Facebook Instagram Linkedin X Youtube
Home Blog Page 10066

Hospital group says revenues to hit P6 billion

THE Medical City (TMC) said it was on track to hit a record P6 billion in revenues for 2019 amid a shakeup in the company’s ownership and administration.

In a statement over the weekend, TMC said its main hospital has grown “four times faster than the previous administration” in 2019.

“The excellent results of our collective work in the past year show how empowered teamwork and focus can do wonders for our institution… The increased revenue is yet another sign that re-booting The Medical City has worked,” TMC Chief Executive Officer Eugenio Jose F. Ramos was quoted in the statement as saying.

TMC elected last year a new board of directors after it shifted its management to welcome investors led by Viva Healthcare Ltd.; Viva Holdings (Philippines) Pre. Ltd.; Felicitas Antoinette, Inc. and Fountel Corp.

Among the newly-appointed officials are Mr. Ramos, chairman Jose Xavier B. Gonzales and chairman emeritus Augusto P. Sarmiento.

“I was optimistic that we could, with better management, achieve the full potential of TMC. Seeing the results further gives us confidence that we are on the right track when it comes to not just financial performance but operational excellence across the network,” Mr. Gonzales said in the statement.

Aside from the main TMC branch in Pasig City, the company said its units in Clark, Iloilo, South Luzon and Pangasinan also showed robust growth last year, with revenues growing by an annual 8%.

“We are seeing revenues up more than 8% over the previous year for all our hospitals. Meanwhile, TMC Main’s increased focus on managing costs and driving productivity resulted in improved operating margins,” TMC Chief Financial Officer Michael Pineda said in the statement.

The Securities and Exchange Commission last year fined TMC’s majority shareholders at least P50.25 million for what it called a surreptitious takeover of the company. The camp of Mr. Gonzales has since appealed the case.

Aside from its five hospitals, TMC also operates a tertiary hospital in Guam and more than 50 clinics all over the Philippines. It employs 3,000 physicians and more than 7,000 support staff across its network. — Denise A. Valdez

Kuya J opens first café

FILIPINO restaurant Kuya J launched its first Kuya J Café on Dec. 16 at Park Square, Ayala Center in Makati City.

“Kuya J Café offers the best of both worlds,” Francis Reyes, chief financial officer of Kuya J Group, was quoted as saying in a press release. “Aside from specially brewed coffee and delicious pastries, we also serve the well-loved Kuya J signature dishes. It is a place where you can either sit back and take a sip of your go-to comfort drink or enjoy a sumptuous dinner with your family.”

Kuya J Café serves own coffee blends and brews. Aside from the House Blend it also has sago’t gulaman coffee and tablea coffee for a chocolatey kick.

Its menu includes items like guava cake, tablea cake, and salted egg cheesecake.

It also offers single servings of Kuya J’s best-sellers, like grilled scallops, beef caldereta, and Chorizo Dinamitas to name a few.

Kuya J started out as a streetside eatery in Cebu before expanding across the country. According to its website, it currently has 108 branches nationwide.

For more information, visit https://www.kuyaj.ph/, or follow Kuya J on its Facebook and Instagram accounts.

Indonesia plans fixed fees for e-wallet transactions

JAKARTA — Indonesia plans to impose fixed fees on some e-wallet transactions, five people familiar with the matter said, in a move that could choke a key revenue stream and raise costs for payment start-ups backed by the likes of Alibaba’s Ant Financial.

Providers of e-wallet services in Southeast Asia’s largest economy currently customize fees for vendors, charging a premium from big retailers and absorbing costs for smaller merchants in an effort to get them to use their platforms.

But Bank Indonesia has already held talks with the biggest digital-payment start-ups to make fees on QR code transactions uniform, the people said, building on its move in August to standardize electronic payments that use the matrix barcode.

Bank Indonesia did not respond to repeated messages and calls requesting comment.

