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AUB to add 10 new locations to branch network

ASIA UNITED Bank Corp. (AUB) plans to open 10 new branches this year in areas demonstrating “vibrant” business activity, while pursuing opportunities to apply new technology to its operations.

In a disclosure to the bourse Friday, the bank said it will continue to expand its brick-and-mortar presence.

“The bank will continue to strengthen its geographical presence in areas demonstrating vibrant business activities. We will continue with branch expansion as we target to open 10 new branches this year,” AUB President Manuel A. Gomez said during the bank’s shareholder meeting Thursday.

Last year, the bank expanded its branch network to a 262 locations, focusing on key provincial cities “critical to the business” such as Cebu, Davao, General Santos and Cagayan de Oro, where AUB strengthened its lending organization to build both the consumer and commercial loans portfolio.

Despite expanding its business, AUB was able to rationalize expenses due to its optimization of efficiency in branch marketing and operations, starting with appointing “high-performing and high-potential” leaders.

Amid the growth of its branch network, Mr. Gomez said AUB embraced technology-driven transformation and strategic partnerships in 2018.

“The AUB Paymate app, our 2017 digital innovation that enabled accredited merchants to accept QR (quick-response) payments, allowed AUB to gain more ground in this field. With our partnership with WeChat in 2017, AUB was the pioneer Philippine QR Partner of e-wallet giants AliPay and UnionPay,” Mr. Gomez said.

The bank announced its partnership with global payments network UnionPay in December 2018 in a bid to boost the adoption of cashless transactions.

Prior to this, AUB partnered with mobile payment providers WeChat Pay as well as Alipay to service the influx of Chinese visitors.

“This move remains in line with the belief that in these technology-driven times, Asia United Bank will utilize technology as its key enabler and differentiator,” the bank said.

Mr. Gomez has said that the lender’s digital strategy allows it to reach out to more clients even with a ”modest” branch network.

The bank posted a P1.1-billion net profit in the first quarter, up 38% from a year earlier, with its core lending businesses remaining robust.

AUB shares were unchanged at P59.50 on Friday. — Karl Angelo N. Vidal

Peso firms after Fitch maintains PHL sovereign rating

peso dollar
PHILSTAR/MIGUEL DE GUZMAN

THE peso strengthened slightly against the dollar on Friday, as market participants reacted to a recent decision by Fitch Ratings to maintain its credit rating for the Philippines.

The peso closed the week at P52.16 against the dollar, three centavos stronger than P52.19 finish Thursday.

The peso opened the session weaker at P52.228. The low was P52.29 intraday before closing the session at its best showing for the day.

Volume rose to $988.32 million on Friday from $892.15 million the previous day.

“The peso strengthened as local participants cheered after Fitch Ratings maintained the Philippine sovereign credit rating at ‘BBB’ and maintained a stable outlook,” a trader said in an e-mail Friday.

Fitch Ratings cited the continued strong performance of the economy and subdued overheating risk.

The investment-grade rating is a reflection of Fitch’s view of the government’s ability to pay its debts, and has the effect of helping reduce borrowing costs.

Earlier, S&P Global Ratings upgraded the country’s credit rating to “BBB+,” a notch away from its single “A” grade.

Meanwhile, another trader said that while onshore trading pressured the peso, the offshore market sold off the dollar after US gross domestic product (GDP) data came in stronger than expected.

The US economy grew 3.1% in the first quarter, exceeding market expectations and dampening fears of a looming recession.

“During the afternoon session, we saw quiet trading initially but the peso went to P52.16 at the close on the back of remittance pile-up during the weekend,” the second trader added. — Karl Angelo N. Vidal

Metrobank is Best Managed Bank in the Philippines

BANGKOK, THAILAND – Metropolitan Bank and Trust Co. (Metrobank) is recognized as The Best Managed Bank in the Philippines at the Asian Banker Leadership Achievement Awards 2019. These awards are widely acknowledged by the financial services industry as the highest possible accolade given to  companies and individuals within the Asia Pacific and Gulf regions.

