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Hot money flows out for 2nd month in Sept.

FOREIGN portfolio investments — also called “hot money” due to the ease by which these funds enter and leave the economy — posted a net outflow for the second straight month in September, though by a smaller amount from the preceding month and a year ago, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.

Hot money recorded a $231.71-million net outflow in September, thinning from the $440.3-million net outflow recorded a year ago and the $391.74 million that left in August.

Gross outflows in September amounted to $1.553 billion, surpassing the $1.183 billion level a year ago but smaller than August’s $1.605 billion.

These offset the $1.301 billion poured in last month that was nearly double the $743.31 million gross inflows recorded a year ago and was slightly bigger than August‘s $1.214 billion.

About 80.2% of investments in September were in securities listed on the Philippine Stock Exchange — mainly to property companies, holding firms, banks, food, beverage and tobacco companies, as well as transport firms – while the balance went to investments in peso-denominated government securities, the BSP said.

The United Kingdom (UK), the United States, Singapore, Malaysia and Luxembourg were the top five sources of investments, accounting for a cumulative 72.3% of the total.

The BSP attributed hot money’s net outflow in the past month to “ongoing trade tensions between the US and China; attacks on Saudi Aramco’s oil facilities in Saudi Arabia which triggered the largest jump in oil prices in decades; the US Federal Reserve’s decision to cut interest rates; the BSP’s decision to cut interest rates and the reserve requirements ratio of banks; and the impeachment inquiry against US President Donald Trump.”

Sought for comment, analysts pointed out to similar factors and also mentioned global developments like the UK impending exit from the European Union at the end of this month and declines in global bond yields.

“Hot money [in]flows improved slightly in September after declines in US and global bond yields while the FOMC (Federal Open Market Committee) cut interest rates. The protracted trade tensions between the US and China, however, ate up gains leading to a bigger outflow on balance,” Security Bank Chief Economist Robert Dan J. Roces said in an e-mail.

ING-NV Manila Senior Economist Nicholas Antonio T. Mapa noted in a separate e-mail that “[s]entiment has improved significantly since that time with the US and China back on negotiations with an initial swap of concessions coupled with increased expectations for Fed rate cuts in October as economic data heads south.” — Luz Wendy T. Noble

Mobile payments across Southeast Asia facing shakeout as market booms

HO CHI MINH CITY/HONG KONG/SINGAPORE — Just next to Ho Chi Minh City’s financial district, two dozen street vendors’ stalls display colorful adverts for e-wallets backed by private equity firm Warburg Pincus, ride-hailing firm Grab and Singapore’s sovereign wealth fund GIC, among others.

Between them, the stalls — selling everything from crab soup to Vietnamese Banh My sandwiches — accept payment from most of Vietnam’s 28 different e-wallets, which also allow users to make cash transfers through their mobile phones.

The wallets, which hope to take advantage of Vietnam’s plan to become a cashless economy by 2027, compete fiercely to gain many users to help them to turn a profit, a battle for market share replicated across Southeast Asia.

Not all of them will survive. Already, the region’s crowded mobile payments sector is starting to shrink, with each national market expected to support only two mass e-wallets, according to consultancy Oliver Wyman.

“The e-wallets spend a lot of money on attracting customers and retaining them, getting them to use the wallet in their daily life,” said Duncan Woods, head of Oliver Wyman’s Asia Pacific retail and business banking practice.

“When you’ve got so many of them out there, it’s about who’s got the deepest pockets,” he added.

Southeast Asia has at least 150 e-wallet licence holders, and firms including Grab, Go-Jek, Tencent Holdings, Ant Financial, Singapore Telecom, AirAsia and dozens of fintech firms are fighting for dominance.

Many have the cash.

Grab plans to invest $500 million in its Vietnam business, with payments a focus area. Softbank’s Vision Fund and GIC invested $300 million in e-wallet VNPAY’s parent company in July, and e-wallet Momo raised $100 million from Warburg Pincus in January, according to news publication DealStreetAsia.

Some are using the cash to build scale, others to buy it, as they race to secure a dominant position in a mobile payments market estimated by Nomura to grow seven-fold to $109 billion by 2025.

Softbank-backed Grab is in talks to merge its Indonesian digital payments firm, OVO, and Ant Financial-backed Dana, both of which are among Indonesia’s top five e-wallets, to bulk up and power ahead of rival Gojek, sources said.