Leading the pack of e-wallet firms in the country is home-grown ride-hailing start-up Gojek, backed by firms including Alphabet’s Google, and start-up OVO, in which Gojek rival Grab has a stake. Ant Financial’s e-wallet DANA trails them, along with state-owned payments platform LinkAja.

The central bank wants to fix some e-wallet transaction fees at 0.7%, the people added, a move that could deter smaller merchants that now pay next to nothing from staying on the e-wallet network or force the latter to increase incentives.

Fixed fees on payments at bigger vendors, like Starbucks, that are currently charged as much as 2%, would also dent revenue for the e-wallet firms, the people said.

The start-ups have already burned through millions of dollars in incentives to lure vendors in Indonesia, where a multibillion-dollar digital payments industry has flourished as over half its nearly 270 million population have no bank accounts.

The country’s internet economy was $40 billion this year and is expected to grow more than three fold by 2025, according to a report here by Google, Temasek and Bain & Co.

‘HURT ALL’
Bank Indonesia is yet to decide on fees on transactions made at bigger vendors, the people said, with one person close to the talks adding it could also be fixed at 0.7%.

A big retailer is typically charged between 0.5% to 2%, one of the people said. As a benchmark, Visa and Mastercard charge around 2% to 3%.

“This will hurt all of us,” said an executive at an Indonesian e-wallet firm, who was not authorized to speak to media and did not want to be named.

The fee earned on e-wallet transactions would have to be split three ways under the new system, sources said: between the e-wallet companies, middle-men payment processors, and the National Electronic Transaction Settlement — a consortium of major Indonesian lenders. Until now e-wallet firms either kept the whole fee or split with some payment processors, and no lenders were involved.

Representatives for DANA, GoJek and Ovo did not comment on the uniform rate proposal, but said Indonesia’s move to standardize the QR network was good for the industry. — Reuters

Microsoft says ‘Thallium’ hackers stole sensitive information

MICROSOFT Corp. said on Monday it has taken control of web domains which were used by a hacking group called “Thallium” to steal information.

Thallium is believed to be operating from North Korea, Microsoft said in a blog post, and the hackers targeted government employees, think tanks, university staff members and individuals working on nuclear proliferation issues, among others.

Most of the targets were based in the United States, as well as Japan and South Korea, the company said.

Thallium tricked victims through a technique known as “spear phishing,” using credible-looking emails that appear legitimate at first glance.

Microsoft said it now has control of 50 web domains used by the group to conduct its operations, following a case filed against the hacking group in the US District Court for the Eastern District of Virginia, and a subsequent court order.

Thallium also used malware to compromise systems and steal data, and is the fourth nation-state group against which Microsoft has taken legal action, the company said. — Reuters

Outlier: Profit taking drags Ayala Land stocks lower

POLICY UNCERTAINTY surrounding the property sector led some market players to take profits on Ayala Land, Inc. (ALI) stocks last week.

ALI was the third most actively traded stock with a total of 24.119 million shares worth P1.113 billion having exchanged hands on the trading floor during the three-day trading week from Dec. 23 to 27, data from the Philippine Stock Exchange showed.

On a week-on-week basis, its share price was lower by 1.09% to P45.5 on Friday from its Dec. 20’s closing price of P46 apiece. Year to date, however, ALI is up 10.17%.

“I think this recent decline not just of ALI, but also for the property sector, is geared towards profit-taking since this sector had a stellar performance, beating all other indices including the PSEi (Philippine Stock Exchange index),” Philstocks Financial, Inc. Client Engagement Officer and Research Associate Piper Chaucer E. Tan said in an e-mail.

Mr. Tan added that the decline may also be attributed to uncertainty over the government policy for Philippine Offshore Gaming Operators (POGO) and the Corporate Income Tax and Incentives Rationalization Act (CITIRA), which “may slow down” the expansion of the information technology-business process outsourcing (IT-BPO) sector in terms of office space take-up.

However, he noted ALI’s resilience as shown in the stock’s double-digit, year-to-date growth, with some investors taking positions towards next year.