The Best Managed Bank Awardis based on excellent financial performance of organizations by measuring vision and strategy against actual achievements, the feedback of staff, customers, investors, and the industry.. Metrobank was recognized  for the following attributes: a superior domestic franchise under the leadership of its chairman and CEO, a strong commitment to domestic customers at the product and service levels, a strong governance structure at both the board and management levels, the ability to execute on strategy and respond to changes in the marketplace, and an environment that provides a stable and long term commitment to all shareholders. Due to a very stringent evaluation process, awards are only handed out once every three years.

Apart from its outstanding credentials in the criteria listed above, Metrobank has likewise streamlined and modernized virtually every aspect of its operations in the past few years, focusing on seamless transactions and ease of doing business. The bank has also been consistent in generating stable and diversified revenue streams, while developing innovative and scalable solutions for its clients.

In 2018, Metrobank’s net income grew by a robust 21% (year-on-year) to P22 billion, which represented the fastest growth posted among the top players in the local banking industry. This was driven by healthy growth in loans complemented by margin expansion, higher fee-based income, and manageable expense growth.

Metrobank is the country’s premier universal bank and has one of the largest domestic networks with over 950 branches and over 2,300 automated teller machines (ATMs) nationwide, and 32 foreign branches, subsidiaries and representative offices. For inquiries, please contact Corporate Communication Department at 857-5526, or Investor Relations Department at 857-9783 and investor.relations@metrobank.com.ph. Or call the Metrobank 24/7 Customer Hotline at 8700-700, or log on to www.metrobank.com.ph. For provincial areas, call toll-free 1-800-1888-5775.

Palace issues EO allowing PNOC unit to take on partners for service contracts

PRESIDENT Rodigo R. Duterte signed an executive order (EO) authorizing the Philippine National Oil Co.-Exploration Corp. (PNOC EC) to take in equity participants for service contracts it acquired in its own name.

Mr. Duterte signed on May 28 EO No. 80, “Rationalizing the Rules for the Engagement of Third Party Participants Under Petroleum Service Contracts, Repealing for the Purpose Executive Order No. 556 (s. 2006).”

The repealed EO No. 556, issued by former President Gloria Macapagal-Arroyo on June 17, 2006, prohibits so-called “‘farm-in’ or ‘farm-out’ contracts awarded by any government agency, including the Philippine National Oil Company (PNOC).”

Mr. Duterte’s EO No. 80 states that PNOC EC, the upstream oil, gas and coal subsidiary of the state-owned PNOC, is now “permitted to enter into farm-in/farm-out agreements” because the practice is “recognized and accepted” in the energy exploration industry.

“The entity acquiring the participating interest considers the transaction as ‘farm-in’, while the entity transferring such interest considers the transaction as ‘farm-out,’” according to the EO.

Under the EO, third parties “can participate in the service contracts awarded by the government to PNOC EC.”

PNOC EC can also “participate in the service contracts awarded by the government to third parties.”

Mr. Duterte’s EO also requires PNOC EC “in all cases” to enter into such agreements “only with reputable, technically competent and financially capable entities.”

The Department of Energy (DoE), in consultation with Government Commission for Government-Owned or -Controlled Corporations (GCG), will issue rules and regulations for the selection process to be followed by PNOC EC when selecting third-party partners.

The DoE, according to the EO, should take into consideration “provisions of existing government selection procedures that enhance transparency and objectivity in the selection process, including the GCG issuances that require contracts entered into by GOCCs to undergo review by the Office of the Government Corporate Counsel.” Both the DoE and the GCG should also closely monitor compliance with the selection guidelines.

Energy Secretary Alfonso G. Cusi said at a briefing at the Palace on Nov. 7, 2018, that PNOC EC had a problem partnering with China National Offshore Oil Corp. (CNOOC) for the Service Contract (SC) 57 because of Ms. Arroyo’s EO.

“Service contract number 57 has issues (regarding) farming-in… because that service contract is owned by PNOC EC and then [it] needs a partner to pursue further exploration and exploitation… when the time comes. So they have been looking for partners and one partner that had shown interest is CNOOC,” he said during the briefing.

He added: “I think the best proposal is coming from CNOOC and PNOC EC cannot continue the agreement or the acceptance of CNOOC’s proposal until that EO is amended.”

