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Max’s Group opens multi-brand site along EDSA

By Zsarlene B. Chua, Reporter

MAX’S Group Inc. (MGI) launched a new multi-brand site along Epifanio de los Santos Avenue (EDSA), as the casual dining company is ramping up expansion in the country.

“We foresee massive commercial gain due to increased efficiencies and synergies [with the multi-brand site],” Ariel P. Fermin, MGI Group Chief Operating Officer, said in a statement.

EDSA Eats is located at the corner of EDSA and Main Avenue in Cubao, Quezon City. The 600-square meter (sq.m.) building can seat 281 and features six MGI brands: Max’s Restaurant, Teriyaki Boy, Pancake House, Krispy Kreme, Yellow Cab, and Jamba Juice.

At the launch on Thursday, MGI President and CEO Robert F. Trota said the building costs 40% less than if the company chose to build six standalone stores.

“What’s good about the store is it operates under one kitchen… that should give us a lot of synergies and efficiencies in terms of labor costs,” Mr. Trota told reporters.

With this setup, he estimated the company can save three to five percent in labor costs.

“This is the type of store that we really want to bring to the provinces, it [can] become destination,” Mr. Trota said, adding that they can partner with developers along national highways and gas stations to create a mini-travel plaza.

MGI is planning to put up two to three multi-brand stores by 2020. It is eyeing one along Marcos Highway.

This isn’t the first time the company experimented with the concept as it launched Burgos Eats in Bonifacio Global City, Taguig in 2015. However, Mr. Trota said EDSA Eats has the most efficient set-up as the brands have a shared kitchen.

The concept is also open for franchising, he said.

As of September, 43% of the 750 stores under the MGI portfolio are franchise-owned. The company targets a 60-40 mix of franchise-owned and company-owned stores by 2021.

Aside from efficiency, EDSA Eats is also the prototype of the company’s sustainability efforts: solar paneling (which is said to be capable of powering 20 households a year, according to the release), a sewage treatment system, and a rainwater harvesting system.

“All the efforts for sustainability will not only be for the multi-brands, it’s for all stores,” Mr. Trota said.

Next year, MGI earmarked P1.1 billion in capital expenditures (capex), funded mostly by loans from the Development Bank of the Philippines. The capex will be spent on building their almost 20,000-sq.m. commissary in Carmona, Cavite and continued expansion of stores.

NCR board sets monthly wage for domestics at P5,000

DOMESTIC WORKERS in Metro Manila have officially been granted a wage hike to P5,000 monthly after the Regional Tripartite Wages and Productivity Commission for the National Capital Region (RTWPB-NCR) released its wage order.

On Wednesday, the NCR wage board published Wage Order No. NCR-DW-02, which will take effect next month, 15 days after publication.

“After review and evaluation of the existing socio-economic conditions and based on Public Consultations/Hearing, studies, and deliberations conducted, the Board agreed to provide for wage adjustments for domestic workers with immediate relief measures to manage the rising cost of living,” the RTWPB-NCR said.

The new monthly minimum wage rate represents a P1,500 increase from the current P3,500 minimum. The wage order covers general household help, nannies, cooks, gardeners, laundry persons; and any person who does household domestic work as their primary occupation.

It does not cover service providers, drivers, children under foster family arrangements, and helpers who perform domestic work sporadically.

Employers are also obliged to provide their domestic help basic necessities such as decent sleeping arrangements; at least three meals a day; and medical assistance without loss of any wage benefits. — Gillian M. Cortez

Bank of England seeks investigation into hacked audio feed of briefings

The Bank of England — REUTERS

THE BANK of England (BoE) asked regulators to investigate how an audio broadcast of some of its press conferences was misused to potentially give traders an unfair advantage.

It barred the third-party supplier of the feed from its press conferences and referred the issue to the Financial Conduct Authority (FCA).

A faster audio could give some traders an edge on words spoken by BoE Governor Mark Carney, which can move the price of the pound or UK gilts.

The discovery was made after concerns were raised with the bank. The FCA said it’s looking at the issue.

“This wholly unacceptable use of the audio feed was without the bank’s knowledge or consent,” the BoE said. “On identifying this, the bank immediately disabled the third-party supplier’s access.”

Central bank announcements are among the most market-sensitive of any news releases, with major monetary authorities employing tight arrangements for how their information is released. The feed issue didn’t affect the security of that information.

“The bank operates the highest standards of information security around the release of the market sensitive decisions of its policy committees,” it said. “The issue identified related only to the broadcast of press conferences that follow such statements.”

