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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

Optimizing agri sector’s potential through tech

By Mark Louis F. Ferrolino, Special Features Writer

The Philippines continues to exhibit a stellar economic performance in recent years, making it one of the fastest-growing economies in the world. Amidst rising global uncertainties, the economy remains strong and is projected to grow at 5.8% this year, according to The World Bank. But despite this, the country’s agriculture sector is left struggling to meet its full potential, recording a steady decline in terms of contribution to the gross domestic product (GDP) over the years.

In 1980, agriculture accounted for about one-fourth of the nation’s GDP. This has dwindled as the country gradually shifted from an agrarian to an industrial and service-oriented economy. At present, the sector represents a thin share of the country’s total GDP. In 2018, Agriculture, Hunting, Forestry and Fishing (AHFF) comprised only 8.1% of the national economy, the Philippine Statistics Authority (PSA) stated.

For Jet Parma, president and country head of Syngenta Philippines, Inc., an affiliate of a leading global agricultural company that offers crop protection products and seeds, agriculture is still an important contributor to the Philippine economy.

He told BusinessWorld in an e-mail that the sector remains crucial for food production and security. It also employs a significant portion of the country’s labor force. In fact, in rural areas, agriculture is still the main source of livelihood and employment, he said.

Based on the latest data released by the PSA, workers in the agriculture sector comprised the second largest proportion of the country’s total employed population in July 2019. These workers made up 23.5% of the total employed, following workers in the services sector that accounted for 57.8%.

There are several challenges that the local agriculture sector is facing which hamper its growth. Limited diversification, low productivity, climate change, and natural resource degradation are some of these.

According to Mr. Parma, factors that hinder productivity include limited access to credit, lack of farm mechanization, irrigation problems, unavailability of post-harvest facilities, ageing farmers, loss of agricultural land, and inadequate farm to market roads.

From April to June of 2019, the PSA reported that the country’s agricultural output contracted by 1.27%, which was attributed to the decline in crops production. Increases, however, were recorded for livestock, poultry and fisheries. At current prices, the value of agricultural production amounted to P424.6 billion, 5.2% lower than the previous year’s level, the PSA said.

Climate change is another major challenge. “Strong typhoons and drought affect planting resulting in poor quality yield,” Mr. Parma said.

Siimilar to other industries, the agriculture sector is not new to change brought by advances in technology. Unsurprisingly, these developments have also helped address some of the challenges of the sector.

In particular, some of the recent innovations in the sector that have helped farmers in their farming practices, according to Mr. Parma, include the introduction of hybrid seeds that are not only insect- and disease-resistant but are also resilient to climate change; crop protection products that are low dose and have multi-site mode of action; use of hand tractor, harvester and planter to address issues on manual labor; solar-powered irrigation systems; use of drones to safely and efficiently apply crop protection products; and mobile applications that help identify crops and diagnose possible field problems.

Though adoption of technology in the local agriculture sector has improved compared to previous years, Mr. Parma said that uptake has been slow and a lot of work still needs to be done.

“There is a need to educate more farmers on how to grow their crops more efficiently. Learning centers or demo sites are helpful as farmers need to see for themselves that new solutions or technology bring better yield and higher RoI (return on investment),” he said.

Mr. Parma added that the government has always been openly supportive of the agricultural sector.

“Several programs were created to address low productivity and improve our competitiveness in the world market. However, the problem has always been in the implementation of these programs,” he said.

In the years to come, Mr. Parma sees an increased adoption of new technology in the sector.

“The population continues to increase but resources remain the same. Land used to produce food will not get any bigger. We have no option but to grow with less. The country should also be less dependent on imports as global supply is also thinning. Innovation and technology are key in order for this sector to accelerate its growth,” he said.

Back to back: Syngenta Philippines wins Top Yielder awards at Corn Derby

For the second time in a row, Syngenta Philippines’ NK8840 rose above a field of 13 corn varieties from seven seed companies when it was declared as the highest yielding variety at the Department of Agriculture’s Region 2 Corn Derby for 2019. Bagging 2017 and 2019 top yielder awards, NK8840 is a first-ever back-to-back awardee.

