MB cuts rates, adjusts inflation forecasts

May 10, 2019 | 12:32 am

THE CENTRAL BANK’s Monetary Board (MB) on Thursday cut benchmark interest rates by 25 basis points (bps) in its third policy review for the year, hours after the Philippine Statistics Authority (PSA) reported that the economy grew at the slowest clip in four years last quarter and two days after the PSA said inflation eased to the slowest pace in 16 months in April.

“At its meeting on monetary policy today, the Monetary Board decided to reduce the interest rate on the BSP’s overnight reverse repurchase (RRP) facility by 25 basis points to 4.5% effective on Friday, May 10… The interest rates on the overnight lending and deposit facilities were reduced accordingly,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a press conference late in the afternoon at the central bank headquarters in Manila.

Mr. Diokno — who has described banks’ already reduced (by a total of 2 percentage points last year) reserve requirement ratio (RRR) as “really high” — also said that while there was “no decision yet” on this issue, it will be “on the agenda next week” of MB’s weekly meeting.

The MB’s move yesterday took the overnight deposit rate to four percent from 4.25% and the overnight lending rate to five percent from 5.25%, partially dialling back a cumulative 175-bp hike fired off through five meetings last year as the BSP scrambled to put a lid on inflation which increased for nine straight months to a nine-year-high 6.7% in September and October. Headline inflation has since slowed for six months to a 16-month-low three percent.

“The Monetary Board’s decision is based on its assessment that the inflation outlook continues to be manageable, with easing price pressures owing to the decline in food prices amid improved supply conditions,” the BSP said in a statement read by Mr. Diokno.

“In deciding on the stance of monetary policy, the Monetary Board noted impact of budget delays on near-term economic activity, but took the view that prospects for domestic demand remain firm, to be supported by a projected recovery in household spending and continued implementation of the government’s infrastructure program,” it added.

“In addition, the Monetary Board observed that the global growth momentum has slowed in 2019.”

In a separate briefing before lunch, Socioeconomic Planning Secretary Ernesto M. Pernia said Mr. Diokno had called him that morning to ask about first-quarter gross domestic product growth, which turned out to have slowed to a four-year-low 5.6% against a 6.1% median in BusinessWorld’s poll last week of 20 economists.

INFLATION FORECASTS CHANGE
In the same afternoon central bank briefing, BSP Deputy Governor Diwa C. Guinigundo said the MB decided to cut to 2.9% the already reduced three-percent inflation forecast for this year that was adopted in its March 21 policy review, but increased next year’s forecast to 3.1% from three percent previously.

The BSP’s inflation target range this year and next remains 2-4%.

“… [T]he Monetary Board also noted that the risks to the inflation outlook remain broadly balanced for 2019 amid risks of a prolonged El Niño episode [which the Philippine Atmospheric, Geophysical and Astronomical Services Administration now expects to last till August] and higher-than-expected increases in global oil prices,” the BSP statement read.

Asked later on by reporters on prospects for future adjustments in policy interest rates, Mr. Guinigundo noted “[t]here was some flexibility exercised by the Monetary Board by way of normalizing the 175 bps… It is not a full normalization, of course, because monetary policy cannot be done in one sweep, in one go.”

“We have to be data dependent, evidence-based so that every move that we do, we know the consequences or the complications of the measures.”

Sought for comment, Ruben Carlo O. Asuncion, chief economist of the Union Bank of the Philippines, Inc., replied in a mobile phone message that the Monetary Board’s latest move would be “generally good for banks and it will help ease tight lending and/or credit” and “will help the economy expand and grow.”

In an e-mail, Security Bank Chief Economist Robert Dan J. Roces said: “We think that an RRR cut is more positive for economic growth as domestic liquidity and aggregate demand could be better augmented by this policy action, especially in light of the sub-6% GDP growth rate and low money supply growth.”

The central bank has estimated that reducing banks’ RRR by 100 bps would inject about P90 billion into the financial system. — Reicelene Joy N. Ignacio

Gross domestic product quarterly performance (Q1 2019)

May 10, 2019 | 12:31 am

PHILIPPINE gross domestic product (GDP) grew by 5.6% in the first quarter, its worst performance in four years, the Philippine Statistics Authority reported on Thursday. Read the full story.

Q1 GDP growth slowest in 4 years

May 10, 2019 | 12:31 am

PHILIPPINE gross domestic product (GDP) grew by 5.6% in the first quarter, its worst performance in four years, the Philippine Statistics Authority reported on Thursday.

