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PHL chocolate maker sets sights on overseas market


By Reicelene Joy N. Ignacio
AFTER OPENING a store in Tokyo this year, Auro Chocolate is hoping to further expand the international distribution of its Philippine chocolate products, which use cacao grown in Davao.
“We want to strengthen our distribution in other countries so that more people are able to enjoy and appreciate fine Philippine chocolate,” Mark M. Ocampo, managing director of Auro Chocolate, said in an e-mail interview with BusinessWorld.
Auro has been making inroads in the overseas market, exporting its products to Spain, Australia, Singapore and United States, and opening a store in the Shibuya district of Tokyo in October.
“We feel proud that our partners in Japan saw the potential to share our unique products and advocacy there,” Kelly S. Go, Auro Chocolate managing director, said in a mobile text message.
“The Japanese love fine chocolate and have also become increasingly aware of the bean-to-bar movement, which places a lot of emphasis on transparency in sourcing. We are different from many of the bean-to-bar companies that are famous there because we not only source the cacao locally, but also produce it in the Philippines, thus enabling us to make a greater impact in our community,” she added.
As a bean-to-bar chocolate company, Auro has full control of the production process from sourcing the cocoa beans to making the chocolate bar. The company helps farmers by providing them with cacao seeds and other forms of support, then later buy their beans at a premium.
“We support almost 3,000 farmers in Davao, representing a few thousand hectares of land by giving them the opportunity for value-adding and paying them significantly higher. We also offer them basic business admin training, creation of organic farming inputs as well as improving on their own cacao and chocolate products so that they are able to treat their farms as a business and continuously generate revenue through out the year without having to rely solely on the harvest season,” Mr. Ocampo said.
Mr. Ocampo said they were inspired to go into the chocolate business, after finding out that an American company used Philippine cacao beans in its chocolates.
“We saw that there was an American company using Philippine cacao beans for chocolate in the US in 2010, so we wondered why as Filipinos, we aren’t making quality chocolate despite having a rich cultural heritage of drinking chocolate (tablea), not to mention being the first country in Asia to grow cacao as well,” he said.
The brand name Auro is combination of Au, the chemical symbol for gold, and oro, the Spanish word for gold.
“We want to bring greater awareness to our national treasures, which are our unique cacao and passionate farmers, that we have taken for granted,” Ms. Go added.
Launched in May 2015, Auro started supplying chocolate products to hotels such as Shangri-la Boracay and Mactan, The Peninsula Manila, and Conrad Manila within its first year. Its chocolate bars are also sold in Coffee Bean and Tea Leaf stores, Echo Store, Gourdo’s and SM’s Kultura.
“Given that we only launched our products within the year, we’re now supplying to many of the luxury hotel chains like Shangri-la, Peninsula, Conrad, etc. We are also being served on-board Philippine Airlines’ international flights for both business and economy. We’ve also won multiple international awards… We’re very humbled and excited for what the next year has in store,” Mr. Ocampo said.
Auro received two bronze awards at the 2018 Academy of Chocolate Awards in London — the Auro Chocolate 70% Dark Chocolate Saloy Reserve under the Tree to Bar Category and Auro Chocolate 32% Roasted White Chocolate Cashew under the Flavored White Chocolate Bar Category.
While the cacao is sourced from Davao farmers, there are plans to get supply from other areas in the country.
“We’re hoping to start sourcing from different areas around the Philippines in the future so that we can support more farming communities around the country,” Mr. Ocampo said.
The Auro official sees bright prospects for the cacao industry in the Philippines.
“We see the cacao industry in the Philippines growing significantly in the next five years as the demand for cacao is an ever-growing concern in the local and international markets,” Mr. Ocampo said.