Located off northwest Palawan, SC 57 was awarded to PNOC EC in September 2005. CNOOC acquired 51% participating interest in the contract in April 2006, while Mitra Energy Ltd. acquired 21%. Its deed of assignment remains pending with the Office of the President. — Arjay L. Balinbin

Uncertainty weighs on electronics firms’ plans

THE COUNTRY has lost a “billion dollars” worth of investments for chip plant expansion due to uncertainty from plans to change tax incentives, the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said on Thursday.

“With all these uncertainties, we talked to our members… in our estimation, we’ve lost about a billion dollars in expansion investment that have gone to other countries,” SEIPI President and Chief Executive Officer Dan C. Lachica said in a press conference, noting that some prospective investments even went instead to China, Vietnam and Thailand.

The lost opportunity translates to a “conservative” estimate of 10,000 jobs that could have been generated, Mr. Lachica said.

The group is now seeking to have a dialogue with the new set of senators voted last May 13, as well as incumbent ones whose terms will end with President Rodrigo R. Duterte in mid-2022.

The Department of Finance had designed this tax reform package to consist of a gradual cut in corporate income tax (CIT) rate to 20% in 2029 from 30% currently, the highest in Southeast Asia, as well as streamlining of tax incentives that includes removal of those deemed redundant that have been depriving the government of hundreds of billions of pesos in foregone revenues yearly.

While most senators favor the CIT cut, many have reservations on the plan to streamline incentives.

The proposed change in incentives includes removal of the five percent special tax rate on gross income earned (GIE) availed of by economic zone locators — which include many semiconductor manufacturers — after the end of their four-to-eight year income tax holiday period in lieu of the regular 30% CIT and all other national and local taxes.

SEIPI has proposed that the GIE rate just be increased to seven percent instead of this incentive being scrapped altogether.

“A two percentage point increase in GIE translates to about 40% increase in cost. So that 40% they (semiconductor manufacturers) are willing to contribute because, you know, you gotta source [the funds for] the [government’s] ‘Build Build Build’ [infrastructure development program] somewhere,” Mr. Lachica said.

“We’re willing to do our part.”

Moreover, imposing the regular CIT instead of the GIE tax will entail “on the average about 60-80%… increase in operating cost.”

The group said it has not adjusted its 0-3% export growth target for this year, which is lower than its 5-6% target for 2018.Economists have cited electronics as a major casualty in simmering trade tensions between the world’s two biggest economies, the United States and China.

At the same time, Mr. Lachica noted that some subsectors that have started to pick up like medicals, industrials and automotive.

“But just on the semiconductors side… Maybe the first half was a little bit challenging but we’re seeing very positive signs for the second half,” SEIPI board member Vincent Abella said.

Latest state data show overseas sales of electronic products, which accounted for 53.98% of merchandise exports, dipped 1.7% to $8.841 billion last quarter, while semiconductors sales, which contributed 72% to total foreign sales of electronic products and 38.87% of total merchandise exports in the same period, dropped 2.8% year-on-year to $6.636 billion.

Overseas sales of electronic products grew 2.8% to $37.569 billion in 2018, accounting for 55.67% of total merchandise sales that year, while semiconductor shipments — which contributed 73.75% to overseas electronics sales and 41.06% to total merchandise exports — edged up 1.2% to $27.707 billion. — Janina C. Lim

Per capita household spending growth slows

GROWTH of household spending slowed to 3.9% in 2018, with nine out of 17 regions posting slower growth rates and one recording a decline, according to data the Philippine Statistics Authority released on Thursday.

Household spending, which accounted for 68.5% of total expenditure, totaled some P6.31 trillion in 2018. This represented a 5.6% year-on-year increase in 2018, albeit slower than the 5.9% growth in 2017.

On a per-person basis, household spending rose 3.9% to P59,162 in 2018 from P56,941. This, however, was slower than the 4.2% growth logged in 2017.

Among the country’s 17 regions, Central Luzon drew the fastest in per capita household spending at 5.3% to P69,926, albeit slower than six percent growth in 2017.

Per-capita household spending growth in the National Capital Region was likewise slower at 3.2% in 2018 from 3.5% in 2017, but remained the highest level of spending among regions at P109,794 per person.