In Vietnam, e-wallet Vimo merged with payment processer mPOS and rebranded as NextPay in June — and kicked off a $30 million fundraising round and an ambitious growth plan.

“We expect to be present across Vietnam and win 50% of the market with 300,000 acceptance points by 2023 from 60,000 merchants now,” NextPay’s Chief Executive Officer Nguyen Huu Tuat said, while noting that getting customers to change their habits was a challenge.

Street sellers in Ho Chi Minh City echoed this view, despite government efforts to change behavior.

Some wallets, including the partnership between local firm Moca and Grab, offer buyers discounts of up to 30% if they use their wallet, stallholders said.

“I want to comply with the government’s cashless plan although I’m not very fond of it, so I offer ‘morning cash, afternoon card’” one merchant, Huong, said when Reuters visited her noodle stall.

Attracting users is essential as a tipping point looms.

“E-wallet consolidation at a regional and local level is highly likely as products mature and consumers migrate to those who offer the most services,” said Phil Pomford, an APAC general manager at fintech firm FIS.

“One likely play would involve one of the big global and/or regional super apps consolidating services across South East Asia.”

The region’s largest players, including ride hailing-turned super apps Grab and Go-Jek, are betting that becoming the main payment method will bind consumers into their networks and offer them higher margin services — a model that Alibaba and Tencent pioneered in China.

“One of the reasons our payments business has seen such success is because we’ve had a very intentional strategy of developing the largest merchant network, whether it’s offline, it’s online or whether it’s on-demand,” Grab’s president, Ming Maa told Reuters.

Others have looked to use an e-wallet as an add-on to their existing businesses. Users of AirAsia’s BigPay wallet can earn AirAsia travel rewards by using the wallet, which they also hope can become a mainstream payment method.

Tencent and Alibaba and its affiliates have primarily focused on Chinese tourists using their wallets in Southeast Asia and have also each invested in wallets in almost every market in the region.

Grab says it is the only digital payments provider in Southeast Asia with access to e-money licences in six major economies, making it the furthest on with a regional approach.

Some observers are still skeptical however.

“Many e-wallets’ business model seems to be: 1) gain a lot of customers and their data. 2) question mark. 3) be very profitable,” said Dmitry Levit a partner at VC firm Cento, which has invested into several payment-processing companies, but stayed away from wallets.

Go-Jek is not worried about competition from other wallets or incumbents, said Aldi Haryopratomo, CEO of Go-Pay, the company’s payment platform.

“By being the payments provider that connects the driver to the bank, we are able to make sufficient margin. And if you always think about competition and threat from the banks, then you are thinking that the pie is fixed,” said Haryopratomo.

“But in Indonesia, the pie is actually getting bigger.” — Reuters

MMFF’s final four films named

A PERIOD film about women looking for the cure for leprosy, a feel-good romantic comedy, a Brillante Ma. Mendoza film, and Rodel “Coco Martin” Nacianceno’s second feature film complete this year’s Metro Manila Film Festival (MMFF) lineup as the final entries chosen from among finished film submissions.

The announcement was made on Oct. 16 at Club Filipino in San Juan City.

The final four entries are:

• Mindanao by Brillante Ma. Mendoza, a film about a mother, played by Judy Ann Santos, who is caring for her child who has terminal cancer while having a husband on active duty as a soldier;

• Culion by Alvin Yapan, a film about three women who all have leprosy and are looking to cure the disease, starring Iza Calzado, Meryll Soriano, and Jasmine Curtis-Smith;

• 3pol Trobol: Huli Ka Balbon stars Coco Martin the director, Jennylyn Mercado, and Ai-ai delas Alas;

• Finally, Write About Love by Crisanto Aquino, is a romantic comedy starring Rocco Nacino and Miles Ocampo. This is Mr. Aquino’s directorial debut.

Write About Love producers, TBA Studios, noted in a release sent shortly after the announcement that the film is about “honoring the unsung heroes of filmmaking — the scriptwriters.”

Mindanao, meanwhile, was one of the Filipino films shown during the recently concluded Busan International Film Festival in South Korea. It was presented in the festival’s Icons section.

The four films join the first four entries announced in July which were chosen from script submissions: Miracle in Cell #7 by Nuel Naval and starring Aga Muhlach and Bela Padilla; Mission Unstapabol: The Don Identity by Mike Tuviera starring Vic Sotto and Maine Mendoza; Sunod by Carlo Ledesma starring Carmina Villaroel, Mylene Dizon, Susan Africa, and Kate Alejandrino; and The Mall, The Merrier by Barry Gonzales starring Vice Ganda and Anne Curtis.

