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Fresh RRR cut to boost lending, economy

Cezar P. Consing

THE SURPRISE reserve requirement ratio (RRR) cut announced on Thursday by the central bank will free up more funds for loans, which can help boost the economy, according to Bankers Association of the Philippines (BAP) and Bank of the Philippine Islands (BPI) President Cezar P. Consing.

In a media briefing on Thursday at the inauguration of BPI’s largest branch located in Makati, Mr. Consing also welcomed the RRR reduction as a move by the Bangko Sentral ng Pilipinas (BSP) to catch up with regional peers’ reserve ratios which are much lower.

“I think all banks would benefit because there’ll be an opportunity to make more money available… There’s more loanable funds essentially,” he said.

The BSP cut banks’ RRR for the fourth time this year, with the latest reduction to take effect in December.

In a statement on Thursday, the BSP said its policy-setting Monetary Board (MB) decided to slash the RRR of universal, commercial and thrift banks by another 100 basis points (bp), bringing total reductions to their reserve ratios for this year to 400 bps.

The MB said the cut will also apply to the reserve ratio of non-bank financial institutions with quasi-banking functions.

This latest cut will follow a 100-bp reduction in all banks’ RRR announced on Sept. 27 which takes effect next month and will bring the reserve ratio of universal and commercial lenders to 14% by December, while the RRR of thrift banks will stand at four percent.

Meanwhile, the reserve ratio of rural banks, which will go down to three percent next month, was untouched.

On the other hand, the reserve ratio of NBQBs will be cut to 14% by December.

Mr. Consing expects banks to see their lending activity pick up, supported by the catch-up in government spending.

“I think you saw lending slow down a little bit, partly because the budget was a little late… But my sense is that the government is trying very hard to catch up on the spending side. And so what happens is when the government spends money, especially the infrastructure? The private sector tends to follow,” he said.

“We are now closer to aligning our reserve ratios with the other countries in the region. I think it also reflects the governor’s confidence in the strength of the financial system. Even at the lower rates of [RRR], it’s still higher [compared to the region]. But I think his [BSP Governor Benjamin E. Diokno’s] plan is to gradually bring it down,” Mr. Consing added.

In a note sent to reporters, ING Bank N.V.-Manila Senior Economist Nicholas Antonio T. Mapa said lending activity remains anemic despite the previous rounds of RRR cuts amid a capital formation meltdown.

“Select prominent analysts have tagged the weakness in bank lending to CFOs holding off on investing as they “wait for rates to hit rock bottom”. Thus, successive rounds of RRR reductions will do little to insulate PHL growth momentum unless accompanied by the right tool to provide the economy a nice shot in the arm going into 2020,” Mr. Mapa said.

BSP data showed that domestic liquidity or M3 grew 6.2% year-on-year to P11.9 trillion, slowing from the 6.7% growth print seen in July.

Meanwhile, outstanding loans of universal and commercial banks increased by 10.5% year-on-year in August, slowing from the 11.1% pace logged in July. Inclusive of reverse repurchase agreements, bank lending grew 10% in August from 10.7% the preceding month. — L.W.T. Noble

Metrobank net income climbs 49% in Q3

METROPOLITAN Bank & Trust Co.’s (Metrobank) consolidated net income jumped by 49% in the third quarter on the back of higher operating revenues, it said in a stock filing Friday.

Metrobank said on Friday that its unaudited consolidated net income climbed 49% year-on-year to P8.5 billion during the July-September period, bringing its total income to P21.6 billion in the first nine months.

“The bank is proud to have sustained strong growth momentum by navigating well amid the dynamic movements in the local economy. We continue to focus on customer service, profitability, and quality growth. As always, our philosophy centers on providing solutions so that our customers can have meaningful banking experiences,” President Fabian S. Dee was quoted as saying in the bank’s statement.

Metrobank attributed the double-digit income expansion to “consistent growth in operating revenues on the back of moderate loan growth and margin expansion, strong trading and FX gains, and higher fee-based income”.

In the nine months to September, the bank’s non-interest income likewise grew by 36% to P23.7 billion. Broken down, its earnings from service fees and commissions stood at P10 billion, P8.1 billion from net trading and FX gains and P900 million in fees from asset management.

“Fee-based revenues as well as trading gains continued to benefit from increased customer flows in fixed income and foreign exchange, as well as opportunities in the financial markets,” it said.

During the same period, the lender said its current and savings account ratio (CASA) grew to 64% of its P1.6 trillion total deposits, providing liquidity for the bank to support the loan growth of 7% to P1.4 trillion.

Metrobank said relative to the current performance of the economy, the credit demand was broad-based and led by the corporate sector.

Meanwhile, its net interest income inched up by 10% to P56.2 billion from January to September, accounting for the lion’s share or 70% of the bank’s P80 billion in total revenues.

Its net interest margin further expanded to 3.91% from the 3.83% recorded in the first semester, while its non-performing loans (NPL) stood at 1.5%.

“The bank set aside P7.8 billion provisions for credit and impairment losses, aligned with the increase in its asset portfolio. This pushed NPL cover higher to 96%, from 87% in June 2019,” it said.

Its cost-to-income ratio improved also to 54% from the 58% posted from a year earlier due to “strong revenue growth” while maintaining operating expense growth at a “reasonable level” at 9%.

Meanwhile, the bank’s consolidated assets stood at P2.3 trillion while its equity is now at P304.7 billion.

Its total capital adequacy ratio was at 17.6% with common equity Tier 1 ratio of 16.3%.