Yields on gov’t debt flat

By Jochebed B. Gonzales, Senior Researcher
YIELDS ON government securities (GS) ended flat last week amid window-dressing activities as market players gear towards the yearend.
On average, GS yields — which move opposite to prices — inched up by 4.82 basis points (bps) week on week, according to the PHP Bloomberg Valuation Service (BVAL) Reference Rates as of Dec. 21 published on the Philippine Dealing System’s website.
“The PHP BVAL yield curve continued to be flatter [last] week,” Michael L. Ricafort, economist at Rizal Commercial Banking Corp. (RCBC), told BusinessWorld in an e-mail.
“Short-term PHP BVAL yields continued to go up as the accounting yearend draws closer amid some window-dressing activities (with some premium for crossing-the-year funds)… However, long-end PHP BVAL yields continued to decline for the 9th straight week,” he added.
A bond trader said by phone that trading last week started “strong” but eventually finished flat week on week.
“Earlier in the week, there was buying interest ahead of the FOMC (Federal Open Market Committee) meeting. There were players betting on a more dovish Fed (Federal Reserve) so yields went down by 10 bps,” the trader said.
“[On Thursday and Friday], players were already liquidating their positions which resulted to flat yields compared to the previous week.”
Contrary to market expectations, the Fed tightened its policy rate by 25 bps to 2.25-2.5%. That was the fourth time the US federal funds rate was hiked this year, up by a total of 100 bps from 1.25-1.5% last January.
At the secondary market on Friday, the 182-day paper led gains, increasing 17.6 bps to close at 6.536%. It was followed by the yield on the 91-day Treasury bill which rose 15.9 bps to 5.81%.
Also picking up were yields on the 364-day, two-, three-, four-, five-, seven- and 10-year papers, gaining 7.4 bps, 6.1 bps, 6.4 bps, 4.3 bps, 1.8 bps, 0.5 bp and 3.4 bps, respectively, to fetch 6.777%, 6.837%, 6.94%, 6.995%, 7.029%, 7.063% and 7.059%.
Meanwhile, the 20- and 25-year bonds saw their yields decline by 4.6 bps and 5.8 bps, respectively, to end with 7.448% and 7.475%.
Moving forward, the shortened workweek due to the holiday season “could lead to some reduction in trading activities” this week and next week, according to RCBC’s Mr. Ricafort.
“[E]asing inflation due to latest peso appreciation and decline in global oil prices could help in sustaining most long-term PHP BVAL yields at the lowest levels in about 2.5-3 months,” he said.
Mr. Ricafort also noted that to date, yields at the long end are already down by around 1.2 percentage points from near decade-highs posted two months ago. At the same time, a softer inflation print could also “help in limiting/tempering any upside for shorter-term tenors,” he said.
Meanwhile, the bond trader expects yields to move “sideways with a strong upward bias due to the holidays and liquidating positions for the banks.”

Breathe like a yogi Basic Pranayama workshop offered

BREATHING is the most powerful healing tool each of us has. And yet most of us forget to breathe, or at least neglect to do so as deeply as we should. To rectify this, there will be a two-hour workshop on Basic Pranayama (breath control) offered on Jan. 12 at Rebel Yoga Manila.
In this workshop, participants will learn how to use the breath and get acquainted with the basic techniques to effect and manage different energy states of health, consciousness and emotion.
Long deep breathing or yogic breath, for instance, is a technique that relaxes and calms and also brings the brain to a new level of alertness, greater energy, and regulates the body’s acid-alkaline balance which affects the ability to handle stressful situations.
This workshop is for both yogis and non-yogis who want to develop the capacity to become steady, calm, and focused in any situation.
Participants should wear light, comfortable clothes, bring a yoga mat, an eye covering, and a light shawl.
An early bird rate of P800 is offered until Jan. 5 while the regular rate is P950. The walk-in rate is P1,000.
The workshop will be held on Jan. 12 from 10 a.m. to noon at Rebel Yoga Manila, 6th floor Jose Cojuangco Bldg., 119 dela Rosa St. corner Castro St., Legazpi Village, Makati. For inquiries, send a text to 0918-888-9198.

How PSEi member stocks performed — December 21, 2018

Here’s a quick glance at how PSEi stocks fared on Friday, December 21, 2018.

 
Philippine Stock Exchange’s most active stocks by value turnover — December 14-21, 2018

How does the philippines compare with other countries in terms of readiness to implement Public-Private Partnerships (PPP)?

How does the philippines compare with other countries in terms of readiness to implement Public-Private Partnerships (PPP)?