The scandal relates to the BoE’s set-piece press conferences after some monetary policy decisions. The events start with a statement from the governor, who then takes questions from assembled journalists. The proceedings are broadcast, with the video managed by Bloomberg and made available to other news providers.

The audio feed involved was a intended only as a backup in case the video failed. The BoE said the supplier that sold it on won’t play any part in future press conferences.

The news was reported earlier by the Times of London. In an age of quantitative investing, where billions of dollars are run by black-box algorithms and high frequency traders, a few seconds’ lead on market-moving information provides a vital leg up.

PAST LEAKS
While information breaches are rare for central banks, they are treated seriously when they occur.

The European Central Bank took action this year to ensure the audio from its press conferences couldn’t be sold on by providing its own fast feed for free via its website.

In the US, Richmond Fed President Jeffrey Lacker resigned in 2017 after he disclosed his role in the leak of information about policy options that the central bank was considering in 2012. — Bloomberg

4 groups keen on Panglao resort

FOUR groups, including companies led by businessman Dennis A. Uy and Gotianun-led Filinvest group, have expressed interest in partnering with the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) to develop and manage the Balicasag Island Dive Resort in Panglao, Bohol, according to the Public Private Partnership (PPP) Center.

At the same time, one group purchased bid documents for Club Intramuros Golf Course project in Manila.

In an interview with reporters on Wednesday, PPP Center Deputy Executive Director Mia Mary G. Sebastian said four interested proponents have submitted the initial required documents to the TIEZA Joint Venture Selection Committee (JVSC) for the Balicasag Island Dive Resort project.

She identified the groups as Mr. Uy’s PH Resorts Group Holdings, Inc.; Filinvest Development Corporation and Filinvest Hospitality Corporation; Philippine Travel Factory & ST World, Inc.; and Panglao Bay Premiere Parks & Resorts Corp.

Ms. Sebastian said the Filinvest group also submitted the initial required documents for the Club Intramuros Golf Course project.

TIEZA announced last November that it would bid out the 25-year development and management contract for the Club Intramuros Golf Course and its facilities.

The selected partner can redesign, reconstruct or rehabilitate the 20-hectare golf course and its facilities. However, the design and construction will need approval from the Intramuros Administration.

TIEZA said the PPP project requires a minimum capital investment of P250 million.

PPP Center said interested parties for the Club Intramuros Golf Course project should submit a letter of intent and other required initial documents to TIEZA on or before Jan. 6, 2020.

Deadline for the submission of eligibility documents is on Feb. 5, 2020 at 12:00 noon at the TIEZA main office in Pasay City.

As for the Balicasag Island Dive Resort project, PPP Center said that under the 25-year concession, the selected partner may expand the resort’s accommodations and add water sports activities and island tours, among others.

Interested parties should submit their eligibility documents until 12:00 noon of Jan. 10, 2020.

Located in Panglao, the Balicasag Island Dive Resort has been operated by TIEZA since 1989. Balicasag is described as a mushroom-shaped coral island with five diving sites. — Arjay L. Balinbin

Your Weekend Guide (December 20, 2019)

PPO 37th Concert Season — Series IV

THE Philippine Philharmonic Orchestra’s 37th Concert Season — Series IV concert will be held on Dec. 20, 8 p.m., at the Main Theater of the Cultural Center of the Philippines. It will showcase pieces by Samuel Barber, Cesar Franck, Felipe De Leon, Pietro Yon, Darius Milhaud, Carl Maria von Weber, and Pyotr Ilyich Tchaikovsky. The show’s performers include percussionist Aimee De la Cruz, soprano Alexa Kaufman, clarinet player Franz Jensen Andra, and with conductor Herminigildo Ranera. Tickets are available through TicketWorld (www.ticketworld.com.ph, 891-9999).

A Christmas concert with Lea Salonga

CELEBRATE the Christmas season with The Gift, A Christmas Special on Dec. 21 and 22 at the Newport Performing Arts Theater, Resorts World Manila, Pasay City. With musical accompaniment by the ABS-CBN Philharmonic Orchestra under the baton of Gerard Salonga, Lea Salonga will be performing with her special guests: Esang De Torres, Gaea Salipot, Alexa Salcedo, and other finalists from The Voice Kids. Tickets are available through TicketWorld (www.ticketworld.com.ph, 891-9999).

The Quest for the Adarna

REPERTORY Philippines’ Theater for Young Audiences presents a musical retelling of the Philippine folk tale “Ibong Adarna.” The Quest for the Adarna has performances until Jan. 26 at Onstage Theater, Greenbelt 1, in Makati. In the kingdom of Berbania, the king falls mysteriously ill and can only be healed by the song of the mythical bird, Adarna, which can be found in its mountain home. His three sons take turns attempting the dangerous journey to help their father. Tickets are available through TicketWorld (www.ticketworld.com.ph, 891-9999).