Metrobank’s shares closed at P71.65 apiece on Friday, up by 0.92% or 65 centavos. — Beatrice M. Laforga

BPI raises P3 billion from LTNCDs

BANK OF THE Philippine Islands (BPI) has raised over P3 billion from long-term negotiable certificates of time deposit (LTNCTD), which it listed on the Philippine Dealing and Exchange Corp. (PDEx) on Friday.

The papers were priced on Oct. 4 at 4% per annum payable quarterly, which is at a discount of 34.7 basis points from the five-year Bloomberg Valuation Service (BVAL) Reference Rates on the pricing date, the bank said in the disclosure on Friday. The LTNCDTs have a tenor of five-and-a-half years and were offered from Oct. 4-18.

“This capital raise will help finance the growth of a loan book that, with every passing quarter, becomes a bit more green, a bit more sustainable,” BPI President and CEO Cezar P. Consing said in the statement.

LTNCTDs are like regular time deposits that offer higher interest rates but cannot be pre-terminated by holders.

However, the notes can be traded on the secondary market prior to maturity, making them “negotiable.”

Hongkong and Shanghai Banking Corp. Ltd. was the sole arranger and participating selling agent of the LTNCTDs, while BPI Capital Corp. was the sole selling agent.

The issuance is part of the bank’s P50-billion LTNCD program approved by the central bank last month and is BPI’s third foray into the capital markets for the year.

BPI last month issued $300 million in ASEAN green bonds and two-year 100-million Swiss franc-denominated negative-yielding green bonds as part of its $2-billion medium-term note (MTN) program established in June last year.

In its maiden drawdown from the MTN, BPI raised $600 million in August last year via five-year senior unsecured fixed-rate bonds quoted at 4.25%.

BIGGEST BRANCH
Meanwhile, BPI opened its biggest branch in the country located in Makati on Thursday, with further expansion set by December 2020.

The lender is also looking to replicate the 2,943-square-meter branch which caters to both retail and high net worth individuals, according to Mr. Consing.

The Makati main branch of BPI has dedicated areas that cater to retail customers, preferred clients with at least P500,000 in deposits, and a private banking lounge, which will serve clients with at least P25 million in deposits.

“I think this is the biggest for us in the Philippines. I’m hoping we can replicate this in a few other urban centers,” Mr. Consing said.

Despite using new technologies as a quarter of their clients are increasingly using online banking, Mr. Consing said the new branch will also cater to clients who are more at home with traditional banking. This, according to him, makes the branch both high-tech and “high touch.”

“The reason you find a lot of spaces here and a lot of meeting rooms…and a lot of lounges is [because] there are a lot of people that really want to sit down and talk can have a dialogue and get advice and there are a lot of people who just want to do everything on the phone.. We just want to make sure that we can cover a wider spectrum as we can,” he told reporters.

Moreover, Mr. Consing said although the trend in the banking industry outside the country is to go digital rather than to open more branches, the local setting is still keen on opening more branches amid the low penetration rate in the country.

According to him, the country has an average of about nine to 10 branches for every 100,000 people, which is still lower compared to its regional peers where there are 12-15 bank offices for every 100,000 people.

“When you get to the higher level of branch intensity, then you actually branch out coming down. So what we’re trying to do is we’re trying to balance digital with brick-and-mortar, we need both,” he said.

The CEO said the bulk of BPI’s branches are in Central Luzon due to demand in the area.

“I think next year, we’ll do maybe 20 to 25 [new] BPI and BPI Family bank branches,” Mr. Consing added.

Meanwhile, when asked about the construction of their new headquarters, Mr. Consing said they are still working to carefully bring down their old headquarters as there are buildings nearby.

“It will take a few years [to construct a new headquarters] but we’ll spend the next year actually taking [down] the old building. I think it [new headquarters] will be much more people-friendly and it will be more green,” Mr. Consing added.

The lender saw its net income rise by 38.6% year-on-year to P8.29 billion in the third quarter, bringing its bottomline for the first nine months to P22.03 billion, a 29.5% jump from the P17.01 billion it booked in the same period a year ago.

BPI’s shares rose 1.9% or P1.85 to P99 apiece on Friday. — Luz Wendy T. Noble

Banks maintain credit standards in third quarter

MOST BANKS kept their overall lending standards untouched for both enterprises and households, a central bank survey found.

Based on the modal approach of the latest Senior Bank Loan Officers’ Survey of the Bangko Sentral ng Pilipinas (BSP) released Friday, the July to September period marked the 42nd straight quarter when majority of the respondent lenders said their borrowing standards were “broadly unchanged.”

The BSP uses the quarterly survey to monitor the lending decisions made by banks and to look through bank credit. The central bank said 50 of 66 banks responded to the poll, of which 42 were universal and commercial banks and 24 were thrift banks.

According to the survey’s modal approach, 81.6% of lenders said they kept their credit standards for loans to corporates, slightly lower than the 82.1% that said the same in the second quarter.

Meanwhile, the diffusion index (DI) approach found banks tightened their lending standards in the third quarter due to their perception of a deterioration in the profile of borrowers, their reduced tolerance for risk, and the less aggressive competition in the financial industry.

“In terms of specific credit standards, the net tightening of overall credit standards was reflected in reduced credit line sizes, stricter collateral requirements and loan covenants, shortened loan maturities, and increased use of interest rate floors,” the BSP said in a statement.

A positive DI for credit standards means more banks tightened lending rules compared with those that eased. A negative DI indicates the opposite.

On the other hand, 81.3% of the lenders reported that they maintained their overall credit standards, down from the 88% that said the same in the April to June period.

“The overall unchanged credit standards for household loans was attributed by respondent banks largely to their steady tolerance for risk and unchanged profile of bank borrowers,” the central bank said.