In a separate e-mail, Unicapital Securities, Inc. Technical Analyst Cristopher Adrian T. San Pedro said the “lingering political uncertainties” on the crackdown of POGOs may be affecting the investors’ sentiment to become “bearish” on property stocks including ALI as these developers are “heavily exposed” to Chinese tenants.

“[The] news on the Sagada development could also be an underlying factor on ALI…,” Mr. San Pedro added.

In a statement last Dec. 23, ALI denied newspaper reports it is developing a tourism project in Sagada, Mountain Province.

Meanwhile, the Philippine Amusement and Gaming Corp. (PAGCOR) stopped issuing new licenses to POGOs starting in August due to national security and economic concerns.

PAGCOR Chairperson and Chief Executive Officer Andrea D. Domingo said the suspension would also prevent the country from being the “catch basin” of fleeing operators after the ban on online gaming in Cambodia.

Moreover, the Finance department has ordered the Bureau of Internal Revenue to close down online gaming operators that have failed to pay taxes.

The House ways and means committee earlier approved a bill that seeks to impose a 5% tax on offshore gaming companies which will replace a 2% gross revenue tax on PAGCOR licensees. The bill also increases the tax on foreign POGO employees’ salaries and allowances to 25% from 15%.

Albay Rep. Jose Ma. Clemente S. Salceda, chairman of the House ways and means committee, told reporters before the holidays that the reform on taxing POGO operations was one of the committee’s priorities.

Meanwhile, CITIRA, which aims to gradually reduce corporate income tax to 20% by 2029 from the current 30% and remove fiscal incentives deemed redundant, is still pending at the Senate.

Despite these uncertainties, Philstocks’ Mr. Tan said ALI’s growth trajectory is still “sustainable” in 2020 and even the next 10 years as it continues to expand in regions outside Metro Manila, noting the strong demand for ALI properties across market segments as shown by its “strong double-digit” earnings growth.

For the nine month period, ALI reported an 11.75% rise in attributable profit to P23.210 billion.

”We expect ALI to hit P40 billion in net income for 2020 to be driven by steady revenues from malls, offices, hotels, and real estate projects,” said Unicapital Securities’ Mr. San Pedro.

Moving forward, Mr. San Pedro expects ALI’s stock support and resistance levels in the short term to range between P44 and P50, respectively.

“I expect the stock to become a potential trend reversal candidate and retest P50 and P54 resistance levels this first quarter of 2020, if it stays above P45,” Mr. San Pedro added.

For Philstocks’ Mr. Tan: “The primary and secondary support is seen at P42 and P40. Consequently, the primary and secondary resistance is at P48.50 and P50, respectively.”

“Based on the historical performance of the sector indices, all sectors posted gains at the start of the year. We think that ALI will also start 2020 strong in its first trading week given this support and resistance ranges,” he added. — Marissa Mae M. Ramos

My 2019 Summary

I AM VERY grateful to have this regular column to cover my wine experiences (with occasional spirits, beers, and other alcoholic beverages too), my wine thoughts, and my travels, and 2019 was as exciting of a year as I ever had.

In the last year, I had a chance to return to Bordeaux after close to a decade of absence. I also continued my wine education on my 4th trip to the Piedmont region of Italy since 2013 — attending my 3rd Nebbiolo Prima in the picturesque town of Alba. The wine business in the Philippines is also on the upswing, with official import volume of wines (as our country really does not have the weather and four seasons to grow Vitis Vinifera grapes to make decent wines) close to doubling since 2010. This will be my first year-end review since 2014.

