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Marawi rehab, hydro plants top agenda at MinBizCon

By Carmelito Q. Francisco
Correspondent

DAVAO CITY — Rehabilitation of Marawi City and the two government-owned hydropower complexes are among the concerns that are expected to be discussed during the three-day Mindanao Business Conference (MinBizCon) in Iligan City starting Sept. 12.

Based on the six-point policy agenda prepared by the Chamber of Commerce and Industry Foundation of Iligan, organizer and host of this year’s MinBizCon, Mindanao’s business leaders will ask the Department of Trade and Industry (DTI) and “other relevant government agencies, especially those who are members of the business and livelihood sub-cluster,” to “accelerate efforts to assist the Marawi business community through external marketing and promotion of local products and services.”

A soft copy of the agenda also said the DTI must conduct orientation workshops on the supplier development program for Marawi “soonest to explore potential opportunities with the business sector.”

DTI and financial institutions are also urged to “design and support and expanded and Marawi-specific financing packages with risk-mitigation features for the entrepreneurial business community in Marawi.”

For the Department of Information and Communications Technology, the appeal is for “private telecommunications companies to immediately establish the necessary infrastructure to improve telecommunication connections” and explore the possibility of granting fiscal incentives for this.

Marawi has been undergoing rehabilitation following the 2017 armed conflict between government forces and members of local extremist groups who sieged the city.

The policy agenda also focuses on the rehabilitation of the Agus and Pulangi hydroelectric power complexes, noting that these assets have “far ranging ramifications on the business climate and competitiveness dynamism of Mindanao.” It urges the Finance and Energy departments, in coordination with the National Power Corp., to prioritize the project and include it in the 2020 National Energy Program.

It noted that options other than full privatization should be considered, including “hybrid privatization” where operation and maintenance can be entrusted to the private sector while ownership of the facility remains with government.

“The other option is to exclude (from privatization) the Agus and Pulangi.”

Republic Act No. 9136, the Electric Power Industry Reform Act (EPIRA) of 2001, mandates the privatization of all government-owned power assets.

The four other main issues that will be put forward during MinBizCon are:

• upgrading of airports in the cities of Pagadian, Ozamiz, Surigao and neighboring Siargao, and Camiguin; and modernization of the Laguindingan Airport in Northern Mindanao;

• comprehensive implementation of the Roads Leveraging Linkages for Industry and Trade, which was started in 2018 and forms part of the five-year program of the Department of Public Works and Highways;

• updates on the Finance department’s proposal to cut the corporate income tax rate to 20% by 2029 from 30% currently and to overhaul investment incentives by making them more time-bound and tied to economic benefits they bring and by removing those deemed redundant; and

• institutionalization of a whole-of-nation approach to counterinsurgency through improved social and economic development programs led by local governments.

Duterte says Xi offered gas deal if 2016 Hague arbitration win ignored

PRESIDENT Rodrigo R. Duterte said his Chinese counterpart has offered Manila a controlling stake in a joint energy venture in the South China Sea, if it sets aside an international arbitral award that went against Beijing.

Mr. Duterte said Chinese President Xi Jinping told him during their recent meeting that if he ignored the Permanent Court of Arbitration’s 2016 ruling, China would agree to be the junior partner in a joint venture to develop gas deposits at the Reed Bank, located within Manila’s exclusive economic zone (EEZ).

“Set aside the arbitral ruling,” Mr. Duterte was quoted as telling reporters late Tuesday in remarks provided by his office on Wednesday.

“Set aside your claim,” he said, quoting Mr. Xi. “Then allow everybody connected with the Chinese companies. They want to explore. If there is something, they said, we will be gracious enough to give you 60%, only 40% will be theirs. That is the promise of Xi Jinping.”

Chinese Foreign Ministry spokeswoman Hua Chunying did not give specifics at a briefing on Wednesday on the exchange between the presidents, but said Mr. Xi noted that cooperation would yield greater progress in exploiting the sea’s resources.

Ms. Hua said Mr. Duterte had expressed willingness to hasten maritime oil and gas exploration and development cooperation between China and the Philippines. With regard to some “specific situations,” working groups between the two sides would consult closely, she said.

The tribunal in The Hague clarified maritime boundaries and the Philippines’ sovereign entitlements, and in doing so, invalidated China’s claims to almost the entire South China Sea. China does not recognize the ruling.

Mr. Duterte has sought to befriend Mr. Xi, hoping to secure billions of dollars of investment, avoiding challenging China over its activities in the South China Sea, including its militarized artificial islands.

BIG SETBACK
Any agreement to forget the arbitral award and team up with China would be a major setback to other claimants, especially Vietnam and Malaysia, which like the Philippines have experienced repeated challenges from China’s coast guard inside their EEZs.

The United States has called that bullying and coercion aimed at denying rivals’ access to their energy assets.

Mr. Duterte did not say if he had agreed to Mr. Xi’s offer, but said the part of the arbitral award that referred to the EEZ “we will ignore to come up with an economic activity”.

The tribunal said the Philippines had legal rights to exploit gas deposits that China also claims at the Reed Bank, about 85 miles (140 kilometers) off the Philippine coast.

The Philippines’ only accessible gas resources at the Malampaya fields will run out by 2024.