Family welfare program as a union deterrent

We are planning to organize a family welfare program for the spouses and children of our employees as part of our Corporate Social Responsibility (CSR). It is being recommended to us by our consultant who claims that such a program is helpful in preventing unions from knocking at the door of our factory. Is he correct? – Faulty Experiment.

A man went to visit a psychiatrist. He said: “I have two problems.” The eager psychiatrist inquired, “Okay, please tell me about them.” The man began: “Well, I think I am a vending machine.” The psychiatrist sat the man right down, looked into the ceiling, and started analyzing the man’s case, but he could think of nothing to say.

Finally, exasperated, the doctor took a P50 bill out of his pocket, forced it down the man’s throat, grabbed him by the head, and shook him till he swallowed the money. Triumphantly, the doctor said: “Okay, give me a Diet Coke.”

The man replied: “I can’t, Doc. That’s my second problem. I’m out of order.”

That’s the point. The recommendation of your consultant is out of order, to say the least. He needs a psychiatrist to determine the extent of his mental illness. Your consultant’s recommendation is one of those being used by incompetent people who would use underhanded tactics to undermine labor rights in the same manner that they continue to practice “endo” hiring.

The Family Welfare Program (FWP) is a legal mandate administered by the Bureau of Workers with Special Concerns (BWSC) of companies with at least 200 employees. The objective is to improve workplace productivity and labor-management relations, among other related issues. When implementing the FWP, private organizations must consider various dimensions:

These include reproductive health, responsible parenthood, early childhood education, gender equality, spirituality, value formation, livelihood, nutrition, health care, nutrition, environmental protection, hygiene and sanitation, sports and leisure, housing and transportation.

I tried to refresh my memory by visiting the online pages of the Department of Labor and Employment’s BWSC, but I was thwarted by a notice that its website is not a secure connection.

Anyway, I don’t deny that at times, the sophisticated use of FWP may be misinterpreted by some people to be an effective deterrent against the formation of trade unions. After all, if the employees’ families are enamored with the many family-oriented programs of an organization, who would bother to rock the boat by forming a union?

Clearly, your management consultant has a malicious intent in prescribing FWP as a union deterrent. It may be considered a double-edge sword, except that he missed one important program — that of establishing a Community Relations Program (CRP) in tandem with the FWP. These two programs can become a potent tool for harmonious and dynamic employee-employer relations, but not intended to thwart union formation, which is an inherent labor right.

Go ahead and implement FWP and CRP minus the intended purpose of your consultant. Instead, consult the labor department on how you can implement those twin programs through a reasonable and legal procedure. Take note that without FWP, your company can be cited by labor inspectors for violating labor standards.

In the meantime, I suggest that your management consider the following broad rules to ensure a sound working relations with the workers and their families.

One, be fair and treat all workers equally. Avoid favoritism even with your hardest-working people. Of course, there are some people who by nature are more likeable than others, but as part of the management team you have to avoid showing your bias by treating everyone with respect and dignity, even if it appears difficult. Management sincerity, especially if done consistently by likeable line managers, can disarm the most difficult people.

Two, be flexible in dealing with employee concerns. There could be many times that you are tempted to simply dismiss an issue by telling the complaining workers that a certain policy is covered by management prerogative. Don’t even think about it. Instead of hiding under this legal protection, exercise care by patiently explaining why a certain policy must be done for the good of the majority and that of the organization.

Three, show concern for the employees and their families. Try to understand the problem from their perspective. This should help you deal with difficulties from an angle that could be used to reconcile them with management interest. If you treat people well, how can they betray your management? If you’re being portrayed as an employee champion, how can they put up a hostile position against you?

Last, display a continuing interest in your subordinates’ families. This can only be done one-on-one by line supervisors and managers. Remember at least the name and birthday of the employee’s spouse. This is easy to do when you invite their spouses to the company’s Christmas party, anniversary celebration, including events where model workers are recognized and rewarded for their milestones.

In conclusion, note that all of these can only be done with the proactive assistance of individual line executives. The CEO or any high-ranking executive cannot do this alone. As long as these executives present themselves as employee mentors, labor-management relations can go a long way, with or without a union.

After all, as a general rule, the employees’ right to organize and maintain a union also includes the right of every worker not to join a union.

ELBONOMICS: If you want to improve, you need to start with the basic rules.

 

Send anonymous workplace questions to elbonomics@gmail.com or via https://reyelbo.consulting

How PSEi member stocks performed — December 19, 2019

Here’s a quick glance at how PSEi stocks fared on Thursday, December 19, 2019.