THE GRAND CRU BORDEAUX TOUR
A huge shout out to Yann Schyler and Charles Delamalle of Schroder & Schyler for arranging my incredible and dreamy itinerary last February. Among the renowned Grand Cru chateaux I fortunately visited early last year, were Chateau Margaux (Grand Cru Classe 1st growth), Chateau Leoville Las Cases (Grand Cru 2nd growth), Chateau Cos Estournel (Grand Cru 2nd growth), Chateau Cheval Blanc (Premier Grand Cru Classe A St.-Emilion), Chateau Angelus (Premier Grand Cru Classe A St.-Emilion), Chateau Kirwan (Grand Cru 3rd growth), Chateau Lagrange (Grand Cru 3rd growth), Chateau Palmer (Grand Cru 4th growth) and Chateau Fleur Cardinale (Grand Cru Classe St.-Emilion). This Bordeaux experience included tastings of wines from current vintage releases to as old as the 1945 vintage of Chateau Leoville Las Cases. The biggest takeaway from the visit is that Bordeaux wines, in particular the Grand Cru Classe wines, are thriving on amazing recent vintages with 2014, 2015, and 2016 all ranging in quality from superior to exceptional.

I learned so much on the trip talking to oenologist, winemakers, and even owners on the peculiarity of each vintage and the signature style of the individual chateaux. No books nor YouTube videos can substitute for the experiential aspect of being with the people of a chateau and drinking their wines in the comfort of their cellar. I will, however, continue to try to communicate these experiences as vividly as I can to my readers.

NEBBIOLO QUALITY SHINES ANEW
For a self-confessed Nebbioloholic (a phrase I coined for a Nebbiolo grape varietal wine fanatic…), the Nebbiolo Prima, which is an annual event previewing 100% Nebbiolo grape-made DOCG wines from Barolo, Barbaresco, and Roero regions, has always been a hedonistic endeavor. From Jan. 23 to 27 in 2019, I was back in Alba, Piedmont to join around 50 wine journalists from 25 countries, representing Europe, North America, South America, and Asia. I happened to be the lone participant from Southeast Asia. Being previewed were the DOCG wines of the Roero 2106 vintage, the Roero Riserva 2015 vintage, the Barbaresco 2016 vintage, the Barbaresco Riserva 2014 vintage, the Barolo 2015 vintage, and the Barolo Riserva 2013 vintage. Two noteworthy vintages were the 2015 Barolos and the 2016 Barbarescos. The 2015 vintage of Barolo is absolutely my favorite, not only among the previous Barolo vintages I previewed, but also from a few I tasted after their commercial release.

Even though 2015 started quite rough, as the Langhe in Piedmont experienced its hottest July since 1880, some positive fortuitous circumstances on weather did save the vines and helped push up the quality of the 2015. It was the windy conditions of July and August that gave the vines much needed relief from the heat. The higher sloped Barolo region benefited more from the winds in aiding the proper ripening of Nebbiolo. The wet winter at the start of the year with plenty of reservoir water also came in handy in combating the dry and hot summer. Nebbiolo was harvested during the last week of September, with yields from vineyards falling by as much as double digit percentages from normal yields. However, the concentrated quality from the low yield made the difference at the end, and it was reflected in my blind tasting of the 2015 Barolos.

The 2016 Barbarescos were equally impressive. That year, 2016, had some genuine vine growing concerns because of low temperatures or the “late cold” that caused some delay in the start of the vegetative cycle of the vines. But the low temperature and the subsequent rains provided the soil with the right amount of water for the physiological development of the Nebbiolo. There was also the high temperatures in August and September that helped immensely in developing the phenolic components of Nebbiolo. These 2016 Barbarescos are therefore well balanced, with good acid structure, lovely nose, and of great structure, but have slightly lower alcohol content. My full review of the specific Barolo 2015 and Barbaresco 2016 brands is available in my column online.

SOMETHING NEW TO DISCOVER
Last year I got a better introduction to wines from Thailand care of GranMonte and its winemaker and owner family member Visootha Lohitnavy. I was able to interview Visootha about the wine and vineyard scene in Thailand during a Thai-themed wine dinner at the Dusit Thani Hotel Makati.

I also got a chance to reacquaint myself with Greek wines, particularly the varietals Xinomavro and Assyrtiko because of the presence of Greek wineries Domaine Sigalas and Kir-Yianni during the 19th Grand Wine Experience.