Sunod replaced the Kris Aquino-starrer (K)Ampon after it was pulled out for changing its main actor beyond the deadline. The Mall, The Merrier earlier working title was Momalland.

The film festival runs from Dec. 25 to Jan. 7 in all cinemas nationwide. Its annual parade of stars will be held on Dec. 22 and will be hosted by Taguig City.

The MMFF is arguably the country’s largest film festival meant to promote Filipino films. It is now on its 45th year. Last year, the festival grossed P1.60 billion. — Zsarlene B. Chua

8 PHL films join Tokyo International Film Festival

EIGHT FILMS form this year’s Philippine contingent at the 32nd Tokyo International Film Festival including Paul Soriano’s Mañanita which will be featured in the Competition section of the festival, and Bradley Liew’s Motel Acacia which will be included in the Asian Future section.

Mañanita is an emotional drama film about a former soldier who spends her nights getting drunk in a bar until a phone call changes everything.

“This superb film turns a series of unassuming shots into an emotional drama,” the Film Development Council of the Philippines (FDCP) noted in a press release.

Meanwhile, Motel Acacia is a horror film about a man confronting a demon haunting a motel he has taken over from his father. This is Mr. Liew’s second feature film.

The other Filipino films to be featured in the festival, which starts on Oct. 28, are Six Degrees of Separation from Lilia Cuntapay by Antoinette Jadaone, Untrue by Sigrid Andrea P. Bernardo, Mindanao by Brillante Ma. Mendoza, Food Lore Series — Island of Dreams by Erik Matti, The Entity (Kuwaresma) also by Mr. Matti, and The Halt (Ang Hupa) by Lav Diaz.

“It has been a fruitful year for Philippine cinema, especially now that we are celebrating its hundred years. FDCP takes pride that our films consistently make a mark in world cinema, especially in the prestigious Tokyo International Film Festival,” said FDCP Chairperson and CEO Mary Liza B. Diño in a press statement.

The 32nd Tokyo International Film Festival runs from Oct. 28 to Nov. 5 in Tokyo, Japan. — ZBC

BSP cuts to boost loans

RIZAL Commercial Banking Corp. sees the cuts in policy rates boosting lending.

RIZAL COMMERCIAL Banking Corp. (RCBC) expects the cumulative policy rate cuts by the central bank to boost loan demand.

“That will result in interest rates easing, particularly the lending rates. That will now attract more business customers. They will be encouraged to resort to more borrowings for their consumer financing,” Rommel S. Latinazo, RCBC Consumer Lending Group head, said in a briefing on Thursday.

Mr. Latinazo said RCBC’s consumer lending book grew close to 14% in 2018.

“So expect more traffic because of banks supporting the auto industry. And then of course, we’d like to continue supporting our countrymen in terms of the need for shelter for their home needs. With the easing of rates, demand should further grow,” he added.

RCBC’s consumer loan book is currently at P90 billion, according to Mr. Latinazo. This is against the bank’s lending portfolio of P480 billion.

The official said RCBC is betting on the consumer sector to boost its lending business noting that the bank has consistently seen double-digit growth in the segment.

“The intention is to sustain our double-digit growth in terms of consumer lending. Consumer lending together with SME (small and medium-sized enterprise) lending will be the pillars of growth for the bank moving forward,” he said.

Mr. Latinazo said RCBC is looking to utilize technologies such as data science, online loan applications, and credit scoring to attract more customers and to ensure efficiency in their credit processing.

“We’re targeting to launch it (online loan applications) once we get approval from regulatory bodies by first quarter of next year,” said Emmanuel K. Valdez, RCBC’s deposit products and promotions division head.

Aside from this, RCBC has also rolled out car and home loan products that come with insurance coverage for the duration of the loan.

RCBC shares lost 15 centavos or 0.57% to close at P26 each on Thursday. — LWTN

Wanted: Intimacy coordinators. Hollywood’s fastest growing job

TWO YEARS after a sexual harassment scandal roiled Hollywood, one of the fastest growing jobs in the entertainment industry is that of the intimacy director.

Fueled by the #MeToo and Time’s Up movements, demand is soaring for intimacy directors or coordinators who help choreograph TV and movie scenes involving sex or nudity and ensure that actors are not exploited or made to feel uncomfortable.