The 2019 corn derby results show that the NK8840 variety produced 12,145 kilos per hectare while another popular Syngenta variety, NK6410, also finished in the Top 3 with a yield of 11,512 kilos per hectare. In the corn derby of 2017, Syngenta Philippines’ NK8840 led the pack when it generated a yield of 12,823 kilos per hectare, beating 14 other corn varieties from seven seed companies. This top variety was then followed closely in the rankings of the 2017 Corn Derby by Syngenta’s NK6414, which yielded 12,655 kilos per hectare, and NK6410, which yielded 12, 580 kilos per hectare, landing in second and third place, respectively. Both years’ results are certified by the Department of Agriculture (DA) Cagayan Valley Research Center (CVRC) Region 02. 

Photo courtesy of Ryan Baldovino

Syngenta Philippines’ NK8840 features big and heavy cobs with large kernels, and strong plant stalks. It boasts of a 12-metric ton per hectare yield performance and has had consistent and stable results over the years. NK8840 is tolerant to drought and sustains its high yield even in stressful conditions. This awarded corn variety is also stay green and disease tolerant. Maturing in 110 to 115 days after planting, the corn ears are easy to harvest by hand and dehusk. NK8840 has the qualities to ensure the farmer of good returns. 

Completing Syngenta’s lineup of winning varieties, NK6414 is suitable for high density planting in both wet and dry seasons. Like the NK8840, NK6414 is also easy to harvest. NK6410, on the other hand, is an early maturing hybrid with semi-drought tolerance, good standability, and corn grains of excellent color and quality. It has consistent high yield in both wet and dry seasons. 

Syngenta Philippines continues to be a leading producer of high quality seed varieties that are able to meet local corn planters’ evolving needs that are driven by changing climatic and economic conditions. This keeps with the company’s vision of helping Filipino growers farm crops productively, profitably and sustainably. 

 

About the Event

The two (2) day Corn Derby cum Corn-Livestock Integration Summit is a project of the DA CVRC Region 2 Office. It was held at the DA Cagayan Valley Research Center, San Felipe, City of Ilagan, Isabela last August 27-28, 2019. 

The theme for this year’s Derby was focused on Masaganang Ani (high productivity) and Mataas na Kita (prosperous income) for all. The program gave around 1,559 participants, mostly farmers, the opportunity to come together and speak with government agencies, seed companies, and other successful farmers. There were also various talks, field tours, technology demonstrations and exhibits designed to encourage farmers to keep planting and to equip them for better results. 

How does the Philippines compare with other economies in terms of ease of doing business?

DOING BUSINESS in the Philippines is easier now thanks to recent reforms, according to the World Bank Doing Business 2020 report. Read the full story.

How does the Philippines compare with other economies in terms of ease of doing business?

PHL moves up ‘Doing Business’ rank

By Beatrice M. Laforga and Jenina P. Ibañez

DOING BUSINESS in the Philippines is easier now thanks to recent reforms, according to the World Bank Doing Business 2020 report.

The country’s ranking rose to 95th place from 124th last year, while its score improved by several points to 62.8, the multilateral lender said yesterday.

Despite the rank improvement, Manila was still seventh among 10 Southeast Asian Nations, behind Singapore which ranked second, Malaysia at No. 12, Thailand at 21st, Brunei at 66th, Vietnam at No. 70 and Indonesia at 73rd.

It was only better than Cambodia (144), Laos (154) and Myanmar (165).

The Philippines made it easier to start a business by abolishing the minimum capital requirement for domestic companies, said the World Bank, which used Quezon City as a benchmark. It also made dealing with construction permits easier by improving coordination and streamlining the process for obtaining an occupancy certificate.

“The role of government policy in the daily operations of small and medium-sized domestic firms is a central focus of the Doing Business data,” the World Bank said. “The objective is to encourage regulation that is efficient, transparent, and easy to implement so that businesses can thrive.”

The Philippines also strengthened minority investor protection by requiring greater disclosure of transactions with interested parties and enhancing director liability for transactions with interested parties, according to the report.

