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Australian Open: Rampaging Sharapova sets up mouth-watering Wozniacki clash

MELBOURNE — Former Australian Open winner Maria Sharapova continued her marauding form by handing out a 6-2 6-1 thrashing to Sweden’s Rebecca Peterson on Wednesday to set up a blockbuster third-round showdown with holder Caroline Wozniacki.
In a clash of former world number one players, the five-times Grand Slam winner will next meet Dane Wozniacki, who eased past Johanna Larsson 6-1 6-3 earlier in the day.
“It’s always a physical match,” Sharapova told reporters of her third-seeded opponent looming in the next round, with Wozniacki having won her first Grand Slam here last year.
“She gets a lot of balls back. A great retriever of the game. Just incredibly solid. Does a lot of things well. You kind of have to, to be number one in the world, to be a Grand Slam champion. I expect her to do all those things on Friday.
“I think the Grand Slam was the one trophy she was looking for. With determination she got there last year. She loves playing here, loves everything about this tournament. I certainly have a tough match ahead of me.”
The Russian 30th seed, who was suspended for 15 months for taking banned drug meldonium in 2016, broke 23-year-old Peterson twice in the opening set and peppered the court with powerful groundstrokes in a superb display of hitting.
Sharapova, who also thrashed Britain’s Harriet Dart 6-0 6-0 in her opening round match, won seven consecutive games against the Swede to take a 4-0 lead in the second set before world number 64 Peterson could get on the board in the set.
LATE FINISH
With the previous match between local hope Alex de Minaur and qualifier Henri Laaksonen lasting five sets at the Margaret Court Arena, Sharapova’s match ended long after midnight and the Russian was in a hurry to finish as it was way past her bedtime.
Asked what her bedtime was, Sharapova said: “10:30. Like in bed at 10:00, sleep by 10:30. My boyfriend challenges it quite a lot, but 10:30 is my time.
“It was definitely a different type of match. Took a lot of warming up for this one. Bit of uncertainty going into a match quite late. But, yeah, despite all those changes, I thought I played well.”
The 31-year-old Sharapova, who last won a Grand Slam at the 2014 French Open, only struggled against the Swede briefly in the second set during a lengthy hold of serve to go up 5-1.
But such was her dominance that the Russian, who won in Melbourne in 2008, did not face a break point in the match and sealed the contest in 71 minutes with a third break in the second set.
“I think there’s certainly things I want to improve. I’ve been happy with the way I focused throughout the match, kept my concentration,” she added.
“It’s not easy to start one match at 11 am, then 48 hours later, a little bit more, to start one that’s just before midnight. Just all those things, they’re about adjustments. I have that experience.
“So I’m happy that I’m able to come out into a match like this and say, ‘I’ve done this before, I know the drill, I know how this goes, I’m ready, and I need to step it up. No matter what my opponent brings today, I have to get it done.’”
Nadal spins way into third round with near flawless display
Rafa Nadal picked apart second round opponent Matthew Ebden 6-3 6-2 6-2 at the Australian Open on Wednesday, in a near flawless display of top-spinning artistry.
The second seed overcame an early first set challenge from the Australian, who should have secured a break-of-serve with the scores locked at 3-3.
Ebden missed a backhand volley off an unexceptional passing shot — and it proved costly.
The Australian was broken the next game, succumbing with a double-fault, and the Spaniard went through the broken line of defence, securing the set and an early break in the second.
Sensing an early end to the proceedings, the crowd tried to lift one of its few remaining local hopes, while at the same time being dazzled by the Spaniard’s control of the court.
The 17-times Grand Slam winner was never seriously challenged again, and the third set became an exhibition match.
At one stage, Ebden simply shrugged after Nadal unleashed a wild forehand winner that was yet completely under control.
Nadal, who showed no signs of discomfort from a thigh strain that troubled him ahead of the first major of the year, will play Alex de Minaur in the third round, marking his third consecutive match against an Australian. — Reuters