CTA cancels P59.84-M tax assessment vs RCBC Savings Bank

THE Court of Tax Appeals (CTA) ruled against the Bureau of Internal Revenue (BIR) and cancelled the alleged P59.844-million income tax deficiency of RCBC Savings Bank, Inc. (RSB) for the taxable year 2006 due to a void waiver supposedly extending the period to assess the bank.
In a decision penned by Associate Justice Erlinda P. Uy dated Dec. 18, CTA’s Special Second Division ruled that the period to assess tax deficiency of RSB, a subsidiary of Rizal Commercial Banking Corp., has already lapsed.
Despite the issuance of nine waivers agreed upon by the BIR and RSB to extend the period of assessment, the appellate court found that the first waiver issued was already void as it was received by the BIR on April 21, 2010, which was already after the expiration of the three-year assessment period for 2006, which was on April 16, 2010.
“Considering that the First Waiver is void, the eight subsequent waivers are also void because there was no period to extend at the time these were all executed as the period to assess has already expired on April 16, 2010,” the decision read.
“Since the waivers executed by petitioner are void, the deficiency income tax assessment for taxable year 2006 is likewise void for having been issued beyond the three-year prescriptive period mandated by law,” it added.
Section 203 of the National Income Revenue Code (NIRC) states that internal revenue taxes of a taxpayer must be assessed within three years after the last day of filing of income tax returns.
However, Section 222(b) of the NIRC provided that assessment period for the collection of taxes may be extended by both parties through an agreement before the lapse of the prescribed period.
RSB is being assessed for deficiency income tax from disallowed deductions from alleged bad debt write-offs of P87.83-million.
The Final Assessment Notice, on the other hand, was only issued on Jan. 16, 2012 or almost five years since the bank filed its corporate income tax return due to the nine waivers issued for the assessment period extension.
For its part, the BIR said RSB should be barred from assailing the assessment due to the nine waivers executed and the bank has previously filed protests but never raised the issue on the validity of the waivers. It also claimed that the assessment has legal and factual basis.
“Nevertheless, petitioner counters that the First Waiver executed on April 13, 2010 is null and void for being belatedly accepted by respondent on April 21, 2010. As a consequence, the period to assess was not validly extended. We agree with petitioner,” the decision read.
The decision was concurred in by Justices Ramon G. Del Rosario and Cielito N. Mindaro-Grulla. — Vann Marlo M. Villegas

Bill raising minimum age to buy cigarettes hurdles committee

THE House Joint Committee on Health and Trade and Industry approved the bill increasing the minimum age to buy tobacco products to 21 years from the current 18.
“They wanted to raise to 21 years old because the brain is still developing during the teenage years. Smoking negatively affects brain development,” Rep. Xavier Jesus D. Romualdo of Camiguin, Trade and Industry committee vice chair, told BusinessWorld over the phone.
The two House panels consolidated eight House Bills and one Resolution, all seeking to amend provisions of the Tobacco Regulation Act (TRA) of 2003.
The unnumbered Substitute Bill will also impose a total ban on advertising tobacco products and further expand the number of public places where smoking is prohibited.
Under the current TRA, tobacco companies are banned from promoting cigarettes through the mass media, but may advertise at the point of sale.
Mr. Romualdo said the Committees agreed to extend the advertisement ban to the point of sale. He noted that in lieu of displaying ads, establishments will be allowed to put up signs indicating the availability of tobacco products for purchase.
The Philippine Tobacco Institute, Inc. (PTI) said persons aged 18 years are “deemed qualified and responsible for all acts of civil life.”
The PTI also said in its position paper that the existing restriction on tobacco products advertisements is “already sufficient.”
The bill “unreasonably limits tobacco companies’ right to protected commercial speech, by extending the ban on all forms of tobacco advertisement, promotions, and sponsorships.”
The PTI said advertising at the point of sale allows companies to promote tobacco products to their target market, while still preventing exposure to unintended markets.
Health and children’s rights advocates supported the increase in the minimum age to buy cigarettes, in light of the increasing incidence of smoking among young people.
“This has been the trend in various jurisdictions and has been proven effective in preventing the initiation of youth to this deadly addiction,” they said in a joint position paper, signed by health advocacy groups that included Health Justice Philippines, Southeast Asia Tobacco Control Alliance and the Social Watch Philippines among others.
The groups also raised the need to provide a broad definition of “public places” to ensure smoke-free environment for Filipinos.
“Smoke-free places should be considered 100% smoke-free and smoking areas cannot be designated in these places,” they said in the joint position paper. — Charmaine A. Tadalan

