue of faking by perhaps the most respected institution in the country, the Armed Forces, went viral. On GMA News, 9th Infantry Division spokesperson Major Ricky Aguilar apologized and explained that the unit released a Photoshopped picture in their “ardent desire to release timely information.”

Defense Secretary Delfin Lorenzana ordered an investigation on the matter as he said that it undermines the military’s efforts to fight the communist insurgency. He assured the public that those who perpetuated the actions will be sanctioned, TV news reported.

We do want to see, 20/20, that miscreants in public service are sanctioned. Yet the most palpable of fear now is due to the culture of impunity that seems to have blinded justice with its “end-justifying-the-means” methods of the present administration’s Drug War. Do we even know how many extra-judicial killings (EJK) have been done, and by whom?

Based on Rappler’s September 2019 update on EJKs (its 80th), there is a noticeably huge disparity between official statistics and numbers cited by human rights groups:

• 5,526 drug suspects killed in police operations as of June 30, 2019, according to the government;

• 6,600 drug suspects killed as of May 31, 2019, as reported by the Philippine National Police on June 18, 2019; and a

• 27,000+ death toll cited by human rights organizations as of December 2018.

Who has “Photoshopped” the EJK picture like the Army’s 9th Infantry Division which admitted to having released a “collage” of old photos of “rebel surrenderees”? Even taking the government’s low figure of 5,526 drug suspects killed — one has to ask who killed them and have these killers been tried and judged in the proper courts?

The Senate investigating committees over more than two years have tried to bring transparency and see with 20/20 vision the anomalies at the Bureau of Customs (BoC), and then at the Bureau of Corrections (BuCor), both institutions implicated in the Drug War. How many retired Armed Forces and Police generals and other high-ranking officers were recruited to head sensitive positions in government, including the BoC and BuCor, where there were suspicions of graft and corruption, and the seeming complicity, or at least the line responsibility, of these hand-picked minions?

“Mukhang guilty” (Looks guilty), the man on the street might say. But always, there has to be proof beyond reasonable doubt for high crimes by high people — except for oppositionist Senator Leila de Lima, who “celebrated” her 1,000th day in detention last November. The three cases of drug trafficking stemmed from her alleged links to the drug trade in the New Bilibid Prison (NBP) when she was justice chief under the past administration, said a Rappler “Explainer” in February 2017.

De Lima is now actively supported by the US Senate, which decided in December to ban from entry into the US Philippine officials who had significantly contributed to her “wrongful” arrest — her defenders carefully avoid referring to it as “illegal” arrest, perhaps for fear of technicalities in the law that will jeopardize her cases. (It seems to the layman that many sometimes-archaic legal technicalities have extricated or condemned “suspects” of high-profile crimes and anomalies, depending on which side of the political fence they may be on.)

And giving the people 20/20 vision when it comes to what is happening (and why) is the dilemma of media nowadays — how to report unbiased news first of all, and then to speak the truth in objective opinion sans influence or favor. Omission of news and relevant facts is a sin as grievous as falsehood in the battlefield for Press Freedom.

Why is the present administration seemingly so intolerant of unflattering news and criticism? It is so difficult to understand why.

Since his assumption of the presidency, and vigorously reiterating this in December, Duterte has been saying he would block the renewal of ABS-CBN’s franchise, which expires in March 2020, after accusing the company of accepting money for a campaign ad that failed to air before the May 9, 2016 polls, and then failing to return the money (ABS-CBN News, April 27, 2017).

BusinessWorld columnist Oscar P. Lagman said in his Oct. 14, 2019 column that “President Duterte has shown a disdain for criticism and opposition, as evidenced by the fates of Senators Leila de Lima and Antonio Trillanes, Chief Justice Lourdes Sereno, media organizations Philippine Daily Inquirer and Rappler, and journalist Maria Ressa.” Yet, like many wondering Filipinos, he noted that surveys by Pulse Asia and Social Weather Station show consistently good ratings, ranging from the high 90%s to a rare 78%, for President Duterte and his people. Lagman ventures that “the two pollsters do not ask what the respondents are satisfied about or what they approve of. The respondents may just be giving answers they consider safe… Survey respondents could also be afraid to say something not favorable to him and his policies.”