For the fourth quarter, majority of the lenders said that they anticipate to keep their credit standards steady. Meanwhile, DI-based result point to banks looking to tighten their lending standards for household loans as they anticipate “a deterioration in profitability of banks’ portfolios and a lower tolerance for risk.” — L.W.T. Noble

Peso rises after RRR cuts

THE PESO strengthened on Friday on the back of a fresh reserve requirement ratio (RRR) cut announced by the central bank, as well as risk-on sentiment due to an unclear Brexit, which supported currencies in emerging markets.

The local unit closed at P51.135 against the greenback on Friday, appreciating by 10 centavos from the P51.24 versus the dollar finish on Thursday.

On a week-on-week basis, the peso strengthened by 16 centavos compared to its P51.295-a-dollar close on Oct. 18.

The peso started the trading session at P51.25 versus the dollar. Its weakest point for the day was seen at P51.33, while its best shot against the dollar was at P51.12 against the greenback.

Dollars traded on Friday rose to $1.396 billion from $1.225 billion on Thursday.

A trader said the peso’s movement for the day was influenced by the unclear path of the Brexit as well as the latest RRR cut which will be effective by December.

“During the afternoon session, the peso gained against the dollar anticipated flows for the weekend. The market seemed to also factor in the RRR cut by the BSP (Bangko Sentral ng Pilipinas) as it will be beneficial in the medium term for Philippine growth and the financial markets,” a trader said in a phone call.

Meanwhile, another trader also traced the Brexit developments as well as the strength of currencies in the region to have influenced the local unit’s performance on Friday.

“There is a slight risk-on sentiment overnight given the uncertainty of Brexit talk. The day also saw emerging market currencies including those in Southeast Asian up against the dollar,” the second trader said in a phone call.

On Thursday, the BSP’s Monetary Board said it will reduce banks’ RRR by another 100 basis points for universal banks, non-bank financial institutions with quasi-banking functions (NBQBs), and thrift banks effective December, trimming their reserve requirement to 14% for both big banks and NBQBs and to four percent for thrift banks.

Meanwhile, European Union governments are unlikely to decide on Friday whether to grant Britain’s requested for an extension of the Brexit deadline and will probably postpone decision until Monday, senior EU diplomats told Reuters.

The British parliament is to vote on Monday whether to have an election on Dec 12, which would be the kind of major political development the EU has long said would be the necessary justification for a third extension of the Brexit deadline.

Reuters reported that most Asian currencies strengthened against the dollar on Friday although investors refrained from big bets while awaiting developments in the Brexit drama and Sino-US trade talks as well as next week’s US Federal Reserve meeting. — Luz Wendy T. Noble

PSE index dips on earnings reports

LOCAL shares slipped on Friday, as companies started reporting their third quarter earnings results.

The Philippine Stock Exchange index (PSEi) lost 28.48 points or 0.35% to close at 7,922.5, while the broader all-shares index dipped by 13.13 points or 0.27% to 4,767.03.

“Local shares traded mostly negative as investors digested the release of major companies reporting corporate earnings and speculation with the latest MSCI rebalancing next month,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said.

“Most banking sector stocks traded higher today and for the weeks as investors positively reacted to the latest RRR (reserve requirement ratio) cut,” he added.

The central bank on Thursday said its policy-setting Monetary Board (MB) decided to slash the RRR of universal, commercial and thrift banks by another 100 basis points (bp), bringing total reductions to their reserve ratios for this year to 400 bps. The latest reduction will take effect in December.

Mr. Limlingan said that investors took refuge outside as the US stocks climbed on a slew of corporate earnings anew.

“The S&P 500 climbed by 0.2% towards 3,010.29 while the Nasdaq Composite gained gained 0.8% to 8,185.80. The DJIA bucked the trend as it shed 28.42 points and settled at 26,805.52. Gold scaled a near two-week peak after US economic data reaffirmed expectations of another rate cut,” he said.

Next week, there is a U.S. Federal Reserve meeting ending Oct. 30 and a Bank of Japan meeting ending Oct. 31. The Fed is widely seen to slash interest rates for a third time this year.

At the local stock market, three out of six sectoral indices ended in the green. The financials sector went up 6.95 points or 0.37% to 1,876.79. Services went up 0.54 points or 0.03% to 1,531.53, while mining and oil went up 81.15 points or 0.88% to 9,209.23.

Meanwhile, the industrial sector fell 66.3 points or 0.62% to 10,470.07. Holding firms declined 39.72 points or 0.51% to 7.745.04, while the property sector dropped 25.94 points or 0.61% to 4,166.29.

Value turnover rose to P6.97 billion on Friday, from P5.19 billion on Thursday, with 1.38 billion issues changing hands.

Net foreign selling stood at P307.27 million. — Jenina P. Ibañez

Embarking on the endeavor of a lifetime

By Bjorn Biel M. Beltran, Special Features Writer

Andrew Carnegie is known worldwide as a titan industrialist, almost single-handedly leading America’s steel industry in the 1800s and becoming one of the richest people in history. He had laid the foundations for the US’ ascent to the global economic spotlight, after which he became one of the biggest philanthropists that the world has ever seen.

Benjamin O. Yao, SteelAsia’s chairman and chief executive officer, might not be Andrew Carnegie, but with him becoming the Philippines’ Entrepreneur of the Year for 2019, the comparison seems apt.

Under Mr. Yao, SteelAsia has become the Philippines’ flagship steel firm and among the largest rebar manufacturers in Asia. With presence across the archipelago, the company produces over two million metric tons annually, serving over 2,000 customers, including the country’s biggest property developers.

