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Gov’t looks to float sukuk bonds under Islamic finance framework

By Elijah Joseph C. Tubayan, Reporter
THE GOVERNMENT is looking at floating Shari’ah-compliant securities next year, but will still wait for the establishment of a legal framework for Islamic banking, the Department of Budget and Management (DBM) said yesterday.
Budget Secretary Benjamin E. Diokno said the development of Islamic finance in the country is part of the Duterte administration’s economic reform agenda.
“The President’s commitment to the Muslim people is not lost on us, his economic managers. One important economic issue that we are looking into is lack of access to Shari’ah-compliant financial instruments in the market,” Mr. Diokno was quoted in a statement as saying.
“This should be exciting news with Islamic finance being largely collateral-based or asset-backed,” he added.
Mr. Diokno however said that the government will first wait for the legal framework before issuing Islamic or Sukuk bonds.
Mr. Diokno said in a media briefing on Wednesday that the start of public offerings of Shari’ah-compliant securities may “take another whole year.”
The House of Representatives on Tuesday approved on second reading House bill No. 8281, or An Act Providing for the Regulation and Organization of Islamic Banks. Its counterpart bill, however, is pending at the committee level at the Senate.
The bill seeks to promote financial opportunities to the underserved Muslim population by authorizing the establishment of Islamic banks, the entry of foreign Islamic banks to operate here, and conventional banks to establish Islamic banking transactions.
Currently, the Al-Amanah Islamic Investment Bank of the Philippines is the sole lender in the Philippines that performs Shari’ah-compliant lending practices.
Islamic banking differs from commercial banking as it prohibits the charging of interest upon loans — instead, lenders earns by forging partnerships and lease-to-own deals with borrowers.
The bill allows Islamic banks to accept or create current accounts, accept savings for safekeeping, accept investment accounts, foreign currency deposits, issue letters of credit or guarantee, negotiate notes and bills of exchange, act as correspondent of banks to handle remittances, act as collection agent of payment orders, provide Shari’ah compliant financing contracts, and handle storage operations for goods or commodity financing, issue shares, among others.
Mr. Diokno said in the statement that the government is committed to “financial inclusion and the growth of our financial sector,” noting it will “continue to move this issue forward with utmost diligence and care.”
The government has been diversifying its financing sources. Earlier this year, it has raised fresh funds from successful issuances of dollar-, renminbi-, and yen-denominated bonds.
It is also set to float retail bonds this year, while another offer of securities is targeted raise money for Marawi city. It is also eyeing to tap the Euro debt market in the future.

Qatar enacts employee insurance law

OVERSEAS FILIPINO WORKERS (OFWs) in Qatar will be entitled to employment insurance under a new law passed by that country, the labor department said.
The Department of Labor an Employment (DoLE) said Thursday that Secretary Silvestre H. Bello III received a report from DoLE International Labor Affairs Bureau (ILAB) Director Alice Q. Visperas “about the issuance of the worker’s support and insurance fund law by Qatar’s highest official, Sheikh Tamim bin Hamad Al Thani.”
Law No.17 series of 2018 was issued on Oct. 29 establishing a “Worker’s Support and Insurance Fund” for private-sector and domestic workers.
Mr. Bello said: “We welcome the issuance of Law No. 17 series of 2018, by the Amir, as this will guarantee the protection of rights and ensure the welfare of Filipino domestic workers in the Arab state.”
According to DoLE’s Report to Congress for the first half, most of the 230,000 Filipino workers in Qatar are domestic workers.
The new law will pay put benefits according to decisions of dispute resolution committees, including end-of-contract benefits and repatriation costs. — Gillian M. Cortez

