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Local airlines bullish for 2019 as oil prices drop

By Denise A. Valdez
Reporter
LOCAL AIRLINES are keeping a positive outlook for 2019, after the industry suffered last year when jet fuel prices soared.
Officials of Philippine Airlines (PAL), Cebu Pacific and Philippines AirAsia said they are bullish this year, as they expect a decrease in the price of aviation fuel and a rise in the number of domestic and international tourists.
PAL Corporate Communications Vice-President Jose E. L. Perez de Tagle told reporters in a Dec. 10 chance interview the company is seeing “continued growth” in 2019.
“We see increasing tourism. China is a big potential. Now that we cover Western Europe and the east coast of North America, that will all add to our being connected and that really helps push growth,” he said.
Since 2017, PAL has recorded losses due to fuel expenses, fleet expansion, increased frequencies and new routes. But Mr. Perez de Tagle is “cautiously watchful and hopeful” the flag carrier will return to profitability soon.
“When the fuel prices went up, it was the number one thing. And it coincided with our investment in all the refleeting and so on. So sana [hopefully] we can overcome all that,” he said.
As of Dec. 28, the International Air Transport Association (IATA) said jet fuel price has gone down 16.3% to $67.49 per barrel versus a year ago. It said the global airline industry is expected to book a net profit of $35.5 billion in 2019.
“We had expected that rising costs would weaken profitability in 2019. But the sharp fall in oil prices and solid GDP growth projections have provided a buffer,” IATA Director General and Chief Executive Officer Alexandre de Juniac said in the statement last month.
Cebu Pacific Vice-President for Commercial Planning Alexander G. Lao said the Gokongwei-led budget carrier is looking to grow the number of passengers in the low teens (below 15%) this year.
“We’re sort of excited because this is the first time in a while that we’re going to grow back to double digits again. So we’re a bit more bullish,” he told reporters on Dec. 10.
Mr. Lao noted the 22-million passenger target in 2018 represents a single-digit growth from in 2017.
For 2019, he said Cebu Pacific is looking at its hub in Clark to fuel its double-digit growth.
“We think Clark has a lot of potential… So far ‘yung nakikita namin sa Clark-Davao, medyo healthy ‘yung load factor which is a good surprise [We’re seeing a healthy load factor in the Clark-Davao route, which is a good surprise]… I think the aviation industry continues to be healthy,” Mr. Lao said, adding Cebu Pacific is expecting to take deliveries of a number of jets in 2019.
Philippines AirAsia President and Chief Executive Officer Dexter M. Comendador said the budget carrier is also expecting an improvement this year.
“Keeping the same price, it would be a lot better. And hopefully not any more major airports will close,” he said.
Of the three airlines, only AirAsia refused to collect a fuel surcharge last year despite initially filing an application to do so with the Civil Aeronautics Board.
Mr. Comendador said the company does not intend to implement a surcharge anytime soon.
“We survived the worst. Pababa naman na ‘yung price ng fuel [The price of jet fuel is going down anyway]… We saw and we tested through our research. If we raise the price by adding fuel surcharge, our loads will drop. Because our market is very price sensitive,” he said.
Mr. Comendador said the company was able to record an average load factor of 83% to 84% as of mid-December.
One of Philippines AirAsia’s plans in 2019 is to conduct an initial public offering and list in the stock exchange.