A joint project with China has been talked about for decades, but has gone nowhere due to the competing claims.

Joint activity could be deemed as legitimizing the other side’s claim, or even relinquishing sovereign rights.

Philippine Foreign Secretary Teodoro L. Locsin, Jr. on Wednesday told ABS-CBN News Channel that a preliminary agreement between China and the Philippines would avoid stating which country was entitled to the gas.

“It’s very clear — no legal position is compromised if we enter into this agreement,” Mr. Locsin said, adding that putting aside the arbitration case was immaterial, because an international court had already made its decision.

“It’s final and binding.”

ANALYSTS CAUTION
Sought for comment, analysts urged careful study of Beijing’s overtures.

“The problem with the proposal raised by President Xi, assuming the conversation really took place, is that it places our claim in a weak position, coming from an assumption that we are the ones who are asking the Chinese for something,” Enrico V. Gloria, political science assistant professor of the University of the Philippines-Diliman, said in an e-mail on Wednesday.

“This is a very problematic assumption as it seems to ignore our victory in the arbitration court. The Philippines should be at the driver seat and be the one setting the conditions and parameters on any joint cooperation project in the West Philippine Sea by virtue of us having sovereign rights in those areas, as ruled by the arbitration court,” Mr. Gloria explained.

“While it might not be obvious for the president, the whole conversation he cited appears to have changed the entire narrative of the Permanent Court of Arbitration ruling itself — that is, China has the sovereign rights and, crucially, we are merely asking for their ‘graciousness’ to exploit the resources within it with them. And that is a thought (or a narrative) the President should be wary about.”

For his part, Michael Henry Ll. Yusingco, senior research fellow at the Ateneo de Manila University Policy Center, said in a separate e-mail: “First, it is not helpful to him because it makes him look like a weak leader. I do not believe he wants to be perceived as such. I know Filipinos would never want their President to be seen by others, specially by other countries, as a weak leader. We always want to our President to project strength in the international stage.”

“Second, it is not helpful to Filipinos because the apparent capitulation to China is very disheartening. Filipinos know that the Philippines is not a powerful nation but protecting and preserving the country’s dignity is still very important. An obvious submission by our national leader to the demands of a foreign dictator is very hard to accept,” he added.

“Third, it is not helpful to the country’s long-term future because the apparent capitulation can alienate allies in the region. The full pivot to China may cause other countries to change their policy towards the Philippines — changes that can raise both security and trade concerns for us, which we may not be ready to address,” Mr. Yusingco continued.

“Strengthening our bilateral relations with China is not a bad move. In fact, it is necessary. But the statements and behavior of our government officials leading this effort must be consistent with the constitutional prescription that the Philippines must always pursue an independent foreign policy. Our government officials, the President most especially, in dealing with foreign nations must always project in words and in deeds the constitutional prescription that the Filipinos’ paramount concern is always national sovereignty and territorial integrity.” — Reuters with A. L. Balinbin

Call for better policies marks mining summit

A BETTER POLICY ENVIRONMENT is needed to help the mining sector achieve its potentials, experts said in annual industry summit on Wednesday.

“We need to awaken the full potential of the mining industry and it means shifting the government regulatory approach from a restrictive developmental policy regime… ” Victor Andres C. Manhit, president of Stratbase Albert del Rosario Institute, said during the second day of the Mining Philippines 2019 International Conference and Exhibition in Pasay City.

“Balanced environmental governance is the key to realizing and unlocking the transformative potential of resource management and sustainable mining activities.”

In the same event, Department of Environment and Natural Resources (DENR) Undersecretary for Climate Change and Mining Concerns Analiza R. Teh said: “we hope to… formulate new policies that would really be responsive to the needs of the mining industry to support their investments and at the same time ensure that environmental safeguards are properly taken cared of.”

Despite the Philippines being known as having significant mineral reserves, miners have been operating in a negative policy environment since the government in 2012 imposed a moratorium on new mining permits until a new law is enacted that gives the government a bigger share in industry revenues.

Such a measure has been re-filed in the 18th Congress and is now being discussed at the committee level in both the House of Representatives and the Senate.

Among others, the measure proposes to reduce the royalty on large-scale mining within mineral reserves to three percent of gross output from five percent currently and introduce a 1-5% margin-based royalty on those outside mineral reserves.

At present, only miners operating within mineral reserves are levied a royalty.

This will be imposed on top of other taxes like corporate income tax, excise tax which Republic Act No. 10963 doubled to four percent, the royalty to indigenous communities and local business tax, among others.

This was the same version the House approved on third reading in the 17th Congress; but failed to hurdle the Senate before the June 3 adjournment.

Pocholo C. Domondon, assurance partner of Isla Lipana & Co., said much depends “on predictability as well as consistency with respect to policy, given the fact that this is a capital intensive industry.”

Under the proposed new tax regime, small-scale miners will also be levied a royalty equivalent to one-tenth of one percent of gross output, whether the contractor operates within or outside mineral reservations.

The Bangko Sentral ng Pilipinas (BSP) is mandated by RA 7076 to purchase all gold produced by small-scale miners “at prices competitive with those prevailing in the world market regardless of volume or weight.”