REGULATORY REFORMS
The Philippines was among 42 economies that made doing business “easier” in at least three out of 10 areas after enforcing regulatory reforms, the World Bank said.

“Selecting the economies that implemented regulatory reforms in at least three topics and had the biggest improvements in their ease of doing business scores is intended to highlight economies with ongoing, broad-based reform programs,” the World Bank said.

“The improvement in the ease of doing business score is used to identify the top improvers because it allows a focus on the absolute improvement — in contrast with the relative improvement shown by a change in rankings — that economies have made in their regulatory environment for business,” it added.

The top 10 economies that made improvement across three or more areas were Saudi Arabia (62), Jordan (75), Togo (97), Bahrain (43), Tajikistan (106), Pakistan (108), Kuwait (83), China (31), India (63) and Nigeria (131).

“Governments can foster market-oriented development and broad-based growth by creating rules that help businesses launch, hire and expand,” World Bank Group President David Malpass said in a statement. “Removing barriers facing entrepreneurs generates better jobs, more tax revenues and higher incomes, all of which are necessary to reduce poverty and raise living standards,” he added.

The “big jump” in the Philippine ranking would help the country get a higher credit rating, improve business sentiment and attract more investments, Trade Secretary Ramon M. Lopez said at a separate briefing yesterday. “Hopefully it will create greater confidence in the Duterte administration.”

He promised more improvements once the country shifts to the electronic processing of requirements in starting a business and adopts an automatic approval and e-payment system along the way.

The full implementation of a law that promotes economic activity by increasing access to cheap credit particularly for micro, small and medium enterprises will “improve the business climate” in the Philippines and empower small entrepreneurs, Finance Secretary Carlos G. Dominguez III said in a separate statement.

Albay Rep. Jose Maria Clemente “Joey” S. Salceda said the “biggest source of rigidity” for businesses remains constitutional restrictions. But “reforms are now gaining traction that would thrust the Philippines into a more competitive economy as proven by the 29-notch leap,” he said.

The Philippines recently set up an Anti-Red Tape Authority, one of the offshoots of an Ease of Doing Business Act that President Rodrigo R. Duterte signed last year.

The World Bank report measured competitiveness of economies in doing business using several indicators: starting a business, employing workers, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

How does the Philippines compare with other economies in terms of ease of doing business?

BSP trims RRR anew

THE Bangko Sentral ng Pilipinas (BSP) has cut banks’ reserve requirement ratio (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 (NBQBs).

“The reduction in reserve requirements will apply to the deposits and deposit substitute liabilities in local currency of banks and NBQBs,” the central bank said. “The reduction will be effective on the first day of the first reserve week of December 2019.”

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.

“The reserve requirement reduction is in line with the BSP’s broad financial sector reform agenda to promote a more efficient financial system by lowering financial intermediation costs,” the BSP said.

“At the same time, the adjustment in reserve requirement ratios is aimed to ensure sufficient domestic liquidity in support of economic activity.”

BSP Governor Benjamin E. Diokno has vowed to bring down big banks’ RRR to single digit before the end of his term.

Analysts said the latest RRR cut will bode well for loan growth and financial markets, and will provide support against local and global headwinds.

“I think the decision to cut RRR is a proactive and timely one that should help mitigate the impact of global headwinds and this year’s public sector underspending on our GDP (gross domestic product) performance. This should also increase the probability of Philippine GDP getting back to the 6-7% range by next year,” Bank of the Philippine Islands Inc. Lead Economist Emilio S. Neri said in a text message.

The reserve ratio reduction will also give the central bank policy space and boost loan growth, said Security Bank Corp. Chief Economist Robert Dan J. Roces.

“Further cuts to the RRR as announced will have positive impact as the BSP nudges loan growth and liquidity while leaving enough policy space in the RRP (reverse repurchase) to support growth momentum in 2020. It is also seen as part of wider efforts to help businesses and consumers weather a slowdown as a fallout from global weakness,” Mr. Roces said in a text message.

Multilateral lenders have trimmed their growth forecasts for the Philippines amid continued global headwinds and the government’s underspending earlier this year due to budget delays.