As China cuts back on iPhones, LVMH handbags could be next

AFTER Apple Inc.’s shock profit warning, investors were quick to make the connection: if Chinese consumers are cutting back on iPhones, Louis Vuitton handbags could be next.
Apple’s sales revision cascaded through global markets, hitting suppliers and rivals, but also a raft of luxury-goods companies that rely on the same clientele that likes to splurge on Apple’s latest products. Hong Kong-listed Prada SpA, Gucci-parent Kering SA, LVMH Moet Hennessy Louis Vuitton, Burberry Group Plc and Richemont, the parent of jeweler Cartier, all declined in the wake of Apple’s shortfall.
“It’s going to become significantly more challenging to do well in China because the market is tightening up,” said David Roth, chief executive of WPP Plc’s “The Store” global retail practice. “This is a challenging signal that people need to button down and understand China better and prepare.”
Apple cut its quarterly revenue outlook to $84 billion from as much as $93 billion, blaming it in part on a pullback in demand within China. That set off warning bells throughout the luxury industry, as Chinese consumers account for about 30% of the $1 trillion in luxury-goods spending worldwide, according to Euromonitor International.
Prada dropped as much as 3.6% in Hong Kong on Friday. In Europe on Thursday, Kering SA fell 5.5%, while LVMH dropped 3.8% and Burberry tumbled 5.9%.
DEMAND DENTED
For years, companies from LVMH to Tiffany & Co. have targeted China’s wealthy tourists, who sought out pricey handbags, jewelry, and other luxury items while on vacation in Paris to Dubai. Investors are worried that sliding yuan, China’s trade war-hit economy, and a government crackdown on overseas purchases could dent demand.
Richemont, which lost 2.8%, has already been feeling the heat. The Swiss watch and jewelry-goods maker signaled in November that Chinese sales growth has slowed.
Others have maintained a more bullish tone, with both LVMH and Kering citing robust China sales in October and saying they welcome as shift to domestic sales.
A key test for retailers will come with China’s celebration of the Year of the Pig, which begins on Feb. 5. The week-long Chinese New Year holiday is traditionally a major occasion for shoppers from China to splurge. About two-thirds of those sales take place outside the country as tourists open their wallets while traveling abroad, taking advantage of better selection and cheaper prices than available at home.
DOMESTIC SHIFT
But with the US trade war weighing on China’s stocks and currency, and President Xi Jinping’s government trying to bolster a faltering economy, more mainlanders are choosing to do their shopping inside China rather than on overseas trips.
“There’s clearly a shift that has started to happen in the consumption pattern: Chinese people are buying more in China,” said Pascal Martin, a partner in Hong Kong with OC&C Strategy Consultants.
Taxes on imported clothing, which had been as high as 25%, are now just 7.1%. A recent crackdown by Chinese officials on travelers returning home with undeclared goods is also encouraging local consumption.
The gap between Chinese overseas and domestic spending on luxury is shrinking and a 50/50 balance is “in sight,” according to an HSBC report last month.
Companies are scrambling to adjust, opening more stores in China or partnering with local online outlets such as Alibaba Group Holding Ltd.’s Tmall. Ermenegildo Zegna, which has stores in 35 Chinese cities, in December opened a flagship store on Tmall Luxury Pavilion, following a similar move by Italian fashion house Valentino in November.
“It’s much healthier to have Chinese consumers consuming your product in their own country, in terms of repeat business and loyalty,” said Thibaud Andre, research director at Daxue Consulting.
RETAILERS’ HEADACHE
The change in consumption patterns is creating headaches for retailers like Tiffany, which has long counted on Chinese shoppers going to Fifth Avenue or Rodeo Drive. In November, Tiffany reported weaker-than-expected sales and highlighted a “clear pattern” of Chinese shoppers cutting back on spending when they’re overseas. Sales in China itself, however, remained strong.
The shift to more domestic purchases will also create more intense rivalry this year as more foreign players vie for consumers’ money in China, according the Bloomberg Intelligence analyst Catherine Lim. She added that the growth prospects on the mainland still remain attractive relative to other countries.
One of the key strategies the companies have is to focus on tech-savvy millennials and the younger Generation Z. The sub-group of shoppers is expected to make up 55% of total global personal luxury goods purchases by 2025, a Bain & Co. report said in November.
Retailers and investors are watching to see whether that spending holds up.
“Luxury brands still benefit from a formidable capacity to recruit new consumers in China,” HSBC analysts led by Erwan Rambourg said in the December note, but “while managers are preparing for a moderation of growth, most investors we met with in Hong Kong have more dire predictions.” — Bloomberg