Other regions that posted slower growth rates in household spending were Calabarzon (four percent from 4.8%); Mimaropa Region (5% from 5.1%); Western Visayas (3.9% from 5.3%); Eastern Visayas (3.8% from 4.2%); Northern Mindanao (2.3% from 2.7%); Davao Region (4.9% from 5.5%); and Soccsksargen (3.2% from 3.3%).

On the other hand, seven regions saw acceleration in per capita household spending growth, namely: Cagayan Valley, Bicol Region, Ilocos Region, Central Visayas, Zamboanga Peninsula, Cordillera Administrative Region and Caraga.

Only the Autonomous Region in Muslim Mindanao (ARMM) posted a decline in per capita household spending (-0.4% from 0.2%).

Economists attributed the spending slowdown to elevated inflation last year, which forced households to tighten their belts.

“Household final consumption spending in real terms may have slowed to 5.6%, but this is still a decent number considering difficulties in 2018 on the back of high inflation, which manifests itself clearly if we take a look at per-capita household spending,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in an e-mail.

Mr. Roces explained that for 2018, the improved household incomes brought by the increase in remittances from overseas Filipino workers, the implementation of the Tax Reform for Acceleration and Inclusion law that slashed personal income tax rates, and “stable employment prospects” were “eroded by high inflation levels, which decreased the purchasing power of households.”

“Discretionary expenditures were restrained due to higher food and transport costs,” Mr. Roces said.

Last year saw inflation picking up for nine straight months, peaking at a nine-year-high 6.7% in September and October before easing to six percent in November and 5.1% in December. This brought the full-year 2018 average to 5.2% against the Bangko Sentral ng Pilipinas’ 2-4% target range for 2018 and was the fastest since 2008’s 8.2%.

Headline inflation has since slowed for six months to a 16-month-low three percent.

In a separate e-mail, Union Bank of the Philippines, Inc. (UnionBank) Chief Economist Ruben Carlo O. Asuncion noted Central Luzon’s acceleration in household spending is consistent with the region being “one of the best performers” last year in terms of economic growth.

Central Luzon was among the 12 regions that recorded overall economic growth above the 6.2% national average in 2018. That year, the region’s economy logged in a 7.1% growth.

“One thing that I see in Central Luzon is the aggressive infrastructure spending and the consequential impact of such development,” UnionBank’s Mr. Asuncion said.

As for ARMM, Mr. Asuncion said: “I think it’s well known how the region is challenged and vulnerable to any type of volatility. I am assuming that this is still an offshoot of the recent armed conflict in the area.”

“With inflation continuing to decline back to the government’s target of 2-4%, UnionBank’s Economic Research Unit sees the improvement in 2019 household spending… [with] inflation settling at 3.2%, well within the government’s goal,” Mr. Asuncion said.

Security Bank’s Mr. Roces was likewise optimistic, saying: “We project that tapering inflation levels will help support higher household spending for this year. With receding inflation, there is upbeat domestic demand.”

“Consumption is coming back. There is excitement once again over higher discretionary expenditures. And with the recent policy rate cuts by the central bank, private investments will continue to sustain jobs and income creation.” — Lourdes O. Pilar

Charting best practices amid tech disruption

By Arra B. Francia
Senior Reporter

BUSINESSES must play catch-up with emerging technologies if they want to remain relevant in this era of artificial intelligence, automation and e-commerce, with top brass’ adoption of latest trends crucial to driving growth.

Speaking at the BusinessWorld Economic Forum 2019 on Thursday, Ayala Corp. Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala said businesses must be proactive in adapting to new technologies, lest they run the risk of becoming irrelevant.

“Businesses should realize that what brought us success in the past will not be the same issues or factors what will bring us success in the future… Technological infrastructure has introduced a whole new way of addressing consumer needs quickly and efficiently,” Mr. Zobel said in his keynote speech during the forum held at the Grand Hyatt Manila hotel in Taguig City.

Mr. Zobel said his group has consistently embraced innovation, enabling it to remain in business for the last 185 years.

The entry of new technologies will translate to new jobs in artificial intelligence (AI), robotics and data analytics, according to Management Association of the Philippines President Rizalina G. Mantaring. Fast-changing business conditions need managers who are innovators who can capitalize on AI and other technologies. “The future could be very different. If you’re unable to envision that, you’ll probably be out of business in 10 years or less… You have a workforce that will have to continuously learn, you need to deal with fear in a workplace, so people skills will be critical in the age of a machine,” Ms. Mantaring said.