It all started when he was 17, a university student working part-time at his father’s steel business at the bottom rung of the corporate ladder.

“Steel has meant different things to me at different points in my life,” Mr. Yao told BusinessWorld in an exclusive interview.

“As a teenager working in the family business that my father founded, steel was a way to help my father succeed in what he believed in. This led me to shadow him, and as a result, absorb his values and his focus on the business.”

As a young man, Mr. Yao rose through the ranks, eventually becoming tasked with the management of the operations of the plant. It was here where he absorbed the tricks of the trade, from productivity, efficiency, movement and handling, cleanliness, and quality, to even the strategy of sustainability through technology and scale.

“Over the years, and with growth, I have seen the business transform to involve more stakeholders and to have a more significant national impact. The paradox of this is that the more we built the business, the less say we had in it,” he said.

The journey towards transforming SteelAsia into what it is today is hard-won. Throughout the years, the company had to maneuver challenges such as the Asian financial crisis, and raise the standards of a local steel industry that had grown complacent with profits from a high-tariff regime that burdened customers with high prices and poor quality.

“Even then, I believed that the country deserved better. I also believed that long-term viability was possible only with sound business fundamentals such as technology-based cost efficiencies,” Mr. Yao said.

Determined to offer better products to Filipinos, SteelAsia established the country’s first modern rebar mill in Bulacan in 1996, and from there it began expanding the steel industry outside of Metro Manila.

Through investments in technology, the company can change specifications quickly depending on its customers’ needs instead of managing stocks and double-handling rebars. Through setting up regional mills, the high shipping costs transporting steel from Manila to other parts of the country were effectively negated to allow customers to get the same quality of steel locally at the same price.

Regionalization also gave SteelAsia a platform for inclusive business as the local operations had a direct impact on communities. The company worked with the communities to develop and hire from within, and grow local suppliers and service providers such as truckers who have a long-term stake in the business.

By 2014, SteelAsia had built 2.3M tons capacity, and has established itself as the largest rebar producer in Southeast Asia and among the global leaders for rebar.

“Our decisions were merely addressing our responsibility to our market and our country. Our strategic and day-to-day actions are founded on the belief that the development of the Philippine steel industry is vital to the inclusive economic growth of our country,” Mr. Yao said.

“We celebrate our victories when awarded a supply contract, when customers show appreciation for our service, or when we commission a new mill and many others. You can call all these successes. Yet when we think of success, we think of achieving our dream of building a steel industry for the Philippines. We are driven by this, but we will never become complacent by thinking that we are successful.”

Already, Mr. Yao is setting his sights on the next phase of developing the Philippine steel industry. As part of an import substitution strategy, SteelAsia is working on projects that currently include a 1 million ton per year rebar mill in Cebu; the first beams, sheet piles and heavy angles manufacturing in Batangas; the first wire rod mill in Quezon; a recycling-based steelmaking facility in Davao; and the country’s first welded reinforcing mesh. These new plants will begin operating over a five-year period.

“The First World in the West began building their steel industries over a hundred years ago. Over the past 50 years, our Asian neighbors — Japan, Taiwan, Korea — started the same. And more recently, China and Vietnam,” Mr. Yao said.

He added, “The Philippines is only starting now. We are still so behind. Our economy is one of the few bright spots in the world. We are in the nascent stage of development, economy-wise and steel industry-wise. There is still decades of growth ahead.”

The Greeks once said that a society grows great when old men plant trees whose shade they know they shall never sit in. Like Andrew Carnegie, Mr. Yao seeks to set the foundation for the country’s growth, for a better future that he might never personally see.

“Steel is an endeavor of a lifetime — meant to last for generations. It has to grow and evolve according to the country’s needs, and opportunities to improve and innovate,” he said. “We want to build something enjoyed by generations down the road. In other words, it is a success we will never see in our lifetime.”

Disrupt. Transform. Inspire!

Winners of the Entrepreneurship Of The Year Philippines 2019 named

By Mark Louis F. Ferrolino, Special Features Writer

It was a momentous and historical night honoring the country’s most outstanding business leaders as the Entrepreneur Of The Year Philippines 2019 concluded with an awards banquet held at the Makati Shangri-La hotel.

Adopting the theme “Disrupt. Transform. Inspire!,” this year’s Entrepreneur Of The Year Philippines searched for visionary entrepreneurs who are driven by their desire to improve the world around them by providing strategic solutions to complex challenges. These promising individuals thrive in the age of disruption and lead enterprises that can inspire and empower communities and uplift the nation.

SGV & Co. Chairman and Managing Partner J. Carlitos G. Cruz led the prestigious gathering with a welcome remarks, highlighting the significance of transformation in the era of disruption.

“Today’s age of transformation has given entrepreneurs vast opportunities for growth, but at the same time, it exposes businesses to various risks and uncertainties. To help us navigate through this era of disruption, we need visionaries who can leverage on new digital platforms and provide people with a clear purpose,” Mr. Cruz said.

The Entrepreneur Of The Year Philippines 2019 has identified 15 outstanding entrepreneurs from diverse industries across the country, such as food and beverage, real estate development, steel manufacturing, importation, trading, health and wellness, technology, agriculture, farming, and logistics. By the end of the night, four entrepreneurs rose above the rest and were hailed as winners in five different categories.

The most coveted award of the night, the 2019 Entrepreneur Of The Year Philippines, was bestowed to Benjamin O. Yao, chairman and chief executive officer (CEO) of SteelAsia Manufacturing Corp. (SteelAsia). He will represent the country in the World Entrepreneur Of The Year awards to be held in Monte Carlo, Monaco in June 2020.