Final season of Game of Thrones to premiere in April

LOS ANGELES — HBO’s hit Emmy-winning drama Game of Thrones will debut its eighth and final season starting in April, the network announced in a trailer released online on Tuesday.
The video featured footage from previous seasons of the costly battles that preceded the coming showdown for control of the fictional kingdom of Westeros. The network did not reveal a specific date for the final season’s premiere, which will run for six episodes.
Game of Thrones, which has won multiple Emmy awards, is HBO’s biggest hit ever with some 30 million viewers in the United States and an army of devoted fans worldwide.
The series is based on novels by George R.R. Martin in a series called A Song of Ice and Fire.
HBO, the premium cable network owned by AT&T Inc., plans to put a large physical and social-media marketing effort behind the upcoming season. Starting Nov. 27, promotions will be spread throughout New York’s Grand Central Station, and 250,000 Game of Thrones mass transit MetroCards will be issued.
Several spin-offs of the series are in the works. HBO said in June that it had given a pilot order to a prequel that will take place thousands of years before the events of the current series. — Reuters

Pepsi Philippines swings to loss

PEPSI-COLA Products Philippines, Inc. (PCPPI) reported a net loss in the third quarter of 2018, hampered by the impacts of higher taxes following the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
In a regulatory filing, the manufacturer of bottled beverages posted a loss of P32.55 million in the July to September period, against a profit of P187.85 million in the same period a year ago. This came amid a 2% increase in gross sales to P9.07 billion.
The slight increase in gross sales is attributed to excise-tax driven price increases, despite lower volumes for the period.
PCPPI is among the food and beverage companies directly hit by the passage of TRAIN law, which imposed taxes on sugar-sweetened beverages (SSBs). The law enacted last January placed an excise rate of P6 per liter on drinks containing caloric or non-caloric sweetener and P12 per liter on drinks containing high fructose corn syrup (HFCS).
In January alone, the company paid P666 million in taxes due to TRAIN.
On a nine-month basis, PIP booked a net loss of P81.19 million, even as revenues went up by 5% to P28.07 billion. This translates to losses per share of two centavos.
“The effect of the TRAIN law on volume and cost continue to adversely impact the company’s profitability with net loss at P81 million year-to-date,” PCPPI said.
PCPPI said it will continue to invest for future growth despite the decline in volumes. It spent a total of P1.7 billion in capital expenditures during the January to September period.
Incorporated in 1989, PCPPI is the license bottler of PepsiCo, Inc. and Pepsi Lipton International Limited in the country. Beverage brands under its portfolio include Pepsi-Cola, 7Up, Mountain Dew, Mirinda, Mug, and Gatorade, among others.
The company is valued at around P5.76 billion, in terms of market cap. — Arra B. Francia

Daimler to open new R&D center in China to accelerate localization

BEIJING — German automaker Daimler AG said on Wednesday it plans to invest 1.1 billion yuan ($158.23 million) in a second research and development center in Beijing to help accelerate localization of Mercedes-Benz vehicle models in China.
Daimler said in a statement the new tech center will be situated close to Daimler’s engine and vehicle assembly hub in China’s capital and is expected to start operations in 2020.
China, the world’s biggest auto market, is Daimler’s single largest market globally. The company’s existing tech center in Beijing was established in 2014.
“We remain positive for further growth opportunities in China… and will continue with our investment here,” Hubertus Troska, Daimler’s chief for greater China operations, said in a statement. — Reuters

Moody’s affirms BPI’s credit rating, outlook

MOODY’S Investors Service has affirmed BPI’s Baa2 rating.