The first-quarter outcome was lower than the 6.3% in the preceding quarter and 6.5% in the first quarter of 2018.

This was likewise lower than the 6.1% median estimate in BusinessWorld’s poll of 20 economists last week and the downward revised 6-7% target set by the government for 2019.

Socioeconomic Planning Secretary Ernesto M. Pernia said in a news briefing yesterday this was the slowest growth rate recorded in 16 quarters, or since the 5.1% logged in the first quarter of 2015.

The first-quarter turnout also snapped the economy’s growth streak of 16 quarters when it registered at least six percent growth.

In a joint statement, the Department of Finance, the National Economic and Development Authority (NEDA) and the Department of Budget and Management said that in order “[t]o reach the [floor of the] full-year growth target of 6-7%, the economy will need to expand by an average of 6.1% over the next three quarters.”

“This target is still within reach, should the private sector sustain its current performance and government be able to jumpstart and speed up the implementation of its new programs and projects.”

On the supply side, services led the way with seven percent expansion, faster than the 6.7% recorded a year ago.

Industry grew by 4.4%, slower than last year’s 7.7%.

Growth in agriculture, hunting, forestry and fishing slowed to 0.8% versus the year-ago 1.1%.

Mr. Pernia, who is NEDA’s director-general, further noted in the briefing that the agriculture slowdown is an effect of the current El Niño episode that is expected to last until August.

On the demand side, government spending grew 7.4% in the first three months of 2019, albeit slower than the 13.6% growth in the first quarter of 2018.

“As we have forewarned repeatedly, the re-enacted budget would sharply slow the pace of our economic growth,” Mr. Pernia said.

“We estimate that we should have grown by as much as 6.6% this first quarter, if we were operating under the 2019 fiscal program.”

The government operated on a re-enacted 2018 budget from the start of the year until April 15, when President Rodrigo R. Duterte signed the latest general appropriations into law, but vetoed P95.3 billion in appropriations that he said were not in accordance with his administration’s priorities, slashing this year’s national budget to about P3.662 trillion.

In a research note, HSBC Global Research economists Noelan Arbis and Joseph Incalcaterra noted that the 2019 budget’s nearly four-month delay has “likely curtailed government spending growth,” adding that higher bank lending rates and low domestic market liquidity “likely caused the slowdown in fixed investment.”

“Indeed, government consumption growth registered its slowest pace in two years and fixed investment growth declined to its lowest in five years, implying a drastic shift in economic activity from recent quarters,” they said.

BROAD-BASED WEAKNESS
In an e-mail to reporters, Standard Chartered Bank economist Chidu Narayanan cited “broad-based weakness” in the economy, noting that “… the details of the [first-quarter] GDP print… suggests that the budget impasse was not the only reason for the slowdown…”

“Household consumption was the only source of strength,” Mr. Narayanan said.

“Government expenditure, capex (capital expenditures) and net exports all slowed in the quarter.”

Growth of private investment, represented in the data as capital formation, slowed to 6.8% last quarter from 10.3% previously. Investments in fixed capital — which includes construction and durable equipment among others — grew 5.73% in the first quarter, the slowest pace since 5.67% in 2014’s second quarter.

A bright spot in the GDP report was household spending, which accounts for about 70% of GDP and which grew 6.3% last quarter, accelerating from 5.3% in the fourth quarter of 2018 and 5.6% in the first quarter of 2018.

Robert Dan J. Roces, chief economist at Security Bank Corp., blamed persistent weakness in trade also for the economic growth slowdown.

“Market analysts and forecasters have long anticipated that the delayed budget was already factored in, and thus government spending ‘still existed’ despite a reenacted budget in [the first quarter]. What was unexpected was the broader drag from the tepid trade component of the GDP, thus a lower than the anticipated growth rate,” Mr. Roces said in a note to reporters.

HSBC’s Messrs. Arbis and Incalcaterra likewise noted a “significant drag on the net export front.”

“Total export volumes expanded only 5.8% year on year, the slowest pace since 2015. Meanwhile, import volumes slowed more moderately, expanding at 8.3%. As a result, the net export deficit rose to 7.8% of GDP, the highest on record.”

Gross national income — the sum of GDP and net income from abroad — grew 4.9% last quarter compared to 5.7% the preceding quarter and 6.3% in the 2018’s first three months.