The International Monetary Fund further downgraded its growth outlook for the country to 5.7%, down from the six percent outlook in July, the 6.5% forecast in April and the 6.6% and 6.7% given in October and September 2018. It also trimmed its 2020 GDP growth forecast to 6.2%.

In September, the Asian Development Bank also slashed its GDP growth outlook to 6.2% from the 6.4% it penciled in an April report.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the fresh round of RRR cuts will boost liquidity and support the market.

“The surprise cut in RRR by one percentage point effective December 2019 could support sentiment on the local financial markets. However, more pesos infused into the financial system could also lead to more supply of pesos, some of which could find their way into the forex market,” Mr. Ricafort said in a text message.

He said the December 100-bp RRR reduction is expected to release about P110 billion in liquidity to the financial system. — Luz Wendy T. Noble

PHL firms most optimistic in the world

BUSINESS LEADERS in the Philippines are the world’s most optimistic about the economy’s overall outlook, according to a quarterly survey conducted by Grant Thornton International among 5,000 respondents in 35 economies in May-June this year.

The rosy view of Philippine companies is in contrast to the global outlook where optimism, revenue expectations and profitability forecasts are generally down.

The consultancy firm’s International Business Report (IBR) showed overall global optimism (total optimistic less total pessimistic) dropped to 32% in the first half of 2019, compared with data in the second half of 2018. Most of the main measures of growth were down at levels not seen since 2016, Grant Thornton said.

“It’s important to heed the signs of volatility and uncertainty in global financial markets, but it’s also worth highlighting that local business leaders choose not to be paralyzed or get sidetracked by the grim possibilities. It’s likely because with strong economic fundamentals still in place, their business is poised to grow and more opportunities will surface,” said Maria Victoria C. Españo, chairperson and chief executive officer of top auditing firm P&A Grant Thornton, in a statement.

However, the IBR showed less developed economies such as the Philippines have rosier prospects.

Philippine business leaders’ overall optimism level stood at 73%, the highest among the economies surveyed. This was followed by Vietnam (72%), Indonesia (66%), India (64%), Ireland (63%), Botswana (60%), Netherlands (55%), Nigeria (52%), United States (52%) and China (45%).

“Philippine businesses are more upbeat than anywhere else in the region, with 73% optimistic about the domestic economy,” the report said, adding that expectations for revenue and profit growth in the Association of Southeast Asian Nations (ASEAN) mid-market have also risen and became among the highest seen globally.

The survey covered 4,928 respondents globally, including 105 respondents in the Philippines. Survey respondents worldwide are chief executive officers, managing directors, chairmen or other senior executives from across industries.

Ms. Españo said the bigger capital spending, especially by the government, and the steady flow of remittances from overseas Filipino workers (OFWs) have also continued to boost overall economic growth and optimism.

Globally, optimism continues to fall and uncertainty lingers in the mid-market, the report said. For the next 12 months, the outlook has fallen to a three-year low, with a net optimism of 32%, down from a net 39% in the second half of 2018.

“Economic uncertainty remains elevated, with 46% of firms identifying this as a constraint to business growth,” it said.

Expectations around revenues, profitability, and employment have fallen to 2016 levels. Fewer companies expect to increase prices over the next 12 months, compared with previous periods. The report said the findings are consistent with wider risks of weak inflation as global growth eases.

Of the firms surveyed, a quarter identified trade tariffs as among the most significant external barriers to international expansion even as export optimism is maintained despite a slower trade growth.

“Investment intentions are down, with firms generally scaling back investment in new buildings, plant, and machinery likely in response to rising concerns over a shortage in orders as well as the increased uncertainty. Investment in research and development as well as technology, though, continues to shine. With demand softening, firms appear to channel investments into quality enhancements,” the report said.

Ms. Españo said there is more than enough room to manage uncertainty and seize opportunities, one of which is the use of technology to remain competitive and plan for long-term success.

“Future growth is also on the horizon, but only if businesses attract and retain skills relevant for that future,” she said. — V.V. Saulon

Metro Manila cities top LGU competitiveness ranking

By Jenina P. Ibañez

QUEZON CITY dominated the annual list measuring the competitiveness of local government units (LGU) in the country for the fourth time, elevating the city to the Hall of Fame of the Cities and Municipalities Competitiveness Index (CMCI) 2019 released on Thursday.