WB to raise rural incomes halfway to target

THE World Bank (WB) said its assistance to farmers and fisherfolk in the Philippines has increased their income by 15% over four years, or halfway to the 30% target of income growth by 2021.
In an implementation and status report, the bank said that the Philippine Rural Development Project has also increased the income of beneficiaries involved in enterprise development by 27% at end of 2018, since the project began in 2014.
“Progress towards meeting the PDO (project development objective) continuous to be satisfactory. Assessments of project impacts indicate increases in real household income, increase in value of marketed output, reduction in input and output hauling costs, increases in farmed area, increase in production volume, reduction in travel time from farm to market, increase in traffic density, and increase in school attendance,” the World Bank said.
“Additional outcomes being realized via the country-wide institutionalization and acceptance of provincial commodity investment plans as a technically-based planning platform for convergence between programs of the DA (Department of Agriculture), LGUs (local government units), and other national government agencies.”
The project aims to increase rural incomes and enhance farm and fishery productivity in the targeted areas by supporting smallholders and fisherfolk to increase their marketable surpluses, and their access to markets.
The project has four components, which includes $19.27 million in support for local and national-level planning, $669.13 million in infrastructure development, $136.94 million in enterprise development, and $57.49 million in project implementation support.
Since 2014, the project yielded a 21.5% increase in the value of the annual marketed output, about half the 41% target set for the end of 2021.
The World Bank said that farmers reached with agricultural assets or services stood at 773,968, exceeding the 600,000 target. — Elijah Joseph C. Tubayan

Stock index seen reaching 8,400 level this year

By Arra B. Francia
Reporter
PHILSTOCKS FINANCIAL, Inc. sees the local bourse finishing the year within the 7,750 to 8,400 level, on expectations of higher spending due to the election season, improved corporate earnings, sustained economic growth, and lower inflation amid global headwinds.
The brokerage house said investors should keep a balanced view on the movements of the Philippine Stock Exchange (PSE) this year, citing how too much optimism in 2018 resulted to a more than 12% drop, while the cautiousness that prevailed in 2017 in turn provided the market with returns of about 25%.
“So for 2019… foremost among the narratives that we think will become a major thread of conversation is the midterm elections in May. Almost everyone is expecting that during an election year, the market goes up significantly,” Philstocks Research Head Justino B. Calaycay, Jr. said in a presentation of the company’s 2019 forecast in Pasig City last Friday.
Philstocks said that the PSE index (PSEi) posted an average 11.38% annual increase during the midterm elections since 2006, albeit lower than the 18.01% average on presidential election years. The counters for mining and oil and services also outperformed the benchmark index, soaring by an average of 23.9% and 17.86%, respectively, during years when a midterm election was held.
The company also noted that investors usually become more bullish on consumer retail, media entities, transportation, as well as communication firms.
With the election season in mind, Philstocks advised investors to bet on different sectors for each quarter. It favored financial, property, and industrial stocks for the first quarter, while dropping financials to make way for holding firms in the second. For the third to fourth quarter, the company switches to the services and mining and oil indices.
Aside from the elections, investors should keep an eye on slowing inflation. Foreign funds were on exit mode last year as foreign investors feared that accelerating inflation would drag down economic growth.
“For the supply side, we already saw that our agriculture problem has been solved because of the trade liberalization programs…unfortunately, we still have the oil to deal with, the production cut, as well as the second round of the excise taxes,” Philstocks Research Associate Jhapet Louis O. Tantiangco explained.
Mr. Tantiangco, however, expects the full impact of the Bangko Sentral ng Pilipinas’ rate hikes to kick in during the second to third quarter of 2019. The brokerage then forecasts inflation to fall within a 4.5-5.5% range.
On the corporate side, Philstocks projects PSEi-member companies to generate an average of 10-15% earnings growth. This considers the temporary boost in disposable income due to the midterm elections, hampered by higher fuel costs and higher borrowing costs.
The 2019 projection is higher than the 6.53% average bottomline growth of PSEi firms in the first nine months of 2018, and a 16.29% average increase in revenues for the same period.
“There will be many influences on the market, and at the end of the day we have to balance them and measure which ones are more important,” Mr. Calaycay said.

First PUMA Select in the Philippines now open

THE streetwear scene in the Philippines got a new player with the recent opening of the first PUMA Select standalone store in the country.
Located at the upper ground floor of the Uptown Mall in Bonifacio Global City in Taguig, the PUMA Select store showcases the brand’s newest products, including its exclusive collaborations with a number of high-profile names from the world of sports and entertainment.
The store officially opened its doors on Dec. 8 where shoppers got to see and grab a hold of a number of PUMA Select’s signature pieces such as the PUMA x XO Tactical, and the PUMA Fenty Avid from the Rihanna Collection.
Also available were favorites that include the PUMA Sued e Bow, PUMA x XO Tsugi Shinsei Caviar and the PUMA x Poggy, which are inspired by traditional and contemporary Japanese styles.