In a separate statement, Finance Secretary Carlos G. Dominguez III said that the first quarter’s 5.6% GDP growth is still a “decent expansion” despite the budget delay that caused the government to miss spending P1 billion a day in the first four months.

“The Duterte administration aims to offset the lower spending at the outset of 2019 resulting from the budget delay and the construction ban during the election season,” Mr. Dominguez said.

“Henceforth, we expect growth to pick up on higher state spending in continuance of last year’s upward momentum.”

According to the Bureau of the Treasury, state disbursements missed targets by 11%, totaling P777.99 billion in the first quarter, although spending overall was up one percent from a year earlier.

Meanwhile, first-quarter fiscal deficit shrank 41% year-on-year to P90.245 billion, missing the program by 52%. In March alone, the fiscal deficit shrank by 47% annually to P58.409 billion, falling 51% short of program.

For Emilio S. Neri, Jr., lead economist at Bank of the Philippine Islands, the details of the GDP report “actually paint an encouraging picture for the Philippine economy” despite the disappointing turnout in the first quarter.

“The recovery of household consumption and the stable growth of private construction suggest that private spending remains strong, with support coming from low inflation and election spending. Meanwhile, weak government expenditure is just temporary as the national budget was already approved, which allows the government to catch up later this year in terms of its infrastructure program,” Mr. Neri said in a note.

“Hence, the economy can still grow by at least six percent in 2019. We note that GDP growth was only 5.1% in [the first quarter of] 2015, and yet the economy still expanded by 6.1% in [full year] 2015.” — Marissa Mae M. Ramos with inputs from Reicelene Joy N. Ignacio

ERC moves to ease power demand amid thin reserves

May 10, 2019 | 12:30 am

THE ENERGY REGULATORY COMMISSION (ERC) has issued a resolution that adds other circumstances that will prompt distribution utilities, including the country’s biggest — Manila Electric Co. (Meralco), to activate their interruptible load program (ILP) and ease energy demand in the system.

“We saw the urgency to clarify the Amended ILP Rules that we issued, particularly as to what is contemplated by the phrase ‘such other minimum threshold’ that would constitute as a condition to activate the ILP. Therefore, we would like to clarify that the phrase, ‘such other minimum threshold’ refers to the emergency state of the grid as defined in the Philippine Grid Code (PGC) 2016 Edition,” said Agnes VST Devanadera, ERC chairperson and chief executive officer, said in a statement on Thursday.

Under the amended ILP rules, distribution utilities may also activate the scheme during other grid conditions, including “emergency state” as defined under the PGC. The amendment comes years after the program was adopted by the ERC in 2010.

ILP seeks to lower the peak demand, thus reducing the stress to the grid.

Meralco and other distribution utilities resorted to the program, which calls on customers to voluntarily de-load or disconnect from the power grid for a limited period whenever the power supply is constricted.

Previously, ILP is activated only when system operator National Grid Corporation of the Philippines (NGCP) declares that the grid is on red alert, or when its dispatchable and contingency reserves have been wiped.

Both reserves are equivalent to the biggest operating plant online — the two identical units of the power plant in Sual, Pangasinan each with a capacity of 647 megawatts (MW).

Under Section GO (grid operations) 6.2.2.3 of the PGC 2016 Edition, the grid is considered to be in emergency state when either a single or multiple outages occur without resulting in total system blackout, but any one of the following conditions exists: there is a generation deficiency or operating margin is zero; the grid transmission voltage is outside the limits of 0.90 per unit and 1.10 per unit of the nominal value; or the loading level of any transmission line or substation equipment is above 11% of its operational thermal limit capacity.

Ms. Devanadera said in view of the clarification, the NGCP is directed to call on distribution utility-ILP administrators to implement their respective ILPs, particularly during situations of red alert and emergency state, as specified in the grid code.

The ERC clarification comes a few days before the mid-term elections on Monday, for which Meralco and NGCP have issued separate advisories on Thursday about their contingency measures for May 13.

Meralco said more than 150 generator sets are on standby on election day, to be carried by roving crews.