Boston Consulting Group Singapore Partner and Managing Director Shiv Choudhury noted how important it is for people in key management posts to be innovative. Focusing on retail, Mr. Choudhury said management’s openness to data analytics could spell the difference in attracting more customers. “Retail is the most data-rich environment… Just like consumer experiences that disrupt us, what can absolutely help us make huge advancements is data,” Mr. Choudhury said, adding that data can be used to personalize consumer experience.

Personalization is one of Lazada Philippines’ major strategies to date, according to its Chief Executive Officer Raymond N. Alimurung. “What we are doing today is personalization. It’s changing the way the app looks. So the app of your Lazada homepage looks different from the person beside you,” Mr. Alimurung said.

Conglomerate Alliance Global Group, Inc. (AGI) has also taken the lead in integrating new technologies into its business. AGI Chief Executive Officer Kevin Andrew L. Tan noted how the group launched the iTownships concept last year, in which “[w]e are able to drive more value… by using mobile to customize the living spaces based on the type of technology they want.”

Just as the foresight of top management is needed to adapt to emerging technologies, employee’s skills are also vital, in that they must be able to quickly learn and adapt once more intelligent robots enter the workplace.

“We have to invest in our people, especially in a world of disruption,” said Susie Lee, vice-president for Global Business Solutions at Degreed.

McKinsey & Company Philippines Managing Partner Kristine Romano assured that embracing new technologies like AI will not replace human beings, but will add significant value to businesses.

And since most people entering the work force now belong to Generation Z, or those who grew up with the Internet integrated into daily life, it is necessary for businesses to keep up with digital transformations, said Acumen Strategic Consulting, Inc. Managing Director Pauline G. Fermin. “We need to take the slack as they enter the workforce to respond to the learning modes that this generation needs… Businesses must be digitally enabled and workflows should be reconfigured to properly enable this generation,” Ms. Fermin said.

RLC plans township in Pampanga

By Arra B. Francia, Senior Reporter

ROBINSONS Land Corp. (RLC) will be developing close to 200 hectares of land in Pampanga into a mixed-use estate, as the property firm rides on the robust economic growth in the province.

The Gokongwei-led firm said it has acquired one consolidated parcel of land near the Clark area that will be turned into Mont Clair, an integrated township with residential, commercial, hotel, and industrial park components.

“We have acquired significant land bank in the Clark area. We think that it will be an important integrated township for the company,” RLC President and Chief Operating Officer Frederick D. Go told reporters after the company’s annual shareholders’ meeting in Ortigas late Wednesday.

Mr. Go said the company has already finished the master plan for the project, but declined to comment on how much investments they are pouring into the development.

“We really believe in the future of Clark,” he said.

Businesses have increasingly been expanding their footprint in Clark, in response to the government’s push to establish it as the next business district outside Metro Manila. Firms that currently have projects in Clark include Dennis A. Uy’s Global Gateway Development Corp. and Gotianun-led Filinvest Development Corp.

Meanwhile, RLC has scheduled to launch P12 billion worth of residential projects this year. Three of these are in Pasig City, namely Sync, Cirrus, and Sapphire Bloc. It will also build the Woodsville condominium in Parañaque City.

“We are expecting their take-up to be really fast and to do really well. When that happens, we have more projects that we are lining up like residential project in Cainta. We are looking at the first residential building this year in Cainta, in our project which we are now calling Sierra or Sierra Valley,” Mr. Go said.

The company also has two joint venture projects scheduled for launch in the second half of the year, which Mr. Go noted are excluded in the firm’s computation of expected sales in 2019. The first one is called the Aurelia in partnership with Shang Properties, Inc. located in Bonifacio Global City. This will consist of about 81,000 square meters (sq.m.) of net saleable area.

It will also unveil its project with Hong Kong Land Group in Bridgetown East in Pasig City by the second half of the year. The P5.6-billion condominium will have 33,000 sq.m. in net saleable area.

The six projects is expected to deliver more than 4,000 residential units for RLC.

RLC earlier said it will spend P27 billion in capital expenditures this year, the bulk of which will be for investments and project development. About P4 billion has been allotted for land acquisitions, in a bid to expand the firm’s current land bank of 762 hectares.