PUMA 2
The first PUMA Select standalone in the country opened on Dec. 8 at the upper ground floor of Uptown Mall in BGC in Taguig.

The people behind the store in the country said the opening of PUMA Select was timely as they recognize the burgeoning streetwear scene in the Philippines and look to enhance it some more.
The store also serves, they said, to highlight how the “cat” brand has evolved in its seven decades of existence — building on its standing as a pioneer in sports and athletic wear by fusing performance with culture and fashion by revisiting its rich history and innovating to develop premium streetwear.
In recent years, the brand has seen itself churning out well-received athletic fashion wear with collaborations with renowned designers and brands such as Jeff Staple, Fenty, STAMPD, The Weeknd, Ken Lagerfeld and more.
To learn more about the store and what it offers, follow PUMA Select on Instagram (@puma.select.ph) for updates. — Michael Angelo S. Murillo

Treasury bills, bonds likely to fetch lower rates on inflation

GOVERNMENT SECURITIES on offer this week are expected to fetch lower rates as investor demand returns following the holiday season.
The Treasury is offering P20 billion worth of Treasury bills (T-bill) today. Broken down, the government plans to raise P6 billion each for the three- and six-month papers, and another P8 billion in one-year securities.
The government will also offer fresh 10-year Treasury bonds (T-bond) amounting to P20 billion on Tuesday.
Traders interviewed last week said the T-bills on offer today will likely fetch lower rates, with one saying yields could go down by 5-10 basis points across all tenors from the previous auction.
At its previous offering, the Treasury made partial award of the T-bills, borrowing just P4 billion out of the P15 billion it intended to borrow after rejecting all bids for the 182- and 364-day debt papers.
The rate of the three-month paper slid to 5.323%, down 2.7 basis points from the previous auction.
At the secondary market on Friday, the 91-day, 182-day, and 364-day T-bills fetched yields of 5.853%, 6.537%, and 6.773%, respectively, based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s Web site.
Meanwhile, the first trader said the 10-year bond auction on Tuesday could fetch a coupon rate of 6.85-7%.
The Treasury fully awarded the 10-year securities it offered last Dec. 4, raising P15 billion as planned versus tenders totalling P49.389 billion. The papers fetched a 6.975% average rate. The government even opened its tap facility to take advantage of the demand, raising P23.136 billion more.
“For the T-bonds, we’re expecting a demand twice the offer amount since it’s the start of the year,” the first trader added. “Investors will start to position so the demand might be strong.”
The trader added that market participants will factor in recent economic data such as the slower-than-expected December inflation.
Inflation continued to ease last month, registering a 5.1% print in December. This was slower than market expectations as well as the 5.2-6% estimate range of the central bank.
For 2018, headline inflation averaged 5.2% — faster than the Bangko Sentral ng Pilipinas’ 2-4% target range and the highest since 2008’s 8.2%.
“It looks like [the bond auction on Tuesday] will be a good one. Yields dropped [last] week following the move in US Treasuries and the [better-than-expected] Philippine CPI (consumer price index) data,” another trader said in a text message, giving a 6.8-6.9% forecast range for the 10-year bond yield.
The 10-year debt fetched 6.937% at the secondary market on Friday.
For this quarter, the government is planning to borrow P360 billion through domestic means. Some P240 billion will be borrowed this quarter through 12 weekly T-bill auctions. On the other hand, P120 billion worth of T-bonds will also be issued through six fortnightly auctions.
The state plans to borrow P1.189 trillion in 2019 to fund its spending plans. Of the amount, 75% will be sourced domestically while the remainder will be from foreign creditors.
However, the 2019 national budget has yet to be passed by Congress and signed into law, leaving the fiscal program hanging so far. — Karl Angelo N. Vidal