“As of now, 10% of GIR (gross international reserves) is gold,” BSP Senior Assistant Governor and General Counsel Elmore O. Capule said during the conference.

Despite the currently negative policy environment, latest available data from the Mines and Geosciences Bureau showed that nickel ore production actually grew three percent to 11.306 million dry metric tons (DMT) in the first half of 2019.

Production of gold was up six percent to 11,078 kilograms (kg), while silver was up seven percent to 15,849 kg.

Copper production was also up during the period by 14% to 156,745 DMT. — Vincent Mariel P. Galang

Yields on term deposits drop on strong demand

STRONG APPETITE for term deposits caused yields to decline on Wednesday as all tenors were oversubscribed despite the slightly higher offer volume.

The Bangko Sentral ng Pilipinas (BSP) garnered P93.395 billion in tenders for its term deposit facility (TDF) yesterday, higher than the P50 billion placed on the auction block.

This week’s total bids also surpassed the P76.055 billion received last week for a P40-billion offering.

“Average TDF rates declined across tenors relative to the previous week as all tenors were oversubscribed reflecting increased liquidity in the system,” BSP Deputy Governor Francisco G. Dakila Jr. told reporters via email.

“The offer volume for the 11 September auction was increased from the previous week’s offer of P40-billion in anticipation of higher excess liquidity to be siphoned from the financial system as a result of funds released from the deposits of the national government with the BSP,” Mr. Dakila said.

Demand for seven-day papers reached P23.7 billion, more than double the P10 billion offered by the central bank for the tenor but lower than the P24.905 billion worth of tenders received a week ago.

Rates for this tenor ranged from 4.3% to 4.4%, a narrower margin compared to last week’s 4.3%-4.992% range. The average rate settled at 4.3486%, 6.55 basis points (bp) lower than last week’s 4.4141%.

The two-week term deposits also attracted tenders worth P34.454 billion, higher than the P20-billion offered by the central bank and the P22.98 billion in bids seen last week for a P10-billion program.

Banks sought returns ranging from 4.25% to 4.465%, wider compared to the 4.4%-4.5% band last week. The average yield for the 14-day papers ended at 4.3995%, down 3.57 bps from the 4.4352% logged during the previous offering.

Meanwhile, the 28-day papers were met with demand worth P35.241 billion on Wednesday against the P20 billion auctioned off by the central bank, rising from the P28.17 billion in tenders received last week.

Accepted yields for the tenor fell between 4.4% and 4.525%, a slightly narrower range compared to the 4.4%-4.5922% band last week. This caused the one-month paper’s rate to average at 4.4907%, just a tad lower than the previous offer’s 4.495%.

“Term deposit facility yields declined across the board, with strong demand towards the shorter tenors on market expectations of dovish guidance from the policy meetings of the European Central Bank and from the US Federal Reserve next week,” a trader said in a separate email.

“Participants have likewise opted to bid for lower yields to secure their TDF placements, especially on the shorter 7- and 14-day tenors,” the trader added.

The TDF is the central bank’s primary tool to shore up excess liquidity in the financial system and to better guide market interest rates.

BSP Governor Benjamin E. Diokno has said the central bank is looking to cut benchmark rates by another 25 bps before the year ends.

The central bank has cut rates by a total of 50 bps this year — by 25 bps each on May 9 and Aug. 8 — to 4.25% for the overnight reverse repurchase rate, 4.75% for overnight lending and 3.75% for overnight deposit, partially dialing back the 175-bp cumulative hikes triggered last year by successive multi-year high inflation that peaked at a nine-year high.

The BSP’s Monetary Board will review its policy settings anew on Sept. 26. — L.W.T. Noble

A galaxy of gastronomic delights at the 8th Culinaire

EXCESS was the name of the game when the accredited caterers of the SMX Convention Centers showed off their capabilities in the eighth year of Culinaire.

This year, 15 accredited caterers participated in the event: Albergus, Bizu, Conrad Manila, The Creamery Catering, Event Shaker Mobile Bar, Goldilocks, Hizon’s Catering, Josiah’s Catering, Juan Carlo The Caterer, Kitchen City, The LJC Catering Service, M Catering and Fine Foods, Manila Catering, TJIOE The Caterer, and Via Mare.

Bono Gelato and Tamayo’s Catering are also among the accredited caterers of SMX, but did not participate in this year’s event.

The caterers serve SMX Manila, SMX Aura, and SM Megamall Megatrade Hall.

“A Constellation of Culinary Wonders” was the evening’s theme, so astronomical-themed dishes were the stars of the evening.

Now, this reporter hopes that nobody expects a rundown of all the plates we had during Culinaire, which was held on Sept. 5 at the SMX Convention Center in Mall of Asia, Pasay City as most of the caterers were really out there to outdo themselves — a company served three courses each, or 45 dishes in total.

Though a few dishes did stand out: the smoked beef brisket with Chipotle adobo sauce, and the galaxy chocolate cake with caramel, served with a Belgian dark chocolate dome-shaped like a ringed planet, from Bizu; the Enoki Nebulas with fish tempura, and stuffed roast chicken with tomato capsicum glaze and corn rice from Via Mare.

We also enjoyed the champorado brûlée with dilis (dried anchovy) and “pearl” (a praline shaped and colored like a pearl) from The Creamery Catering, and the scallop with Pastis Prado Wine (served on a rock) and the Crown of Pork roast from Juan Carlo The Caterer.