“These generator sets intend to provide basic lighting to polling and canvassing places in case of unexpected power interruptions. Around 300 floodlights will also be ready for deployment and use in case of emergencies, but Meralco also advises polling centers to bring backup lights as well as extra precautionary measure,” it said. “On May 13, Meralco will have on duty 300 responding crews, who will be working 24/7 to ensure that Meralco is prepared to respond to any eventualities.” — VVS

Disney delays Avatar 2, sets dates for new Star Wars films

May 10, 2019 | 12:08 am

LOS ANGELES — Walt Disney Co. on Tuesday pushed back the release of James Cameron’s sequel to box-office champion Avatar by a year, to December 2021, and announced debut dates for new Star Wars films starting in December 2022.

Disney acquired the Avatar franchise and several other movies through its recent purchase of film and TV assets from Rupert Murdoch’s 21^st Century Fox, strengthening its dominant position at movie theaters.

Avatar 2, the follow-up to the 2009 blockbuster that is the highest-grossing film of all time, had originally been slated to reach theaters in 2014 but was delayed to 2017 and then to December 2020.

With the sequel now scheduled for December 2021, Disney moved Avatar 3 to December 2023, Avatar 4 to December 2025, and Avatar 5 to December 2027.

A year ago, director Cameron told reporters he had begun filming on the second and third Avatar movies and had written the fourth and fifth films in the series.

The story of a blue, humanoid race on a lush moon known as Pandora, Avatar is the highest-grossing movie in history with $2.8 billion in global ticket sales, though box office experts say its long-standing record could soon fall to current Disney hit Avengers: Endgame from Marvel Studios.

In between Avatar movies, Disney said it would release new Star Wars films in December 2022, 2024 and 2026.

The company did not release details, but it has previously announced plans for two Star Wars film series — one overseen by The Last Jedi director Rian Johnson and another to be written by David Benioff and D.B. Weiss, the creators of HBO’s hit television show Game of Thrones.

The Avatar 2 delay moves one of Disney’s biggest movies off its 2020 slate. Films on next year’s schedule include a retelling of Mulan, two untitled Marvel films, and Steven Spielberg’s remake of Broadway musical West Side Story.

Eight Marvel movies are scheduled to be released between 2020 and 2022, the company said. — Reuters

Oil, food units drag San Miguel Q1 profit lower

May 10, 2019 | 12:08 am

EARNINGS of diversified conglomerate San Miguel Corp. (SMC) slumped by 18% in the first three months of 2019, as its fuel and food businesses were weighed down by volatile global oil prices and higher input costs.

In a statement issued after the market’s close on Thursday, SMC said net income dropped to P12.8 billion, even as consolidated revenues went up seven percent to P250.9 billion.

“The slowdown in these businesses is temporary. We are not taking them lightly and we’re seeing clear signs of recovery. We anticipate higher consumer spending from an improving economy, primarily the easing of inflation,” SMC President and Chief Operating Officer Ramon S. Ang said in a statement.

The company also expects the election season to help boost results.

“We’ve implemented a good number of measures to recover lost ground and further strengthen our competitive positions in industries where we are in,” Mr. Ang added.

San Miguel Food and Beverage, Inc. (SMFB) posted a one percent profit increase to P7.4 billion, following a 14% uptick in consolidated revenues to P75.7 billion. The growth was attributed to higher volumes across the beer, spirits, and food businesses.

Profit growth, however, was tempered by an industry-wide oversupply and decline in poultry prices, due to the government’s lifting of special safeguard duties against imports. The company was also affected by the rising cost of major raw materials such as wheat, soybean meal, corn, and cassava.

The fuel and oil business through Petron Corp. saw a 77% decline in net income to P1.3 billion during the three-month period, as revenues also dropped four percent to P124.6 billion. Petron’s local operations reported a five percent drop in volumes following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law. This came alongside prevailing movements in global crude prices and lower refining margins.

SMC Global Power Holdings Corp., meanwhile, posted an operating income of P9.8 billion, 23% higher year on year on the back of a 41% uptick in consolidated revenues to P34.7 billion.

Longer operating hours at the firm’s Ilijan and Sual power plants resulted to a 42% increase in consolidated off-take volume growth to 6,826 gigawatt hours. The full contributions of Units 2 and 3 of the Malita and Limay power plants further supported SMC Global Power’s results.

Meanwhile, SMC Infrastructure’s operating income rose one percent to P3.1 billion. Revenues likewise increased eight percent to P6.4 billion.

