BDO earnings climb in Q3

October 30, 2018 | 12:02 am

BDO Unibank, Inc. booked a higher net income in the third quarter.

BDO UNIBANK, Inc. saw its earnings climb in the third quarter on the back of the robust expansion of its key businesses.
In a regulatory filing on Monday, the Sy-led BDO said it booked a net profit of P8.4 billion in the July-September period, 18.6% higher than the P7.08 billion logged a year ago.
This brought BDO’s income in the nine months ended September to P21.5 billion, up 6% from the P20.4 billion in a comparable year-ago period.
Excluding BDO Life, which was impacted by mark to market on its investment portfolio brought by Philippine Financial Reporting Standards 9, as well as its ongoing investment in the micro, small and medium enterprise lending business, BDO said its year-to-date income would have registered a 13% growth from a year ago.
The bank attributed the earnings growth to the “solid expansion from its core lending and deposit-taking, life insurance and fee-based businesses.”
BDO’s net interest income stood at P71.5 billion in the first nine months of the year, higher by 20% from a year ago.
Its lending business grew 17% to almost P2 trillion at end-September, driven by the middle market and consumer segments.
Deposits stood at P2.3 trillion, up 12% from a year ago, with low-cost current account, savings account (CASA) ratio stable at 70%.
The bank’s net interest margin also increased year-on-year and quarter-on-quarter due to “upward loan re-pricing and managed funding costs given a large low-cost CASA base.”
On the other hand, non-interest income grew to P35.8 billion in the nine months ended September, supported by insurance premiums and fee-based earnings, which grew by 21% and 7% respectively.
However, these were offset by the 71% decline in trading and foreign exchange gains brought by the continuing volatility in the capital markets.
Overall, gross operating income grew to P107.3 billion in the third quarter, higher by 13%.
Likewise, operating expenses grew 13% to P71.7 billion in the nine months ending September, as business and branch expansion were sustained. The higher documentary stamp tax on time deposits, which doubled due to the government’s tax reform program implemented this year.
Volume-related operating expenses, comprising 41% of the total operating expenses, grew 14%.
The bank set aside P5.5 billion in provisions, even as its gross non-performing loan (NPL) ratio dropped to 1.1% in the third quarter versus 1.2% in the previous quarter as well as the 1.3% a year ago.
NPL cover likewise increased to 175% from the 158% booked in the second quarter and 136% last year.
BDO’s total capital increased to P311.8 billion, with both its common equity Tier 1 and capital adequacy ratios well above the minimum regulatory requirements at 12.3% and 13.9%, respectively.
“With the positive performance in the first nine months this year, the bank believes that the 2018 full-year earnings guidance of P31 billion remains within reach given the seasonally stronger fourth quarter, combined with encouraging results from the bank’s strategic initiatives expanding across underserved segments and growth areas,” the bank said.
Last month, BDO, the country’s biggest bank in asset terms, has established a peso-denominated bond program of up to P100 billion, even as it said it has no definite timeline yet for an issuance.
BDO shares closed at P118.30 apiece on Monday, up P2.30 or 1.98%. — Karl Angelo N. Vidal

Developers urged to use renewable energy in projects

October 30, 2018 | 12:02 am

REAL estate developers should adopt sustainable practices in their projects, including the use of renewable energy, in response to increasing demand from home buyers.
Imperial Homes Corp. (IHC) President and CEO Emma M. Imperial said there is strong demand for housing that incorporates renewable energy. The company has incorporated solar panels in housing units at its Via Verde project in Sto. Tomas, Batangas, allowing residents access to renewable energy.
“The people living there are able to earn income from the solar electricity because now they can do it because it’s cheaper,” Ms. Imperial told reporters on the sidelines of a Lamudi media roundtable last Oct. 18.
She noted some residents even use the “extra energy” in their homes for side businesses selling meals to workers at nearby factories.
“It empowers the housewives… They start learning how to use the solar (power) by making businesses. They make… home-cooked meals and they deliver it to factories. They start even making iced candies. They can make P3,000 a month because of iced candies. For home cooked meals, some of them earn as much as P6,000 to P9,000 a month.. and they are only paying, for the houses, P7,500 a month, so they make money,” Ms. Imperial said.
With the solar panels, residents also save on their electricity bills. Ms. Imperial noted residents pay between P11 to P100 a month with 1.2-kilowatts of solar energy, which is enough to power light bulbs, a washing machine, an iron, and three electric fans.
Recently, Ms. Imperial noted residents using solar power are also installing air conditioners in their homes.
“The know-how is now being experienced by them and they are even better than us now… It’s more discovery as we build this solar-powered community, so I tell everyone, it provides inclusive growth.. This is the thing that provides inclusive growth to the low-cost housing community,” she said. — V.M.P. Galang