Plus points to Juan Carlo too, for the interesting table setting–a table laden with roses, under a canopy of fairy lights — and at the center, a woman serving as a human candelabra, her face painted in gold.

It was evident that the judges also enjoyed the centerpiece as Juan Carlo won Best Centerpiece. The same caterer also took home the prizes for Best Appetizer, Best Set-Up, and the People’s Choice Award. Bizu, meanwhile, won Best Main Course for the aforementioned smoked beef brisket, and The Creamery Catering won for Best Dessert for their champorado (sweet chocolate rice porridge), as well as Star of the Night for the grilled miso-marinated sea bass on a soba (Japanese buckwheat noodle) salad, clams, cream sauce, and tapioca pearl.

Anton Diaz of the blog Our Awesome Planet, Dedet dela Fuente of Pepita’s Kitchen and chef JJ Yulo of the blog Pinoy Eats World were the judges for the contest.

“All our accredited caterers go through a yearly three-stage accreditation process that includes documentation, hygiene audit, and site or commissary visits, and review and approval together with our Food Hygienist and our Director of Banquets and Event Services,” said Agnes Pacis, the Vice-President of Sales and Marketing for SMX.

“We look into the company background, production capacity — a minimum of 3,000 persons — a proper commissary, kitchen, banquet equipment, and staffing, service standards, logistics, and food safety management system, which is a must,” she added.

NEW SMX CONVENTION CENTERS
The evening also became a platform to announce the latest properties for the SMX Convention Centers.

Walid Wafik, Vice-President-General Manager of SMX Convention Centers announced the opening of SMX Olongapo, due to open later this month at the fourth level of SM City Olongapo Central. It will have five function rooms and seven meeting rooms.

Mr. Wafik also announced forthcoming SMX Convention Centers: SMX Clark in 2020, SMX Sta. Rosa and Iloilo in 2021, and SMX Cebu in 2022. SMX Clark will be the second standalone property for SMX.

“SMX Convention Center’s market dominance will help bridge the gap between local and international events coming to the Philippines. Organizers will be able to bring their events to different regions in the country. The additional spaces we will be building will only help the economy with MICE (Meetings, Incentives, Conventions, and Exhibitions) creating a multiplier effect on other industries, the highest being the transportation and manufacturing sectors. We will continue to build Convention Centers that can better cater to the needs of clients and by 2022, we will have 13 properties,” said Ms. Pacis, counting existing locations in Manila (three locations), Bacolod, Davao and Cebu (two locations). — Joseph L. Garcia

Globe buys back Yondu shares

GLOBE TELECOM, Inc. is buying back all its shares in Xurpas, Inc. subsidiary in a move expected to benefit its enterprise business.

In separate disclosures to the stock exchange Wednesday, the two companies announced Globe is buying back 51% or 22,950 shares from Xurpas subsidiary Yondu, Inc., making it the sole owner of the company again.

The transaction is priced at P501 million, which Globe paid in cash after signing and executing the Deed of Sale of Shares yesterday.

“Bringing Yondu into the Globe value chain will promote synergies and strengthen the position of our enterprise business. We believe in Yondu’s growth prospects as we leverage on its capabilities in a robust IT industry,” Ernest L. Cu, president and chief executive officer of Globe, was quoted in a statement as saying.

To recall, Xurpas bought 51% of Yondu from Globe in 2015. Its divestment now is expected to give the company “additional liquidity, (retired) debt, and (room) to focus on high-value, emerging, innovative, and disruptive technologies and platforms,” Alexander D. Corpuz, Xurpas president, said in a statement.

Yondu handles content development and provides mobile value-added services and information technology services. Xurpas said the company has grown to include service management, software development and turnkey solutions to its portfolio since it invested in the company four years ago.

“The transaction is consistent with Globe’s strategic imperative of developing its ICT capabilities responsive to the changing needs of its customers,” Globe said in its statement. “Yondu’s strong IT core competencies combined with Globe’s digital expertise will strengthen the value proposition of products and services catered to enterprise clients.”

In another disclosure, Xurpas also announced it is dissolving its subsidiaries Xeleb Technologies, Inc. and Xeleb, Inc., which handled celebrity-themed mobile games. It said the two companies “have no significant contribution to the Xurpas Group,” hence its board decided to approve their dissolution.

Meanwhile, Globe claimed in a separate statement the price of its mobile data services are one of the cheapest ones in the region, standing at $0.43 or approximately P22.50 per gigabyte (GB).

Comparing its prices to that of network operators in six countries, namely Singapore, Malaysia, Thailand, Indonesia, India and China, Globe said its prices were the second lowest, only beaten by India at $0.23 per GB.

“With our customers’ surging demand for mobile data consumption, providing more economical data promos is more important than ever. We will continue to…create more cost-effective promos to give our customers the best possible quality of experience,” Mr. Cu was quoted as saying. — Denise A. Valdez

In a fracturing world, the biggest central banks still stuck together

WASHINGTON/TOKYO/FRANKFURT — The last time major central banks shifted gears together, it was a cooperative move to keep the financial crisis of a decade ago from becoming a full-bore, worldwide depression.