Brooklyn Nets shock Harden, Houston Rockets in overtime

LOS ANGELES — Spencer Dinwiddie converted a three-point play with 28 seconds remaining in overtime, and the Brooklyn Nets erased a seven-point deficit in the extra session for a 145-142 victory over the host Houston Rockets on Wednesday.
Dinwiddie scored 25 of his 33 points in the fourth period and overtime, including three 3-pointers in the final 27 seconds of regulation, allowing Brooklyn to overcome a season-high 58 points from Houston’s James Harden.
Harden recorded his second consecutive 50-point game, and he added 10 rebounds and six assists. The Rockets set an NBA record with 70 3-point attempts, with PJ Tucker hitting a 3-pointer with 1:09 left in regulation to bypass the old mark of 61.
Brooklyn’s Treveon Graham added 21 points while Jarrett Allen piled up 20 points and 24 rebounds.
CELTICS 117, RAPTORS 108
Kyrie Irving made a go-ahead jumper and added a 3-pointer during an 11-0 run late in the fourth quarter as Boston defeated visiting Toronto.
Irving finished with 27 points and a career-best 18 assists as the Celtics ended a three-game losing streak and snapped Toronto’s five-game winning streak. Al Horford contributed some big points down the stretch in a 24-point game for the Celtics, and Gordon Hayward added 18.
Kawhi Leonard scored 33 points to top Toronto, which led by four in the middle of the fourth quarter and was tied 106-106 with 2 1/2 minutes to go. Serge Ibaka added 22 points and 10 rebounds for the Raptors.
SPURS 105, MAVERICKS 101
San Antonio relied on its bench to rally from a 19-point deficit and win at Dallas.
Marco Belinelli led the bench charge in the second half, and he topped the Spurs in scoring with 17 points. Patty Mills had 14 and Davis Bertans added 12 points, including a dagger 3-pointer with 1:42 to play.
Rookie Luka Doncic led Dallas with 25 points, eight assists and eight rebounds.
BUCKS 111, GRIZZLIES 101
Giannis Antetokounmpo recorded 27 points and 11 rebounds as Milwaukee posted a victory at Memphis.
Eric Bledsoe added 16 points as the Bucks won for the 14th time in the past 17 games. D.J. Wilson scored a career-best 13 points for Milwaukee, which led by as many as 31 points.
Omri Casspi scored 17 points for Memphis, which has dropped nine of its past 10 games and 16 of 20. JaMychal Green had 14 points and 10 rebounds. — Reuters

Bataan, Makati firm up MPBL playoff chances in separate wins

BALANGA — Bataan and Makati subdued their respective rivals on Wednesday night here at the People’s Center and put themselves in good position to secure the home court advantage heading to the playoffs of the MPBL Datu Cup.
Facing an equally formidable foe in Navotas, the Risers of Bataan showed composure down the stretch in outlasting the Clutch, 84-78, to firm up their hold of the solo lead in the tournament put up by Senator Manny Pacquiao with Kenneth Duremdes serving as commissioner.
The Risers now carry a 17-2 win-loss card, which put them a game and a half ahead of their closest pursuers — the San Juan Knights, the Manila Stars and the Makati Super Crunch, all bunched up in second to fourth spots carrying a 16-4 mark.
The Risers, backed by F2 Logistics, held their rivals scoreless in the last 3:03 mark of the match to finally put away the Clutch, who absorbed their 11th loss in 19 games but remained in seven spot of the tough northern division of the tournament.
In between making stops, the Risers made some key baskets as Yvan Ludovice’s jumper started it all in the 2:26 mark that put his team on top, 80-78.
Both teams had a two-minute dry spell, but in the crucial seconds of the game, Ludovice, Byron Villarias, Pamboy Raymundo and Richard Escoto made the big plays.
Ludovice fed off Villarias for a short stab that gave the Risers an 82-78 lead with 24 seconds left.
The Clutch had several chances along the way but they couldn’t come up with a better execution, seeing veteran Jojo Duncil committing two crucial turnovers, while missing their next offensive thrusts.
Earlier, Makati extended its winning streak to 10 after adding lowly Rizal to its list of victims, 66-55. — Rey Joble