Respondents possibly being “afraid” can only mean we are not seeing 20/20 the real state of affairs in our country. Watching a year-ender talk show, Prospects for 2020 by Ruth Cabal on CNN Philippines on Jan. 3, gave me a sinking feeling that we, the people, have allowed ourselves to be deceived, and have deceived ourselves piteously. Ana Tabunda, head of Pulse Asia, warned of the “chilling effect of listed companies like Manila Water and Maynilad” being forced to change “onerous” contracts and “affecting investor confidence in the country.”

Having 20/20 vision when it comes to the real state of affairs in 2020 is urgent for the Filipino people, as a solid basis for decisive action for the improvements needed in what we think of ourselves and what we must do to improve ourselves. No more fake news, no more unreliable surveys. Just our own 20/20 vision in 2020.

 

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

ahcylagan@yahoo.com

Elon Musk’s moment of truth arrives as made-in-China Tesla cars start rolling out

ELON MUSK’S decision to assemble Tesla Inc. cars in China required years of planning and billions of dollars in spending. Now comes the challenging part.

The electric Model 3 sedans rolling off the assembly line at Tesla’s Shanghai plant — its first outside the US — face a market where total vehicle sales are expected to fall for a third straight year. After capturing about 5% of China’s car sales, electric vehicles have been losing steam as the economy cooled and the government scaled back subsidies for buyers.

That could spell trouble for a launch that investors are watching closely for evidence that Tesla has what it takes to go global. A slow start for sales of its made-in-China cars would put more pressure on the unprofitable manufacturer’s finances, giving Musk little room for missteps to support a stock that’s hovering at an all-time high.

“Tesla is rushing to start deliveries before other global brands bring in more EVs,” said Zhang Yan, an analyst at research firm LMC Automotive in Shanghai. “It’s an attempt to conquer the market.”

EV sales plunged 42% in China in November as the government handouts that lowered sticker prices receded significantly. That means Musk and his team are looking at a market that’s very different from mid-2018, when the decision to build a Shanghai plant was announced. Back then, the industry’s sales were growing at a roughly 100% clip.

ELECTRIC SHOCK
The tough market could mean that Tesla sells just 21,000 China-built Model 3s this year, according to LMC Automotive. That would qualify as a sluggish start given the Shanghai facility already builds more than 1,000 cars a week and plans to double production during the next year.

The forecast takes into account Tesla’s history of production delays, potential supply-chain constraints and the complexity of manufacturing high-quality cars at scale, LMC Automotive said.

Yet others are more optimistic. Yale Zhang, managing director of Shanghai-based consultancy AutoForesight, said Tesla could sell about 100,000 Model 3 cars. Wang Lei, a Shanghai-based analyst for China International Capital Corp., said Tesla could sell a combined 120,000 Model 3 and Model Y vehicles.

Given Tesla’s volatile share price, investors will be hyperfocused on the Shanghai ramp-up. Success in boosting China sales could propel Tesla to as high as $500 a share, a Morgan Stanley analyst, Adam Jonas, said in a December note to clients. Tesla climbed to a record $443.01 on Friday after rising 26% last year.

So far, the China project has gone smoothly. Musk’s visits helped the company get preferential bank loans and swift approvals for construction and manufacturing. And while the subsidies are being phased out, the locally built Model 3 still qualified for a sizable handout of as much as about $3,550 per car.

But success requires winning over the consumer. A majority of China’s EV purchases — about 70%, according to Sanford C. Bernstein — so far have been to the government and “policy-direct” customers, including taxis, mobility services and other government-affiliated fleet operators. Such buyers typically forgo premium cars like Teslas in favor of cheaper, local models.