Interest in the specialized job is high, but training can take months.

“We have stunt coordinators. We really take care of people in those kind of scenes. But scenes of intimacy have kind of been left a little too alone,” said Jessica Steinrock, managing director of the non-profit Intimacy Directors International (IDI).

HBO now has an intimacy coordinator on all its shows involving intimate scenes, while Showtime uses one on The Affair and other series.

Elsewhere, IDI and groups like Theatrical Intimacy Education and Intimacy on Set run multiple workshops in the United States and the UK that empower actors to speak up.

IDI, founded in 2016, says the number of its intimacy instructors has mushroomed to 29, from just four two years ago. More than 70 people applied for 10 places with IDI earlier this year to train for the role.

THE POWER OF NO
“It is absolutely growing at a rapid pace,” said Gabrielle Carteris, president of the US actors union SAG-AFTRA. “There are a plethora of shows and not enough intimacy coordinators right now.”

Intimacy directors act as a liaison on movie and TV sets between producers or directors and actors to ensure that actors are treated with respect, whether the script calls for a first kiss or a rape scene.

Before sexual misconduct allegations involving multiple actors, directors and producers swept Hollywood in 2017, actors were often left to fend for themselves in establishing boundaries at work.

Steinrock, who has also worked as an actor, recalled feeling vulnerable one time, when the hand of a fellow actor slipped lower than usual during a scene.

“I found myself thinking, ‘is it because he likes me? Is it because he is more in the moment today?’ Even though my character might be ok with that, me — the actor — was not. But I found it really difficult to have that conversation,” she said.

Steinrock and Carteris said there has been some resistance from directors who fear shooting of some scenes may be slowed down. But those who have tried it have mostly embraced the practice.

David Simon, co-creator of HBO’s porn industry drama The Deuce, told Rolling Stone magazine in an interview last year that he would never work without an intimacy co-ordinator again.

CREATING A BIGGER POOL
Finding the right people for the work takes care.

“We’re looking for people that have an interest in sensitivity, consent and mental health but also people that have movement experience,” said Steinrock.

SAG-AFTRA is currently working with several groups to establish common protocols for the work of intimacy coordinators and the training they undergo.

“There are actors who are older now and who want to pay back, but it doesn’t necessarily mean they are qualified. There are dancers who have been talking to us about aging out of their careers and they want to be able to come into the next thing,” said Carteris.

“We do have to create a bigger pool and then we have to create that training ground so that there is a standardized way of working that we all understand what is expected,” she added.

Independent actor, writer and educator Heather Maria Acs decided she wants to train as an instructor after taking part in a recent intimacy workshop in Los Angeles with some 20 other people.

It’s a career she never could have envisaged three years ago despite her 20 years in show business. “I had no idea and yet it makes so much sense. I’m excited to share it with other people,” she said.

Acs said the skills she had learned in just one afternoon workshop were “not only skills for performers but they are life skills.”

“The one thing I will take away… is how powerful a ‘yes’ can be when there is an option to say ‘no.’ And how powerful a ‘no’ can be when we know it’s safe to say ‘yes,’” she said. — Reuters

BIR padlocks another POGO for evading taxes

ANOTHER Philippine Offshore Gaming Operator (POGO) service provider has been padlocked amid the government’s crackdown on the sector.

The task force led by the Department of Finance (DoF) and the Bureau of Immigration (BI) found that Altech Innovations Business Outsourcing was not registered for value-added tax (VAT) purposes, with unpaid taxes worth an estimated P100 million.

On Thursday, the Task Force POGO supervised by Bureau of Internal Revenue (BIR) Deputy Commissioner for Operations Group Arnel SD. Guballa and Finance Assistant Secretary Antonio Joselito G. Lambino II went to the POGO service provider’s head office in Aseana City, Parañaque City and another branch in the Double Dragon Building located in Pasay City.

“The violation of this is that they are not registered sa (with the) BIR as VAT-registered taxpayer,” Mr. Guballa told the media after they closed the head office of Altech in Aseana City on Thursday.

The official said the BIR does not have the exact amount of Altech’s tax deficiency yet, although they have estimates.

“Estimates pa lang kasi (because) we will wait for their documents to be presented to us. Siguro mga nasa (Our) estimate namin, it will run to hundreds of millions. A hundred million. Wala pang (No) exact figure,” Mr. Guballa said.