Beast in the East

There was a decided buzz in the air at the TD Garden long before opening tip yesterday, and not simply because the East-leading Raptors were on tap. In recent memory, the Celtics had been plagued by inconsistent play that led to off-court concerns on the unity, or lack thereof, of their stalwarts. Considering all that was said — and not said — on record, the 18,624-strong crowd was on edge and hoping that the prospect of doing well, if not winning, against highly regarded opponents would goad the hosts into performing to potential.
Optimism ran high, but so did wariness. Five-time All-Star Kyrie Irving minced no words in wondering, after three straight disappointing losses, whether the younger set among the Celtics would learn to play with the passion required for them to go all the way. Would his biting opinions, aired publicly no less, galvanize the targets, or would they be received negatively given the seeming hypocrisy underlining them? After all, the very players underfire did manage to extend the LeBron James-led Cavaliers to Game Seven in the 2018 Conference Finals even as he was himself sidelined due to injury.
As things turned out, the fans were proven right. The game was tight and could well have ended up with the Raptors securing victory and, in the process, further planting questions inside the Celtics’ minds. Instead, the green and white stayed steady under pressure, ultimately prevailing pulling away. And, in retrospect, it was, perhaps, only fitting that Irving led them with decided force; in the last six minutes, he either scored or assisted in every single one of the 25 points they scored. Indeed, they put up a whopping quarter century on the board in the last half of the payoff period riding on his coattails. His stats during the fateful timeframe told the story; he had 10 markers on four-of-six shooting from the field, six dimes, one rebound, and one block in turning a single-basket deficit into a three-possession triumph.
The message is clear, to be sure: At prime, the Celtics deserve their preseason status as the beasts in the East, the rise of the Bucks and the Raptors notwithstanding. They’re just too good, too complete, and too well coached not to stay solid in the crunch. Then again, they’ve found themselves going pitter-patter with the schedule precisely because they’ve been at odds with expectations. Perhaps Irving’s talking the talk, and then walking the walk, will finally get them to be at their level best every time out. They certainly need to if they want to maintain their relevancy in the Era of the Mighty Warriors.
 
Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

Cement supply will remain sufficient for Build, Build, Build programs

Local cement manufacturers are bullish and fully supportive of government’s Build, Build, Build programs.  In a recent letter, CeMAP informed DTI that the domestic cement industry currently has an installed and operating capacity of 34.5 million tons or about 862 million bags of cement annually.  On top of the current installed running capacity, there are also a number of cement capacity expansion projects by various players that will be completed this year and in the next few years.
“In addressing the supply needs in the event that Safeguard Measures are implemented, the local cement industry shall ensure that there will be adequate cement supply in the country”, according to Cirilo Pestano, Executive Director of CeMAP.
The cement industry has also been dealing with challenges brought about by the recent surge of imported cement viewed as injurious to the local industry, prompting DTI to intervene and investigate.
In the past five years, the volume of cement imports entering the Philippines grew exponentially, soaring from just 3,558 metric tons in 2013, to as much as 4.8 million metric tons for the first three quarters of 2018.  This is owed to an overcapacity of cement in the region.  And this despite the Philippine cement industry’s capability to fully serve supply demands.
In spite of the challenging business environment, CeMAP remains bullish on the growth prospects of the industry and expects the employment of some 400,000 Filipinos, directly or indirectly, by 2030 as a result of the projected labor requirement coming from various capacity expansion programs of both existing and new cement manufacturers.
In the short- to medium-term, incumbent cement manufacturers are projecting up to 17 million tons in added capacity, which can translate to more than 110,000 jobs. Pestano says, “The figure does not include those of the new players yet.  If everyone is accounted for and if all new plants materialize as announced, we will see more jobs created across the value chain.”

Looking for office space? Property consultancy shares their 2019 forecast

The spirit of entrepreneurship is growing stronger in the Philippines, with over 900,000 MSMEs recorded in 2017. With more and more businesses popping up, demand for suitable office spaces has never been higher.
The question of where to establish one’s headquarters is often top of mind for entrepreneurs. And rightly so, as setting up an office is more than just renting a vacant spot. Much like choosing a home, it’s a decision that is influenced by various internal and external factors.
In their annual report, real estate services company Pronove Tai International Property Consultants revealed how the office market fared in 2018 and what to expect in the new year.

Highs and lows for 2018

In terms of office stock, or accumulated completed buildings recorded from 1967 to Q4 2018, Makati remained the largest office district with 3.4 million square meters of office space. Taguig and Ortigas Center followed with 2.2 million square meters and 1.7 million square meters, respectively.
However, Taguig took the lead in terms of office supply, or annual completed supply of space. 280,000 square meters were constructed in 2018, followed by Makati with 121,000 square meters and Quezon City with 118,000 square meters.
However, more office supply doesn’t necessarily translate to more vacancies. Despite having the lowest office supply among the three districts, Quezon City recorded the highest vacancy rate at 13%. Mandaluyong’s 10% vacancy rate increased by 2% from 2017, while Taguig maintained its 7% rate.
Meanwhile, vacancy rates in Muntinlupa, Ortigas Center, Makati, and Bay Area slipped in 2018, dipping below the healthy 5% vacancy rate. Bay Area in particular is essentially at full capacity, hitting a tight 0.4%.   