This year’s index was released during the 7th Regional Competitiveness Summit held at the Philippine International Convention Center in Pasay City.

The rankings often reflect regions’ contributions to gross domestic product (GDP). The Philippine Statistics Authority reported that Metro Manila contributed the largest share to the country’s GDP at 36% in 2018. This was followed by Cavite-Laguna-Batangas-Rizal-Quezon (Calabarzon) at 17% and Central Luzon at 9.8%.

CITIES
The city list showed Metro Manila localities account for six of the top ten most competitive cities, including Quezon City (first place), Manila (second), Pasay (fourth), Makati (fifth), Pasig (sixth), and Muntinlupa (eighth). As for cities outside the capital, Davao came in third place, followed by Cagayan de Oro (seventh), Iloilo (ninth), and Bacolod (tenth).

In terms of “economic dynamism” which measures the economic activity and productivity of an LGU, the top ten consisted of, in descending order: Pasay, Davao, Quezon City, Manila, Makati, Pasig, Baguio, Parañaque, Bacolod, and Cagayan de Oro.

In terms of “government efficiency” — which refers to quality and reliability of government services and government support for sustainable productive expansion — Quezon City, Manila, and Davao got the top three spots. These were followed by Pasig, Iloilo, Cagayan de Oro, Muntinlupa, Taguig, Makati, and Bacolod.

Quezon City topped the “infrastructure” list, followed by Manila, Davao, Pasay, Makati, Cebu, Muntinlupa, Pasig, Parañaque, and Cagayan de Oro.

Cities that topped the “resilience” category, which refers to capacity to sustain competitiveness, were Iloilo, Cagayan de Oro, and Davao. These cities were followed by Quezon City, Manila, Makati, Navotas, Muntinlupa, Pasay, and Pasig.

MUNICIPALITIES
The most competitive municipalities are based in Rizal province. Topping the list is Cainta (Rizal), followed by Taytay (Rizal), Baliwag (Bulacan), Santa Maria (Bulacan), Binangonan (Rizal), San Mateo (Rizal), Rodriguez (Rizal), Silang (Cavite), Carmona (Cavite), and Angono (Rizal).

The most competitive provinces were from the Calabarzon region, with Rizal dominating the list for the fourth time. Laguna and Cavite came in second and third place.

The three most improved local government units were:

• Among highly urbanized cities, Valenzuela and Malabon shared the top spot, followed by Angeles (Pampanga) in second and Parañaque and Caloocan sharing third place.

• Among component cities, Meycauayan (Bulacan) topped the list, followed by Tangub (Misamis Occidental) and Toledo (Cebu) in second place. San Jose del Monte (Bulacan) came in third).

• Among first to second class municipalities, Plaridel (Bulacan), Pandi (Bulacan), and Santa Rosa (Nueva Ecija) topped the list, in descending order.

• Among third to sixth class municipalities, Poro (Cebu) was in the top spot, followed by Penaranda (Nueva Ecija) and Tabina (Zamboanga del Sur).

OPPORTUNITIES
In his speech during the event, DTI Secretary Ramon M. Lopez said the ranking is an opportunity for policy makers and public officials to see where they are and compare it to their past performance.

“As such, the program serves as a driving force to do better, to be more innovative, and to utilize and manage resources more effectively,” he said.

He said each city and municipality has its own way to become competitive.

“We can do this by focusing on addressing critical challenges and working together through coordination within government and collaboration with our stakeholders from the private sector.”

Fruitas IPO gets PSE go signal

FRUITAS Holdings, Inc. has gained the approval of the Philippine Stock Exchange, Inc. (PSE) to conduct its initial public offering (IPO) next month.

The food and beverage kiosk operator is planning to offer 533,660,000 shares with an over-allotment option of up to 68,340,000 shares, which will be priced at a maximum of P1.99 apiece. This would raise up to P1.2 billion in total for the company.

The final terms and conditions of the offer — including the actual number of shares it will sell and the offer price per share — are yet to be finalized.