Now, a new round of global rate-cutting risks taking on a competitive edge as policy makers try to stay ahead of rising trade tensions, a volatile investment climate, and a shift in the political mood from shared support for globalization to a more zero-sum battle over a slower-growing world economy.

It’s a situation that has created deep internal divisions at the European Central Bank (ECB), the Bank of Japan (BoJ) and the US Federal Reserve as officials debate how to confront a global slowdown with limited room to cut interest rates, and with elected officials pursuing policies that may be doing harm, at least in the short run.

The three institutions, particularly the Fed, set financial conditions that influence interest rates, exchange rates and capital flows worldwide, and all three are expected to loosen monetary policy when they meet over the next eight days.

If the situation seems to echo the coordinated easing of a decade ago, the focus on trade and the fate of global manufacturing have created a different landscape, where winners in one part of the world may come at the expense of losers elsewhere.

“The worst thing that could happen is a global race to the bottom,” among central bankers in Tokyo, Frankfurt and Washington, said one official familiar with the BoJ’s thinking, who spoke on condition of anonymity.

Not everyone feels the need for looser policy, and indeed Japan in particular is concerned about it.

If the Fed and ECB do as expected at their upcoming meetings, BoJ officials will be torn between how a stressed financial system may respond to ever lower rates, and how Japanese exporters may be damaged if the yen rises in value as a result of the actions of those other central banks.

European officials, disappointed that elected leaders haven’t spent aggressively to boost economic growth, are sparring over how much lower already negative rates can go without causing problems, how expansive other ECB programs should become, and what good any of it might do.

At the Fed, policy makers are split over whether to cut a lot, a little or not at all.

In each case, officials are reckoning with the fact that their economies and financial systems have become so tied together that fully independent policy making, insofar as it ever was possible, may be a thing of the past.

“We really thought monetary policy had things under control,” and would be able to offset whatever programs elected leaders chose to pursue, even a trade war, said Tara Sinclair, an economics professor at George Washington University.

“Does that work in a super low interest rate world and in a very integrated world?” when central banks may have lost much of their traditional influence over the domestic economy.

CHASING EACH OTHER DOWN
The ECB meets this Thursday, and European officials noted their place in the queue as they contemplate pushing the euro area’s target interest rate deeper into negative territory.

The Fed’s decision in July to reduce interest rates for the first time in more than a decade “had indirect consequences for European monetary policy…through channels such as exports and the exchange rate,” said Bundesbank President Jens Weidmann. Now, “if the ECB further loosens the monetary policy reins, this could, in turn, step up pressure on the Fed to act.”

The Fed’s latest policy meeting concludes next week, on Wednesday, Sept. 18, when the US central bank is expected to reduce interest rates again by a quarter of a percentage point. The BoJ meets the next day.

China, the chief target of US President Donald Trump’s drive to raise tariffs and rewrite global trading rules, took its own steps last week to loosen bank credit, and nearly 20 other central banks have cut rates or loosened policy in recent weeks.

Recession risks may be rising, with policy makers like St. Louis Fed President James Bullard saying larger central bank moves may be warranted to bring the Fed, for example, closer into line with what financial markets expect and to lift the inflation outlook.

Yet unlike a decade ago interest rates are already so low, and even negative in Europe and Japan, that the impact of rate cuts alone is not expected to be great. The appetite for less conventional steps, like more aggressive bond-buying, is untested outside of crisis conditions in the United States, and remains controversial elsewhere.

LESS HARMONY
In addition, the policy moves of a decade ago were about rekindling growth that would help every nation, and elected officials and fiscal leaders were enacting their own economic stimulus programs to pull in the same direction as monetary policy.

Now, they are pulling the other way, particularly in the United States where efforts to protect local industries using tariff and trade restrictions, according to many economists, have weighed on global growth.

The focus on tradeable goods has made the politically sensitive issue of exchange rates more important.

Monetary policy shifts world capital flows, and in doing so alters the relative price of a country’s exports and imports. In his criticism of the Fed, for example, Trump has encouraged rate cuts to try to keep the value of the dollar down — a troubling argument for Europe, in particular, with Germany perhaps already in recession and hoping to maintain the trade surplus that drives its economy.

Goldman Sachs analysts this week said the likely outcome, even with the expected Fed and other action, is a sort of sluggishness that may not involve a recession as much as subpar performance — a reminder that, even as some try to reverse decades of globalization, its influence remains.

“You can’t ignore what’s going on in the rest of the world,” said MIT economics professor and former Bank of England official Kristin Forbes. “We don’t live in a bubble.” — Reuters

There is more to Kobe than just beef

By Cathy Rose A. Garcia, Associate Editor

MOST PEOPLE head to Kobe, Japan just to sample the famous Wagyu beef, but there’s so much more to the capital city of Hyogo Prefecture.

Located about 30 kilometers west of Osaka, Kobe is a perfect day trip. It takes about an hour by train from downtown Osaka to Kobe-Sannomiya station, the city’s main railway terminal.

Kobe has a lot to offer, such as gardens, saké breweries, museums, and even a Chinatown.

HAKUTSURU SAKÉ BREWING
First stop on our itinerary was a visit to a saké brewery.