Different drivers, different needs

Different industries have different specialized needs that they need their office locations to satisfy.
Quezon City’s bad traffic and lack of competitive infrastructure projects repelled potential tenants who were looking for locations that were accessible and boasted complete amenities. The city’s average rent, which was significantly lower than other districts, wasn’t enough to convince businesses to set up shop in the area. Grade A buildings in Quezon City cost P850 per square meter per month to rent, much cheaper than Makati’s P1,570 or Taguig’s P1,310 for buildings of the same grade.
On the flip side, Bay Area and Makati’s issuance of Letters of No Objection (LONO) to Philippine offshore gaming operators (POGOs) drove up the demand for spaces under this sector. Their employees’ familiarity with the districts was also a consideration for POGOs. “Given that these are mostly foreign workers, they’re not as familiar just yet with Quezon City as compared to the two other districts [which issued LONOs],” said Monique Pronove, CEO of Pronove Tai.

Further growth for 2019

Overall, the office market is expected to grow in 2019, with office stock projected to hit 11.7 million square meters, with 1.04 million square meters coming from new office supply. Quezon City is expected to be the fastest-growing district with a 31% year-on-year growth rate. “We will be seeing competitive pricing within this area,” Pronove reported. “The top developers [SM, Eton, Robinsons, Ayala, and Araneta] are represented there with developments that will be completed in 2019.”
POGOs are also expected to increase their demand for space. The industry has already taken up 45% of pre-leased transactions for 2019, surpassing IT and business process management firms (IT-BPM) and traditional firms at 36% and 19%, respectively. Pronove expects these firms will also be expanding to different districts like Mandaluyong and Taguig, as well as cities like Clark, Davao, and Cebu.
To help support these developments, the government is called to fast-track proclamations of economic zones, vital for industries like IT-BPM when choosing their locations. In 2018, approval time for economic zone applications took up to 14 months, too slow to fully actualize the growth potential in the sector.
For landlords, Pronove Tai encourages them to acquire tenants from different sectors. “We always say that landlords should diversify their tenancy mix and should not be focused on just one demand driver,” said Pronove.