 

How effective are Philippine courts in enforcing commercial contracts?

How effective are Philippine courts in enforcing commercial contracts?

DoF flags UHC funding shortfall due to lower ‘sin tax’ yields

By Beatrice M. Laforga
Reporter

FINANCE SECRETARY Carlos G. Dominguez III said funding for universal health care (UHC) set to roll out next year will likely fall short due to lower projected revenue on the newly-passed sin tax bill.

Mr. Dominguez added that the estimates are pointing to a funding gap, though actual financing needs may change once the program is implemented.

“Most likely, we will not quite hit the total amount that will be required, but again, we’re just talking about estimates now, we have to look at how it will actually work out,” he said in a news conference Thursday.

The reconciled version of the tax measure, which was passed Wednesday, is expected to yield P22.2 billion in revenue during the first year of implementation.

Of this total, 60% will be set aside for UHC, 20% will fund the Health Facilities Enhancement Program and the remaining 20% will be allotted for programs intended to help the Philippines hit its Sustainable Development Goals.

The projected revenue is lower than the P36 billion expected yield from the Department of Finance’s (DoF) initial proposal.

“At the moment, the UHC is one of our major programs to improve the productivity of our countrymen and at this point, we’re only dealing with estimates because we don’t have a universal health care program (yet), I suspect that sometime in the future we will have to revisit the estimates and compare it against actual,” Mr. Dominguez said.

UHC will require P257 billion worth of funding for its first year of implementation, sourcing the bulk from the general appropriations act and the remainder from revenue generated by Republic Act 11346, which imposes new taxes on tobacco and vaping products, as well as the newly-ratified tax measure.

However, UHC’s implementing agency, the Department of Health (DoH), has a proposed budget of P96 billion as approved by the Senate. The P4.1-trillion 2020 national budget is still being discussed at the bicameral conference committee level.

Nonetheless, Mr. Dominguez said the decision by the two chambers of Congress must be respected and that the department “appreciates the understanding and the actions the legislature has taken.”

“Maybe, who knows, Filipinos will actually get into the habit of eating better, smoking less, drinking less so that the total cost of the universal health care is going to go down. That is really very important… you have to take care of yourself first,” Mr. Dominguez told reporters.

Meanwhile, he said that the administration’s excise tax collections on alcohol and tobacco products have exceeded the previous government’s collections by 70%.

“I haven’t put in here the figures for the sweetened beverages but just the alcohol and cigarettes are already 70% more than what was achieved under the Aquino administration. Of that 70%, roughly 50% comes from increased rates of excise tax on alcohol, tobacco and e-cigarettes, plus around 20% more for better compliance by the manufacturers and that also comes hand in hand with stricter enforcement,” he said.

House Ways and Means Committee Chairman Jose Ma. Clemente S. Salceda said that the measure will be transmitted next week to the Palace for the President’s approval.

The DoF has been pushing the measure’s implementation by Jan. 1.

The measure is a part of the administration’s comprehensive tax reform program, along with other bills still pending in Congress, including the measure seeking to lower corporate income tax and rationalize tax perks.

Safeguard duties for ceramic tile imports rejected

THE Tariff Commission has recommended against imposing safeguard measures on ceramic floor and wall tile imports after the conclusion of its investigation.

In a report issued Wednesday, the commission said that it found no evidence of increased ceramic tile imports, concluding that any serious injury to domestic production is “moot and academic.”

The Department of Trade and Industry (DTI) in May imposed a provisional safeguard duty of P3 per kilogram on ceramic tile imports in an effort to protect domestic industry.

The tariff commission found that import volumes of glazed ceramic tiles, which the Philippine ceramic tile industry produces, declined at an average of 7% from 2015 to 2019 following a 200% import surge in 2014. Glazed ceramic tiles account for 87% of total ceramic tile imports.

Total ceramic tile imports grew by around 200% in 2014, then declined by an average of 4% in the following years.

Relative to domestic production, imports grew by 36% compared to the 2% growth in local tile production from 2013 to 2018. The share of ceramic tile imports rose by 200% in 2014, followed by an average decrease of 6% from 2015 to 2018.

The report said that since local production of ceramic tiles was relatively constant, “the movement in the share of imports to domestic production mirrored the trend in imports (in absolute terms).”

The commission said that the domestic ceramic tile industry will benefit from the recommendation against safeguard measures, as it will have continued exposure to price and quality competition from imports.

The inability of the domestic industry to be competitive after safeguard measures were applied in 2002 to 2011, the commission said, “implied that other causes of injury, other than increased imports, may be plaguing the domestic industry and should be properly addressed.”