He added that the tax bureau is still verifying whether the company is registered with the Philippine Amusement and Gaming Corp.

“Sa BIR, we focus on our agency, kung anong violation nila sa Tax Code (and their violations of the Tax Code),” Mr. Guballa said.

The official also noted that authorities now have to deal with POGOs operating in the guise of business process outsourcing (BPO) companies.

“It’s difficult to distinguish ’yung mga BPO natin na parang call centers kasi ganoon din naman ’yung scheme or methodology on how to do the online gaming (because they operate in the same scheme or methodology online gaming firms do)…And sa intel[ligence] report nalaman namin ngayon ‘yung mga nago-operate na hindi nakarehistro as service providers ng online gaming (we found that those operating are not registered as service providers of online gaming),” he said.

Mr. Guballa, however, clarified that padlocked POGO operators can go back to business once they rectify their violations.

“We will lift the closure order provided they comply with the conditions given by the BIR para makapag-operate uli sila (so they can operate again),” he told reporters.

Two weeks ago, the task force also shuttered Great Empire Gaming and Amusement Corp.’s offices in Subic Freeport, in Quezon City, and in Aseana City in Parañaque City after its findings revealed the company was not registered for VAT.

“We are expecting an increase of voluntary compliance kasi nga (because) of the enforcement activity that we are doing. And we want to tell them, these service providers that in the Philippines, they should comply with our tax laws para walang problema (so there will be no problem),” Mr. Guballa said. — L.W.T. Noble

DoF sexual harassment rules call for penalties up to dismissal

THE DEPARTMENT of Finance (DoF) said it issued a “three-strikes” system for handling sexual harassment complaints, which will result in dismissal on the third offense at the latest, even if the violations are minor.

Department Order No. 062-2019 published in newspapers on Wednesday, requires DoF officials and employees, even those appointed by the President, that face sexual harassment cases to undergo the administrative hearing.

The administrative offense of sexual harassment, as defined by the Department Order, involves “sexual advance, request or demand for a sexual favor, or other verbal or physical behavior of a sexual nature” committed by a DoF official or employee “directly, indirectly, or impliedly.”

DoF saw the “need to devise uniform rules and regulations particularly in the definition of the administrative offense of sexual harassment and the sanctions therefor, and the procedures for the administrative investigation, prosecution and adjudication of sexual harassment cases.”

It said sexual harassment can happen verbally, physically, through malicious touching, overt sexual advances and gestures with lewd insinuations, or through the use of objects, graphics or written notes with sexual undertones.

An official or employee found guilty faces suspension or even dismissal, depending on the gravity of the offense.

It said the DoF Board of Personnel Inquiry and Review will serve as the disciplining authority for such cases filed by or against any DoF officials and employees.

Sexual harassment complaints will be filed with the department’s Committee on Decorum and Investigation (CODI). CODI will then have to investigate and submit the findings to the disciplining authority. The committee also has to raise awareness of the issue within the department, it said.

The DoF Board of Personnel Inquiry and Review will issue a formal charge three days after the receipt of the report, if a prima facie case was established during the investigation.

It can also order a preventive suspension of the employee if “there are reasons to believe that he or she is probably guilty of the charges which would warrant his or her removal from the service.”

“Any person found guilty of sexual harassment shall, after the investigation, be meted the penalty corresponding to the gravity or seriousness of the offense,” it said.

Persons charged with minor offenses face reprimand on first offense, a fine or suspension of up to 30 days on second offense and dismissal on third offense.

Minor offenses include telling sexist jokes verbally and through text, emails, displaying sexually offensive materials, making offensive hand or body gestures and malicious leering, among others.

For “less grave offenses” such as unwanted touching, derogatory remarks or innuendo and verbal abuse with sexual overtones, the person charged faces a fine or suspension on first offense and dismissal on the second time.

Grave offenses are punishable with outright dismissal.

Grave offenses include sexual assault, unwanted touching of private parts, malicious touching, requests for sexual favors and other such acts, it said.

The rules take effect 15 days after publication, which means they come into force by the end of October. — Beatrice M. Laforga

Fed must be ‘aggressive’ to boost inflation in low rate world

PEORIA, ILL. — A low interest rate environment sets limits on what the Federal Reserve can accomplish with monetary policy, making it important for the Fed to “proactively” cut rates when risks appear to provide a buffer for the economy, Chicago Fed President Charles Evans said Wednesday.