Gov’t mulls takeover of Hanjin’s shipyard

OPTIONS for a resolution of debt troubles of Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), which has entered rehabilitation, could now include a possible government takeover of its facilities in Subic Bay Freeport in Central Luzon, the country’s Defense chief said on Wednesday.
Wednesday also saw a senior central bank official saying that banks may have to be more “proactive” in monitoring the financial condition of borrowers to which they have significant exposure, while a HHIC-Phil official said the company could return to profit three years from the entry of an investor.
During Senate deliberations on the proposed Department of National Defense 2019 budget, Defense Secretary Delfin N. Lorenzana said he posed the idea to President Rodrigo R. Duterte on Tuesday evening, adding that the latter was “very receptive” to the idea.
“While we sympathize with the financial woes of Hanjin, we are excited really by this development because we see the possibility of having our own shipbuilding capacity in the Philippines, especially large ships like what’s being built in Hanjin’s shipyard in Subic,” Mr. Lorenzana said.
“And so, the Flag Officer-in-Command Admiral (Robert A.) Empedrad reached out to me — I think yesterday or the other day — and I said, ‘why not we takeover the Hanjin [facility] and give it to the Navy to manage?’” he recalled.
“And so I brought this idea to the President last night and he’s very receptive to the idea. Although the Secretary of Finance… (Carlos G.) Dominguez (III) is also thinking of… how the local banks can recoup their investment there…”
Presidential Spokesperson Salvador S. Panelo declined to comment when asked to verify the development.
The South Korean shipbuilder’s debts to five of the country’s biggest banks have been estimated to total some $412-million.
Trade Undersecretary and Board of Investments managing director Ceferino S. Rodolfo said last week that two Chinese shipbuilders have expressed interest in acquiring HHIC-Phil.
Mr. Empedrad told senators in the hearing that the Philippine Navy “cannot take over totally the entire Hanjin [shipyard] but a portion probably…”
Senate Majority Leader Juan Miguel F. Zubiri proposed for management of the shipbuilding facility to be given to a private entity while the government takes a majority stake. “Instead of using funds to (buy ships) abroad, we are earning. Filipinos are building our ships and it’s under the control of the Department of National Defense. I think it’s a win-win solution,” he said.
Senator Panfilo M. Lacson, one of the Senate Finance committee’s vice-chairmen, said the P75 billion added to the Department of Public Works and Highways 2019 could help cover the government takeover. “There’s… P75 billion in the proposed budget… What if the government will just take over Hanjin[’s shipyard] and then bid out to possible partners, private entities, then let the Philippine Navy partner with private entity?” Mr. Lacson said.
MORE ASSURANCES
The local banking sector will not reel from HHIC-Phil’s $412-million loan default, the central bank said on Wednesday, even as one of its senior officials flagged the need for lenders to be more “proactive” in vetting huge loans.
The Bangko Sentral ng Pilipinas (BSP) moved anew to calm markets, assuring that the five banks with big loan collectibles from the South Korean shipbuilder have what it takes to remain on solid ground.
“[B]ased on the results of the BSP’s stress-testing exercise, an assumed write-off of the loan exposures to Hanjin will have minimal impact on the industry’s CAR (capital adequacy ratio),” BSP said in a statement.
Industry-wide CAR stood at 15.36% as of September 2018, well above the eight percent global standard and the central bank’s 10% requirement, while liquidity coverage was more than enough at 157.6%, data showed.
The Rizal Commercial Banking Corp. (RCBC) had the biggest exposure with $145 million lent to HHIC-Phil, followed by the state-run Land Bank of the Philippines with $85 million; the Metropolitan Bank & Trust Co. (Metrobank) with $70 million; BDO Unibank, Inc. with $60 million and the Bank of the Philippine Islands (BPI) at $52 million.
“Based on the latest data, the BSP is confident about the local banks’ ability to manage this specific challenge. They are also equipped to handle the negotiations required to complete Hanjin’s corporate restructuring while remaining compliant with prudential regulations,” the central bank added.
Asked whether banks will need to tighten lending standards after Hanjin’s case, BSP Deputy Governor Chuchi G. Fonacier replied in a text message: “Partly yes, and partly on really being proactive in monitoring the financial condition and other developments of their borrowers, especially those with large exposures.”
CREDIT RATER WATCHES
In a separate statement on Wednesday, international debt watcher Fitch Ratings said that Philippine banks will not be shaken by HHIC-Phil’s problem debts, but noted that lenders with “more significant exposure” could see some pressure on their credit rating.
Referring to RCBC’s exposure to HHIC-Phil, Fitch noted that “[t]he full amount exceeds its 2017 net profit, and provisioning on these loans could result in the bank reporting at least one quarterly loss, implying some risk of capital impairment, although we do not expect the bank to set aside the full amount of its exposure.”
“The exposure of the three largest banks — BPI, BDO and Metrobank — is more manageable relative to their loan books and pre-provision profits,” the credit rater added.
“The sector- and company-specific causes suggest this case is unlikely to indicate broader stress across banks’ loan books…”
‘OPEN TO ANY TIE-UP’
A HHIC-Phil executive, who asked not to be named, said by phone on Tuesday that the company expects to return to profit three years after the entry of an investor.
“We really see ourselves profiting after three years. We just have to be funded $12 million monthly,” the source said, adding that HHIC-Phil’s debt to local banks actually totals about $312 million, with another $100-million liability carried by its South Korea-based supplier that is separate from Hanjin’s Philippine unit.
“We’re open to any tie-up as long as the company can take care of the debt and provide for the operating capital.”
Among others, HHIC-Phil is banking on developments like the United Nations International Maritime Organization’s policy to cut the sulfur content of ship fuel to 0.5% from the current 3.5%. “That policy will take effect in 2020 and we can really make profit from that as there is only a small number of ships that meet that requirement,” the executive said. — Camille A. Aguinaldo, Melissa Luz T. Lopez and Janina C. Lim