And most recently, at a wine event in Singapore, I came across relatively unknown Italian varietals that could really get interesting in the near future — these are red varietals Nero d’Avola and Susmaniello, and white varietals Passerina and Fiano Minutolo

The only bummer in the past year was the constant threat of higher tax on wines. It never actually materialized, but it is, sadly, expected to happen in early 2020. I have been told of the final upward tax adjustment on wines in the Senate version, which will most likely be the one ratified into law.

For now, let us enjoy our wine in peace. Happy New Year to all!

Erratum: as pointed out by reader Arnold Oliva, in my last column on Prosecco I clumsily wrote that Veneto and Friuli Venezia Giulia regions are from northwest Italy, when these wine regions are in fact from NORTHEAST of Italy. Thank you Arnold for the correction.

The author is a member of the UK-based Circle of Wine Writers (CWW). For comments, inquiries, wine event coverage, wine consultancy and other wine related concerns, please e-mail him at protegeinc@yahoo.com.

JPMorgan Chase seeks full control of its China futures joint venture

JPMORGAN Chase & Co. wants 100% ownership of its China futures joint venture. — REUTERS

JPMORGAN CHASE & Co. is seeking 100% ownership of its futures joint venture in China, according to a person with knowledge of the matter, making it the first global bank to take advantage of the opening of the nation’s futures market, where transactions topped $30 trillion in 2018.

The US bank plans to raise its current 49% stake in JPMorgan Futures Co., said the person, asking not to be identified because the matter is private. The onshore venture has applied for a major shareholding change involving more than a 5% stake, according to a Dec. 25 filing to the China Securities Regulatory Commission, which didn’t give additional details.

JPMorgan declined to comment on the shareholding change plan.

Starting with its futures and insurance markets, China will enact the most sweeping changes in decades from early next year to allow the likes of JPMorgan, Goldman Sachs Group, Inc. and BlackRock, Inc. to expand their footprint in China and compete for a slice of its growing wealth. Global firms may plow 7 trillion yuan ($1 trillion) to 8 trillion yuan of assets onshore in the next few years, Huang Qifan, vice-president at China Center for International Economic Exchanges, said last month.

Overseas companies currently have a tiny presence in China’s futures market which is dominated by nearly 150 local players. JPMorgan set up its joint venture in 2007 while UBS Group AG controls a futures subsidiary through its onshore securities outfit.

JPMorgan Chief Executive Officer Jamie Dimon has said that his firm is committed to bringing its “full force” to China. The New York-based firm last year became the first US bank to receive Chinese approval to take majority ownership of a securities joint venture. — Bloomberg

ICTSI Poland hits 500,000th TEU move

Baltic Container Terminal (BCT), the Polish unit of International Container Terminal Services, Inc. (ICTSI) at the Port of Gydnia, reached its 500,000th twenty-foot equivalent unit (TEU) move on Dec. 21, 2019. “As a gateway terminal serving the Polish economy, we are extremely pleased to have reached this latest milestone. More than hitting our targets, this new record highlights Baltic Container Terminal’s capability to continuously outpace market growth, and our readiness to serve the vibrant Polish economy and the Eastern European markets,” Wojciech Szymulewicz, BCT chief executive officer, said in a statement.

Upgrade at Ogetsu Hime

ADD P100 to upgrade a meal at Ogetsu Hime through its Oget and Enjoy All-You-Can offer. The upgrade promo get the diner an unlimited amount of over 100 Japanese specialties including sushi, rolls, atarashi, sashimi, katsu, ramen, tempura, rice boxes. One can sample, for example, unlimited US Angus Tenderloin, premium sushi, and more for P988 for lunch or P1,088 for dinner from Monday to Friday, and P1,088 for lunch and dinner on weekends throughout the year. Ogetsu Hime has branches at SM Megamall and SM Aura.