The commission added that the non-imposition of safeguard measures will spare consumers from ceramic tile price increases. They found “no clear relationship” between employment in the domestic industry and imports.

The Philippine ceramic tile industry consists of two companies: Mariwasa Siam Ceramics, Inc. and Formosa Ceramic Tiles Manufacturing Corp. Another firm, Eurotiles Industrial Corp., became a pure importer in 2017. First Lepanto Ceramics, Inc. ceased operations in 2013.

The tariff commission’s investigation began on May 30 2019 and concluded on Dec. 13. — Jenina P. Ibañez

Privatization office sets floor price for 20% stake in toll firm at P2.58B

THE Privatization and Management Office (PMO) of the Department of Finance (DoF) is taking offers for the negotiated sale of the government’s 20% stake in Tollways Management Corp. (TMC).

“The PMO, for and on behalf of the Republic of the Philippines, is offering for sale on an ‘as-is, where-is’ basis the 76,000 common shares owned by the Republic of the Philippines, equivalent to 20% of the issued and outstanding common shares, in the TMC,” the PMO said in a bulletin published in a newspaper Wednesday.

The government failed to dispose of its shares in an April auction.

The government has set the minimum base price for its shares at P2.58 billion, as approved by the Privatization Council (PrC).

The PMO said that qualified offerors “must submit an offer not lower than the said minimum base price.”

The government has also set the deadline for the submission of offers for March 6, 2020.

Required submissions to the PMO’s Disposition Committee include a letter of intent, a duly notarized confidentiality agreement, and payment of a non-refundable fee of P50,000.

“The opening and tabulation of offers will be done on the same date, immediately after the offer submission deadline,” the PMO said.

While the offer is open to all parties, shareholders of TMC have right of first refusal “in accordance with the company’s articles of incorporation and by-laws,” it added.

TMC is a subsidiary of Metro Pacific Tollways Corp. (MPTC), the tollways unit of Metro Pacific Investments Corp. (MPIC).

TMC is the MPTC subsidiary in charge of the operations and maintenance at the North Luzon Expressway (NLEx) and Subic Clark Tarlac Expressway (SCTEx).

MPIC is one of three key Philippine units of Hong Kong’s First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

Metal mines output up 6.5% by value

THE value of production generated by metal mines rose 6.5% year-on-year in the first nine months to P99.58 billion, the Mines and Geosciences Bureau (MGB) said.

The MGB said in a statement that nickel accounted for 48% or P47.36 billion of the total for the period, due to larger volumes shipped which offset a decline in nickel prices.

Gold accounted for 37% or P36.9 billion; copper 14% or P14.4 billion; and silver and chromite 1% or P900 million.

Prices of nickel, copper, and silver fell during the period. Gold prices rose by an average of 6% year-on-year to $1,362.99.

“The nine-month average of copper and nickel declined 9.45% and 1.31%, respectively. Copper price dropped from $3 per pound to $2.72 per pound, year-on-year,” the MGB said. However, it noted that nickel prices have been rising in the third quarter.

“The nickel ore export ban in Indonesia is expected to boost prices, which will be a welcome development for the country’s nickel producers. This will naturally increase the demand for our nickel ore,” MGB said.

In 2018, Indonesia was the world’s top nickel producer at 560,000 tons, followed by the Philippine with 340,000 tons. Both countries’ top market is China.

Top gold producers were Masbate Gold Project of the Philippine Gold Processing and Refining Corp., controlled by the Filiminera Mining Corp., which accounted for 32% or 5,182 kilograms (kg) worth P11.78 billion. This was followed by the Didipio Copper-Gold Project of OceanaGold Philippines, Inc. and the Mindanao Mineral Processing and Refining Corp. of Philsaga Mining Corp. with 2,637 kg and 2,596 kg, respectively.

For silver production, the Apex Maco Operation of Apex Mining Company, Inc. had a 34% share or 8,518kg worth P227.29 million. OceanaGold’s Didipio produced 4,093kg worth P107.2 billion.

Carmen Copper Corp.’s Toledo Copper Operation topped copper production with a 65% share or 36,986 metric tons (MT) worth P8.34 billion. OceanaGold’s Didipio followed with 10,186 MT, Philex Mining Corp.’s Padcal Copper-Gold operation produced 8,555 MT, and Lepanto Consolidated Mining Co. produced 951 MT.

Taganito Mining Corp. was the top nickel producer with 65,659 MT worth P5.87 billion, followed by Rio Tuba Nickel Mining Corp. with 35,684 MT worth P2.81 billion. Both are units of Nickel Asia Corp. — Vincent Mariel P. Galang