MOODY’S Investors Service has affirmed its investment-grade rating for Bank of the Philippine Islands (BPI), assigning a “stable” outlook, on the back of its strong capital and liquidity.
In a statement on Thursday, the global debt watcher said it has maintained BPI’s long-term local and foreign currency deposit as well as foreign currency senior unsecured debt ratings of Baa2, a notch above the minimum investment grade and at par with the country’s credit rating.
Moody’s likewise maintained its short-term local and foreign currency deposit and issuer ratings at P-2, while baseline credit assessment (BCA) stood at baa2.
Counterparty risk assessments were also affirmed at Baa1(cr)/P-2(cr).
Moody’s said its ratings are based “on its assessment that the bank will likely receive support from the Philippine government in times of need.
Moody’s said that BPI’s Baa2 deposit rating is underpinned by the bank’s BCA, which took into account the Ayala-led lender’s “consistently robust capital and liquidity,” reflecting its “disciplined and prudent” growth.
In assessing BPI’s BCA, Moody’s also considered the lender’s track record of above-industry-average risk-adjusted profitability backed by its presence in consumer and corporate segments as well as high credit risk concentration in its asset book.
“BPI’s asset quality has improved over the last few years because new non-performing loan (NPL) formation remain low, while the bank has also been able to resolve its legacy problem issue,” according to the credit rater’s statement.
BPI’s non-performing loans ratio increased slightly to 1.82% as of September from the 1.8% recorded the previous quarter.
Moody’s added that it is unlikely to raise BPI’s deposit rating ahead of the country’s rating given the high correlation of risk between the lender and the Philippines.
For the lender’s BCA to be raised, the debt watcher said BPI must consistently reduce its non-performing assets, improve profitability or have higher levels of loss-absorption capacity, apart from the upgraded sovereign rating.
BPI reported a P5.98-billion net income in the third quarter on the back of the double-digit expansion of its net interest earnings.
It has raised $600 million through a drawdown from its $2-billion medium-term note program last August. The five-year notes, which carry 4.25% coupon rate, was assigned a Baa2 rating by Moody’s.
BPI shares was at P84.50 apiece on Thursday, up P1.90 or 2.3%. — Karl Angelo N. Vidal

Xurpas losses deepen in Q3

XURPAS, Inc. saw its losses deepen in the third quarter, as its mobile consumer services business continued to slump.
In its regulatory filing, Xurpas said its net loss attributable to equity holders of the parent ballooned to P49.759 million, from a loss of P21.26 million a year ago.
The company reported its revenues from July to September fell 44% to P259.633 million, on a 43% drop in service income.
For the January to September period, Xurpas swung to an attributable net loss of P184.387 million from a net income of P81.190 the previous year.
Total revenues decreased by 48% to P869.103 million during the nine-month period. This was mainly attributed to the 80% plunge in mobile consumer services revenues to P230.64 million.
“After the VAS (Value-Added Services) system migration of Globe (Telecom, Inc.) in the first quarter 2018, the revenues from this segment dropped significantly from its previous levels in 2017. Xurpas and Globe are working together to look for new products and business models for this segment,” the company said.
Revenues from enterprise services, which accounted for 67% of total revenues, rose 21% to P582.3 million as of end-September.
The mobile content provider noted its gross expenses in the third quarter went down 29% to P332.191 million, and in the nine-month period by 25.53% to P1.088 billion. — Denise A. Valdez