More hybrid PPP projects to be implemented next year — NEDA

THE GOVERNMENT will implement more “hybrid” public-private partnership (PPP) projects next year, under which it initiates project construction using its own funds or official development assistance (ODA), the National Economic and Development Authority (NEDA) said.
Such projects are typically bid out to the private sector in the operations and maintenance (O&M) phase, in order to minimize start-up delays.
“It should be next year, in the middle of next year. We have not determined the appropriate financing yet, but I think there will be (more),” Socioeconomic Planning Secretary Ernesto M. Pernia told reporters on Thursday when asked when the government will roll out more hybrid PPP projects.
“So the ‘Build, Build, Build’ will be at a high level in 2019,” he added, noting that economic growth may come in “closer to 7%” next year.
So far, the government has two ongoing hybrid PPP projects since deciding to shift away from the pure PPP structure in the latter half of 2016 as it sought to accelerate project implementation.
It includes the construction of a new passenger terminal at the Clark International Airport through the Bases Conversion and Development Authority. The second project is the New Bohol (Panglao) Airport runway and terminal expansion aided by Japan International Cooperation Agency (JICA).
The P9.36-billion Clark International Airport Expansion Project was awarded to the winning bidder late 2017, with the P5.61-billion O&M phase awarded last week. Japan meanwhile signed a P2.1-billion loan agreement on the New Bohol Airport expansion in October. The government has yet to award the O&M concession.
The government said that a traditional PPP project usually takes an average of 29 months from project conceptualization to the awarding of the contract.
Initially, the government wanted to bid out the project’s construction together with the O&M for better coordination between the builder and the O&M provider, but Mr. Pernia said this structure has not yet been adopted.
“It should be done simultaneously. It has not yet been implemented. In fact, the good thing is that before the completion of Clark [International Airport Expansion], an O&M contract is in place,” Mr. Pernia said.
He added that the new approach will be adopted “for the next project.”
The PPP Center said last week that it is currently drafting guidelines for implementing agencies and private-sector stakeholders on hybrid PPPs, and these guidelines are expected to be issued within the first half of 2019.
They said that some private proponents were concerned that O&M PPP structure effectively reduces their participation in key state projects, but the PPP Center said that the hybrid PPP model can be structured to include information technology components in the O&M.
Nevertheless, the PPP Center said that the shift to a hybrid PPP financing mode is achieving the goal of faster project implementation.
“We definitely see improvements in the fast-tracking,” PPP Center Deputy Executive Director Mia Mary G. Sebastian said in a briefing on Wednesday. — Elijah Joseph C. Tubayan

Conditional cash transfer bill reported out of committee makes it to Senate plenary

THE BILL institutionalizing the government’s conditional cash transfer program has been reported out to the plenary for approval in the Senate.
The Senate committee on social justice, welfare and rural development is recommending the passage of Senate Bill No. 2117 or the proposed Pantawid Pamilyang Pilipino Program (4Ps) Act.
The bill describes 4Ps as “the national poverty reduction strategy program” as well as “a human capital investment program” that will span a maximum period of seven years to improve the health and education of the country’s poorest families.
Under the proposed measure, families are given educational and health cash grants monthly. Educational cash grants are given for a 10-month period yearly, depending on the number of children and their level of educational attainment. The program provides at least P300 monthly per child enrolled in day care and elementary school, at least P500 monthly per child enrolled in junior high school, and P700 monthly per child enrolled in senior high school.
As for the health and nutrition cash grant, at least P750 monthly for a 12-month period is distributed to beneficiaries.
The bill also provides the following conditions that beneficiaries must comply with for continued cash transfers under the program:

• pregnant women must avail of health services during the pregnancy as well as give birth in a health facility attended by a skilled health professional

• children under five years old must receive regular preventive health and nutrition services

• children one to 14 years old must avail of deworming pills at least twice a year