One of Kobe’s best-known saké breweries is Hakutsuru Saké Brewing Co., Ltd. The company restored its old saké brewhouse and turned it into the Saké Brewery Museum, which is open to the public for free.

The two-level museum features dioramas showing the process of making saké. To make up the lack of English language signs, visitors can watch videos on the history of saké and how it is made.

At the end of the tour, visitors can sample saké as well as purchase different kinds of saké, saké cups, cosmetics, face masks, and even saké ice cream.

KOBE NUNOBIKI HERB GARDENS
Our next stop was Kobe Nunobiki Herb Gardens, located on Mount Rokko. Considered one of Japan’s largest herb garden, it boasts of around 75,000 herbs and flowers. The garden areas are divided into themes, such as Rose Symphony Garden, Four Seasons Garden, and Kitchen Garden.

We had to take a cable car to go to the Welcome Garden, where you can have snacks and coffee at the café. The building is designed to look like a German castle, giving a vaguely European atmosphere.

We took a leisurely walk down the mountain, pausing to enjoy the fresh air and take countless photos of the pretty flowers and lush trees. The Herb Garden features over 100 varieties of herbs, while the Kitchen Garden mixes vegetables and herbs.

The Kaze no Oka Flower Garden is particularly picturesque, as colorful flowers blanket the hill. There are numerous benches and hammocks where you can take a break and take in the gorgeous view of Kobe city.

At the time of our visit, the gardens were filed with roses, lavender, marigold, and chamomile.

KOBE BEEF
Having worked up an appetite, we headed to downtown Kobe in search of the city’s famous Kobe beef. Across from Sannomiya station, there are rows of restaurants serving Kobe beef.

Steakland is a popular choice among tourists because it offers set meals with Kobe beef at a “reasonable” price. Lunch is a particularly busy time, since the lunch set prices are lower than those during dinner.

Kobe beef is a type of Wagyu beef from Tajima black cattle that are born, raised, and slaughtered in Hyogo prefecture. But not all Tajima cattle have meat that can be considered as Kobe beef, as only a few thousand cows meet the standards.

At Steakland, the Kobe beef was served teppanyaki-style. A chef cooked the cubes of beef on a sizzling iron griddle in front of us. It was cooked medium-rare, making it extremely tender and juicy. The set meal also included drinks, rice, grilled vegetables, and miso soup.

EARTHQUAKE!
After lunch, we headed to the Great Hanshin-Awaji Earthquake Memorial Museum.

Going around Kobe with its gleaming buildings and excellent roads, it is difficult to imagine that the city was in ruins after being hit by a massive earthquake on Jan. 17, 1995. The Great Hanshin Earthquake, which had a magnitude of 6.9, left over 6,000 people dead and over 43,000 injured. Nearly 250,000 homes were completely or partially destroyed, along with roads, public transportation, and other structures.

Through the museum, the Disaster Reduction and Human Renovation Institution aims to ensure that the lessons from the massive earthquake are not forgotten and it provides crucial information on how to prepare for future disasters.

We watched a short 3-D documentary on the areas affected by the earthquake, the aftermath and the reconstruction efforts. Homes made of light materials, old buildings, even highways, collapsed easily.

Seeing how easily the old buildings and homes made of light materials collapsed brought back memories of the 1990 Luzon earthquake, where a magnitude 7.7 quake caused widespread damage in the region and over 1,000 people were killed. It makes you wonder how major cities in the Philippines will be able to withstand an earthquake of a similar magnitude.

Like Japan, the Philippines is geographically prone to natural disasters and can learn much from the country’s experience in handling relief efforts, reconstruction and disaster prevention.

And if Kobe, brought to its knees after the 1995 quake, can rise and become the bustling city it is now 24 years later, then there’s hope.

SM to open new mall in Olongapo

SM PRIME Holdings, Inc. will be opening a new mall in Olongapo City this Friday as it continues its provincial expansion.

In a statement issued Wednesday, the listed property developer said SM City Olongapo Central will offer 72,000 square meters of gross floor area. About 85% of its leasable space has already been awarded to tenants.

“Olongapo City remains as one of the fastest growing cities in Central Luzon creating a wonderful synergy on economical and sustainable development,” SM Prime President Jeffrey C. Lim said in a statement.

“SM City Olongapo Central will not only enhance the beauty of this thriving city, and its province, but will also create more jobs and business opportunities to locals who aspire to grow with our company.”

Located along Rizal Avenue in Barangay East Tapinac — considered Olongapo’s primary business district — SM City Olongapo Central will stand four stories tall with shopping, dining, and entertainment options.

The mall will house staple SM brands such as SM Supermarket, The SM Store, Our Home, Watsons, Uniqlo, Surplus, Sport Central, SM Appliance Center, Ace Hardware, BDO Unibank, Inc. and China Banking Corp.

It will also include amenities such as a food hall, cyberzone, wellness zone, six digital cinemas, a convention center, over 700 parking slots, and a sports entertainment venue.

The new mall marks SM Prime’s second project in Zambales after SM City Olongapo Downtown, and its 73rd in the country. This will be added to the company’s total gross floor area of 9.3 million square meters, including its seven malls in China.