The company grew its net income by 19% to P1.84 billion in the first quarter of 2019, after revenues also went up seven percent to P6.78 billion.

Shares in RLC fell 1.6% or 40 centavos to close at P24.60 each at the stock exchange on Thursday.

PHL stock market accounts hit 1 million in 2018


THE number of stock market accounts at the Philippine bourse breached the one-million mark in 2018. — BW FILE PHOTO

THE RISE of online trading pushed the number of stock market accounts past the one-million mark in 2018, according to a report by the Philippine Stock Exchange, Inc. (PSE).

The PSE said in a statement Thursday that its 2018 Stock Market Investor Profile report showed there were 1.089 million stock market accounts by the end of last year, 25.4% higher than 2017’s 868,810.

The increase can be attributed to the 60.9% surge in online accounts to 625,763 from 388,864 in the previous year.

“It may have taken some time to breach this one million milestone but as they say better late than never. The advent of online trading has proven to be the catalyst for the rapid growth of stock market investors in the last five years,” PSE President and Chief Executive Officer Ramon S. Monzon said in a statement.

Mr. Monzon added that they will continue to intensify investment literacy efforts in order to reach the next million stock market investors in a shorter period of time.

Retail investors accounted for 97.5% of total stock market accounts, while the 2.5% balance came from institutional investors. Domestic investors dominated the total accounts at 98.4%, while foreign investors owned the rest.

The PSE report showed that 51.6% of total investors were male, while 48.4% were female. This is an improvement from 2017’s ratio of 54.6% to 45.4% for male and female investors, respectively.

Investors aged from 18 to 29 years old showed the fastest growth for the year, as they increased their share of account holders to 21.5% from 16.2% in 2017. The 30- to 40-year-old range still comprised bulk of total investors at 43.1%, while those aged 45 to 59 account for 21.5%. The 60 and above range contributed the balance of 13.9%.

“Some people still have stereotypes of stock market investors which are debunked by our latest investor profile report. Investors nowadays are younger and a significant number of them are women,” Mr. Monzon said.

Meanwhile, 62.4% of investors revealed that their salaries were less than P500,000 annually. Those who earned between P500,000 to P1 million accounted for 21%, while those earning more than P1 million per year made up 16.6% of total investors.

“It also shows that it is not necessary to have a big salary to be able to invest, what is important is to know how to set aside money for investment,” Mr. Monzon added.

In terms of location, most investors still came from Metro Manila at 62.2%, followed by those in Luzon at 21.5%. Investors based in Visayas and Mindanao were recorded at 8.9% and 4.4%, respectively.

On the other hand, foreign investors in the PSE were mostly Chinese (23.7%), American (15.7%), and Japanese (10.3%). — Arra B. Francia

DMCI Power sales jump 20% in Q1

DMCI Power Corp. reported a 20% rise in sales in the first quarter, driven by an increase in energy demand from its three electric cooperatives in Oriental Mindoro, Palawan and Masbate.

In a disclosure to the stock exchange, listed parent company DMCI Holdings, Inc. said the off-grid energy player reported total volume sold increased to 76 gigawatt-hours (GWh) during the January to March period, from 63 GWh in the same period last year.

“The 20% increase was driven by the strong take-up of Oriental Mindoro Electric Cooperative (Ormeco), Palawan Electric Cooperative (Paleco) and Masbate Electric Cooperative (Maselco),” the Consunji-led company said.

Energy sales to Ormeco stood at 15.87 GWh during the first quarter, surging 39% from 11.39 GWh in the same period last year. This was driven by the opening of the rehabilitated 69-kilo volt (KV) transmission line from Calapan to Puerto Galera.

“The National Power Corporation completed the rehabilitation of the transmission line in May last year. Since then, we have been able to maximize the generation capacity of our power plant,” DMCI Power President Nestor D. Dadivas said in the statement.

Energy sales to Paleco went up 19% to 33.21 GWh in the three-month period, due to an increase in tourist arrivals in Palawan.

Citing the Provincial Tourism Office of Palawan, DMCI Power said tourist arrivals in the island during the first quarter rose 20% to 1.165 million.