Philippine GDP growth seen slowing

By Elijah Joseph C. Tubayan
Reporter
PHILIPPINE economic growth will likely slow up to this year, according to latest estimates of a macroeconomic surveillance organization for the Association of Southeast Asian Nations (ASEAN) Plus 3 economies and HSBC Private Bank.
AMRO TRIMS FORECASTS
The ASEAN+3 Macroeconomic Research Office (AMRO) trimmed its Philippine GDP growth projections for 2018 and 2019.
AMRO sees gross domestic product (GDP) growth settling at 6.4% in 2018 and 6.3% in 2019 based on its January update of the ASEAN+3 Regional Economic Outlook (AREO) published on Wednesday.
This is slightly down from the 6.5% and 6.4% estimates for those years in AMRO’s October report.
If realized, growth will slow from the 6.7% logged in 2017.
This compares with the ASEAN+3 estimated average of 5.3% for 2018, down from 5.4% previously, and 5.1% for 2019, which was kept from the previous report.
AMRO’s inflation forecast for the Philippines in 2019 was also revised to three percent from 4.3%. This will moderate from the 5.2% inflation clocked in 2018, which breached the central bank’s 2-4% target range.
It is also faster than the region’s two percent and 2.2% average inflation estimates for 2018 and 2019, respectively — changed from 2.1% and two percent forecasts for the same respective years.
“Amid moderate growth performance with inflation starting to ease, some economies in the region have kept their interest rates on hold during their most recent policy meetings,” the report read, noting that “[t]he Philippines maintained the policy rate at 4.75%, following four rate rises since May, as the peso has strengthened slightly while inflation has started to moderate.”
Headline inflation reached a peak of 6.7% in September and October 2018, the fastest pace in nine years. The overall rise in prices of widely used goods slowed to six percent in November and eased further to 5.1% in December.
The surge in consumer prices has been blamed for slower-than-expected economic growth, traced to higher and new excise taxes on select goods and high world fuel prices.
Malacañang in September issued orders removing non-tariff barriers and streamlining procedures for food distribution.
The Bangko Sentral ng Pilipinas (BSP) raised interest rates by a total of 175 basis points in five Monetary Board meetings from May to November, and kept policy rates steady in its final meeting for 2018 in December.
GDP growth averaged 6.3% in the first three quarters of 2018, against the government’s downward-adjusted target of 6.5-6.9% for that year. For 2019, the target is at 7-8%.
AMRO’s latest forecasts compares with the World Bank’s 6.4% and 6.5% for 2018 and 2019 respectively, the Asian Development Bank’s 6.4% and 6.7% estimates for 2018 and 2019, respectively, the International Monetary Fund’s (IMF) 6.5% and 6.7% for the same years, and 6.7% of the Organization for Economic Cooperation and Development for both years.
Moreover, AMRO said in a separate blog post that the ASEAN+3 area — consisting of the 10 ASEAN members plus China, Japan and South Korea — faces a “high likelihood” of “high impact” risk from further escalation of the US-China trade conflict.
But it also noted that the area “has done well and remains the fastest growing region in the world”, with “most economies… growing at close to or slightly above potential with subdued inflation.”
The Philippines, along major ASEAN economies such as Indonesia, Malaysia, Thailand, and Korea “continue to have relatively strong external positions with adequate reserves and current account balances that are either in surplus or in small deficit,” AMRO said.
The regional surveillance body said that countries should rain vigilant for potential downside risks.
“For economies facing strong external headwinds and spillovers, policy makers have preemptively tightened monetary policy to help assuage market concerns. On the fiscal front, prudent public finances have allowed fiscal policy to play a crucial countercyclical role, helping to support growth. However, with the narrowing fiscal space, authorities would need to reprioritize spending to support structural reforms and growth,” AMRO said.
“Policy makers should continue to remain vigilant, with no room for complacency. Longer term structural reform agenda should also be pushed ahead, such as in building capacity and connectivity to foster resilience and enhance future growth prospects,” it added.
HSBC CITES RESILIENCE
For HSBC, Philippine GDP growth will ease slightly this year due to higher interest rates even as private consumption is seen to remain strong.
HSBC projects GDP growth to moderate to six percent this year from the 6.2% projected for 2018.
“We anticipate the economic growth in the Philippines to stay relatively resilient, in line with the synchronized global slowdown scenario,” HSBC Private Banking Chief Market Strategist in Asia Fan Cheuk Wan said in a press conference on Wednesday.
For this year, the private lending unit of the HSBC Group expects the BSP to “approach the end of its tightening cycle” by hiking its benchmark rates by 25 basis points in the first quarter.
“We still have the excise tax increase. This will continue to underpin inflation concerns at the beginning of the year,” Ms. Fan added. “But after a Q1 BSP rate hike, and with the impact of the oil price correction of last year… we will start to see easing inflationary pressures in the Philippines.”
HSBC projects local headline inflation clocking in at 3.8% for whole-year 2019, well within the BSP’s 2-4% target band.
It also expects the “Philippine Stock Exchange index to recover to 8,600 by the end of 2019 after the sharp correction last year.” — with Karl Angelo N. Vidal
Performance projections for Southeast Asia, select major Asian economies

Performance projections for Southeast Asia, select major Asian economies

PHILIPPINE economic growth will likely slow up to this year, according to latest estimates by a macroeconomic surveillance organization for the Association of Southeast Asian Nations (ASEAN) Plus 3 economies and HSBC Private Bank. Read the full story.
Performance projections for Southeast Asia, select major Asian economies