Fertilizer prices rise

THE AVERAGE price of four grades of fertilizer rose year-on-year in November, the Philippine Statistics Authority (PSA) said.
The PSA said that the average price of Urea fertilizer rose 18.53% year-on-year to P1,102.05 per sack in November. The price was up 2.43% compared with October.
Prices rose in all regions except for MIMAROPA (Mindoro, Marinduque, Romblon and Palawan), PSA said. The top price of P1,350 was charged in the Autonomous Region in Muslim Mindanao (ARMM), while the lowest price of P1,030 was charged in Ilocos Region.
The average price of Complete fertilizer rose 3.64% year-on-year to P1,128.89 in November and rose 0.73% from October.
ARMM had the highest price for Complete fertilizer at P1,383.33 per sack, while Cagayan Valley had the lowest at P1,013.75. All regions posted price growth except for Bicol.
The average price of Ammosul fertilizer rose 10.75% year-on-year to P627 and 1.85% from a month earlier.
Prices rose in all regions except for Cavite, Laguna, Batangas, Rizal and Quezon (CALABARZON) and MIMAROPA. They were higest in ARMM at P947.50, while Cagayan Valley had the lowest at P538.75.
The average price of Ammophos fertilizer rose 8.34% year-on-year to P974.08 and rose 1.44% compared with October.
Prices were highest in the ARMM at P1,252.50, while they were lowest in Cagayan Valley at P897.88. Prices did not rise in CALABARZON and MIMAROPA.
The highest prices for Ammophos were recorded in Eastern Visayas at P1,092.50 while the lowest were in South Cotabato, Cotabato City, Cotabato Province, Sultan Kudarat, Sarangani and General Santos City (SOCCSKSARGEN) at P807.38. — Reicelene Joy N. Ignacio

Property firms interested in Fort Bonifacio lot

By Vincent Mariel P. Galang
SEVERAL PROPERTY firms showed interest in the Insurance Commission’s (IC) share in a 5,000-square meter lot in Fort Bonifacio, Taguig City.
Representatives from Filinvest Land, Inc. (FLI), Robinsons Land Corp. (RLC), and MySpace Properties, Inc. attended the pre-bidding conference conducted by the Bases Conversion and Development Authority (BCDA) at its office on Jan. 4. Representatives from construction firms also attended.
During the pre-bid conference, the interested bidders expressed concern over how the lot will be divided since only the IC’s share is up for auction.
BCDA officials said the winning bidder will have to discuss such matters with the property’s co-owner Landbank Leasing Corp. (LLC).
“It’s a 5,000 square meter (sq.m.) property. We’re not bidding out a 2,500 sq.m. lot or property. What we are bidding out is the… ideal share,” said Joshua M. Bingcang, chairperson of the BCDA asset disposition program committee.
Last week, the BCDA issued a notice inviting interested parties to bid for the IC’s share, representing half of the 5,000-sq.m. lot along Lawton Avenue, Fort Bonifacio. The minimum acceptable bid is set at P596.520-million.
Under the terms of reference, the BCDA said the lot can be turned into a mixed-use development with commercial, retail and office components.
The lot is surrounded by Megaworld Corp.’s McKinley West on the north, RLC’s Cyber Sigma Center commercial office building on the east, and the National Mapping and Resource Information Authority (NAMRIA) office complex on the west.
An adjacent lot is currently being leased by RLC from the BCDA.
The terms of reference may be purchased at the BCDA Corporate Center for a non-refundable fee of P100,000 in Bonifacio Global City, Taguig City until Jan. 22.
The deadline of submission of eligibility documents and final proposals and preliminary examination of bids is on Jan. 22, while the results will be announced on Jan. 31.
The announcement of the winning bidder and issuance of notice of award is scheduled on Feb. 7, while signing of the contract will be done between Feb. 8 to March 7.