Meanwhile, DMCI Power said dispatch to Maselco jumped 12% to 26.64 GWh, as Masbate saw “strong economic activities” during the first quarter.

“We are confident that sales volume to our offtakers will continue to grow in the ensuing months of 2019,” Mr. Dadivas was quoted as saying.

DMCI Holdings earlier said it will allocate P1.3 billion from its P31-billion capital expenditures (capex) this year to DMCI Power. The off-grid energy business posted a net income of P100 million in the first quarter, up 32% from the P76 million it recorded in the same period last year. — Denise A. Valdez

YouTube booming in PHL

By Zsarlene B. Chua, Reporter

WHEN YouTube was started 14 years ago, it was originally intended to be a website where people could shoot, post, and share their videos, and while the original purpose remains, the video-sharing website has become so much more — it is now a platform on which people can build careers.

“I’ve watched YouTube over the years change the landscape [in the United States] and I think it’s starting to happen elsewhere as well. I think YouTube is now a platform for media,” Mark Lefkowitz, head of YouTube Creator and Artist Development for Asia Pacific, told reporters during a press conference preceding the YouTube Fanfest Manila on May 26 at City of Dreams Manila in Parañaque City.

“People are leaving broadcast television and cable television in the US [for YouTube]. So I think it’s a platform that allows everyone to have a voice and share their experience with the world,” he added.

Since August 2018, the site has been the second most popular website in the world after Google, according to analytics website, Alexa.

Mr. Lefkowitz admitted that it comes as a “shock to [him]” when he goes to YouTube events like YouTube Fanfests and he sees the screaming fans of various content creators.

YouTube Fanfests (YTFF) are typically held annually in various cities in the world and have been held in Manila since 2014. The one-day live show brings local and international YouTube stars together on stage to entertain their fans.

This year, the Philippines saw two international and 15 homegrown “creators,” as those who make content posted on the video sharing site are called, take the stage including Alex Wassabi and dancer/choreographer Matt Steffanina, Ranz Kyle and Niana Guerrero, Hannah Kathleen, JaMill, ThatsBella, Rei Germar, and Ken San Jose, among others.

The event was held on May 26 at the Mall of Asia Arena in Pasay City and was attended by thousands of fans who lined up at the venue hours before the live show started at 6 p.m.

“We’re now seeing people who are everyday people becoming stars in the platform, so to me it’s unbelievable but it’s really cool, like anybody can be famous,” he said.

Mr. Lefkowitz mentioned that he has noticed the Philippines is “starting to take off” as the company’s numbers showed that there are currently over 750 channels with 100,000 subscribers and more than 60 channels with more than a million subscribers in the country. Last year, only about 300 channels had passed the 100,000 subscriber mark and 19 channels had more than a million subscribers.

“I get really excited when I think about the Philippines because there’s so much opportunity here, we just started to see over the last few years a lot of diverse creators come online. We have seen creators from the north of the country… [to] the south,” he said.

“The Philippines is, I would say, just starting to catch on in terms of a YouTube culture. And I think we’ve seen a tremendous amount of growth last year,” he added.

THE YOUTUBER CAREER
A successful YouTube career can bring in considerable amounts of money — social media tracking and analytics website Social Blade estimates that YouTube’s most popular content creator, Pewdiepie (real name: Felix Kjellberg), who has more than 96 million subscribers, can earn up to $14.8 million annually from YouTube ads alone.

Other revenue streams like sponsorships are also available for creators.

“I don’t know how [much] all of these make but we see people more and more who are able to earn a living on YouTube, which for us, makes us really happy that they can do what they love and they can actually earn a living here,” Mr. Lefkowitz said.

“In the beginning, it was just me and my friends doing whatever we wanted to do,” said Alex “Wassabi” Burriss, at a roundtable discussion on the same day, “and now I have a manager and assistant and agent — all this stuff — and a whole team of editors and cameramen.”

Mr. Burriss started his YouTube career in 2006 and currently has over 11 million subscribers and has clocked in more than 4 billion views. He is known for his challenge videos, skits, and travel vlogs, among others.

“I’ve been making videos for 13 years and [during] the first five years, it was just me and my friends having fun, we weren’t getting paid to do it. There’s no other reason [to do it other than] we just like making videos. And then it took off and it just hasn’t stopped. It’s gotten crazier and crazier,” he said.