Shares in SMC soared 3.99% or P7.50 to close at P195.50 each at the stock exchange on Thursday. — Arra B. Francia

Google tops 15 million music subscribers as it chases after Spotify

May 10, 2019 | 12:07 am

GOOGLE’S paid music services have eclipsed 15 million subscribers, according to two people familiar with the numbers, a milestone for a company that has struggled to build subscription media businesses.

The figure includes subscribers to two services — YouTube Music and Google Play Music, an older service that is being folded into YouTube Music — said the people, who asked not to be identified because the information isn’t public. The number also includes some customers who are still on promotional trials.

Google, part of Alphabet, Inc., is still a long way from the market leaders: Spotify Technology SA has more than 100 million subscribers, while Apple, Inc. has more than 50 million. But the progress is a good sign for an ad-supported company that has rarely gotten customers to pay for its services.

YouTube declined to comment on the total number of customers for its paid music service, but said subscribers to YouTube Music and Premium grew 60% between March 2018 and March of this year. Premium subscribers pay for the music service, as well as access to the regular YouTube without ads.

YouTube has been synonymous with free since its founding in 2005, attracting more than 2 billion users by offering up a bottomless buffet of videos spanning music, comedy and learning at no cost. But the site has been trying for years to convert some of those customers into paid subscribers.

YouTube Music is its latest effort, and its most successful in terms of total customers. YouTube TV, a live TV service offering dozens of channels for a monthly fee, has more than 1 million subscribers.

INDUSTRY TENSION
YouTube Music offers a library of millions of songs, playlists and some videos. The company added 5 million music subscribers since YouTube introduced the new service last May, said the people.

The growth of streaming platforms has helped the music business recover from a 15-year decline. YouTube has a complicated history with the industry, which blames the site for flooding consumers with free music videos.

Lyor Cohen, a former label executive who now serves as YouTube’s global head of music, has tried to improve the company’s relationship with the industry. He has pushed new video initiatives to draw more customers, including short-form video series featuring acts such as Billie Eilish, and funded promotional campaigns for new albums. In the past month, YouTube hosted live streams of the Coachella music festival and premiered a new video from Taylor Swift. — Bloomberg

How SSI secured deal for Shake Shack franchise

May 10, 2019 | 12:07 am

By Cathy Rose A. Garcia, Associate Editor

SHAKE SHACK is officially opening today its first Philippine branch in the heart of Bonifacio Global City (BGC), a long way from its start as a hotdog cart in a New York City park 15 years ago.

Randy Garutti, chief executive officer of Shake Shack, said the Philippine store will be the 225^th Shake Shack in the world.

“(In 2004) we were just trying to raise money for a park. We never dreamed there would be a second Shake Shack. I certainly never dreamed I’d be sitting here with you in Manila today,” he said during a roundtable interview at the Shake Shack in Central Square, Bonifacio High Street.

SSI Group, Inc., a listed specialty retailer whose portfolio includes Hermes, Gucci, Zara and Old Navy, secured the deal to finally bring the popular burger chain to the country. Its unit Specialty Food Retailers, Inc. holds the exclusive franchise for Shake Shack in the Philippines.

Mr. Garutti said he first met SSI President Anton T. Huang in 2013, but at that time the company was not ready to expand in the Philippines.

“We were a much smaller company then. We were probably not ready to come (here). There’s a lot of work that goes in building an international supply chain to make sure this burger taste the same. I don’t think we were ready to do it at that time,” he said.

But Mr. Huang continued to meet with Mr. Garutti throughout the years, and finally his persistence paid off.

“Whenever we look to grow, what matters most to us is the partnership, integrity and opportunity that we have together with the partner. We found that with Anton and SSI…. For us, it’s always about partners that share the same beliefs and ethos of how to take care of people, build a great brand, and build something really special,” he said.

Mr. Huang always believed Shake Shack is a brand and concept that would be a hit with Filipino consumers.

“I think the market is ready, the local customers are extremely excited as we have been seeing on social media… Who doesn’t know Shake Shack? Randy and his team have built a great brand. They’re known for the consistency of their quality and taste throughout all their Shacks worldwide,” the SSI president said.

The Manila menu features classics such as the ShackBurger, Shack-cago Dog, crinkle-cut fries, and custard ice cream. The main ingredients for the buns, custard, fries, and Angus beef are sourced internationally.

Mr. Garutti already tried the burgers at the Manila branch, saying it tastes exactly like the ones in New York.