• children three to four years old must maintain an 85% attendance in day care or pre-school classes

• children five to 18 years old must maintain an 85% attendance in elementary or secondary classes

• at least one responsible person in the family must attend family development sessions conducted by the Department of Social Welfare and Development (DSWD) at least once a month

Beneficiaries of the program are also covered in the government’s national health insurance program of the Philippine Health Insurance Corp. (PhilHealth). Funding from their health coverage will be covered by revenue from sin taxes. They can also avail of livelihood and skills training programs of the DSWD and the Department of Labor and Employment (DoLE).
DSWD serves as the central planning agency of the program. It will select the qualified 4Ps beneficiaries using a standardized targeting system.
The amounts granted will be available to beneficiaries during the first three years of the program’s implementation. Adjustments in the rates can be made by the President, upon the recommendation of the National Advisory Council (NAC).
The NAC is composed of representatives from the DSWD, Department of Health (DoH), Department of Education (DepEd), National Anti-Poverty Commission (NAPC), National Commission on Indigenous Peoples (NCIP), Philippine Commission on Women (PCW), Council for the Welfare of Children (CWC), National Nutrition Council (NNC), Population Commission (PopCom), Presidential Commission for the Urban Poor (PCUP), and two representatives from accredited nongovernmental organizations (NGOs).
Advisory Councils are also to be created in the city or municipal, provincial, and regional levels. They are tasked to promote coordination among agencies in the implementation of the program, promulgate a grievance redress system, and review assessment reports regarding the program.
The DSWD is also mandated to provide an annual report of the 4Ps program.
The bill was sponsored to the plenary by Senator Antonio F. Trillanes IV, vice chairperson of the Senate committee on social justice, welfare, and rural development, in place of committee chair Senator Leila M. de Lima who remains in detention.
“The 4Ps Act, if enacted, can be a transformative program that will improve the lives of not only the 4.4 million beneficiaries across the country it currently serves, but the remaining fraction of the poor families we wish to be covered in the coming years,” Mr. Trillanes said in his sponsorship speech.
“The institutionalization of this program through this measure will ensure its sustained implementation and continued insulation from political patronage that can weaken its impact,” he added. — Camille A. Aguinaldo

Malaysian firms keen on landing engineering contracts in PHL

MALAYSIA is hoping to offer the expertise of its engineering companies to the Philippines, which is pursuing an aggressive infrastructure program, a Malaysian embassy official said.
“We are very much interested to bring in our expertise in engineering services, things like building information systems, facility management systems, IBS (industrialized building systems). We have been bringing in companies and have been in contact with DPWH (the Department of Public Works and Highways) where we introduce these services,” according to Siti Azlina Mohd Ali Hanafiah, Trade Commissioner from the Embassy of Malaysia Trade Office (MATRADE)
“We would like to share that technology with the Philippines. We have fostered a group of Malaysian companies who came here in October. We hope we can evolve into collaboration in these areas,” Ms. Siti Azlina told BusinessWorld on the sidelines of the Malaysia Chamber of Commerce and Industries Philippines Inc (MCCI) news conference on Dec. 15.
According to MATRADE data, Malaysian exports to the Philippines rose 9.7% year-on-year in the first nine months of 2018 to $3.101 billion.
Malaysian exports to the Philippines include manufactured goods like electrical and electronic products, chemical products, petroleum products, machinery equipment and parts, processed food, metals, plastics, optical and scientific equipment, wood, and transport equipment with a share of 78.2%, followed by agricultural goods like palm oil and palm oil-based agriculture products, sawn timber and molding, seafood, saw logs, natural rubber, and other vegetable oils with a share of 16.6%, and mining goods like crude petroleum, tin, crude fertilizer at 4.5%.
Ms. Siti Azlina said Malaysia exports more to the Philippines than it imports, and is looking at industries whose products it can tap.
For the agriculture sector, Ms. Siti Azlina said that palm oil and palm oil-based agriculture products remain Malaysia’s top export product to the Philippines.
“We are one of the largest exporters of palm oil in the world, but the rest (of the agricultural sector is) very small,” Ms. Siti Azlina said.
“Our agriculture is very much dominated by palm oil. Currently, Malaysia and Indonesia are two largest exporters of palm oil. At the moment, we sell a lot to India. We have investments here in palm oil as well, in Mindanao,” according to Ms. Siti Azlina.
Edward Ling MCCI president, said in a separate interview that Malaysian companies are looking at more infrastructure and manufacturing projects in the Philippines, including those involving the processing of agricultural goods such as banana and pineapple.
“The ‘Build, Build, Build’ program gives so much to do,” Mr. Ling said.
“There are more companies in Malaysia and MCCI will be looking at what the country needs and the agenda of the country. Tourism is one and the (Philippine) government is very committed to improve tourism so more tourists will visit here,” Mr. Ling said.
Asked about areas of interest for Malaysia, Mr. Ling said the Philippines can contribute workers, citing the number of Overseas Filipino Workers (OFWs) already in that country. — Reicelene Joy N. Ignacio