ATI secures new ISO certification

October 30, 2018 | 12:02 am

ASIAN Terminals, Inc. (ATI) on Monday said it is now ISO 45001:2018 certified, making it the first international port operator in the Philippines to receive the top-tier certification in occupational health and safety.
It was also recertified as compliant in areas of Environment Management (ISO 14001:2005), Quality Management (ISO 9001:2015) and Supply Chain Security Management (ISO 28000:2007).
“We are very pleased to be the first international terminal operator in the Philippines to have secured the ISO 45001:2018 and be recertified for our Integrated Management System. These achievements further attest that ATI’s processes are at par with world-best practices,” ATI executive vice-president William Khoury said in the statement.
The certifications were made by independent auditing firm TUV Rheinland Philippines.
“As a responsible port organization, it is our conscious commitment to implement the highest standards on health, safety, quality, security and environment, which collectively contribute to safer, better and more efficient port services for the Philippine supply chain,” Mr. Khoury added.
The certifications are developed by the International Organization for Standardization (ISO), an organization that forms international standards often used as metric for a company’s products, services or systems. These are conferred by third party certification bodies.
During the first half, ATI posted an 18.22% increase in its attributable net income to P1.4 billion on the back of record-high volumes. — Denise A. Valdez

Jackson’s ‘Bad’ tour jacket up for auction

October 30, 2018 | 12:01 am

LOS ANGELES — Michael Jackson’s black “Bad” jacket that the singer wore on his first solo tour is going up for auction in November and could fetch up to $100,000.
Julien’s Auctions said on Friday that the jacket, which Jackson signed on the back with a silver permanent marker, was worn throughout the singer’s “Bad” world concert tour from 1987-89.
The jacket, with multiple zippers, straps and buckles, is one of the late singer’s most iconic costume pieces alongside his red and black leather “Thriller” music video jacket that sold for $1.8 million at auction in 2011.
Jackson has become one of the most collectible celebrities since his sudden death in 2009 in Los Angeles at age 50 from an accidental overdose of an anesthetic he was using as a sleep aid.
The “Bad” jacket is being sold by Texas businessman and philanthropist Milton Verret along with almost 100 other items from his large rock ‘n roll memorabilia collection.
Verret also owns the “Thriller” jacket, which he takes around children’s hospitals, but is not putting that item up for auction.
The Nov. 10 auction at the Hard Rock Café in Times Square, New York, will also feature electric guitars played by Bob Dylan, Paul McCartney, Eric Clapton, and U2 band members The Edge and Bono. The various guitars are expected to fetch between $20,000 — $50,000 apiece.
Part of the auction proceeds will go to the MusicCares charity arm of Grammy Award organizers the Recording Academy that provides health and other services to musicians. — Reuters

Designer lighting brand Faro launched in Philippines

October 30, 2018 | 12:01 am

By Vincent Mariel P. Galang
LANDLITE Philippines Corporation (LPC) recently introduced Faro Barcelona, a Spanish brand for lamps and ceiling fans, in the Philippine market.
The LPC recently opened the showroom for Faro Barcelona products at Lux Decor in Park West Residences, Bonifacio Global City.
Ms. Jocelyn Johanna S. Li, general manager of LPC, told BusinessWorld, the company decided to carry Faro Barcelona to introduce a designer lighting brand in the local market.
The Faro Barcelona offers a wide array of lighting products, such as Niko (a wall lamp with wireless charging), Lula (a designer lamp), Jellyfish (an indoor floor lamp), Retro (a set of designer lamps), Hoshi (a table lamp), and Mine (a lamp with a wooden structure). Prices range from P2,000 to P20,000.
Faro Barcelona also has ceiling fans, which have a winter/summer function.
“You only have to see the showroom that we have… .It’s one of the most beautiful showrooms that we have all around the world. I think they know how to show what we want to show as a brand,” Jordi Prat, junior sales representative at Faro Barcelona, told BusinessWorld.
LPC is looking to take advantage of the new condominiums and hotels, as it targets both residential and commercial customers for Faro Barcelona products.
“It is a very good opportunity for us to enter the market. There are a lot of condominiums in here, and a lot of these condominiums they would like more functional lighting. Actually the price of Faro is not that expensive compared to the really branded ones in Europe. With the same functionality and design, it perfect for the middle market… And hotels because there are a lot of hotels being built here in the Philippines. Faro has a series of products that are for hotels,” Ms. Li said.
Faro Barcelona products cater to the mid to high-end markets, which are keen on “fashionable and decorative” lighting products at a reasonable price.
“They are very fashionable and usable. Not just aesthetically beautiful, but it’s usable… Aside from lighting, their functionality. They are more into a day-to-day stuff that you will need in a house,” said Ms. Li.
Asked about opening other showrooms in the future, Ms. Li said: “We hope so. If the market demand arises then we will open more showrooms by then.”