China’s tech industry straps in for more turbulence after a wild 2019

CHINA’S tech industry enters a new year after weathering unprecedented turbulence in 2019, when giants emerged in social media and artificial intelligence only to bear the brunt of Washington’s campaign to contain the world’s No. 2 economy. There’s little reason to think 2020 will be much different given US efforts to hobble Chinese champions from Huawei Technologies Co. to SenseTime Group Ltd. deemed a threat to national security.

American lawmakers went after some of the country’s biggest names last year. Foremost among them were smartphone and networking titan Huawei and ByteDance Inc., the Chinese wunderkind that in the span of a few years overturned social media entertainment and drew a billion-plus mostly younger US users to its online video app TikTok. The heightened scrutiny came just as pressure back home intensified.

Beijing sought to scrub sensitive content from ByteDance apps and Tencent Holdings Ltd.’s WeChat, while the economy grew at its slowest pace in decades, depressing Alibaba Group Holding Ltd.’s e-commerce business. Investors cooled on the sector with venture capital activity halving — triggering fears the industry’s heyday is over. That in turn demoralized the country’s already-overworked tech professionals, who rebelled for the first time against the 70-plus hour workweeks that Alibaba-founder Jack Ma labeled the norm.

Given Washington’s increasing hostility, China is now even more driven to devise alternatives to foreign technology from AI chips to blockchain solutions while propping up local champions: bad news for the likes of Qualcomm Inc. and Apple Inc. that depend on China for much of their revenue. It’s started to upend a decades-old supply chain centered around China, threatening to split the old world order in two. It’s not just in hardware — from Russia to Southeast Asia, many governments have begun to co-opt characteristics of the Chinese internet arena, from harsh fake-news laws to censorship and data sovereignty.

“This year was perhaps the first year we understand China tech at its most global ever. But it also showed us the specter of it becoming more and more insular,” said Michael Norris, research and strategy manager at Shanghai-based consultancy AgencyChina. “This is bigger than just the US in terms of about assuaging the fears of countries like India that platforms aren’t going to disseminate nude photographs or hate speech.”

A CAPITAL WINTER
The industry’s woes may be best quantified by a plunge in capital flow. The amount of venture money invested plummeted by more than 50% to about $50 billion from a record $112 billion in 2018, when it topped the US, according to the market research firm Preqin. VC funding dropped in the US too, but only slightly. China birthed only 15 unicorns, or startups worth at least $1 billion, down from 35 the year before, according to CB Insights.

The plummet coincided with a loss of confidence in some of the industry’s marquee names, exemplified by the rocky debuts of WeWork and Uber Technologies Inc. While Alibaba raised $13 billion in a milestone Hong Kong offering, smaller names like SenseTime and Full Truck Alliance struggled to raise capital. “The power of the mobile revolution is coming to an end. Globally, we are seeking what comes next,” said Kai-Fu Lee, founder of Sinovation Ventures.

The startup and VC industry is likely headed for a shakeout. Many investments from the past bubbly years aren’t panning out, with startups struggling to live up to their valuations. Fund raising by China-focused venture firms fell by about 50% to about $13 billion, according to Preqin.

James Hull, a Beijing-based analyst and portfolio manager, said there’s a sense that the “easy stuff” in China’s internet startup scene is done. Hull expects the next hot wave might be the enterprise sector. “But I don’t think that will play out as well because B2B is difficult — the selling is difficult.”

HUAWEI: DOWN BUT NOT OUT
The year kicked off with Chief Financial Officer Meng Wanzhou under home arrest in Vancouver, fighting extradition to the US. Then the Trump administration tightened its grip on China’s largest tech company in May, banning Huawei from buying some components and software from American tech giants including Intel Corp. and Google. Throughout 2019, Washington pushed allies to pass on purchasing Huawei-made fifth-generation telecom gear, accusing the company of aiding Chinese espionage. Huawei’s disputed such claims but that didn’t stop Japan, Australia and New Zealand from blocking Huawei from 5G projects.

The most immediate repercussions lie with its smartphone business. New Huawei models introduced on overseas markets will be devoid of must-have Android apps like Google Maps and Gmail. In response, Huawei stepped up efforts to become more self-reliant, mobilizing its 190,000 employees to develop in-house alternatives and unveiling a potential Android surrogate dubbed Harmony OS.