SM Prime is scheduled to open three more malls before the year ends, namely SM Center Dagupan, SM City Butuan, and SM Mindpro Citimall. It is set to spend P80 billion in capital expenditures this year — 39% of which are for malls — to pursue its provincial expansion.

The company has also lined up the opening of seven malls in 2020, namely SM City Roxas, SM Calamba Turbina, SM Tanza, SM San Fernando in La Union, SM Laoag, SM Zamboanga, and SM Malolos.

Shares in SM Prime dropped 0.43% or 15 centavos to close at P34.50 each at the stock exchange on Wednesday. — Arra B. Francia

Shopback boosts PHL operations with new app features, interface

By Zsarlene B. Chua
Reporter

SOUTHEAST ASIAN cashback rewards program Shopback is ramping up its Philippine operations four years after entering the country with a new user interface and new app features in response to the increased penchant of Filipinos to online shopping.

“The e-commerce and online ordering market just exploded [in the past few years] with Lazada, Shopee, Zilingo, and in the food space, Food Panda,” Prashant Kala, country manager of Shopback Philippines, said during a press conference on Sept. 9 at the Manila House Private Club in Bonifacio Global City in Taguig.

The increased appetite for e-commerce is apparent in Shopback’s numbers from 2018 to this year where they saw 29,000 orders a day as of August compared to 800 orders a day in the same period last year.

“This is still relatively small compared to our operations in Singapore, Taiwan, Indonesia, and Thailand but we are optimistic that the Philippines will definitely catch up with these more established markets very soon,” Karoline Santiago, partnerships head of Shopback Philippines, said in a statement.

In order to encourage more online shoppers to go to Shopback, the app introduced an update that includes a more seamless user interface and games to earn rebates.

They said they were also banking on the 9.9 sale last Sept. 9 by various online merchants like Lazada and Shopee by offering extra cashback percentages and sale items to bolster their numbers.

“This time around, we’re trying to be more visible in terms of our reach — we’re trying to reach more people and more influencers and also promoting brands that can help us gain more traction,” Ms. Santiago explained.

Shopback was founded in 2014 in Singapore and is currently in seven countries in the Asia Pacific including Australia and Taiwan. The company claimed to have over 12 million users and is partnered with over 2,000 brands worldwide.

As a cashback rewards platform, Shopback partners with merchants to offer rebates for purchases made from said merchants. Users must first run the Shopback app and look for their preferred merchant, then the app will redirect the user from the Shopback app to the chosen merchant.

The users then proceed with their transactions and Shopback will track such purchases and give users a corresponding rebate which they can withdraw and transfer to digital wallets and their personal bank accounts.

Mr. Kala explained that Shopback earns by getting a commission from partner merchants but noted that they don’t always do so if the merchant is small or starting up.

This year, the company aims to “doing at least $300 million worth of cross-business [sales]” up from the $14.54 million total value of products sold in 2019. From January to August, the company reported having sold $104.5 million worth of products.

BoJ’s dilemma spurs speculation

WIKIPEDIA.ORG

JAPAN’S CENTRAL BANK, long a pioneer in pushing the envelope of monetary policy in its campaign to stimulate the economy, may yet add to its record of innovation.

The Bank of Japan’s current dilemma is that while its peers have eased policy — or are set to do so soon — it has refrained from additional action. That leaves Japan’s exchange rate vulnerable if other central banks’ moves drive down their currencies. A stronger yen would hurt Japanese exporter earnings and the stock market, and put downward pressure on prices.

Yet taking Japanese interest rates deeper into negative territory, or stepping up asset purchases, risks doing yet more damage to investment returns. Governor Haruhiko Kuroda himself issued a warning on that front last week.

This Gordian Knot-type conundrum has revived speculation about a so-called reverse operation twist. That’s where the central bank moves to cut short-term rates while supporting longer-term ones. In theory, it could head off yen appreciation, support institutional investors’ returns and boost bank stocks.

“Aggressive tapering alone would be viewed as major tightening,” if the BoJ just focused on cutting back its bond purchases, Yujiro Goto, head of foreign-exchange strategy at Nomura Holdings Inc. in Tokyo, wrote in a note Tuesday. That approach would risk a strengthening of the yen, he added.

That’s why “a reverse twist operation-type policy combination would be necessary,” Goto wrote.

In the original Operation Twist in the 1960s, US policy makers attempted to shrink the gap between short and long-term yields. The Federal Reserve mounted another such maneuver in 2011.

BoJ watchers also floated the idea of a reverse twist back in 2016, when — like now — there were global economic headwinds and trenchant declines in longer-dated bond yields were stoking angst among Japanese investors.

Kuroda said in an interview with the Nikkei newspaper last week that yields on 20-year and 30-year Japanese government bonds have “fallen a bit too far” and that returns for life insurers and pension funds have fallen significantly — negatively affecting consumer sentiment.

Three years ago, instead of a reverse twist, the BoJ adopted a new framework, twinning the negative short-term interest rate it had adopted earlier in 2016 with a target for 10-year bond yields of around zero.

Trouble is the actual yield is now well below zero, at -0.20% in Tokyo trading late Wednesday. Japanese banks, insurers and pension funds have been piling into foreign securities in their hunt for returns, potentially stockpiling risk as they do so. Regulators have had to tighten scrutiny.