PSBank posts higher profit

October 30, 2018 | 12:01 am

PHILIPPINE Savings Bank (PSBank) saw its net income grow to P2.03 billion as of September, supported by sustained loan growth and higher fee-based revenues.
In a disclosure published yesterday, the thrift lender said its bottom line rose 8.1% from the P1.878 billion it made during the comparable nine-month period in 2017, driven by the strong growth of its core businesses.
Net interest income went up by 5.6% year-on-year to reach P8.7 billion. This came on the back of an 8.1% increase in the bank’s loan portfolio now worth P153.9 billion.
The Ty-led lender’s deposit base likewise expanded by 7.2% to hit P197.7 billion, according to the regulatory filing to the Philippine Stock Exchange. As a result, PSBank’s total assets amounted to P231.091 billion.
This led to a return on equity ratio of 11.7%, while return on assets stood at 1.2%.
According to the bank’s quarterly report, PSBank booked P677.089 million net profit from July-September, three percent lower than the P698.368 million it made during the same period last year.
Gross revenues hit P4.863 billion in the third quarter, up by 6.1% from the P4.568 billion raked in a year ago. These gains were offset by higher operating expenses worth P4.114 billion, nearly a tenth higher than the P3.757 billion costs incurred previously.
Still, the bank posted a capital adequacy ratio at 13.8%, which is well above the 10% requirement set by the Bangko Sentral ng Pilipinas.
The bank operates 250 branches and over 580 automated teller machines nationwide.
In a statement, PSBank President Jose Vicente L. Alde attributed the robust credit growth to the lender’s push towards innovation, which they said allowed them to “provide excellent customer service” and “maintain growth despite industry challenges.”
The listed lender said they were first to offer a one-day credit decision for property loans to purchase brand-new homes or condominium units from accredited developers.
PSBank is the thrift lending arm of the Metropolitan Bank & Trust Co. Earlier this month, the bank announced its plan to raise roughly P8 billion via a stock rights offering in the first three months of 2019.
Mr. Alde said the fresh capital will be used to “support the projected growth of the bank,” particularly the consumer loans segment.
This follows the plan to offer P10 billion worth of medium-term notes and long-term negotiable certificates of time deposits worth P5.08 billion issued in August.
PSBank shares closed at P78.35 each yesterday, up P7.05 or 9.89% from P71.30 last Friday. — Melissa Luz T. Lopez

PhilRealty 9-month earnings soar despite Q3 drop

October 30, 2018 | 12:01 am

EARNINGS of Philippine Realty & Holdings Corp. (RLT) soared in the first nine months of the year, even as profits slowed during the third quarter.
In a regulatory filing, the property firm said net income attributable to the parent dropped by 78% to P13.83 million in the July to September period, slipping from the P64.63 million posted in the same period a year ago.
Revenues for the quarter also went down by 12.24% to P379.88 million.
Despite the overall drop in the company’s financials for the third quarter, attributable profit for the nine-month period climbed by 1,664% to P45.49 million. The company’s revenues also surged to P1 billion, 55% higher than the P647.37 million recorded in the same period a year ago.
The company attributed the higher real estate sales — which grew by 56% to P895.77 million for the first three quarters — to its luxury residential properties in Metro Manila, namely SkyVillas and SkyLine Towers in Quezon City and the Icon Plaza in Bonifacio Global City.
“The increase in sales in 2018 is due to the aggressive sales and market efforts of the parent company,” RLT said in a filing.
Rental income also expanded by 220%, rising to P68.1 million during the nine-month period, due to additional leasing agreements entered into by the company.
“We are very hopeful that the awareness and the momentum generated by our sales group will spill over to the fourth quarter,” RLT Chief Financial Officer and Treasurer Edmundo C. Medrano said in a statement.
With the positive reception for its products, RLT said it is preparing new projects in the pipeline.
“We are happy with how our basic products are selling at this point. However, we are bound to surprise the market with the exciting projects that we will be doing in the next few months and years,” RLT President and Chief Executive Officer Alfredo S. del Rosario, Jr. said in a statement.
Shares in RLT rose by 4.88% or two centavos to close at 43 centavos each at the stock exchange on Monday. — Arra B. Francia

How PSEi member stocks performed — October 29, 2018

October 30, 2018 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Monday, October 29, 2018.

Philippine Stock Exchange’s most active stocks by value turnover — October 29, 2018

Which regions saw the biggest growth in labor productivity?

October 30, 2018 | 12:00 am

PHL, China to sign at least five agreements during Xi Jinping’s visit

October 29, 2018 | 10:14 pm

DAVAO CITY — The Philippines’ economic managers met on Monday with a delegation from top trading partner China, led by State Councilor and Foreign Minister Wang Yi, to prepare the groundwork for at least five deals that are expected to be signed during President Xi Jinping’s November visit.
“We would like to take this opportunity to discuss the status of the cooperation agreements and documents to be executed during the visit of President Xi Jinping,” Finance Secretary Carlos Dominguez III, who led the Philippine party, said in his opening statement prior to the closed-door meeting held at the Marco Polo Hotel in Davao City.
In a statement after the meeting, Mr. Dominguez described it as a “productive dialogue” that focused on the status of agreements, particularly those relating to Chinese funding support for the administration’s Build, Build, Build program.
Mr. Dominguez said the agreements planned for signing are all “on track.”
Several members of President Rodrigo R. Duterte’s Cabinet were present, including Budget and Management Secretary Benjamin E. Diokno, Transportation Secretary Arthur P. Tugade, Public Works and Highways Secretary Mark A. Villar, Bases Conversion and Development Authority President and Chief Executive Officer Vivencio B. Dizon, and Assistant Secretary Roderick M. Planta on behalf of Socioeconomic Planning Secretary Ernesto M. Pernia. Ambassador to China Jose Santiago L. Sta. Romana was also present.
“Both our governments expressed full commitment to our shared goals of implementing the important consensus reached between our leaders, as well as bringing our bilateral relations to a higher level through enhanced cooperation in the areas of infrastructure, trade, investment and people-to-people exchanges,” Mr. Dominguez said, referring to the high-level bilateral meetings held in Beijing in August.
“We greatly appreciate the Chinese Government’s assistance in translating this into concrete actions,” he added.
Mr. Dominguez said an Exchange of Notes is also being drafted for financial assistance through the China International Development Cooperation Agency (CIDCA).
During the August meeting, Mr. Pernia presented several projects for CIDCA financing, including future phases of the Mindanao Railway Project; Ipo Dam No. 3 in Norzagaray, Bulacan; the Port Irene Development-Navigational Channel in Cagayan; the Cabadbaran Small Reservoir Irrigation Project in Agusan del Norte; the River Basin and Watershed Management Project in Camarines Sur; the Luzon-Samar (Matnog-Allen) Bridge; the Dinagat-Leyte-Surigao Link Bridge; the Camarines Sur-Catanduanes Friendship Bridge; development of the Luzon Eastern Seaboard; the Bohol-Leyte Link Bridge; the Cebu-Bohol Link Bridge and the Negros-Cebu Link Bridge.
Mr. Wang, for his part, said “economic cooperation” is an integral part of bilateral relations.
Improving economic cooperation, he said, is important in “realizing the long-term stable friendship between our two countries.”
Wang cited the significant growth of two-way trade between the two countries as well as the rise of Chinese investment in the Philippines, which, he said increased “by more than 500%” in the first six months of 2018.
Data from the Philippine Statistics Authority show China at the top spot among the country’s trading partners in the first half of 2018, with $14.08 billion , accounting for 16.6% of the period’s total trade.
This excludes Hong Kong, considered a Special Administrative Region of China, which ranked 5^th with a trade value of $6.29 billion.
Mr. Dominguez said “China, including Taiwan, Hong Kong and Macau, is now the Philippines’ biggest trading partner with total trade amounting to $44.8 billion in 2017 and $33.5 billion from January to August this year.”
Meanwhile, three bilateral documents were signed after Monday’s meeting. These are: the Exchange of Letters for the Feasibility Study of the Davao River Bridge (Bucana) Project; the 50 million yuan grant for the Supply of Law Enforcement-Related Materials/ Equipment to the Philippines; and a $1 million grant for the victims of typhoon Vinta (international name: Tembin) in 2017. — Marifi S. Jara

Palace backs Dominguez but he is ‘driving his own TRAIN’