These K-beauty products work nicely

By Zsarlene B. Chua
Reporter
AT THE tail end of 2018, Korean skincare cult favorite Dear, Klairs, officially launched in the Philippines with the presence of its brick-and-mortar shelves in select Watsons and BeautyBar stores in the country.
“It was maybe in 2016 when we noticed that we’ve been getting really good traffic [online] from the Philippines… and when we entered BeautyMNL we saw good results and that’s when we decided to launch our products offline,” Ryan Soungho Park, CEO of Wishcompany, Inc., told BusinessWorld in an interview in December at SM Makati.
Wishcompany is a beauty company whose brands include Dear, Klairs, Jungle Botanics, and By Wishtrend.
Launched in 2010, Dear, Klairs is a brand focused on “developing functional products even sensitive skin types can use,” said a statement.
Mr. Park said that while the entire Dear, Klairs catalog won’t be available in the Philippines, the favorites will be found on the shelves for purchase and that includes the Supple Preparation Facial Toner, Freshly Juiced Vitamin Drop, Gentle Black Deep Cleansing Oil and its sheet masks — Rich Moist Soothing Tencel Mask and Midnight Blue Calming Sheet Mask.
“The Philippines is known for loving all things skincare and makeup, most especially K-Beauty,” Mr. Park said before adding that this is the reason why they decided to come into the Philippines.
“We’re very optimistic with the Philippines, it’s a good time to invest more and meet our customers in person,” he added.
Dear, Klairs will have shelves in over 100 Watsons stores and 19 Beauty Bar stores but the focus for 2019 isn’t about growing their footprint, said Mr. Park as the company will focus on the “quality of the stores” and its selection more than the number.
TRYING THEM OUT
After the launch in December, this writer was given three products to try from the Dear, Klairs best-sellers line: the Supple Preparation Facial Toner (P1,150 for 180 ml), the Freshly Juiced Vitamin Drop (P1,200 for 35 ml), and the Gentle Black Deep Cleansing Oil (P1,200 for 150 ml).
I admit that I have not had the best experience with Korean skin care because I noticed that the things that I have tried — including the Laneige Water Sleeping Mask (P1,540 for 70ml) — gave me break outs or were unsuitable for my dry (and sometimes sensitive) skin, but I’d also heard a lot of good things from Dear, Klairs so I was excited to try the products out.
And the Dear, Klairs fans are not wrong — the products I tried for more than two weeks now gave me some of my best skin days in recent years, especially the toner which will probably replace my go-tos: Kiehl’s Calendula Extract Alcohol-Free Toner (P1,520 for 200 ml) and Human Heart Nature’s Hydrating Face Toner (P185 for 200 ml).
The Supple Preparation Facial toner is said to have ingredients like Lipidure and Beta-Glucan which are claimed to provide “deep hydration and help prepare the skin absorb the following products better and boost their effectiveness,” according to the bottle.
I use this right after I do my double cleanse — first with an oil-based cleanser (like the Gentle Black Deep Cleansing Oil) and a cleansing foam — and what I particularly love about this toner is how it really sinks into my skin and leaves it plump and hydrated. It has a thick, almost-but-not-quite gel texture so instead of using a cotton pad, I pour a few drops on my hands and pat the toner on my face.
It also has does not have a strong fragrance and smells a bit like baby powder, which is a plus.
Now, about the cleanser which contains “antioxidant-rich” black sesame oil and blackcurrant seed oil — I do like it but I do have some reservations: because while it does remove makeup and does not dry out the skin, the consistency is thicker than what I’m used to and, in my opinion, does not emulsify well when in contact with water.
I still prefer using my Biore Cleansing Oil (P349 for 150ml) because it disintegrates when in contact with water and doesn’t leave a still-oily surface (and it’s cheaper) though I have been using the Dear, Klairs cleansing oil on days when I think I need a deeper clean.
VITAMIN C PRODUCTS
Finally, the Freshly Juiced Vitamin Drop. For much of 2018, I was on the hunt for a good Vitamin C serum to brighten my face because while I have usually clear skin, the dryness leads to dullness which isn’t a good look.
This year, I tried Kiehl’s Powerful Strength Line-Reducing Concentrate (P3,675 for 50ml) because it contains 12.5% Vitamin C and hyaluronic acid (a humectant or moisture-binding ingredient that keeps the skin plump and hydrated) and those two things are what I need right? Wrong, because for some reason, the product gave me break outs so I decided to give it to my mother as I was not about to waste it because it did cost me a lot of money.
My mother loves it, by the way.
I also tried the Lauren & Co. Beauty Skin Vitamins Antioxidant serum with SPF 70 (P599 for 30 ml) which contains Vitamin C, Vitamin E, and other botanicals. I love it because it has SPF and has the nutrients I need for my face. My only gripe about this is that it doesn’t hydrate my skin — which probably makes this perfect for those with normal to oily skin. I still use it at daytime though because of the SPF and Vitamin E.
And then I arrived at the Freshly Juiced Vitamin Drop. I would admit that at first I was skeptical because most Vitamin C serums are encased in a dark glass bottles because Vitamin C does not react well in sunlight but Dear, Klairs’ serum was encased in a clear glass bottle — the press release said that the “non-irritating solution puts up a good fight against yellowing” because Vitamin C serums turn yellow when exposed to sunlight and this greatly reduces its efficacy.
So I tried the Vitamin Drop and initially, as the packaging suggested, I used it in combination with my night cream — I put one to two drops in my night cream before I applying it on my face as the packaging suggests this method for those with sensitive skin.
It did feel warm for a few seconds — like all Vitamin C serums — and after a few days I saw better skin texture and my skin brightened up a bit.
After a week, I decided to bite the bullet and apply it directly to my face with the fervent hope that it wouldn’t give me break outs. It didn’t and it actually brightened my skin.
I do use it only at night because I realized that using this in tandem with the Lauren & Co. serum makes me greasy.