It’s complicated

By Menchu Aquino Sarmiento
Movie Review
Kung Paano Siya Nawala
Directed by Joel Ruiz
FROM THE trailer and the stars, one expects just another romcom. The screenwriter-director Joel Ruiz admirably tries to go deeper. He even manages to insert his advocacy for fostering abandoned or abused pets through PAWS (Philippine Animal Welfare Society). The film’s most endearing characters are Whisky and Hammer, both rescue puppers. Kudos to JM de Guzman and Rhian Ramos for subtly yet sweetly serving as poster folks for such a worthy cause. Their characters are enhanced by the added dimension of their being animal lovers. In the film’s ambiguous ending, it is only the love between human and animal which is constant and unconditional. The protagonists also represent two industries dominated by millennials: food service and BPOs.
Lio (JM de Guzman), the call center agent, has a neurological disorder: prosopagnosia or face blindness. Fortunately, his job doesn’t require him to look at his clients, so he gets by. In the workplace, he relies on other visual physical cues like facial hair or body shape. Because this is a romcom, there is a metrosexual officemate, but with few speaking lines, unlike in the typical romcom where he would be the female protagonist’s confidant. Here Lio is close to his only sister Lexy (Barbara Ruaro) who happens to be discreetly gay.
Lio’s co-workers don’t know he’s disabled. They think he’s just socially awkward, sometimes unreliable. Such shortcomings don’t stop him from bedding a series of women, whom he studiously records on his cellphone. After Shana and he break up, he frantically scrolls through the photos of his multiple partners, but none of these intimate strangers look like Rhian Ramos. Was she all in his head? The film might have been more interesting if it had more of that kind of Matrix alternative reality thing going on. Too often, it descends into maudlin family drama.
The repetitive flashbacks of how Lio’s father walked out on their family when he was 10 are forced. After a couple of these, a scene pops up of Lio chasing after his dad, then getting hit by a car. The addition of physical trauma to his psychological woundedness seems like an afterthought. Before Shana enters his life, Lio cartoonishly runs into a ladder, carried by two men on the street, and gets another head wound. Later, he falls in her bathroom, sprains his arm, and has to wear a sling. The injury doesn’t advance the plot except to show how his mother (Agot Isidro) is so caught up in her own drama, she is hardly concerned about her son’s arm being in a sling.
Such a series of unfortunate events are not necessary to elicit sympathy for Mr. De Guzman’s character. His performance is nuanced and restrained. He is touchingly baffled yet exhilarated when freshly fallen in love with Shana — he sees her face on every woman at a club. Similarly, in a fit of jealousy, he sees her former lover’s face on every man in the photos of her customers which she has taped to the living room wall. His send up of Shana’s hip sophisticated friends is spot on. Unfortunately, the repeated inside joke about their “beauty parlor,” alluding to Shana’s maintaining the top knot hairstyle by which he recognizes her, falls flat. The only two people whose faces are indelibly imprinted in Lio’s unique brain are those of his neurotically needy mother and his lezzy little sister. Ricky Davao has a cute cameo playing himself, as a short-term suitor to Lio’s passive-aggressive, possibly depressed, mother. She never got over her husband’s abandonment.
But the film has its moments, particularly when Shana first appears. Ms. Ramos has the quirky untamed quality of Holly Golightly from Breakfast at Tiffany’s or the Melanie Griffith character in Jonathan Demme’s cult classic Wild Thing. In the latter, the Lulu character temporarily sets aside her black vinyl hot pants and dominatrix bustier for a virginal white party dress, as she role-plays the girl-next-door during her high school reunion. Here Shana puts away her drab barista apron to get all skintight and slinky at a decadent penthouse party hosted by the chic yet skeezy Mommy Trish. She owns the upscale but unfurnished house which Shana lives in for free. The barista job is just a cover for Shana’s true calling: high society drug dealing. She has a dead sister and an estranged, judgmental family as well, but the weight of her emotional baggage is barely felt. Channeling Clementine in Eternal Sunshine of the Spotless Mind, she also drinks too much. But being the good businesswoman, she doesn’t touch her merchandise so she’s never shown tooting, toking, or even humping, keeping the film PG.
MTRCB Rating: PG

Toyota Philippines recalls 65 Prius units

TOYOTA Motor Philippines Corp. (TMP) has ordered a recall of 65 units of certain Prius models for failing to enter a failsafe mode in “rare” driving scenarios.
In an Oct. 18 dated letter addressed to Ruth B. Castelo, the Department of Trade and Industry’s Undersecretary for its Consumer Protection Group, TMP First Vice-President Rommel R. Gutierrez said the concerned units were produced between April 16, 2009 to April 3, 2013.
“The involved vehicles were designed to enter a failsafe driving mode in response to certain hybrid system faults. Toyota has found that in rare situations, the vehicle may not enter a failsafe driving mode as intended,” read the letter posted on the DTI’s website.
“While power steering and braking remains operational, a vehicle stall while driving at higher speeds could increase the risk of a crash,” it added.
TMP noted that the reprogramming is already being prepared and will immediately notify concerned customers via an official letter to bring their vehicles at Toyota dealers.
The reprogramming campaign will be of no cost to the car owner.
TMP referred to the campaign as a “Special Service Campaign for the Power Management ECU Reprogramming of Certain Prius Models,” adding this “provide[s] a remedy” to the similar campaign announced in February 2014. — Janina C. Lim

Starbucks planning to lay off 350 global corporate employees

STARBUCKS CORP is laying off about 350 global corporate employees, Chief Executive Officer Kevin Johnson said on Tuesday in a memo to employees, seen by Reuters.
The elimination of the non-store employees is part of a restructuring plan that Johnson unveiled in September in an attempt to make the company nimble enough to tackle rivals in a fiercely competitive US coffee market.
“Every single decision was made after very careful consideration… And while incredibly difficult, they came as a result of work that has been eliminated, de prioritized or shifting ways of working within the company,” Johnson wrote in the memo.
The layoffs would primarily affect employees at its Seattle Support Center, the memo said. The Wall Street Journal first reported the lay offs. — Reuters