SMALL SLICE
“It’s a distorted need,” said Robin Zhu, an analyst with Bernstein. “And the market won’t change much in the next two-to-three years.”

Cars that cost less than 100,000 yuan ($14,300) make up more than half of EV sales in China, according to Bernstein. Tesla last week cut the starting price of the Model 3 to 323,800 yuan from 355,800 yuan — a 9% reduction. Subsidies lower the starting price to 299,050 yuan.

“To paraphrase Elon Musk, demand may be insanely high, but people literally cannot afford to buy them,” Zhu said.

CROWDED FIELD
To be sure, there is a segment of China’s massive population that can afford Teslas. But the Palo Alto, California-based company won’t be the sole global EV brand targeting those buyers.

Volkswagen AG’s Audi plans to start selling nine new-energy-vehicle models in China during the next two years, with more than half of them being pure battery-electric. The first electric model, the E-Tron, debuted in November at a starting price of about 693,000 yuan.

Daimler AG’s Mercedes-Benz EQC electric model became available in October and starts at 580,000 yuan. BMW AG plans to start building the iX3 crossover in China next year and is working with a Chinese partner to electrify its Mini model.

There also is a slew of local upstarts targeting the premium segment. Electric SUVs from NIO Inc. and Guangzhou Xiaopeng Motors Technology Co., or Xpeng Motors, are priced aggressively and already have found fans.

“It will be challenging for carmakers to differentiate themselves and be competitive,” said Stephen Dyer, managing director at Alixpartners, a global consulting firm.

Tesla, a pioneer in electric cars, probably will have an edge for the next one-to-two years before competition starts catching up, said David Whiston, an analyst at Morningstar Inc. in Chicago. Tesla’s vehicles have an industry-leading driving range to go along with the brand appeal.

Boding well for the company, registrations of Tesla vehicles in China rose 14-fold to 5,597 in November. While growing from a low base, the figure suggests healthy demand for its cars even though all the models available thus far have been the pricier imported versions of the Model 3, and the higher-end Model S sedan and Model X SUV.

ROLLER COASTER
Tesla also doesn’t have to worry about selling traditional internal-combustion vehicles. Its global rivals operate expensive gas-guzzler plants in China and need to make sure their new EVs aren’t cannibalizing more profitable gasoline-powered lineups.

“Other multinationals, carrying the legacy of traditional automakers, came into the market reluctantly and lately. They are jumping in the pool they never wanted to swim in,“ said Bill Russo, chief executive officer of consulting firm Automobility Ltd. in Shanghai. “Tesla is not a conflicted company. They don’t have to choose. — Bloomberg

Peso to weaken further on geopolitical tensions

THE PESO may see continued weakness this week mainly due to geopolitical tensions caused by a US airstrike that killed Iran’s most prominent military official.

The local unit closed at P51.09 a dollar on Friday, dropping 40.5 centavos from its P50.685 close on Thursday, according to data from the Bankers Association of the Philippines.

Week on week, the peso depreciated by 45.5 centavos against its P50.635 close on Dec. 27.

Economists attributed the peso’s decline last week to geopolitical tensions due to the US airstrike that killed one of Iran’s key military officials.

“This trend and significant decline points to the unfolding of geopolitical risk. An Iranian top commander has been killed apparently in an attack by the US and is said to raise tensions significantly in the region,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a text message on Friday.

The said incident has led to an “increase in risk aversion,” according to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC).

“The US dollar was higher amid some increase in global market risk aversion after the latest geopolitical risks involving Iran, thereby leading to some flight to safe havens, including some profit taking in Emerging Markets and riskier asset classes,” he said in a text message on Saturday.

Reuters reported that Iranian major-general Qassem Soleimani died on Friday following a US air strike on his convoy at Baghdad airport.