Gov’t debt yields decline

By Christine J.S. Castañeda
Senior Researcher
YIELDS on government securities (GS) went down in the first trading week of the year amid lower inflation prospects.
GS yields — which move opposite to prices — dipped by an average of 11.28 basis points (bp) week-on-week, according to the PHP Bloomberg Valuation Service Reference Rates as of Jan. 4 published on the Philippine Dealing System’s Web site.
“The shortened work week opened with inflation forecasts below the 6%, pushing local yields lower on improved inflation prospects in the coming months,” said Nicholas Antonio T. Mapa, senior economist at ING Bank N.V.’s Manila branch.
“Friday’s inflation data release confirmed the downtrend in price gains, helping boost demand of fixed income assets to close out the week,” Mr. Mapa added.
For his part, Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, said: “The securities market has been actually performing well and has been considered to be one of the world’s best performers at the moment. Externally, there is expectation that the [US Federal Reserve] could reverse its policy tightening before the end of this year.”
“These factors may have been making government securities attractive and consequently increasing demand for such. Thus, driving yields downward,” Mr. Asuncion added.
Headline inflation eased to 5.1% in December, data from the Philippine Statistics Authority showed. This was slower than the 6% recorded in November but was faster than the 2.9% logged in the same month last year.
December’s print was the slowest pace since May’s 4.6%. The latest inflation figure was also lower than the 5.7% median in a BusinessWorld poll but fell within the 5.2%-6% estimate given by the Bangko Sentral ng Pilipinas (BSP).
For 2018, inflation averaged 5.2% — faster than the BSP’s 2-4% target range and the highest since 2008’s 8.2%.
At the secondary market on Friday, the 91- and 182-day Treasury bills were the only papers to post gains from a week ago, as their yields rose 7.7 bps and 2.3 bps, respectively, to close at 5.853% and 6.537%.
Meanwhile, the rate of the 364-day Treasury bills declined by 1 bp to 6.773%.
At the belly, yields on the two-, three-, four-, five-, and seven-year bonds fell 14.4 bps (6.741%), 17.3 bps (6.803%), 20.3 bps (6.813%), 21.9 bps (6.818%), and 19.1 bps (6.87%), respectively.
At the long end, the 10- and 20-year Treasury bonds also saw their yields decline by 12.8 bps and 11.7 bps, respectively, to end with 6.937% and 7.374%. The 25-year bond lost 15.6 bps to fetch 7.372%.
Moving forward, UnionBank’s Mr. Asuncion said: “I am expecting that yields would further go down as the external environment plays out as what global markets are expecting.”
“The performance of the local bourse may be a critical indicator moving forward,” he added.
For ING’s Mr. Mapa: “Market players will likely look to M3 (domestic liquidity) data to in the coming sessions while also looking to global developments for further direction.”