The tumult forced reclusive Huawei billionaire founder Ren Zhengfei into the media spotlight to defend his company, lash out at the US and expound on his company’s efforts to lead the coming 5G revolution. Huawei may have survived the first wave but it’s likely that the real pain will come in 2020.

STARS ARE BORN
China’s tech boom over the past decade birthed twin giants Alibaba and Tencent, a duo that effectively controls almost every aspect of the country’s internet through their sprawling business empires and vast investment portfolios. But from 2019, a new generation of tech darlings rose to the fore and now challenge their forebears.

Foremost among them is ByteDance, the world’s most valuable startup. After its first breakout hit, news app Toutiao, the Chinese company is rocking youths the world over with TikTok, an app known for everything from teenage twerking to singing gummy bears. It’s been downloaded about 1.45 billion times since launching, but has become a lightning rod for criticism as tensions rise between the US and China. From Facebook Inc. chief Mark Zuckerberg to a growing coterie of lawmakers, prominent Americans warn that user data may wind up in Chinese government hands. ByteDance has repeatedly denied that could happen.

The year will see ByteDance try to extend its tentacles into a panoply of fields. It’s testing a paid music app in emerging markets to challenge the likes of Apple Music and Spotify. It’s looking to make video games to tackle Tencent on its home turf. Other rising contenders include Tencent-backed super app Meituan and AI leader SenseTime.

Meituan, which displaced Baidu Inc. as China’s third most valuable tech firm last year, will continue to battle Alibaba in nascent areas from food delivery to online travel. For SenseTime and fellow domestic AI pioneers such as Megvii Technology Ltd., the challenge will be grappling with US sanctions that threaten to crimp their fledgling businesses.

DISMANTLING THE OLD WORLD ORDER
China’s position as factory for the world of technology is in jeopardy. The (mainly Taiwanese) assemblers of the world’s electronics are exploring options beyond China to varying degrees. From Inventec Corp. to Foxconn Technology Group and Quanta Computer Inc., the makers of everything from iPhones to Dell laptops have either moved production back to Taiwan or to further-flung regions around Asia, seeking to escape US tariffs. The idea is that, even if Washington and Beijing strike a trade deal, diversification is essential in the longer term given tensions are unlikely to subside and labor costs will rise.

Even leading Chinese hardware suppliers recognize the risks. Luxshare Precision Industry Co. has invested in Vietnam and established a unit in India, while Goertek Inc. has begun making Apple’s popular AirPods earbuds in Vietnam. Taken together, the collective exodus spells the start of the end of a system that’s served the world’s leading electronics brands well since the 1980s.

WORKERS’ WOES MOUNT
Last year forced Chinese tech workers to come to terms with the new reality. Many had taken jobs with startups in the hope of cashing in when they debut or get bought. But as that deal-making streak cooled, the prospect of working long hours — 996, or 9 a.m. to 9 p.m., six days a week — lost much of its appeal. In March, Chinese programmers on GitHub put together a list of companies known for short-changing their employees on overtime. That post spurred a greater awareness of the human cost of China’s tech boom. In December, Huawei drew widespread condemnation when a former employee who had been detained for 251 days after the company reported him to police for alleged extortion was released without charge.

One thing’s clear: the Chinese tech arena, long regarded as an alternate reality to a US app-dominated world, will draw further away from its American counterpart. And some of its biggest players will seek to extend their influence overseas, as they’ve done from Africa to Southeast Asia.

“What’s changed is the trade war, the talk of decoupling,” said Paul Triolo, head of global technology policy at Eurasia Group. “This has really galvanized the authorities. It doesn’t necessarily mean that they will be more successful. But they’re determined.” — Bloomberg

Yields on gov’t debt flat

By Lourdes O. Pilar, Researcher

YIELDS ON government securities (GS) traded in the secondary market ended flat last week as investors await new market cues amid the holiday season.