The Entrepreneur Of The Year Philippines recognizes Mr. Yao’s outstanding dedication, leadership and centeredness on transformation and disruption, which have made SteelAsia the country’s flagship steel firm and among the largest rebar manufacturers in Asia. With its presence across the archipelago, SteelAsia’s annual production reaches over two million metric tons, serving over 2,000 customers, including the country’s biggest property developers.

Mr. Yao also received the Master Entrepreneur award, which is given to an entrepreneur who best exemplified sound management practices in critical areas of the company like finance, marketing, human resources, and sales.

Meanwhile, the Emerging Master Entrepreneur, an award given to an entrepreneur who has applied sound management practices and exceptional leadership to building an enterprise with vast potential for future growth and expansion, was presented to Jose P. Magsaysay, Jr., chairman emeritus of Cinco Corp.

The Woman Entrepreneur award, on the other hand, was given to Esther Wileen S. Go, president and CEO of MediLink Network, Inc. The said award aims to recognize the outstanding contributions of women in entrepreneurship and leadership, and is given to a trailblazer whose work has vastly improved her industry.

The Small Business Entrepreneur award, which is given to an entrepreneur for best demonstrating a management excellence in a business with assets of less than a hundred million pesos, was awarded to Rolandrei Viktor E. Varona, president and CEO of Zark’s Food Ventures Corp.

The other finalists of this year’s Entrepreneur of the Year Philippines were Alexander M. Cruz, chairman and CEO of XRC Mall Developer, Inc.; Beverly M. Dayanan, founder, president and CEO of Contempo Property Holdings, Inc.; Miguel C. Garcia, founder, chairman, president and CEO of DTSI Group, Inc.; Alvin S. Hing, chairman and CEO of Excelsior Farms, Inc., together with Paul T. Holaysan, president and chief operating officer of the same firm; Henry Lim Bon Liong, chçcairman and CEO of SL Agritech Corp.; Olivia Limpe-Aw, president and CEO of Destileria Limtuaco & Co., Inc.; Sindulfo L. Sumagang, president of Oneworld Alliance Logistics Corp.; Regan C. Sy, CEO and vice-president for Marketing of Regan Industrial Sales, Inc.; Necisto U. Sytengco, chairman of SBS Philippines Corp.; and Aivee A. Teo, president and medical director of The A — Institute.

All nominees for the Entrepreneur Of The Year Philippines went through a strict financial data ranking system used by all Entrepreneur Of The Year participating countries. Criteria for judging include entrepreneurial spirit, financial performance, strategic direction, global (or community) impact, innovation, and personal integrity/influence.

The finalists were evaluated by an independent panel of judges composed of distinguished business personalities.

This year’s panel was co-chaired by Antonette C. Tionko, Undersecretary of Revenue Operations Group and the Corporate Affairs Group of the Department of Finance; and Ambassador Jesus P. Tambunting, OBE, chairman of Capital Shares Investment Corp. and 2009 Entrepreneur Of The Year Philippines. The other panel members were Ramon S. Monzon, president and CEO of The Philippine Stock Exchange, Inc.; Rizalina G. Mantaring, president of the Management Association of the Philippines; Reynaldo D. Laguda, executive director of Philippine Business for Social Progress; and Natividad Y. Cheng, chairperson and CEO of Multiflex RNC Philippines, Inc. (URATEX) and 2017 Entrepreneur Of The Year Philippines.

The Entrepreneur Of The Year was founded in United States by professional services firm Ernst & Young (EY) in 1986, with the aim to recognize the achievements of the most successful and innovative entrepreneurs worldwide. In 2001, EY expanded the program and launched the World Entrepreneur Of The Year awards.

In the Philippines, the Entrepreneur Of The Year program was established by the SGV Foundation, Inc. in 2003. Over the years, the program has recognized more than 200 market leaders in the country whose innovative ideas disrupt traditional business boundaries.

The very first winner of the Entrepreneur Of The Year Philippines was Jollibee Foods Corporation President and CEO Tony Tan Caktiong, who then went on to win the 2004 World Entrepreneur Of The Year award.

Smarter and more efficient SUVs

Sport utility vehicles, or SUVs, are a very fine option for a car to be used for regular driving as well as for long rides. Vehicles of this type are also notable for their excellent performance in any condition, ready to take any challenging obstacles on the road.

As SUVs keep on rolling out to cater to both new and experienced users, car manufacturers have been updating their SUVs with more innovative features and more enhanced builds. The top SUVs to date, as presented by some local listers of automobiles, have shown these improvements.

Toyota has vehicles that are regarded as reliable SUVs, namely the Toyota Rush and Toyota Fortuner. According to a list by price comparison site Priceprice.com, the Rush is noted for its efficient engine, comfortable and luxurious interior, modern and sporty exterior, and competitive pricing. It is currently updated with the same engine that powers Toyota Avanza, a 1.5-liter Dual VVT-i gasoline engine, which can produce 102hp and 134Nm of torque. It also comes with either a 5-speed manual or 4-speed automatic transmission.

The Fortuner, meanwhile, is considered as the best-selling mid-size SUV in the country. It now has two new diesel engine variants, 2.4-liter and 2.8-liter. It also has added safety features such as Stability Control, Active Traction Control, and Hill-Start Assist Control for the car’s V variants. Also, the model is now available in the following color variants: Silver Metallic, Freedom White, Gray Metallic, Attitude Black Mica, Phantom Brown Metallic, Avant-Garde Bronze Metallic, and White Pearl Crystal Shine.

Tough and reliable features characterize the refreshed Mitsubishi Montero Sport, which now displays a front redesigned with the carmaker’s Dynamic Shield grille. “It also features chrome linings which envelope the huge air intakes and goes all the way to its fog lamps, [and] its exterior is more complemented by its chic LED headlamp and accentuating taillights,” Priceprice.com added.