Sugar next on government’s deregulation list after rice — Diokno

THE GOVERNMENT will move to open up sugar imports this year to make the industry more competitive, the state Budget chief said, explaining that President Rodrigo R. Duterte’s administration wants to do the same for other food items.
“We have to deregulate most of the agricultural sector. That’s the direction now of the government, like freer importation of all food products,” Budget Secretary Benjamin E. Diokno said in a media briefing on Wednesday.
Following the proposed rice tariffication law — which will replace import quotas with a regular tariff scheme in a move estimated to slash P7 per kilogram (/kg) off this staple’s retail prices and inflation by 0.7-0.8 percentage point — that now awaits signing into law by Mr. Duterte, the government will now focus on removing hurdles to sugar trades.
“Next is sugar. That’s bloodier than rice. It’s one of the inputs to our potential exports. All the commodities, it turned out… were so restrictive with respect to agriculture,” the Budget chief explained.
“We plan to deregulate or relax that industry. That puts pressure on the domestic economy to compete,” he added, noting that local prices of sugar are “still expensive compared to the global rate.”
Sugar import permits are currently coursed through planters’ groups and traders, a process that incurs additional costs to the detriment of consumers.
Philippine Statistics Authority (PSA) and Sugar Regulatory Administration (SRA) show prevailing retail prices at P60/kg for refined sugar, P50/kg for washed sugar and P48/kg for raw sugar. Those prices compare with refined sugar’s P55.03/kg, washed sugar’s P50.16/kg and raw sugar’s P47.10/kg in January last year.
Production of locally produced sugar has also been declining, to 2.08 million metric tons (MT) in crop year 2017-2018 from 2.5 million MT in crop year 2016-2017.
Industry group Philippine Food Processors and Exporters Organization Inc. is projecting a 1 million MT shortfall of sugar in 2019.
Sugar was among the drivers of inflation in 2018 that hit nine-year highs, prompting the SRA to import 150,000 MT of the produce. The Department of Agriculture has also indicated that it is open to importing 100,000 MT more this year if supply is inadequate.
Malacanang in September last year issued orders removing non-tariff barriers and streamlining procedures to ease food distribution and boost supply.
Moreover, Mr. Diokno said that meeting its economic growth and poverty rate targets would depend on the performance of the country’s agriculture sector.
“If agriculture would grow by four percent, the economic growth target of 7-8% is really doable. In 2018 it is projected to hit at least 6.5%,” Mr. Diokno said.
Latest PSA data show production of agriculture — which has historically contributed about a tenth to gross domestic product (GDP) and accounted for a fourth of employed persons — edged up by a nearly flat 0.15% in 2018’s first three quarters, compared to 4.64% in 2017’s comparable period and the 2.5-3.5% annual target for the sector under the 2017-2022 Philippine Development Plan.
Agriculture Secretary Emmanuel F. Piñol said last week that he expects the sector to have turned in one-percent growth for the entire 2018 — due to storms that battered farms — after expressing confidence in late December that two percent would be “doable”.
The PSA will report fourth-quarter and full-year 2018 GDP growth on Thursday next week and agriculture’s performance for the same periods days prior.
GDP growth averaged 6.3% in the first three quarters of 2018, short of the downward-adjusted 6.5-6.9% target for 2018. For 2019-2022, the target is 7-8%.
“We really have to focus on mechanization, we have to focus on adopting high-quality seeds, more irrigation… We have to show farmers that these things can really make a difference,” Mr. Diokno said.
“The country’s growth is domestic-driven as we invest heavily in the ‘Build, Build, Build’ program and as we invest heavily in our human capital,” he added.
“Agriculture is the weakest link. That’s also bad in our desire to reduce poverty to 14% by 2022” from 21.6% in 2015. — Elijah Joseph C. Tubayan