The Pentagon said the strike was aimed at deterring future Iranian activity in Iraq.

Mr. Soleimani, commander of the Quds Force of Iran’s Revolutionary Guards, has helped Iran fight proxy wars across the Middle East. He died alongside Iraqi militia commander Abu Mahdi al-Muhandis.

Iranian general Gholamali Abuhamzeh was quoted by Tehran-headquarted Tasnim news agency to have said that the country will retaliate.

“Vital American targets in the region have been identified by Iran since long time ago… Some 35 US targets in the region as well as Tel Aviv are within our reach,” he was quoted as saying.

Meanwhile, US President Donald J. Trump on Saturday said on Twitter that Washington will hit 52 Iranian sites “very hard” should Iran retaliate after the drone strike.

“They attacked us, & we hit back. If they attack again, which I would strongly advise them not to do, we will hit them harder than they have ever been hit before,” Mr. Trump said in a tweet on Sunday.

Factors that can affect currency trading this week will include developments in the Middle East and some local data.

“We’re watching this emerging geopolitical issue closely. This may impact the peso strongly if it continues or escalates,” UnionBank’s Mr. Asuncion said.

Aside from this issue, RCBC’s Mr. Ricafort cited local developments as factors that could affect peso trading this week.

“Another important catalyst is the release of the least inflation data for the month of December. President [Rodrigo R.] Duterte is also scheduled to decide on contracts with Metro Manila’s water utilities on Jan. 6 is another possible catalyst on the local financial market,” he said.

BusinessWorld’s poll of 13 economists yielded a median estimate of 2.1% for December headline inflation, with prices rising due to seasonal demand over the holidays as well as base effects diminishing and the weather disturbance caused by Typhoon Ursula.

If realized, this would be at the lower end of the 1.8%-2.6% forecast range of the Bangko Sentral ng Pilipinas (BSP) and higher compared to the 1.3% print in November.

For this week, Mr. Asuncion said the peso could move around the P50.90 to P51.20 band, while Mr. Ricafort gave a forecast range of P50.80-51.30. — L.W.T. Noble with Reuters

Euronext wheat falls in 2019

PARIS — Euronext wheat closed with an annual decline after a year-end rally only partly offset a price drop linked to a recovery in European production.

March milling wheat, the most active contract on the Paris-based exchange, settled 0.25 euros, or 0.1%, down at 188.75 euros ($212.08) a ton after a shortened session on Tuesday ahead of the New Year holiday.

The contract was consolidating below Monday’s six-month high of 189.75 euros. That peak came after a rally in international wheat markets linked to an initial US-China trade agreement, steady export demand and global harvest concerns.

Over the year, spot futures on Euronext, including the current March contract, showed a 7.1% decline from the 203.25 euro close at the end of 2018.

European Union common wheat production rose 14.5% this year from the drought-hit 2018 harvest, according to the European Commission.

However, a global price rally, brisk export demand and an expected drop in the sown area for next year’s harvest helped the European wheat market recover towards the end of the year.

“We’re seeing good international demand along with a drop in wheat area in France, Germany and Britain, which means there’s no room for a major weather upset,” said Arthur Portier of consultancy Agritel.

The wheat market was also monitoring transport strikes over pension reform in France, which could disrupt a wave of shipments to Morocco.

Rapeseed futures on Euronext ended the year with a sharp gain, reflecting the impact of a 13-year low for EU production and a broad year-end rally in oilseed markets.

February rapeseed on Euronext ended Tuesday’s session 0.3% down at 411.50 euros a ton.

It was consolidating below Monday’s high of 414.75 euros, the highest spot price since the end of April 2017.

Over 2019, spot rapeseed prices rose nearly 13%.

The smaller maize (corn) futures market on Euronext showed a 5.6% annual decline in spot prices, ending the year at 168.50 euros a ton.

Euronext crop futures will resume trading on Thursday after Wednesday’s New Year closure. — Reuters

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