Other updates to the Montero include leather contoured seats with multi-layer cushioning and a comprehensive Multimedia Entertainment System and Dual Zone Automatic Climate Control System.

Another top SUV is the Honda CR-V. The latest version of Honda CR-V is set to stand out amongst competitors with a turbocharged engine that delivers “a rare combination of thrift and zest, something that isn’t experienced yet from most of its contenders in its class”.

The 2019 Honda CR-V also highlights expanded spaces, with a roomy interior and plentiful storage areas. Driving this model is described as “both comfortable and athletic”, hence a very helpful vehicle for treading the metro’s challenging roads.

Noted for its “upscale interior, high safety scores, plenty of cargo space, and a smooth ride”, the Honda CR-V is the #1 compact SUV in the latest Best Cars rankings by the US News & World Report.

Indian automaker Mahindra also joins the roster with its Scorpio Floodbuster. While its aesthetic is seen as a throwback to classic types, its performance is nonetheless up-to-date. “Its 2.5-liter turbodiesel engine is more than enough to take you where you need to go,” reviewed local financial comparison website eCompareMo.com. “This rugged ride has a ground clearance of 180 millimeters and can seat up to nine passengers.”

Nissan’s entry to the mid-sized SUV competition is the Terra. Sharing the same wide profile of the Patrol and Navara models, Nissan Terra has a modern rugged look that is “akin to its American competitors”. It is powered by a YD25 DDTi inline-4 diesel engine, accompanied by a turbo-charger and intercooler. Also, the engine can perform 187hp and 450Nm of torque.

Ford Everest, meanwhile, is popular for its durability that makes it fit to be taken through horrendous traffic as well as rainy-day floods. Updating this model is the new 2.0-liter Bi-turbo diesel engine matched with a 10-speed auto. It also features the Terrain Management System, a traction control support, and a rear diff locker “to aid the vehicle in controlling its stability”.

Suzuki Jimny is characterized by “a certain unbeatable charm that most modern SUVs cannot get correctly”. The four-seater subcompact vehicle, eCompareMo adds, is powered by a 1.5-liter K15B engine that makes it stable enough to “go through any punishing its driver wants.”

Isuzu MU-X is regarded by Priceprice.com as a “perfect and practical” vehicle both for out-of-town and routinary drives. It is equipped with a Euro 4-compliant 3.0L Blue Power turbocharged engine that, together with the SUVs improved emission, is capable to produce 175hp and 380Nm of torque. Other notable features of the vehicle include a Terrain Command System (on 4×4 variants) and a premium touchscreen head unit.

Chevrolet Trailblazer is considered a top vehicle for outdoor driving “which requires a more-than-decent performance and drivability that never fails”, with a 2.5L or 2.8L engine powering the vehicle. Its 7- or 8-inch touchscreen infotainment system is equipped with the brand’s latest Chevrolet MyLink System, which allows for playing of radio stations, music files, or movies via its four- or seven-speaker setup. Its safety features, meanwhile, include the Traction Control System, the Anti-lock Braking System with EBD, and Panic Brake Assist.

An apparent newcomer to the country, SAIC Motor-owned MG has its ZS subcompact SUV, which “can go toe-to-toe with others” with a fuel-efficient 1.5-liter inline-four engine that can perform 114hp and 150Nm of torque.

Korean automaker Hyundai has refreshed its Santa Fe line with an added two-row design and high-quality interior materials. It is powered by a reliable 2.2L R CRDi e-VGT that fuels both its front wheels, coupled with a new 8-speed automatic.

The Mazda CX-9 features a distinct look from its signature KODO design, as shown by its prominent grille, longer hood, and sleeker headlights. The car’s “bespoke” exterior is highlighted by a prominent rear end, long hood, and well-constructed windshield.

Lastly, Foton Toplander is considered by eCompareMo as a “cheap alternative to more famous midsize SUVs”. Making it an affordable choice is its efficient 2.8-liter turbocharged Cummins ISF engine. “Not only that it can push out 161 horsepower from its core but it can also be a great hauler thanks to its three-ton towing capacity,” wrote the comparison portal. — Adrian Paul B. Conoza

Why buy an SUV instead of a sedan?

With Metro Manila being consistently among the top 10 worst cities in the world, there seems to be little reason why anyone would get a larger, bulkier sport utility vehicle (SUV) over a small car. With today’s gas prices, downsizing seems like the most economical option.

And yet, according to sales figures from distributor groups Association of Vehicle Importers and Distributors (AVID), Chamber of Automotive Manufacturers of the Philippines (CAMPI) and Truck Manufacturers Association (TMA) taken in the first half of 2019, Light Commercial Vehicles, such as SUVs and vans, have outsold passenger cars by almost double — 108,111 units compared to 63,349.

Clearly, Filipinos prefer SUVs. We listed down the reasons why.

SUVs carry more people

The most obvious reason, perhaps, is also the most compelling. The simple answer is that SUVs can carry more people more comfortably and more reliably. Whereas sedans can carry only four to five people maximum, a three-row SUV can seat up to seven or more people, offering more flexibility.

With Filipino families often extending towards aunts, uncles, cousins, and grandparents, an SUV is the most logical choice. Unless a family has enough resources to shell out for two cars to seat everyone, an SUV can comfortably accommodate for everyone in the extended family (and friends) for those holiday trips.

SUVs have more space for cargo

Speaking of family vacations, often Filipinos love to pack everything they need during trips, from beverage coolers to pots, pans, and even grills. Sedans most likely do not have the space for such bulky cargo. When not crammed full of passengers, SUVs can efficiently store double or triple the cargo of sedans or small hatchbacks, efficiently and securely.