Chelsea Logistics secures PCC nod for Trans-Asia acquisition

CHELSEA Logistics Holdings Corp. (CLC) on Wednesday said the Philippine Competition Commission (PCC) has cleared its proposed acquisition of Trans-Asia Shipping Lines, Inc.
In a disclosure to the stock exchange, CLC said it received the PCC decision saying it will “not take further action (on the transaction)… on the basis of the conditions provided in the Undertaking submitted by the Company.”
As part of the conditions, CLC agreed to have the PCC monitor the passenger and cargo rates, as well as explain “extraordinary rate increases” in critical routes.
The listed firm will also submit semi-annual reports on passenger and cargo trips in critical routes, and maintain service quality in passenger and cargo services using a customer satisfaction index developed by third party monitor.
Last October, the PCC started a Phase 1 review of the 2016 deal between CLC and Trans-Asia after initially voiding it on the grounds of their failure to notify the competition watchdog.
The nullification of the deal resulted to the PCC’s approval of CLC’s acquisition of a stake in KGLI-NM Holdings, Inc., which owns 2GO Group, Inc. The PCC had earlier said the Trans-Asia transaction initially raised competition concerns, as both 2GO and Trans-Asia were owned by businessman Dennis A. Uy’s Udenna Corp.
SHARE OFFER WITHDRAWN
At the same time, CLC said it will no longer proceed with the offering of three million preferred shares with an oversubscription offer of up to two million preferred shares after “careful consideration” of its business strategies.
CLC said it has withdrawn its listing application for the share offer.
The application was filed with the Securities and Exchange Commission last September. In its filing, CLC said then it would sell the five million preferred shares at P1,000 each, to fund its expansion and acquisitions.
In the nine-month period, CLC saw a 72% decline in its net income to P43.013 million. — Denise A. Valdez

It’s baaack!


NOSTALGIC music fans bit their fists hard when Hard Rock Café in Glorietta closed its doors in 2017. Now, they can release their fists, for it has reopened at the Conrad S Maison in the Mall of Asia area in Pasay City.
The original Hard Rock in Makati, which opened in the mid-’90s, was the company’s main foothold in Manila. The parent company was founded in London in 1971, but changed hands several times since, before finally landing in the lap of the Seminole Tribe of Florida.
Explaining how the company acquired the local franchise, Rommel Turbanos, Vice-President of The Bistro Group (the company behind the Manila franchises of TGI Friday’s and Red Lobster, among others), pointed out that the holder of the previous Philippine franchise was a Singapore-based company and when its franchise deal ended, it was not renewed. “We were looking at the opportunity to bring Hard Rock to complete our portfolio,” said Mr. Turbanos.
“I think the international principal wanted somebody who was really local,” he noted. “It’s different when you have the locals, to have a good grasp of the market.”
While Mr. Turbano says that The Bistro Group has long been a “believer” in the brand, he also talked about how it is a perfect fit for The Bistro Group’s portfolio. “We know there’s a big opportunity in terms of the food,” he said. But also, “Filipinos love music. That’s a bigger part of the consideration, plus the merchandise.”
The merchandise may also play a part in the future success of the new location: Mr. Turbano identifies a large part of the Mall of Asia Complex crowd as a “good mix of locals and tourists” — tourists, some of whom happen to collect Hard Rock Café merchandise from around the world.
The new Hard Rock Café can seat about 220 people, and will feature live performances.
As for the food, BusinessWorld had a satisfying time polishing off ribs, chicken, and brisket, but will gladly abstain from the restaurant’s sticky sweet signature cocktails, the Bahama Mama and the Electric Blues. Stick to the beer.
As mentioned above, the first Hard Rock Café in Manila opened in 1995. The college kids who may once have populated it have since grown up — which would explain the volume of cheerful uncles during the Jan. 10 launch. Mr. Turbanos outlines the strategy to keep it relevant to younger crowds: “We’ll play different genres.” It seems to have worked once: this 20-something reporter was drawn to the old Hard Rock Cafe thanks to a performance by the Swedish indie band, The Radio Dept., back in 2011.
Meanwhile, at the new Hard Rock Cafe, the aforementioned cheerful uncles kept asking this reporter which songs I knew from the bands’ lineup of Chicago, Queen, and Styx covers. I got my revenge after they asked me about Ariana Grande’s hit, “Thank U, Next.”
The blend of old and new is also seen on the decor. All the Hard Rock Cafés worldwide have a collection of music-related memorabilia on their walls because of a tradition started by Eric Clapton (he asked to have his guitar placed over his usual seat to reserve it). The decor on the Hard Rock Cafe at S Maison includes dresses worn by Steve Nicks and Kelly Rowland on the walls.
As for other things to look forward to from the Bistro Group, Mr. Turbanos said that more Hard Rock Cafes may be set to open. And he dropped another hint about what to expect: “A lot — [think] bigger brands.” — Joseph L. Garcia
Hard Rock Café Manila is open Sunday to Thursday (11 a.m. to midnight) and Friday to Saturday (11 a.m. — 1 a.m.). It is located on Level 2, S Maison at Conrad, Pasay City. For details and reservations call 990-9809).

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