Mr. Evans said that when inflation is low, providing “too much accommodation” can help the US central bank reach its inflation target sooner. In contrast, not acting strongly enough can cause inflation expectations to be anchored at low levels.

“In my view, these differences mean we need to err on the side of providing aggressive enough accommodation to get inflation moving up with some momentum,” Mr. Evans said at an event hosted here by the Greater Peoria Economic Development Council.

Speaking to an audience of local politicians and business leaders, Mr. Evans stressed the importance of responding quickly to downside risks, making the case that the Fed could raise rates later if needed.

“Engineering a modest overshoot of our inflation objective better guarantees that we would actually meet our inflation target in the future,” Mr. Evans said. “Any excessive overshooting could be controlled with modest rate hikes.”

Evans supported the two interest rate reductions approved by the Fed in July and September and said Wednesday that he thinks monetary policy is “probably in a good place right now.” The US central bank’s target rate is now at a level between 1.75% and 2.00%.

Last week, Mr. Evans said he would go into the Oct. 29-30 meeting “open minded” about to whether rates should be adjusted in either direction. Investors are widely expecting officials to cut interest rates by a quarter of a percentage point at the October meeting.

Evans said he expects the US economy to grow by above 2% this year and pointed to healthy consumer balance sheets and a strong labor market as bright spots. Still, he said that uncertainty over trade policy and a slowdown in global growth have led to a decline in business investment.

“There is some risk that the economy will have more difficulty navigating all the uncertainties out there or that unexpected downside shocks might hit,” Mr. Evans said. “So there is an argument for more accommodation now to provide some further risk-management buffer against these potential events.”

Mr. Evans said in an interview with reporters that the need for monetary stimulus could decline if there are positive developments in some of the conflicts threatening to slow the economy, including the trade war with China and Britain’s exit from the European Union.

The policy maker also said that Fed officials are still evaluating solutions for improving liquidity in money markets and studying why reserves are not circulating within the banking system.

The Fed announced last week that it will purchase $60 billion in short-term Treasury bills a month to bring the reserves in the banking system back to about $1.5 trillion, or the level seen in early September before there was a spike in borrowing rates for cash.

Evans said that financial regulations, such as Dodd Frank, have changed banks’ demand for reserves and stopped some banks with excess reserves from lending out the cash.

“It’s not just the level of reserves,” he said. “A second dimension to that is reserves are concentrated in a small number of the larger banks, and what is their appetite for arbitraging repo rates against other rates when they have regulatory requirements. The entire market functioning has changed over the last 15 or more years.”

Evans said he is “open minded” to the possibility of a standing repo facility, an approach that officials discussed in their June meeting that would allow financial firms to borrow cash at a fixed rate. But he said Fed policy makers still need to discuss how such a program would be structured and if it is needed to improve access to liquidity.

“I think we might struggle with this longer than we would like,” he said. — Reuters

Locsin blasts DreamWorks’ Abominable for China map

THE ANIMATED movie Abominable from DreamWorks Animation has landed in controversy here after the film featured a map of China showing the Asian giant’s maritime claims which are disputed by its neighbors.

Foreign Secretary Teodoro Locsin backed a boycott of all movies from the Comcast Corp.-owned production house, joining Vietnam that has also raised its objections. At the center of the dispute is the movie’s apparent endorsement of Beijing’s so-called “nine-dash line” that lays claims to 80% of the South China Sea.

“For me, call a universal boycott of all DreamWorks production here on,” Mr. Teodoro Locsin said in a tweet this week, reacting to a Twitter post by a maritime-law professor calling for the movie to be banned in the country. But unlike Vietnam, which has ordered cinemas to pull the movie, the Philippines hasn’t imposed any restrictions yet.

DreamWorks is the latest example of a business getting caught in the geopolitical crossfire as countries tussle over issues ranging from sovereignty claims to maritime boundaries. The National Basketball Association found itself in the center of a storm last week after a team official in the US expressed his support for the pro-democracy protesters in Hong Kong in a tweet that was later deleted.

While Vietnam has been the region’s most forceful nation in pushing back against Beijing’s claims in the South China Sea, tensions have been simmering between the Philippines and China as well. President Rodrigo Duterte, in a rare rebuke of China earlier this year, told China to lay off an island in the disputed waters. Manila has also escalated a protest over the presence of more than 200 Chinese vessels near the area.