Underinvestment seen in regions under national minimum wage

EMPLOYERS said a national minimum wage would reduce investment in less urbanized regions and accelerate the trend of workers migrating to cities.
Employers Confederation of the Philippines (ECOP) Acting President Sergio R. Ortiz-Luis, Jr. said in an interview with BusinessWorld last week that a national minimum wage would be bad for competitiveness in many regions.
“Wages should not be the same. Wages (encourage) investment in some regions. If the incentives are the same, people will gravitate to cities,” he said.
He added that businesses will prefer to invest in more developed areas, and this trend will “deprive workers and their employment in other places, especially in provinces.”
The Wage rationalization Act or Republic Act 6727 states that the Regional Tripartite Wages and Productivity Board (RTWPB) representing each region has the responsibility to determine wage orders in their respective areas. As of this year, 16 wage boards have issued wage orders for 2018, setting minimum wages between P256 and P537.
Caraga in Eastern Mindanao has yet to have a new wage order despite the lapse of one year since its last wage order on Dec. 8. It is currently in the process of consultation prior to issuing a wage order.
In May, the Makabayan bloc of the House of Representatives filed House Bill No. 7787 or the National Minimum Wage Act that called for a P750 minimum wage for all regions.
The National Wages and Productivity Commission (NWPC) said it will review the current minimum wage setting starting next year.
In an interview with BusinessWorld last week, NWPC Director Maria Criselda R. Sy said that the commission was asked by Department of Labor and Employment (DoLE) Secretary Silvestre H. Bello III to analyze the wage fixing system.
“The Secretary had instructions to review the minimum wage determination process in the Philippines,” she said.
Ms. Sy added that the commission is also tasked to commission a third-party study on the urgings of legislators.
“There was a suggestion in the budget hearing of the senate for the DoLE to consider a third-party study or analysis of the minimum wage determination process in the Philippines because there’s this clamor for a national minimum wage,” she said.
Ms. Sy added that NWPC and DoLE don’t have the power to amend the current minimum wage setting system since changes require legislation. — Gillian M. Cortez

Bill renewing FBS Radio franchise filed at House

A BILL renewing the broadcast franchise of FBS Radio Network, Inc. for another 25 years has been filed at the House of Representatives.
House Bill 8617, if enacted, will extend the Network’s franchise, granted in 1995 and set to expire in 2020.
“The continued operation of FBS Radio promotes healthy competition amongst the participants in the industry,” Sponsor Rep. Cecilia Leonila V. Chavez of the Butil partylist said in the explanatory note.
The FBS Radio Network carries the branding 94.7 Mellow, formerly 94.7 Mellow Touch, and targets urban professionals.
It covers Metro Manila, Cavite, Bulacan, Rizal Laguna, and Batangas. Its broadcast also reaches Pampanga, Tarlac, Bataan and Nueva Ecija.
The measure will allow FBS Radio to continue “to construct, install, establish, operate and maintain radio and television broadcasting stations in the Philippines.”
The bill requires FBS Radio to provide adequate public service time, and sets a maximum of 10% paid commercial time. It is banned from broadcasting obscenity and indecent language, among others.
The network cannot transfer or sell its franchise to other entities without the approval of Congress.
FBS Radio is required to submit an annual report to Congress as part of the terms of the franchise. — Charmaine A. Tadalan

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