He now describes his YouTube career as “more of a business” and that it’s “gotten a lot more difficult” because more and more eyes are on him.

“When I started, it was like a new thing: it was like uncharted territory and you kind of had to figure [things] out as you went, and now it’s a lot more pressure because there are just so many other YouTubers. So you got to try really hard to find your voice and find what you want to be and what you want kids to look up to you for,” Mr. Burriss said.

“And with all this power or responsibility you have to be more careful [with] what you do,” he explained.

THE NEW RULES
With YouTube’s ever-growing popularity, it has become a continuous challenge for the site to try and maintain a “responsible and healthy” environment as it has faced criticism over the years when it came to its response to copyrighted content, conspiracy videos, videos involving minors, monetizing and demonetizing content, among others.

“We started to make a lot of changes: I think we made 30 policy changes over the last year to try and strengthen our guidelines… [Creators] should make sure they follow our guidelines and are creating responsible content,” YouTube’s Mr. Lefkowitz said.

Among the new policy changes is that YouTube will now show abbreviated subscriber counts instead of precise totals starting August.

The change was prompted by the recent drama which happened between beauty YouTubers James Charles and Tati Westbrook where Mr. Charles lost more than 3 million subscribers while Ms. Westbrook gained more than 4 million in a week.

(The drama revolved around Ms. Westbrook announcing her disassociation from Mr. Charles, whom she had been friends with since he started YouTube four years ago, after accusing Mr. Charles of allegedly hitting on unwilling straight men and for promoting a competitor to her health supplements brand.)

While Mr. Charles has regained more than a million of his lost subscribers, ripples have been felt in the community, and while YouTube did not explicitly state that the aforementioned issue was the reason for the policy change, they did say that they want to “foster a sense of digital well-being” as content creators are “just too concerned about their [numbers],” said Tu Nguyen, communications manager, YouTube APAC during the press conference.

Mr. Burriss said that after more than a decade in YouTube, he is at a point where he “doesn’t look at numbers anymore.”

“I just do whatever I want to do and then I film it… my main focus now is just to have fun,” he said.

“I think for creators to be successful, it’s really important to be authentic and really share the message you want to share. And so I would advise creators [that] if they want to be successful, to think about that and to be themselves,” Mr. Lefkowitz said.

Robinsons Retail still rationalizing RSCI stores

ROBINSONS Retail Holdings, Inc. (RRHI) is looking to rationalize the store network of Rustan Supercenters, Inc. (RSCI)

“Like what the whole RRHI does, we’ll expand (in) the locations we know would be profitable. And then we’ll close those that are hopeless,” RRHI President and Chief Executive Officer Robina Y. Gokongwei-Pe told reporters after the company’s stockholders’ meeting in Ortigas on Thursday.

“You have to look at efficiencies, and like all companies, you have to cut off the fat,” she said.

RRHI completed the acquisition of RSCI in December last year. The deal placed RSCI’s total network of 80 stores, including Marketplace by Rustan’s, Rustan’s Supermarket, Shopwise Hypermarket, Shopwise Express, and Wellcome, under RRHI’s control.

Ms. Gokongwei-Pe noted the company bought RSCI because it “saw the potential.”

“Their top-line sales was P24 billion when we got it. With P24 billion you’ll be able to get scale, take advantage of the scale and the efficiencies,” she said.

RRHI’s attributable net income fell 32% to P827 million in the January to March period. Excluding RSCI, the company would have booked an eight percent uptick in core net earnings to P1 billion.

The company said it is targeting to open 100 to 125 new stores in 2019, composed of 15 to 17 supermarkets, 18 to 20 do-it-yourself stores, 30 to 40 convenience stores, 15 to 30 drugstores and 20 to 25 specialty stores. This does not include another 100 new franchise stores of The Generics Pharmacy (TGP).

“We project to spend a total P3.5 billion to P5 billion for our planned organic store expansion this 2019,” Ms. Gokongwei-Pe said. She noted the allocation of the capital expenditures will likely remain the same: 52% for supermarkets, 16% for specialty stores, 14% for department stores, 10% for do-it-yourself stores, 5% for convenience stores and 3% for drugstores. — Denise A. Valdez

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