The space inside a typical SUV’s cabin makes it easier to haul larger items like boxes, luggage, sports gear, and even bicycles and furniture. This also makes them a prime choice for small business owners who need a vehicle to haul merchandise or tow other vehicles. With the Philippine economy comprising of more than 99% small business owners, the appeal of having an easy, reliable transport vehicle is obvious.

SUVs have never been more fuel-efficient

Technology has come a long way from the gas-guzzling jalopies of the past. Automakers have discovered new and more effective ways of reducing the fuel consumption of vehicles and making the larger, heavier SUVs more efficient. Aerodynamic designs, fuel-saving technologies integrated in smaller displacement engines, as well as advanced structural materials to reduce overall weight all have been leaps towards making a more economic vehicle.

SUVs offer more protection

Size matters, at least in terms of car safety. As SUVs are bigger and heavier than smaller and lighter sedans, they offer more mass between a passenger and the hostile elements of the road. Longer hoods, bigger crush zones, and an heavier weight to keep it on the ground, SUVs have an advantage in frontal crashes over smaller vehicles.

According to the Insurance Institute for Highway Safety (IIHS) in the US, a heavier vehicle will typically push a lighter one backward during the impact, putting less force on the occupants of the heavier vehicle and more on those in the lighter vehicle. The organization’s fatality data even goes as far as to show the mortality rates between passengers of lighter vehicles and heavier ones. The lowest 2015 death rate by vehicle type is for very large SUVs: 13 deaths per million registered vehicles. The highest is for mini cars: 64 deaths per million registered vehicles.

SUVs can deal with rougher terrain

In the worst circumstances, SUVs are also the most dependable. In a flood-prone country like the Philippines, having a sedan submerged in floodwaters is adding another problem to an already terrible day. The higher stance of SUVs can allow them to operate in roads sedans cannot, offering a dependable investment for the days when you really need some semblance of safety.

Of course, SUVs are also better off-road, making them better at navigating unpaved roads in the provinces or exploring new places.

SUVs just look cool

Last but not least, SUVs have the advantage of simple confident and empowering design. Many are the Filipino drivers who love the sense of power and status an SUV provides.

The Philippines is not alone in this either. According to an article by the New York Times last year, SUVs are particularly popular in China, “where the big cars have offered a sense of status, stability on bumpy roads, and room for larger families emerging with the phasing out of the one-child policy”. The article further cites the global consulting firm McKinsey predicting that by 2022, one in every two cars sold in China will be an SUV.

Offering safety, efficiency, reliability, comfort, and an aura of confidence and success, SUVs are arguably the most versatile vehicle out in the market today. — Bjorn Biel M. Beltran

Developments in the global SUV market

As sport utility vehicles (SUVs) keep on advancing with design and technological enhancements, it continues to be much favored by driving consumers both globally and locally.

Automotive business intelligence supplier JATO Dynamics reported the growing popularity of SUVs on a global scale. The intelligence firm noted that SUVs was the top segment in 2018, with 29.77 million units sold or 36.4% of the total market. This is an increase of 2.5% and, more importantly, the highest recorded market share to date.

This growth in the market, JATO noted, is due to the participation of car makers in the segment as well as the contribution of the largest markets such as China. “As more car makers joined the segment, sales were boosted by new models and were further helped by a growing consumer awareness of these vehicles,” wrote JATO on its Web site. “But stalling sales in China — one of the main drivers of growth over the last 10 years — meant that the rapid growth began to change. However, most of the car makers that were missing from the segment finally joined which helped to stabilize sales.”

China, as the largest SUV market, counted for almost 35% of SUV global sales, although it dropped by 2.9% to 10.35 million units.

“The lack of incentives during the last few years is having a negative impact on the industry and puts more pressure on the market. This coincides with a decline in consumer spending capabilities,” explained JATO on the reasons for the decrease. “Since 2014, the citizen financial leverage ratio (debt/savings) has increased from 46% to 63%, meaning that consumers simply have less money to spend.”

The United States ranked as the second top market, with a 10% increase in their SUV sales to 7.75 million units. Europe followed with an 18% growth in sales, tallying 5.4 million units.

Furthermore, JATO found compact SUVs as the most popular subsegment of SUVs, with 12.4 million units. It got 41% of total sales, an increase of 7%. Midsized SUVs followed with 7.26 million units (up by 3%); while small SUV ranks third with 6.58 million units (up by 13%). Big SUVs, meanwhile, tallied 3.68 million units, with 2% increase.

Here in the Philippines, considerable growth in SUV leads and sales still give good news to the segment. In the latest quarterly report by online automotive marketplace AutoDeal, leads in midsize SUVs gradually increased in the past four quarters. Based on the inquiries received by AutoDeal for major vehicle categories, midsize SUVs reached almost 15% of total leads in the 2nd quarter of 2019, fourth among the car categories listed.

AutoDeal also recorded slight increases from previous periods in the proportion of its tracked generated sales of midsize SUVs and subcompact crossovers for the 2nd quarter of 2019. The earlier reached almost 20%, while the latter was close to 10% of the shares.

Not only have SUVs been counted for its sales growth. This segment was also observed for improvements in terms of safety and fuel economy.

SUVs are now seen to be safer on the road than before by the Insurance Institute for Highway Safety (IIHS). Its recent study concluded that SUVs are not a major threat to occupants of smaller vehicles after it tracked a decreasing rate of car driver deaths in crashes with SUVs relative to the death rate in crashes with other cars in the past years.