On average, GS yields — which move opposite to prices — went down on average by 0.7 basis point (bp) week on week, based on the PHP Bloomberg Valuation Service Reference Rates as of Dec. 27 published on the Philippine Dealing System’s website.

Financial markets were closed for the holidays on Dec. 30 to Jan. 1.

“Yields moved sideways to slightly down this short work week as market players stayed mostly in the sidelines ahead of the Christmas holidays, with most only servicing end client requirements or positioning lightly for next year,” Carlyn Therese X. Dulay, first vice-president and head of Wholesale Treasury Sales at Security Bank Corp., said in an e-mail interview.

For Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort, local benchmark tenors edged lower week on week after tracking the easing of benchmark yields in the US and other developed countries.

“Lower yields also partly brought about by recent gains in emerging markets amid improved global market risk appetite in optimism that the phase one US-China trade deal could be signed as early as January 2020…,” Mr. Ricafort said in an e-mail.

“On local factors, BSP (Bangko Sentral ng Pilipinas) Governor Benjamin E. Diokno reiterated possible 0.50-bp cut in local policy rates in 2020 and also signaled that the BSP is not in a hurry to cut RRR (reserve requirement ratio),” he said.

“Market sentiment also improved after President Rodrigo R. Duterte’s approval to extend the 2019 government budget until 2020 to make up for the delay in the approval of the 2019 national budget earlier this year,” added Mr. Ricafort.

Reuters reported late last month that US President Donald J. Trump said he and Chinese President Xi Jinping will hold a signing ceremony to sign the Phase 1 deal that was finalized before yearend.

Meanwhile, China has yet to confirm the details of the trade agreement released by US officials with the former’s Commerce Ministry saying the specific components of the deal will be made public after the official signing.

At home, Mr. Duterte signed the Republic Act No. 11464 on Dec. 20, but was only announced last Thursday. The act will extend the availability of the 2019 budget until Dec. 31 this year to make up for the four-month delay in passing the 2019 fiscal program which slowed economic expansion in the first semester of last year.

Also, the central bank cut benchmark interest rates by a total of 75 bps last year, dialing back a 175 bps worth of hike in 2018 to tame a high inflation environment that averaged 5.2%.

The BSP chief signaled that he sees at least 50-bp cut in benchmark interest rates in 2020, but added that the central bank is not in a hurry to cut banks’ RRR.

At the secondary market on last Dec. 27, yields on Treasury bills (T-bills) fell compared to their week-ago levels. The 91-, 182-, and 364-day T-bills dropped 0.5 bp, 0.1 bp, and 4.8 bps to yield 3.204%, 3.373%, and 3.415%, respectively.

At the belly, the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) saw their yields rise by 2 bps (3.738%), 2.1 bps (3.830%), 2.2 bps (3.940%), 2.1 bps (4.061%) and 0.1 bp (4.729%), respectively.

On the other hand, rates of the 10-, 20-, and 25-year T-bonds declined by 4.3 bps, 4.9 bps, and 1.2 bps, respectively, to fetch 4.461%, 5.159%, and 5.218%.

For this week, Security Bank’s Ms. Dulay expects yields to stay within range.

“Expect next week to stay quiet as well, with the New Year’s holidays and another short work week,” said Ms. Dulay.

Meanwhile, RCBC’s Mr. Ricafort said yields could still continue to ease depending on December’s inflation data.

“Local interest rate benchmarks could still continue to ease [this] week amid relatively low/benign inflation… as the market remains relatively liquid after the total RRR cuts have so far in 2019 infused more than P450 billion in additional peso funds into the local banking system,” said Mr. Ricafort.

Mr. Ricafort added: “The financial markets would be anticipating for the latest inflation data as a major source of leads/cues for direction in the local financial markets, including local interest rate benchmarks.”

Which were the Philippines’ top-earning conglomerates in 2018?

Top 50 Companies

1...10,06510,06610,067...14,244Page 10,066 of 14,244
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube