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Intel and MediaTek partner on laptops with 5G modems for 2021

TAIWAN’S MediaTek Inc. has announced a partnership with US chipmaking giant Intel Corp. to supply future Intel-powered PCs with fifth-generation networking modems from the start of 2021.

The agreement marks a small step toward a big change in the way computing is done, as 5G promises to revolutionize both the speed and availability of cellular networks, creating dense coverage with bandwidth comparable to current Wi-Fi standards and beyond. Mobile computers stand to benefit greatly from this upgrade, and US PC vendors Dell Inc. and HP Inc. have both been named by MediaTek among the likely first customers for the 5G-enabled, Intel-powered laptops that are to come.

In July, Intel agreed to sell its cellular modem business to Apple Inc. for $1 billion, which the Cupertino, California company will use to speed up and improve design efforts around a 5G chip for its 2020 iPhones. Without its own in-house development, Intel has to license 5G technology in and MediaTek has been deemed the best option, sidestepping more direct rival Qualcomm Inc. and the sanction-laden Huawei Technologies Co.

As the dominant provider of processors for desktop and notebook computers, Intel is in a position where it can dictate when the broad majority of laptop PCs embrace the addition of 5G connectivity, and the timeline set out from this MediaTek partnership suggests that it’s a little over a year away. — Bloomberg

How good is Château Lafite Rothschild’s Chinese wine, Long Dai?

By Elin McCoy, Bloomberg

WHAT’S THE ultimate status wine in China? Famed Bordeaux first growth Château Lafite Rothschild. That’s why the company’s first wine made in China is such a big, big deal.

The cabernet blend labeled Long Dai debuted at the company’s winery in Qiu Shan Valley, in China’s northeastern Shandong Peninsula, in September. It won’t arrive in the US until 2020, and only 100 cases will be imported. They’ll be available at a few top shops and restaurants, but the majority of the 2,500-case inaugural release will be sold in China.

So when Lafite Chief Executive Officer Jean-Guillaume Prats brought a sneak preview bottle to New York for me to try, my taste buds were primed.

THE TASTE
I won’t keep you in suspense. The quality of this first vintage of Long Dai, 2017, is impressive. It doesn’t taste like any other luxury Chinese red I’ve tried. Most of them have been big, plush, ripely fruity reds that seem almost sweet. Long Dai, by contrast, is very dry and subtle. It’s refined and restrained, echoing the polished, elegant style of Lafite, though it’s not at the level of a first growth.

The mineral notes and freshness of this three-grape blend (cabernet sauvignon, cabernet franc, and marselan) reminded me of a bright, stylish cool-climate cabernet from somewhere like Australia’s Margaret River, or maybe a delicious fourth or fifth growth Bordeaux. Marselan, in case you’re wondering, is a French cross between cabernet sauvignon and grenache that’s planted around the globe and highly popular in China. Lafite Chairman Saskia de Rothschild calls it “a grape that has an incredible capacity of adaptation to any terroir.”

Aged in barrels made at Lafite’s own cooperage in France, Long Dai has sophisticated, nuanced aromas and lightly spicy, savory fruit flavors that almost seem juicy. It perfectly balances fruit, acidity, tannin, and alcohol, and has a long, silky texture. The wine is surprisingly appealing even at this young age, though if you do, Prats advises putting it in a decanter for an hour before serving.

The name Long Dai, taken from the ancient Dai Temple at the foot of Mount Tai, a sacred nearby peak, was chosen in tribute to local history.

Inevitably the wine will be compared with the Chinese red LVMH launched several years ago, the rich, powerful, sumptuous Ao Yun (whose name means “flying above the clouds”). The two wines don’t taste much alike, as you might expect, considering the wineries are more than 3,000 kilometers apart and the vineyards totally different in altitude and terroir.

Both are among the very best Chinese wines I’ve tasted, though they’re completely different in style. Ao Yun, a blend of mostly cabernet sauvignon with about 10% cabernet franc, is bolder, more dramatic, and intense, with tons of tannin. It has more richness and impact — more like a Napa cabernet. Long Dai has more elegance, balance and subtlety, and a more quiet power. The marselan in the blend softens the tannins and adds a spicy note and aromas of violets. As the vines get older, there will be more complexity.

THE BACK STORY
I first heard rumors about Lafite’s plan to make wine in China more than a decade ago. Over lunch recently at New York’s Gabriel Kreuther, Prats filled in the timeline from idea in 2008 to the release of the first bottle this year. Lafite is no newcomer to making wine outside Bordeaux. Its parent company, Domaines de Barons de Rothschild (Lafite), has projects in France’s Languedoc, Argentina, and Chile. So in some ways it was no surprise it would want to capitalize on the name in the fast-growing wine market of China, where the brand remains a shining star. In 2009, DBR started exploring a 400-hectare zone in the hilly land in Penglai, near the coast in Shandong province. At first the company partnered with CITIC, the Chinese government investment agency, but since 2016 it’s been going it alone. (CITIC, Prats says, decided to concentrate on its solely owned core businesses and sold its 30% share to DBR, but its construction arm built the winery.)

Prats already had plenty of experience making wine in China before joining DBR in 2018. As head of Estates and Wines for Moët Hennessy from 2013, he oversaw LVMH’s Ao Yun project in Shangri-La, in the remote mountains close to Tibet, whose first vintage appeared in 2016. At the same time, he established Moët Hennessy’s Domaine Chandon sparkling wine facility in Ningxia.

Why Shandong for the Lafite experiment? “In every wine region there are challenges,” Prats explains. “In Ningxia, the cold from the Gobi desert means you have to bury the vines in winter. In Shangri-La, it’s logistics, getting skilled people and equipment to a remote mountain location. In maritime Shandong, summer rain and humidity are a problem, but it has a long tradition of viticulture.” Luckily, global warming is making the region drier and warmer.

The team dug nearly 500 soil pits to see which part of the property would be best for vines. They settled on 30 hectares with thin soil over granite bedrock in a spot where cool coastal breezes could modify that humidity. In 2011 they planted vines on 360 terraces. But it wasn’t until the 2017 vintage that they were happy with the wine. The company expects to double its 2,500-case output in four or five years.

THE LAFITE CONNECTION
What also took time, Prats says, was obtaining “the right protections.” That included registering the brand and working on ways to prevent counterfeits, a constant problem for Lafite in China. Several years ago, a senior Chinese government official estimated that half the Lafite in the country was fake, much of it blended and bottled on boats moored in international waters off the Chinese coast.

That’s why all the Long Dai wine from rejected early vintages was sent to be distilled into spirits, according to Prats. Tight secrecy surrounded the name and label, which looks similar in typeface and design to Château Lafite’s. Even the staff at the winery didn’t know the name until last July. The bottle carries several counterfeit protections, including NFC tracking built into the capsule, a label that can’t be removed, and the DBR five-arrow motif embossed in the glass.

De Rothschild and Prats clearly have serious ambitions for Long Dai, which already stands out as more interesting than the other reds in the Lafite portfolio made outside Bordeaux. Prats lays out Lafite’s goal in China: to create a great estate whose wines will be an endorsement of the country’s wine-producing potential. “That Lafite is there bestows a powerful imprimatur,” he says. “We have the privilege to help educate and grow the Chinese market for domestic wines.”

China has emerged as an up-and-coming wine giant in the past two decades, though consumers still regard the growing number of local wines as mediocre. But the domestic wine industry — and Lafite — want to get them excited about the country’s wines. The potential is huge: According to IWSR data, China is the world’s second-largest wine market by value and fifth-largest by volume.

For now, the Lafite connection is key. Tailor-made for domestic tourism, Domaine de Long Dai incorporates a replica of Château Lafite’s circular barrel cellar, though the pillars are painted bright red. Copies of family portraits hang in the great hall that will be used for entertaining. The winery will be open to visitors by appointment at the end of the year.

“We always have Lafite at the back of our minds,” says de Rothschild, who succeeded her father as Chairman of Domaines de Rothschild (Lafite) last year. “We were looking for a similar subtlety and complexity from the birth of Long Dai.” But this, she adds, is just the beginning. As the bottle’s back label says, “Welcome to Chapter One.”

AUB books higher income

Asia United Bank Corp. (AUB)
ASIA UNITED Bank Corp. posted higher earnings in the third quarter. — BW FILE PHOTO

ASIA UNITED BANK Corp. (AUB) saw its net profit increase in the third quarter, thanks to interest income from loans and receivables.

In a statement on Wednesday, the lender said its net income climbed 66% year on year to P3.8 billion in the third quarter.

“Boosting its bottom line was the 38% growth in interest income from loans and receivables,” the bank’s statement said.

The bank’s net interest income expanded by 24% to P6.9 billion in the July to September period from P5.6 billion a year ago. This resulted in a 4.3% net interest margin, up from the 4.2% logged in the same comparable period of 2018.

Meanwhile, AUB’s gross interest income increased by 39% to P10.4 billion as of end-September from P7.5 billion a year ago.

“This growth is a result of the successful execution of our strategy from the beginning of the year, which remains a testament of the trust and confidence that our customers give us,” AUB President Manuel A. Gomez said in a statement.

AUB raised P7 billion through its maiden bond offering in October, going beyond its initial target of P3 billion.

The three-year papers carry a coupon rate of 4.625% per annum and is the first tranche of the bank’s P30-billion bond program announced in August.

AUB’s shares closed unchanged at P53.70 apiece on Wednesday. — LWTN

Globe names new information chief

GLOBE TELECOM, Inc. on Wednesday announced the appointment of Carlomagno E. Malana as its new chief information officer beginning Jan. 1, 2020.

Mr. Malanca is replacing Ma. Aurora Sy-Manalang who will assume a new role in Globe’s fintech affiliate, Mynt, as chief technology and operations officer (CTOO).

“We disclose the appointment of Mr. Carlomango E. Malana as chief information officer (CIO) effective 01 January 2020,” Globe told the stock exchange on Wednesday.

Globe said Mr. Malana will be responsible for all of its systems development and infrastructure investments.

“He will also lead Globe’s efforts to digitize its operations,” it added.

Mr. Malana, according to Globe, is a strategic business and technology executive who held “multiple leadership positions in strategy and execution, technology, mergers and acquisitions (M&A) integration, finance, sales and transformation, including technology transformation in big data, process automation, digital, cloud and migrations in AT&T from 2001 to 2019.”

He graduated with degrees in BS Mechanical Engineering and BS Material Science Engineering from the University of California in Berkeley. He also earned his master’s degree in business administration from the Southern Methodist University in Dallas, Texas.

Ms. Sy-Manalang, who has been the CIO of Globe since 2015, will begin her new role as Mynt’s CTOO on Jan. 1, 2020.

Globe said Ms. Sy-Manalang will lead Mynt’s technology, product, and operations “starting with the customer experience management team.”

The Ayala-led telecommunications giant reported its attributable net income rose by 20% to P17.68 billion in the first nine months of 2019, on the back of a 13% jump in consolidated service revenues to P110.6 billion.

Globe earlier said it spent nearly P32 billion as of the first nine months of the year “to enhance its networks data capacities and capabilities.”

It said it will “continue to reinvest in the network, which is currently on track to reach capital expenditure commitments of $1.2 billion by the end of 2019.”

Globe expects its capital expenditures for the full year to reach around $900 million. — Arjay L. Balinbin

Kaspersky sees more cyberattacks in 2020

INTERNET security firm Kaspersky sees cyberattacks increasing in 2020, particularly in regions situated along trade routes between Asia and Europe, as political conflicts turn to the cyber environment.

In its security bulletin for 2020 published on Nov. 20, Kaspersky said real-world tensions and conflicts can now be extended to the cyberworld.

“We have seen numerous examples. Consider, for example, accusations of Russian interference in US elections and fears about a possible reboot of this in the run-up to the 2020 elections. We’ve seen it in the ‘naming-and-shaming’ of alleged Chinese hackers in US indictments. The widespread use of mobile implants to surveil ‘persons of interest’ is another example,” it explained.

With this trend, Kaspersky said there can be a growth in political espionage with governments seeking to “secure their interests” both domestically and globally, which means that there would be surveillance of activities of “undesirable” individuals in the country and even abroad.

“This could result in new attacks in regions that lie along trade routes between Asia and Europe, including Turkey, East and South Europe and East Africa,” the report said further.

Kaspersky also expects more sophisticated methods of attacks to take place next year.

It said attackers will likely “exfiltrate data with non-conventional methods, such as using signaling data or Wi-Fi/4G, especially when using physical implants.”

Kaspersky added it is “possible” that in the coming months, “we will start discovering more UEFI (Unified Extensible Firmware Interface) malware and infections as our ability to see such systems is slowly improving.”

As for the mobile attacks, Kaspersky said: “There are no good reasons to think this will stop any time soon. However, due to the increased attention given to this subject by the security community, we believe the number of attacks being identified and analyzed in detail will also increase.”

On the abuse of personal information, the report said: “We can see the danger in what could be considered especially sensitive leaks, for instance when it comes to biometric data.”

“Also, widely discussed deepfakes are providing the technology to make such attacks a possibility, especially when combining this with less obvious attack vectors such as video and audio. We should not forget how this can be automated, and how AI can help with the profiling and creation of such scams,” it added. — Arjay L. Balinbin

Kantar to offer outdoor advertising metrics

By Jenina P. Ibañez, Reporter

MEDIA RESEARCH agency Kantar Media Philippines, which is known for its television ratings measurements, is expanding its research to outdoor advertising.

Kantar and market research company Strategic Consumer and Media Incites, Inc. (SCMI) will be offering out-of-home (OOH) advertising metrics on Metro Manila travel patterns to help assess customer exposure to billboards and banners.

In a press briefing on Wednesday, SCMI Research Director Mary Ann Africano-Cortez said OOH advertising has two percent share of advertising spending in the Philippines, with P21 billion in annual revenues.

Television advertising accounts for 65%, while radio has a 27% share, digital with 7%, and print with 1%.

Improved metrics measurement, said Kantar Managing Director Jay G. Bautista, can increase ad spend share.

“Ten years ago the ad spend on radio was only at around 12% of the market because they didn’t have research. So the KBP (Kapisanan ng mga Brodkaster ng Pilipinas) put together and funded research so that grew their ad spend share,” he said.

“Any time a standard is established in a market, based on our experience, the support from advertisers also increases.”

The companies will be collaborating on audience measurement studies. Travelers will be given “non-intrusive” trackers to gather information on Metro Manila travel patterns.

The studies are intended to help marketing professionals understand how many consumers see their ads, the demographic profile of consumers who pass through specific areas, and how long and how often consumers are exposed to ads.

The travelers in the study will also be answering surveys detailing which ads piqued their interest.

“We can now customize what is the specific (advertising) material that’s suitable for the profile of those who pass by EDSA-Guadalupe, for example,” Ms. Africano-Cortez said.

The companies will offer various types of reports such as audience demographic profiles. Marketing professionals can also access a browser-based site that includes a map that plots travel patterns and a list of available outdoor ad sites.

After an initial survey of 1,000 people to establish the general profile and travel habits of the surveyed population, the companies will be conducting quarterly tracking studies covering 500 people.

Reports will be made available starting on the second quarter of 2020.

Kantar is looking to continue expanding beyond television ratings research, and is now working on doing research for the print industry’s online arms.

“What we’re going to collaborate with SCMI in the future is to provide research on online readership and consumption of news because we all know while people are on Facebook or Twitter, the news that they see actually comes from the publishers.”

Glenrothes whisky: a taste of the sun

IT CHANGED hands like a parcel at a party, and it has burst into flames at least four times, but here we are, drinking their single malts.

The Glenrothes was founded in 1878 by James Stuart and Reverrend William Sharp. It was acquired by Edrington, then called Highland Distillers, and was then bought by Berry Bros. & Rudd. In 2017, Edrington bought it back. Edrington, as a group, is behind Macallan and The Famous Grouse (which carries a Royal Warrant, and was the favorite tipple of Princess Margaret). Within that timeframe, it has recorded four fires: in 1897, 1903, 1922, and 1962; but it’s still a good product. One of its water sources includes a spring called Fairies’ Well, so that might explain their luck. Its new collection, called the Soleo (named after a process in Spain of sundrying grapes prior to pressing), is its first since its reacquisition by Edrington.

BusinessWorld went to taste the Soleo collection early this week at The Brewery in BGC. Three glasses were laid out in front of us: the 12, The Whisky Maker’s Cut, and the 18. There’s a 10 and 25, but they weren’t there that night. We think it’s appropriate that the collection should be named after a process that involves the sun: drinking each one in sequence feels like watching the sun go from East to West. Banana, lemon, and melon mark the 12, and the heat makes it feel as if one were drinking sunlight. The Whisky Maker’s Cut, with notes of vanilla and orange peel, tastes smoky and rich, and while it contains some remembrance of the 12, it is its darker sister; like a sun in the afternoon. The 18, meanwhile, was probably the blue hour, with a refined bite like the first crunch of an almond, and a bit of fire enveloped in something heavy and wet, like rain.

The brand is unique for having its own cooperage (that’s barrel factory), so it doesn’t have to fight for barrels during auctions. Instead, according to Hans Eckstein, Brand Advocate for Edrington, these are sent to Spain, filed with sherry, emptied (the sherry is reused for other things) and then sent back so the casks could season the whiskies. “Sherry has just really been their style, ever since,” he said.

After the tasting, UDD (formerly Up Dharma Down), the indie group favored by the young, alternative-loving crowd, played at a small concert on the second floor of The Brewery. This points to a marketing scheme by Scotch companies to appeal to the young.

“I think they’re trying to update their image, I guess, from being an Old Man’s drink, to being a finely crafted spirit,” said Mr. Eckstein. — Joseph L. Garcia

BPI Family Savings Bank bond offer oversubscribed

THE THRIFT BANKING arm of the Bank of the Philippine Islands (BPI) has cut short its offer period for its P2-billion maiden bond issue after it saw robust market demand.

In a disclosure to the local bourse on Wednesday, BPI said BPI Family Savings Bank’s (BFSB) bond offering, which began last Monday, has already exceeded its initial target of P2 billion, which prompted the bank to cut the offer period that was supposed to run until Dec. 6.

“The bank attributes this to robust demand from both institutional investors as well as high-net-worth and retail clients,” it said.

The bonds have a tenor of two-and-a-half years and were priced on Nov. 21 at 4.3% per annum, to be paid quarterly.

BPI said the bonds will help support its thrift unit’s “drive to diversify its investor base and fund its asset expansion, particularly loan growth, digitalization initiatives, and general corporate purposes.”

The thrift bank earlier said the issue marks the first tranche of its P35-billion bond program. The papers are set for issuance and listing on the Philippine Dealing & Exchange Corp. on Dec. 16.

BPI Capital Corp. is the sole selling agent for the bonds, while The Hongkong and Shanghai Banking Corp. is the sole arranger and participating selling agent for the transaction.

Meanwhile, the Land Bank of the Philippines–Trust Banking Group is the appointed trustee for the bond issuance.

BFSB’s parent BPI’s net income jumped 38.6% year on year to P8.29 billion in the third quarter, bringing its bottom line for the January to September period to P22.03 billion, up 29.5% from the same period last year.

Its shares went up 2.13% or P1.85 to close at P88.85 apiece on Wednesday. — B.M. Laforga

Arthaland seeks SEC approval for issuance of P6-B green bonds

ARTHALAND Corp. has formally filed its application with the Securities and Exchange Commission (SEC) to issue P6-billion fixed-rate bonds, of which P3 billion will be Association of Southeast Asian Nations (ASEAN) green bonds.

In its prospectus submitted to the SEC and uploaded on its website, the niche property developer said its bond program will have multiple tranches, where the maturity and specific terms for each will be determined in its corresponding offer supplements.

For the first tranche of the bonds, Arthaland said the offer will be worth up to P2 billion and have an oversubscription option of up to P1 billion. It will follow the company’s green finance framework, where the proceeds of the issuance will fund the construction of green projects.

The registration of the green bonds with the SEC follows Arthaland’s announcement last month of its intent to tap the market for ASEAN green bonds.

Green bonds are a type of debt financing meant to raise funds that will support projects with environmental impact. Arthaland said it will subscribe to the standards for green bonds set by the ASEAN Capital Markets Forum, International Capital Market Association and Loan Market Association.

Proceeds from the debt issuance will be used for projects in Arthaland’s “eligible green portfolio,” comprised of those that adhere to three main environmental objectives: climate change mitigation, promotion of green buildings and environmentally sustainable management of land.

Arthaland prides itself for being the “foremost green developer” in the country, with international recognition for its green buildings. Among these are its Arthaland Century Pacific Tower and Arya Residences, both located in Bonifacio Global City.

The company is also the developer of Savya Financial Center in Taguig City, which has been registered for dual certification in the US Green Building Council’s Leadership in Energy and Environmental Design and the Philippine Green Building Council’s Building for Ecologically Responsive Design Excellence.

Arthaland reported an attributable net income of P647.36 million in the nine months to September, up from P75.64 million a year ago, driven by a 151% surge in revenues to P1.49 billion.

Shares of the company at the stock exchange slipped two centavos points or 2.33% to 84 centavos apiece on Wednesday. — Denise A. Valdez

CDO fair shows off Mindanaoan cuisine

MALL GOERS flocked to the different food stations of Mindanao Kain Na! in the Ayala Centrio Mall, Cagayan De Oro.

CAGAYAN DE ORO — Some of the best food in from Mindanao was brought together at the Ayala Centrio Mall at Cagayan de Oro City for the Department of Tourism’s Kain Na! food festival.

From Nov. 22 to 24, the cuisines of the Zamboanga Peninsula, Northern Mindanao, Soccsksargen, Caraga, and Lanao del Norte was featured in the festival.

Ayala Centrio Mall is the fourth Ayala Mall to host local cuisine and chefs in this year’s edition of Kain Na! following stops at Baguio, Alabang, and Manila Bay.

Among the chefs who participated was Queny Villarante from Region 9 who prepared daral, a coconut sweetmeat crepe; biyaki, steamed corn sweet tamales; and jaa, a crispy rice flour treat. Neal Roa and Rowel Gomez from Region 10 cooked pineapple chicken stew and Bukidnon roast beef, while Precious Pearl Valdez and Dina Tuan from Region 12 served samples of Gensan rolls and tuna sushi.

Paolo Lumbres and Leo Calub from Region 13 prepared buntaa, coconut-stuffed crabs in coconut milk, and kinilaw, a raw seafood dish. Roseller Fiel from Lanao del Norte cooked chicken biryani, beef randang, and browa.

“The DOT has been at the forefront of promoting food tourism for more than a decade now. We continue to strengthen this fruitful partnership with the Department of Agriculture, Department of Trade and Industry, and Ayala Malls championing food and farm tourism,” said Tourism Assistant Secretary Roberto Alabado III. “Tourists now are becoming more curious of the Philippines because we are now presenting to them there’s more than beaches in the Philippines. We have food, we have textiles, we have so much more to offer and this is what tourism is all about.”

The food samplings and cooking demonstrations were complimented by Food and Farm Travel Exchange between the local food suppliers and their tour operator counterparts. DOT-accredited travel agencies and tour operators across the region presented “Eating your way through the Philippines: Fun Food Trips & Farm Tours.”

Capping the three-day event was a Mindanao Fashion exhibit featuring designs by the Oro Fashion Designers Guild.

RCBC looking to set up virtual bank by 2020

RIZAL COMMERCIAL Banking Corp. is looking to launch its own online-only bank next year.

RIZAL COMMERCIAL Banking Corp. (RCBC) is looking to join the virtual banking scene in the country by next year.

Angelito “Lito” M. Villanueva, RCBC’s executive vice-president and chief innovation and inclusion officer, told reporters in a media briefing held in Makati on Wednesday that the bank wants to target the mass market in a bid to boost financial inclusion.

Asked whether they have submitted an application to the Bangko Sentral ng Pilipinas (BSP), Mr. Villanueva said: “Not yet. It is something that I think will happen by January.”

Mr. Villanueva noted that the country’s virtual banking landscape has yet to see local players coming in.

“In the Philippines, we haven’t seen any local digital banks so far as having it offered as a separate proposition,” he said.

Currently, the online-only banking players in the country are only Malaysian financial giant CIMB Bank and Dutch lender ING Bank N.V., which both launched their services this year.

The two players have been trying to attract users through promotional interest rates of up to 4% per annum for those who will be depositing until a certain period.

When asked whether RCBC will also be willing to offer premium interest rates to compete in this playing field, Mr. Villanueva said: “Yes, yes.”

He said they are specifically targeting to attract the mass market to go into virtual banking. He noted, however, that good communication is needed for the market to understand the value propositions of online banking.

Ano ba ’yung 4% sa pera kong isang libo? … Dapat maintindihan nila na sa bawat isang daan mo, makakakuha ka ng apat na piso (What is 4% of P1,000? … They have to understand that for every P100, you get P4). It has to be quantified,” he explained.

“83% of depositors [are] with deposit sizes of less than 50,000. In general, maliit talaga ’yung deposit sizes (deposit sizes are really small). 68% of them would have deposit sizes of less than 4,000 pesos,” Mr. Villanueva said.

With this in mind, the official said banks should look into developing strategies to attract depositors into putting more money into their accounts.

“One of the things that you need to understand is, how do you now increase the deposit size to a much higher level? You have to provide some carrot sticks,” he said.

“For example, ’yung high interest rates and how they could make use of that facility for them to borrow funds from you at a much lower interest rate. So those things are bundled together to make the proposition more attractive to the rest of the public,” he added.

Once its virtual bank plans come into fruition, RCBC is looking to require an average daily balance of around P800-1,000, according to Mr. Villanueva.

RCBC currently has about two million accounts, with 38% of these accounts’ holders accessing bank services through their online app, he added.

The official said he is positive that with electronic know-your-customer initiatives in place, the bank will be able to attract one million new account users next year.

Mr. Villanueva added that RCBC’s Diskartech app, which will feature various financial inclusion tools for small businesses, is set to be rolled out in January.

RCBC registered a 41% surge in its net earnings to P4.5 billion as of end-September, compared to the P3.2 billion logged in the same period in 2018.

The Yuchengco-led bank’s share price closed unchanged at P24.80 each on Wednesday. — Luz Wendy T. Noble

Privacy lapses could be part of tech antitrust cases

Josh Hawley — WIKIPEDIA.ORG

ANTITRUST authorities probing Facebook Inc. and Alphabet Inc.’s Google have struggled with scrutinizing companies whose products are popular and free. Now they may have a solution: Use privacy as a test.

As the US Justice Department, Federal Trade Commission, Congress and the states investigate whether internet companies are flouting antitrust laws, academics and even some regulators are pushing to go beyond the traditional focus on price as a determinant of harm. Enforcers, they say, should also consider privacy lapses as a proxy for anti-competitive behavior.

Their legal reasoning goes like this: Monopolists generally stop innovating, let product quality slip and treat customers poorly, knowing no competitor has the ability to grab market share. Repeated privacy lapses can be a sign that a company — Facebook is often cited as a prime example — has let product quality and customer service slip, knowing its social-media dominance is unassailable.

Senator Josh Hawley, the Republican senator from Missouri, buys this argument. Facebook, he said, has suffered few real consequences despite its shoddy record on protecting users’ privacy. Consumers have nowhere else to go to get the totality of what Facebook offers — a classic antitrust problem of degrading quality.

“One of the reasons data privacy concerns are so pressing is because these companies are monopoly size,” Hawley, a big-tech antagonist who sued Google when he was his state’s attorney general, told Bloomberg last week. “If we had a viable alternative to Facebook that wasn’t scooping up someone’s data, that wasn’t selling our information without telling us, then I would be less concerned.”

Hawley echoed a view that is gaining traction with federal and state antitrust enforcers, as well as the leaders of a congressional probe into big internet platforms. One advantage of the privacy-erosion-is-antitrust theory is that no new laws are needed to enforce it.

Days after the Justice Department’s Google probe was revealed in June, for instance, its antitrust chief, Makan Delrahim, linked the two issues, noting that quality can figure in antitrust analysis in addition to price and that “privacy can be an important dimension of quality.”

Delrahim noted that the 1998 case against Microsoft Corp. didn’t revolve around higher prices. Instead, the US alleged that the software company illegally maintained a monopoly over personal-computer operating systems by blocking manufacturers from installing a browser that competed with its own. Both browsers were free to consumers.

Including privacy in the investigations would expand the range of issues enforcers are known to be looking at, including Facebook’s past acquisitions and Google’s conduct in the digital advertising market. Facebook and Google declined to comment.

US Representative David Cicilline, the Rhode Island Democrat leading the House probe of the tech sector, referred in a hearing earlier in November to “the obvious cost to personal privacy that has resulted from consolidation in the digital marketplace.”

Privacy and competition have long been treated as distinct areas of the law. Google and Facebook have agreed to pay fines for privacy violations under consumer-protection statutes, but they have faced little antitrust action.

One reason is that federal courts have clung to the consumer-welfare standard and often demand evidence of higher prices before deciding cases in favor of enforcers. Just last year, the US Supreme Court ruled 5-4 for American Express Co. and against the US and 11 states alleging that cardholders were harmed when American Express prohibited merchants from steering customers to cards with lower fees. The majority’s rationale? There was no evidence that American Express’s policy harmed consumers by pushing up the price of credit-card transactions.

Now, Hawley, Delrahim and Cicilline are signaling a shift in the way the government thinks about antitrust enforcement, particularly in technology. State attorneys general are exploring similar ideas.

New York Attorney General Letitia James, who is leading the states’ Facebook probe, said the coalition will “use every investigative tool at our disposal to determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising.”

The public interest in the overlap is relatively new, said Dina Srinivasan, a former digital ad executive who has written that Facebook’s data practices could form the basis of an antitrust case.

“We’ve seen this momentum in many of those circles since the beginning of the year,” she said.

Srinivasan argued in a February article in the Berkeley Business Law Journal that consumers were able to rebuff Facebook’s tracking of users on third-party websites when the social media market was competitive. After the demise of rivals such as MySpace, Facebook expanded tracking to millions of websites to further its advertising business despite consumer pushback, she noted. A truly competitive market would swiftly punish such practices, Srinivasan wrote.

Not all legal experts agree that privacy violations could be part of any antitrust suit. A case that’s “based on a data privacy theory of harm is not in the cards,” said Jim Tierney, who oversaw tech-sector antitrust enforcement at the Justice Department from 2006 to 2016 and is now a partner at Orrick Herrington & Sutcliffe LLP, a law firm that counts Facebook as a client. Tierney said he doesn’t do any work for the company.

Others see a different problem. “Consumers seem just willing to give up the data,” said Sam Weinstein, a professor at Cardozo Law School. “If that’s what’s happening, it’s hard to see antitrust interceding.”

Some non-US jurisdictions have sought to twin privacy and antitrust, with mixed results. Germany’s competition authority, the Federal Cartel Office, in February ordered Facebook to overhaul how it tracks users off its site over allegations that the company used its dominance to force consumers to accept unfair terms. Facebook responded that the agency misapplied German law because the company faces “fierce competition.”

In August, however, a German court suspended the ruling, expressing “serious doubts about the legality” of the order. The agency is appealing. — Bloomberg

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