Given that the impetus for lower long term yields lately has been global, not local, there may not be much the BoJ can do to limit damage to savers if it steps up stimulus via interest rates. (There’s always other moves, like expanding exchange-traded fund purchases.)

While the BoJ could trim its bond buying to prevent any “violent” move in longer-dated yields, “it would not be surprising should Japan end up joining Switzerland and Germany in having its entire yield curve” below zero, Morgan Stanley analysts including Takeshi Yamaguchi wrote in a note last month. — Bloomberg

A global wallet for travelers

By Susan Claire Agbayani

YOU LOVE TRAVELING. You don’t go to just one destination at a time. You are adventurous that way: exploring (or maybe, even doing business) in different cities in different parts of the world at any given time. But then, switching currencies can be such a hassle. Once you get home to the Philippines, you get “bill shock” over the additional charges you had incurred due to multiple conversions from one currency to another.

Or, you might have called or visited your bank prior to the trip, and opened other accounts for currencies you may have needed for your trip, believing it would make it easier for you to hop from city to city or country to country.

Citi Philippines Consumer Business Head Manoj Varma notes that opening a new currency account with other banks — apart from one’s having to physically go to a branch of that bank — could take anywhere from half a day to two days.

“We make it as convenient as possible for all our clients. We don’t want to inconvenience them by requiring them to visit our branch for each transaction,” said Therese Chan, Retail Bank Director for Citi Philippines.

Naturally, Citi has a solution.

Frequent travelers to foreign destinations can now access eight currencies with one Debit Mastercard with Citibank Global Wallet, a new feature which allows customers to make purchases overseas at point-of-sale or online, and withdraw cash from Citibank ATMs without incurring additional currency conversion charges, says a press release from Citibank.

Citi Philippines Retail Bank Products Head Rene Aguirre noted during a press conference at Grand Hyatt Manila in BGC earlier this month that “The product evolved largely due to feedback from our customers. One of their common pain points when it comes to travelling abroad is usually the trouble or hassle of having to hold multiple debit cards to be able to access different currencies.

“Usually, in other banks, if you had, let’s say, five to eight currencies, you would have to have the same number of debit cards. One debit card for each currency,” said Mr. Aguirre. That would mean either a different wallet for each debit card, or a thick one containing all debit cards — which is so inconvenient — noted Mr. Varma.

“In this case, you get all eight currencies in one single debit card,” Mr. Aguirre said.

FIRST IN THE PHILIPPINE MARKET
Citi is the first bank in the Philippines to introduce this feature, said Ms. Chan. And it is linked to the Citigold and Citi Priority Debit Mastercard, the press release indicated.

If one doesn’t have a Citibank account as yet, one can just go through the usual account opening process. “Once you have an account with us, you can activate the Citibank Global Wallet via the Citi mobile app,” said Ms. Chan.

“All you need to do is download the Citi mobile app which will show you a list of all the accounts you have with us, whether they are bank or credit card accounts. At the very bottom of the screen, there is an option for you to activate the Global Wallet. With just a few clicks, you can open eight different currencies,” Ms. Chan said.

Aside from the Philippine peso one can also open US Dollar, European Union Euro, Great Britain Pound, Australian Dollar, Japanese Yen, Singaporean Dollar, and Hong Kong Dollar accounts.

“The app also allows you to choose what source account you’d like to use to fund all of these currencies. It’s at your convenience. You don’t have to create eight accounts all at once. You can just choose what’s relevant to you or what you need at that time,” Ms. Chan said.

She added that a client needs to have a Citibank Debit Mastercard to use the Global Wallet.

The credit card is also smart enough to switch to the currency one is transacting in.

In addition to this, “CitiGlobal Wallet automatically assigns a primary account where you probably would have most of your funds, so that if the currency that you need is not immediately available — but you need to draw funds — it can draw from that primary account,” Ms. Chan said.

There are two elements in a credit card transaction: a foreign exchange rate, and a transaction fee. On the average, a typical credit company will charge anywhere from 3.5 to 4% for any transaction involving foreign exchange. With the Citi Global Wallet, the client, said Mr. Aguirre, is “levied only a slight fee of half a percent.”

It also promises transparency in terms of the FX rate “so you don’t get ‘bill shock’ because you know exactly at what exchange rate you’re getting converted,” Mr. Aguirre said.

The mobile app can also handle wire transfers.

There’s a catch though. The Citi Global Wallet is exclusively for Citi Priority and CitiGold clients of Citibank, “for now.” Mr. Aguirre said that those who open a Citi Priority or CitiGold account from now until Sept. 30 get a welcome gift of up to $5,000 cash credits that can be spent around the world.

“Our clients can also enjoy free ATM withdrawals not only in Citibank ATMs but from any ATM abroad. Until Oct. 31, 2019, the international ATM fees of our CitiGold clients are on us,” said Mr. Aguirre. “Clients can enjoy rebates on withdrawal fees charged to your account when you withdraw from non-Citi ATMs abroad with your Citigold Debit Mastercard. This is available for transactions in US Dollar, Euro, Australian Dollar, Sterling Pound, Japanese Yen, Hong Kong Dollar and Singapore Dollar. Aside from this, clients can continue to enjoy free ATM withdrawals at any Citi ATM worldwide.”

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