“In 2013-16, the rate that car drivers were killed in crashes with 1-4-year-old SUVs was just 28% higher than the rate that car drivers were killed in crashes with other cars, also between 1 and 4 years old. That compares with 132% in 1989-92 and 59% in 2009-12,” IIHS explained.

IIHS attributed this observed compatibility of SUVs with cars and minivans to “newer SUV designs that lowered the vehicles’ front ends to better align with cars’ energy-absorbing structures.”

Joe Nolan, IIHS senior vice-president for vehicle research, noted that reducing the weight of a vehicle as heavy as an SUV has allowed for more sophisticated designs “that do a better job of managing forces in a crash”, aside from electronic stability control and other crash avoidance features.

“This suggests that reducing the weight of the heaviest vehicles for better fuel economy — for example, by switching from steel to aluminum — can improve safety for other road users without sacrificing occupant protection,” Mr. Nolan was quoted as saying.

In addition, the United State Environmental Protection Agency recently observed that as SUVs continue to gain market share, they nonetheless achieve low carbon dioxide emissions and high fuel economy.

“Truck SUVs (larger or 4WD SUVs) improved fuel economy by 0.1 mpg (to 22.4 mpg) and CO2 emissions by 3 g/mile in model year 2017, while car SUVs (generally smaller 2WD SUVs) essentially remained flat with no change in fuel economy (26.2 mpg) and a slight increase in CO2 emissions of less than 1 g/mi,” EPA reported. — Adrian Paul B. Conoza

Keeping SUVs in good shape

Sport utility vehicles (SUVs) are one of the most popular choices among car buyers these days due to their versatility. They have the pulling capacity of a small truck but the comfort, luxury, and ride of a larger car. They can handle different weather and road conditions, perfect for family getaways, fishing trips, camping expeditions or moving of huge items. Although SUVs are tough and durable, they also need the right kind of care to keep them in good shape.

Exterior and interior maintenance

Protecting SUVs from its worst enemies, such as sun, wind and rain, is one of the best ways to take good care of them. SUVs, if left unprotected in these elements, will deteriorate and eventually rust away, according to Jason Fogelson, an automotive journalist specializing in SUVs. “If you can’t get in the garage, consider buying a cover,” he said. When parking the car at work or at the store, on the other hand, it’s good to look for some shades.

Inspecting the SUV on a regular basis is also a must. Finding the small problem before it becomes big will help keep auto detailing simpler and more effective, Mr. Fogelson said. “Check all of the paint for dirt and sediment. Check the chrome for pitting and rust. Check the tires and wheels for scrapes and discoloration. Look around the interior for dirt, debris, and stains,” he suggested.

SUVs, just like other vehicles, also need to be washed. According to Mr. Fogelson, the longer the dirt sits on the paint, the more aggressive cleaning requires. “Don’t wait for a good coat of dirt and dust to collect,” he said, noting that washing SUVs once a month is good, but doing this for twice a month is better.

Putting a good coat of wax is also important once the SUV is clean. The wax acts as a protectant that keeps dirt and dust from binding to the coat and paint. In addition to this, Mr. Fogelson said that wax also acts as a moisture barrier, keeping water from penetrating pores in the painted surfaces and getting to the metal below.

Mr. Fogelson also advised the use of specially-formulated cleaners, polishes, and waxes to achieve the longest life and the best look of an SUV. “You can mix and match your favorites from various companies. Buy the best that you can afford, and keep it simple,” he said.

Before and while driving SUVs

Checking the condition of a vehicle before setting off anywhere is really important. Current fluids of the SUV, including the oil, coolant and windshield water fluid, need to be checked periodically, auto mechanic Pro Car Mechanics said.

Tire pressure also needs to be maintained. “Low tire pressure can cost you with lower gas mileage. A vehicle like an SUV burns up enough gasoline, so anything which will maintain decent gas mileage is important,” the auto mechanic said on its Web site.

The Pro Car Mechanics also advised SUV drivers to check the fuel level. On a regular basis, it’s better to drive with at least half a tank of gas to improve mileage and prevent the fuel pump from working too hard.

While driving the SUVs, it is important to keep in mind that they have limitations too. Be sure to take corners slowly and brake earlier than you would with a car, auto repair shop AAMCO Colorado said.

“SUVs weigh considerably more than regular automobiles — anywhere from 4,000 to 10,000 pounds. They take more to get going, and a lot more to stop. They also need more room to come to a complete stop. When driving in wet, snowy, or slippery conditions, you really need to take into consideration your ability to stop and maintain control of the vehicle. A large vehicle does not stop faster or better because of its weight. It is quite the opposite. The increased weight actually works against you, carrying the vehicle forward with greater inertia. Having four-wheel drive does not give you any advantages or added safety, either, when it comes to stopping on ice or other slick conditions,” AAMCO Colorado said in its Web site.

When carrying heavy loads or towing things, AAMCO Colorado advised to ask a mechanic on how to properly load the SUV efficiently so the weight of the objects is centered. It is also important to learn how to properly connect a trailer or vehicle to tow, it added.

Care and maintenance

Maintaining the engine of SUVs and its other working parts tends to be more expensive due to the larger sizes, equipment, and complexity of the vehicles, AAMCO Colorado said.

In terms of choosing a car repair shop for maintenance, it’s better to stick with one shop. “When you find one that you are interested in, start off with getting small services and repairs done to see how they do, then work up to bigger services. This way, they’ve earned your trust in case you need any big fixes like a transmission repair,” AAMCO Colorado said.

As with all cars, changing the engine oil and oil filter regularly is important for a smooth running engine, it added. — Mark Louis F. Ferrolino

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