“Remember, this is not fastfood, every time you order, we cook the burger, spin the shake by hand to order… We’re a fine casual (restaurant), not fastfood. That’s the difference. It’s still a cheeseburger, but it’s really good and the best ingredients,” he said.

Shake Shack has also worked with local producers on Manila-exclusive items. For the Shack Attack concrete, chocolate brownies from local bakery Bucky’s and Auro are mixed in.

Prices start at P250 for a ShackBurger and P190 for an Ube Shake.

“Our philosophy as a whole for Shake Shack is we should price the way we need to price, as opposed to this is the cost and this is the business. As Randy pointed out, we need to build the community… We want to be a Shack for everyone,” Mr. Huang said.

Asked when Shake Shack will open more stores, Mr. Huang said the company wants to focus on ensuring the first branch serves its customers well and meets their expectations.

“Once we’ve done… then we will look at expansion opportunities. As I’m sure you can sense, with the kind of demand for Shake Shack in the Philippines, I think the expansion opportunities are endless. We really have to select properly in terms of how we expand deliberately,” he said.

For Mr. Garutti, there’s no rush to open more Shake Shacks. In fact, after the Manila store, there are no plans to open other Shacks in Southeast Asia.

“If we do our job starting tomorrow, one burger at a time and people love what we do, it will give us the opportunity we hope to expand but today we are focused on this team, the guests, and doing it that well. We have to do it so good every day, one burger at a time,” Mr. Garutti said.

George Clooney returns to TV with Catch 22

May 10, 2019 | 12:06 am

LOS ANGELES — Twenty years after he left medical drama ER, George Clooney returns to television this month with an adaptation of Joseph Heller’s Catch-22, a novel whose complexity the actor said made it ideal for a six-part series.

The Oscar winner, known for films like Syriana, Gravity, and The Monuments Men, also served as executive producer and directed two episodes of the Hulu series set during World War II about a member of a US bomber squadron fighting the higher-ups in the military bureaucracy.

“I thought it was a fun way to tell this story. It’s hard to tell this story as complex as it is in a two-hour movie,” Mr. Clooney said at the series premiere in Los Angeles on Tuesday evening.

“It’s never been about the medium although television and streaming has gotten much more interesting and more fun, it was more about telling the story. It’s about telling good stories.”

Heller’s 1961 novel, previously adapted into a 1970 movie, follows US bombardier Yossarian who is infuriated that the army keeps raising the number of missions he must fly to be released from duty.

Yossarian’s only way to avoid the missions is to declare insanity, but the only way to prove insanity is a willingness to embark on more of the highly dangerous bombing runs, thus creating the novel’s absurd “Catch-22.”

The Sinner actor Christopher Abbott stars as Yossarian while The Wolf of Wall Street actor Kyle Chandler plays his commander, Colonel Cathcart. Mr. Clooney portrays training commander Scheisskopf.

“It’s a heightened piece, it’s satirical, it’s dramatic, it’s harrowing, it’s very funny,” Mr. Abbott said.

“It kind of lives in a world on its own but I think the themes are kind of universal because they’re really just about the human condition.” — Reuters

PLDT expects core income to hit P26B this year

May 10, 2019 | 12:06 am

PLDT, Inc. is optimistic it can hit the P26-billion target for telco core income in 2019, after posting a six percent growth in the first quarter.

In a statement issued Thursday, PLDT said telco core income reached P7.2 billion. This takes into account adjustments for the net effect of gains/loss on foreign exchange, derivative transactions, manpower rightsizing program, accelerated depreciation, and Voyager Innovations, Inc.

Consolidated service revenues went up seven percent to P38 billion, primarily due to the continued recovery of the individual wireless business which grew 18% to P16.9 billion. This came on the back of rising data usage and the addition of 3.4 million subscribers for the quarter, for a total of 63.4 million subscribers by end-March.

PLDT Chairman and Chief Executive Officer Manuel V. Pangilinan said the individual wireless segment’s growth “surpassed even our expectations,” noting that the company will now contribute to the overall growth of the wireless industry in the country.

“For the first time, we grew by P2.6 billion for the quarter…the reason why the wireless industry has not grown for the past few years is because we have not grown, and Globe (Telecom, Inc.) has grown. Not that we’re growing, and Globe is growing, now the entire wireless industry will grow,” Mr. Pangilinan said after a press briefing for their first quarter results in Makati yesterday.

Data and broadband service revenues also firmed up 21% to P24.4 billion, accounting for 68% of total service revenues.