Musical light tunnel signals Christmas in Pasig

By Michelle Anne P. Soliman
Reporter
IT IS the time of the year again when friends and family can take photos, go for a drive, do their holiday shopping, or go on a food trip along a rainbow-colored tunnel filled with music.
For its second year, Ortigas & Co. has opened the 2018 Stevie Award-winning Christmas Street Light Musical Tunnel at the Frontera Drive at Ortigas East (formerly Frontera Verde) in Pasig City.
“Last year, Ortigas & Co. needed a project that will creatively announce its Frontera Verde’s transition to Ortigas East, and at the same time bringing in more people into the existing establishments,” Jaime E. Ysmael, President and CEO of Ortigas and Co., told BusinessWorld in an e-mail, about how the project came about.
According to Mr. Ysmael, this year’s musical tunnel has over 4,000 pixels of light — with each pixel composed of three bulbs in red, blue, and green, and these will flash — or dance — in time with music. Last year there were less than 3,000 pixels in the tunnel.
musical light tunnel 2
According to a press release, the tunnel stretches 1.4 kilometers or “the length of 28 Olympic swimming pools.”
The musical tunnel will play English and Filipino Christmas medleys every 30 minutes from 6 to 10 p.m. nightly until Jan. 6, 2019.
“Christmas time is a holiday most celebrated by Filipino families and we really wanted to add to their festivities by putting up installations such as this Street Light Musical Tunnel. One of our goals is to make Pasig a staple holiday destination for Filipinos as well as tourists who would want to see a spectacle in the metro,” Mr. Ysmael wrote.
Aside from the tunnel, there are other activities in the area this holiday season. A StrEAT food market will be open until Jan. 6, 2019. Meet & Greet sessions with Santa for children will be held on all Saturdays of December at the Fashion and Furniture Village from 2 to 5 p.m. Fireworks will light up the Ortigas skyline every Saturday at 7 p.m. And the traditional Simbang Gabi will be held at the Food Village from Dec. 15 to 23 at 6 p.m.

BSP tweaks peso debt pricing rules for new valuations

By Melissa Luz T. Lopez, Senior Reporter
THE CENTRAL BANK has tightened rules on the pricing of peso debt securities, taking into account new valuations for these papers.
In a statement, the Bangko Sentral ng Pilipinas (BSP) said it has tweaked rules on marking-to-market of financial instruments, to keep up with the change in pricing peso-denominated government securities.
This comes after the Bankers Association of the Philippines shifted away from the Philippine Dealing System Treasury Reference Rates to the PHP Bloomberg Valuation Service (BVAL) Reference Rates in as benchmark for Treasury yields.
Starting this month, market rates for debt papers are based on BVAL.
“The new policy aims to ensure consistency of fair value measurements and comparability of financial reports in the financial system,” the BSP said in a statement sent late Wednesday.
“The Bangko Sentral also expects BSP-supervised financial institutions to have adequate governance structures and control processes to ensure that valuations are prudent and reliable for risk management and financial reporting purposes.”
The change in valuations seek to ensure consistency in pricing instruments by acknowledging the BVAL, which has been recognized as the valuation methodology by the Securities and Exchange Commission.
The central bank said the change in the rules would also allow the regulator to align with international accounting standards and will adopt the provisions of Philippine Financial Reporting Standards (PFRS) 13 on fair value measurement.
“The issuance of enhanced rules on valuation is part of the capital markets road map aimed at promoting price transparency and confidence in the market, encouraging active market trading, and providing basis for the establishment of reliable and market-based benchmarks,” the BSP added.
The central bank also pointed out that the change in valuation rules is part of reforms aimed at deepening the local capital markets, particularly to promote price transparency and market confidence as well as to encourage market trading.
The reform also provides basis for the creating “reliable and market-based” benchmarks, the central bank noted.