Sarangani abaca cooperative signs China supply deal

DAVAO CITY — A cooperative in Sarangani province is expanding its abaca production area to about 1,000 hectares as it started selling its products to China.
The Philippine Rural Development Project (PRDP), in an e-mail to BusinessWorld, said it is assisting the United Maligang Multi-Purpose Cooperative in Kiamba, Sarangani to maximize its output after a Chinese company ordered about 2.2 tons of its abaca products last month.
At present, the cooperative has a production area of about 600 hectares.
“They can meet the demand if abaca producers in Sarangani area consolidate,” PRDP said.
Some P35.7 million in PRDP funds will support enhanced production, processing, and marketing.
Included in the package are 74 portable stripping and dying machines for the weavers, hauling and delivery trucks, 56 heavy-duty spindle stripping machines, a pressing machine for abaca bailing and a forklift.
The PRDP is also building a processing center.
Beverly Pacquiao, treasurer of the United Maligang group, was quoted in the statement as saying that while the cooperative and the Chinese buyer still do not have final terms on the extent of its purchases, “it is an opportunity to expand our production area.”
“We were enticed to grab the trade opportunity because of the higher buying price compared to the price offered by the local market,” she added.
For the first shipment, the Chinese buyer bought about 400 kilograms (kg) of S2 fiber at P140/kg, higher than the P100/kg prevailing rate.
The other products purchased were Hank-type fiber and cake-type fiber.
Ms. Pacquiao said the cooperative, at present, can only supply about half of the eight-ton order, but she is confident that with the expansion of abaca production, it can eventually meet the requirement.
“If the construction of a warehouse and processing plant under PRDP project is completed, they will be able to produce more abaca products and definitely have more supply to sell,” PRDP said.
United Maligang is one of the cooperatives in six towns in Sarangani receiving PRDP assistance.
Abaca is among the commodities that Sarangani has identified under its Provincial Investment Commodity Plan and value-chain analysis, two requirements to qualify for PRDP assistance. — Carmelito Q. Francisco

Bright prospects expected for Puregold in 2019

FOREIGN INVESTORS snapped up shares in Puregold Price Club, Inc., as the grocery retailer is expected to benefit from slower inflation and higher consumer spending.
The Lucio L. Co-led company was the seventh most actively traded stock from Jan. 2-4, with a total of P1.021 billion worth of 22.625 million shares exchanged, based on data from the Philippine Stock Exchange (PSE).
Puregold share price jumped to P47.2 apiece on Friday, up P2.05 or 4.54% from the previous day. It was also 9.77% higher than last year’s closing price of P43.
Aniceto K. Pangan, trader at Diversified Securities, Inc., said via mobile message that the activity last week was driven “[m]ainly [by] the entry of foreign investors particularly on blue chips such as Puregold.”
Net foreign buying for Puregold was at P42.780 million on Friday, according to PSE’s daily quotation report.
Prospects for Puregold are expected to be brighter this year, as inflation showed signs of easing. The year-on-year increase in the prices of basic goods and services slowed to 5.1% in December 2018 from the previous month’s 6%.
The latest figure was the slowest in seven months since May’s 4.6%. The rate of change in prices hit a nine-year high of 6.7% in September before easing to 6% in November.
“Despite the risk of inflation in consumer spending, Puregold’s financial performance remained resilient as reflected on its double digit growth in net sales and net income recorded for the first three quarters of 2018,” Charlene Ericka P. Reyes, officer in charge of trading and research at First Resources Management and Securities Corp. (First Resources), said via e-mail.
“With consumer staples seen to be in demand in a high inflation environment, investors are starting to price-in the expected slowdown in inflation rate for the year as this will complement the lowered income taxes with higher consumer spending,” Ms. Reyes said.
Puregold posted a net income of P4.618 billion in the first nine months of 2018, 18% higher than the P3.899 billion in 2017’s comparable period. This was driven by a 14% rise in system-wide net sales to P99.818 billion versus P87.564 billion a year ago.
The company had attributed the strong performance to sustained same store sales growth (SSSG) during the nine-month period, which stood at 5.8% for its Puregold stores and 8.8% for S&R outlets.
“After the release of its financial performance in the first nine months with consolidated net sales up by 14%, they revised upward their guidance on consolidated net sales as well as, same stores sales growth by 100% indicating the unexpected performance of the company for the first [three quarters in 2018] with sustained momentum going to the [fourth quarter],” Mr. Pangan said.
Mr. Pangan expects Puregold’s continued expansion and acquisitions will drive growth this year.
For First Resources’ Ms. Reyes, “[w]e remain optimistic that Puregold will be able to hit its guidance for 2018, with a double digit growth of 12% to 14% in consolidated net sales, and 4% to 6% in same store sales growth.” — M.M.M.Ramos

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