The Enterprise unit generated revenues of P9.8 billion, nine percent higher year on year, thanks to the improvement of its cloud and cybersecurity services.

Growth for PLDT Home was more muted at three percent to P9.1 billion, as the company cited the impact of the labor department’s ruling on outsourced services and the disruption of repair and installation services starting mid-2018.

Meanwhile, net income attributable to the parent slipped by three percent to P6.71 billion versus the P6.9 billion seen in the same period a year ago. The company attributed this to the lower gain in the valuation of its investment in Rocket Internet compared to the same period a year before.

PLDT said it only had 2.6 million Rocket Internet shares by the end of the quarter, compared to its 10-million shareholdings in 2018.

HQ REDEVELOPMENT
On the other hand, PLDT Chief Finance Officer Anabelle L. Chua said they will be raising capital from the sale of assets to finance the company’s P78.4-billion capital expenditures for the year.

“There are a few properties that we are looking to dispose, and that process will be started soon. It depends on the bid process, but some of these properties could fetch somewhere from P3-5 billion,” Ms. Chua said during the press briefing.

Alongside the sale of two property assets, Mr. Pangilinan said they will also redevelop PLDT’s headquarters.

“I think there has been internal meetings that focus on these things — on a debate whether we should have a vertical campus, in which case it will slightly be in this area. These two buildings will be developed into two towers…We just have to design it in a way as green as possible and plenty of open spaces,” Mr. Pangilinan explained.

Mr. Pangilinan said he will be talking with Japan’s NTT Realty group next week to work on the details of the new headquarters.

This is a revival of the company’s plans back in 2017 to move to the southern part of Metro Manila, although this did not push through due to employee complaints about its location.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

Shares in PLDT jumped 3.61% or P45 to close at P1,290 each at the stock exchange on Thursday. — Arra B. Francia

Insufficient evidence to conclude that Prodigy frontman committed suicide

May 10, 2019 | 12:05 am

LONDON — Prodigy frontman Keith Flint died as a result of hanging and drugs that were in his system, an inquest into his death heard on Wednesday, but there was not enough evidence to determine he committed suicide.

Mr. Flint, a figurehead of the 1990s rave movement famous for tracks such as “Firestarter” and “Breathe,” was found dead at his home in March, aged 49.

The inquest concluded that he died as a result of hanging, and that cocaine, codeine, and alcohol found in his system.

“An open verdict was recorded,” a spokesman for the coroner said, adding that a full inquest would be held next month.

Renowned for his facial piercings, heavy makeup and eccentric devil-horned hair cut, Mr. Flint played a major role in establishing the credibility of dance and electronic music.

Essex Senior Coroner Caroline Beasley-Murray said there was insufficient evidence to conclude his death was either an accident or suicide, but said there was no suspicious circumstances and no third party involvement.

“We will never quite know what was going on in his mind on that date,” the Press Association quoted her as saying.

“He clearly was extremely popular, he was much-loved by so many fans.” — Reuters

Cebu employers warn TUCP wage hike proposal is unsustainable

May 10, 2019 | 12:05 am

A VISAYAN employers’ association said a recent petition for increase in the minimum wage for Central Visayas is “not sustainable” and will hold back the region’s competitiveness.

The Cebu Chamber of Commerce and Industry (CCCI) said in an email to BusinessWorld on Wednesday, “(I)t is important to understand that business has never been more challenged than today and is likewise laboring to survive, grow and compete.

“The idea of having one party ‘winning’ over another party for a small stagnant economic pie is simply not sustainable and a no-win situation for both employers and employees.”

On Monday, the Trade Union Congress of the Philippines (TUCP) filed a petition to increase the Central Visayas minimum wage to as high as P772 for private sector workers. The minimum daily wage in the region ranges from P313 to P368.

The CCCI said all establishments need to think of other ways to show how they value worker welfare since a higher salary cannot always be immediately granted. “It’s not all about take-home pay but making the human capital become competent and better in a holistic sense,” CCCI said.

If the wage petition is approved, CCCI said loss of employment is a possibility, while warning that companies will have greater incentive to consider digitizing their processes.

“Increasing the cost structure with a depressed market will eventually force businesses to automate, import cheaper materials (actually happening), or will discourage entrepreneurs to reinvest, worse, will sell out to exit from business,” the chamber said. — Gillian M. Cortez

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