October 29, 2018 | 10:13 pm

PRESIDENT Rodrigo R. Duterte on Sunday reiterated his support for Finance Secretary Carlos G. Dominguez III, while also suggesting that Mr. Dominguez was ultimately responsible for the effects of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
“I pray that we will improve our situation with Sonny Dominguez there driving his own train,” Mr. Duterte said in a televised speech during the birthday and thanksgiving party of former foreign affairs secretary Alan Peter S. Cayetano in Davao City on Sunday night.
He added that many are “crying” about the tax reform law but that he stood by Mr. Dominguez, a friend from childhood.
“(A)ng train mo [Mr. Dominguez], maraming umiiyak,” Mr. Duterte said. “I believe in you. (I have said that) I stand by him, I have known him since childhood, he is a very good friend and he can do wonders for the country.”
In a speech last week, Mr. Duterte noted that rising world oil prices are mainly the reason for high inflation.
“We do not have the buffer (for oil price volatility). We do not have a reserve that we can (tap). We do not have that luxury. And that is why inflation is very high,” Mr. Duterte said.
The President said the main factor driving world oil prices is the attempt by the United States to isolate Iran economically and diplomatically.
“You can crucify me if you want. Behead me if you want in public. I cannot do anything about the oil. And it’s getting worse because Iran is about again to make a surprise move simply because [United States President Donald J.] Trump does not like Iran,” he said.
He suggested that it is not the Philippines’ fight but it is nevertheless feeling the impact — “Damay tayo.”
He expressed the hope that an oil exploration agreement with an Israeli company bears fruit “even beyond my term” noting that a successful discovery would give Filipinos “a break.”
In a statement on Sunday, Presidential Spokesperson Salvador S. Panelo said: “For the time being, the government has decisively acted to tame inflation. Our people are beginning to feel the effects with the price of rice starting to go down, and just yesterday, the Suggested Retail Price (SRP) program and prescribed labelling for milled rice have been launched by the Department of Agriculture and the Department of Trade and Industry to protect consumers from profiteers.” — Arjay L. Balinbin

ALU-TUCP says NCR wage positions far apart

October 29, 2018 | 10:13 pm

THE leading mainstream labor organization said negotiating positions on the minimum wage increase in Metro Manila remain far apart ahead of the wage board’s upcoming decision for the region.
In a phone interview with BusinessWorld, Associated Labor Unions — Trade Union Congress of the Philippines (ALU-TUCP) Spokesperson Alan A. Tanjusay said that the biggest labor coalition in the country is skeptical that the Regional Tripartite Wages and Productivity Board for the National Capital Region (RTWPB-NCR) will grant a wage adjustment that will satisfy workers.
ALU-TUCP sought a wage hike of P334, based on its estimate of a living wage for a worker in the region beyond the current pay scale of P512 a day.
Mr. Tanjusay added that ALU-TUCP upgraded its initial counter-offer of P80, as reported earlier this month, to P100 when the NCR wage board had a private meeting on Friday after a public hearing. He described the new P100 offer as “take it or leave it.”
“Anything less than P100, the ALU-TUCP will boycott the proceedings.”
Employers Confederation of the Philippines (ECoP) Acting President Sergio R. Ortiz-Luis, Jr. said that his organization will honor any “reasonable” outcome of the wage decision.
“We will respect and comply with their decision given that they make a reasonable one,” he said in a phone interview with BusinessWorld.
ECoP was present during the management consultation and public hearing held by the NCR wage board last week. The employers have been warning that an excessive increase in the minimum wage will have adverse effects not only on business but also employment.
Last week, ECoP Governor Antonio H. Abad, Jr. called on the wage board during its meeting with management to not use inflation as the only basis for raising wages because inflation fluctuates while wages are not subject to reduction.
Mr. Ortiz-Luis said he expects the RTWPB-NCR to make a rational decision.
“I believe the board won’t decide on political and emotional driven motives,” he said.
On Sunday, Presidential Spokesperson Salvador S. Panelo said that he also believes the NCR wage board will make a reasonable decision.
Mr. Tanjusay noted that Mr. Panelo failed to spell out what he considers reasonable.
“Mr. Panelo did not define, did not qualify what an acceptable wage order is,” the ALU-TUCP spokesperson said.
“We know that the Board is dominated by government and the employers and they always connive to outvote the labor representatives and members of the board to (arrive at) a meager wage increase. It is in the interest of businesses to keep wages to the barest minimum regardless of workers’ worsening condition,” Mr. Tanjusay said in a message to BusinessWorld on Monday. — Gillian M. Cortez