Mr. Duterte is also pressing ahead with a plan to explore oil and gas in the sea jointly with China, which has promised 60-40 revenue sharing favoring the Philippines. The US estimates the region has $2.5 trillion in unexploited hydrocarbon resources.

In a separate tweet Thursday, Mr. Locsin said “failure to react may be seen as a kind of submission on the diplomatic level,” adding “but our reaction must be minimally invasive of free speech concerns.”

Abominable is a Chinese co-production about a teenage girl named Yi, who finds a yeti on the roof of her home in Shanghai. She names him “Everest” and sets off to help him get home to his family. The movie opened in US theaters late last month. — Bloomberg

SEC clears Fruitas Holdings’ IPO

By Denise A. Valdez, Reporter

FRUITAS HOLDINGS, Inc. has been cleared by the country’s corporate regulator to conduct its initial public offering (IPO) next month.

In a statement yesterday, the food and drinks kiosk operator said it has been given the pre-effective clearance by the Securities and Exchange Commission (SEC) for its planned IPO, moving it closer to listing at the Philippine Stock Exchange (PSE).

“We are thankful to the SEC for granting pre-effective clearance for our IPO as this will allow us to serve our products to more Filipinos, source more raw materials, employ more people and contribute to the growth of the Philippine economy,” Fruitas President and Chief Executive Officer Lester C. Yu was quoted as saying.

Fruitas is planning to offer 533,660,000 primary common shares with an over-allotment option of up to 68,340,000 outstanding common shares, priced at a maximum of P1.99 apiece. This is equivalent to 28.2% of the company being opened to public investors.

The offer period is targeted to start on Nov. 18 until Nov. 22, with listing at the PSE scheduled on Nov. 29.

The company aims to generate P1.2 billion in the IPO, which will fund its expansion plans, acquisitions, introduction of new concepts and debt repayment.

“Going public will further strengthen our position as the leading food & beverage kiosk business player in the country and broaden the opportunities for growth,” Mr. Yu said.

Fruitas is tapping BDO Capital & Investment Corp. and First Metro Investment Corp. as joint issue managers, bookrunners and lead underwriters for the offering.

The company said it was able to grow its stores to 949 as of June from more than 400 in end-2016. Its consolidated revenues ended at P1.58 billion last year, up 37% from a year ago on the back of strong sales from its stores.

Among the brands it owns are Fruitas Fresh From Babot’s Farm, Buko Loco, Juice Avenue, Buko Ni Fruitas, Johnn Lemon and Black Pearl. It also operates food parks such as Uno Cinquenta in Maginhawa and Le Village The Lifestyle Park in E. Rodriguez, Sr.

Three companies have so far conducted IPOs this year: Kepwealth Property Phils, Inc. which raised P385 million, Axelum Resources Corp. which raised P4 billion and AllHome Corp. which raised P14.9 billion.

Nevada gaming regulators seek ban on Steve Wynn from state’s casino industry

NEVADA gaming regulators are seeking a ban on former Wynn Resorts Ltd chief Steve Wynn from the state’s casino industry, citing allegations of sexual misconduct that emerged a year ago, a regulatory filling showed.

The Nevada Gaming Control Board lodged a complaint on Monday with the state’s Gaming Commission, saying Wynn was “unsuitable to be associated with a gaming enterprise or the gaming industry.”

“He failed to exercise discretion and sound judgment to prevent incidents, which negatively reflected on the repute of the State of Nevada and acted as a detriment to the development of the gaming industry,” the filing noted.

The US casino mogul resigned as CEO of his company Wynn Resorts early last year following claims he subjected women co-workers to unwanted advances, becoming one of the most prominent business leaders to quit over sexual misconduct allegations in recent months. He has denied the accusations.

Nevada’s gaming control board said it had undertaken its own investigation on Wynn’s conduct after the company failed to monitor and investigate the same, and has found numerous “potential instances of unwelcome sexual conduct.”

Earlier this year, Wynn Resorts said it had agreed to an undisclosed settlement in response to a disciplinary complaint filed by the Nevada Gaming Control Board following the sexual misconduct claims.

The casino company, which has operations in Las Vegas and Macau, and Wynn’s lawyer could not be reached for a comment.

Wynn’s departure from his company came as the “MeToo” movement galvanized women to publicly air their experiences.

Massachusetts gaming regulators in April fined Wynn Resorts $35 million for not disclosing sexual misconduct allegations against its founder. — Reuters

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