Fruitas will announce pricing details on Nov. 14, while the offer period will be from Nov. 18 to 22. The company will list its shares, with the ticker FRUIT, on the bourse on Nov. 29.

The company said it will be using the proceeds from its IPO to expand its store network and to fund further acquisitions, introduction of new concepts and debt repayment.

Fruitas has 949 stores as of June 30 and owns more than 20 brands, including Fruitas Fresh From Babot’s Farm, Buko Loco, Juice Avenue, Buko Ni Fruitas, Johnn Lemon and Black Pearl.

In 2018, it was able to record a consolidated revenue of P1.58 billion, growing 37% from a year ago due to the robust sales from its stores nationwide.

Aside from beverage kiosks, Fruitas also operates food parks such as Uno Cinquenta in Maginhawa and Le Village The Lifestyle Park in E. Rodriguez, Sr. It also bought Negril Trading in 2015 to take over De Original Jamaican Pattie Shop and Juice Bar, and assets of Sabroso Lechon last year.

BDO Capital & Investment Corp. and First Metro Investment Corp. are working on Fruitas’ IPO plan as joint issue managers, bookrunners and lead underwriters.

Fruitas President and Chief Executive Officer Lester C. Yu earlier said going public would allow the company to strengthen its position as the “leading food & beverage kiosk business player in the country.”

Aside from Fruitas, Cal-Comp Technology (Philippines), Inc. is also planning to conduct an IPO next month, with approval from the Securities and Exchange Commission obtained last week.

Other companies that have gone public this year are Kepwealth Property Phils, Inc. in August and Axelum Resources Corp. and AllHome Corp. earlier this month. — Denise A. Valdez

Basic Energy mulls foray into wind power

By Victor V. Saulon, Sub-Editor

BASIC Energy Corp. plans to set up a wind farm in Luzon in partnership with a foreign entity, said its top official, who described the proposal to be in the initial stage although a letter of interest has been submitted to the Energy department.

“Ang (The) estimation is anywhere from 40 to 50 megawatts (MW),” Oscar L. de Venecia, Jr., president and chief executive officer of Basic Energy, told reporters after the company’s annual stockholders’ meeting in Makati City.

He declined to disclose the specific location of the project although the company has existing exploration sites in Luzon, including a geothermal energy project in Batangas that stands on a hilly location in the province.

“Next step is we attend to all the different meetings with the Department of Energy,” Mr. De Venecia said. “Then, we sit down with them and start negotiating the terms and conditions.”

The filing of application for a service contract will be up to the company to decide, he added.

Asked about what prompted the company to consider a wind energy project, he said the industry is “a little more stable” than solar energy at this time, with a “little less participants, and less competition.”

Mr. De Venecia said the decision to consider wind energy was also brought about by the declining cost of such projects.

“It’s of course [because] cost and equipment and materials are going down also. It’s also that the towers are improving,” he said.

He placed the cost of putting up a megawatt of wind energy at $1.5 million, although he declined to give an estimate of the total project cost.

The decline in cost and the improvement in the efficiency of wind towers mean putting up the same facility translates into more energy output.

“Whereas before, you’re looking at one mast and do 2 to 3 MW. Now, you’re looking at 4 to 5 MW,” he said. “If you break it down, if you’re looking at a 5-MW mast and it’s a 40 to 50 MW, we’re looking at around nine to 10 masts.”

Mr. De Venecia said the wind project is still with the company’s business development group, and has not yet been elevated to Basic Energy’s management for final decision.

“They’re still evaluating whether the data that we have right now and the forecasts for the project will merit us proceeding to apply for a service contract,” he said. “We still also have to talk to our partners.”

Funding for the project will depend on the agreed ownership structure with the foreign partner, which the official declined to identify, although the local company wants a majority stake of at least 60%, he said.

On Thursday, shares in Basic Energy slipped by 7.41% to P0.25 each.

Alliance Select divests US, Indonesia business

ALLIANCE Select Foods International, Inc. is selling its businesses in the United States and Indonesia to focus on the Philippines and New Zealand.

In a disclosure to the stock exchange Thursday, the seafood company said it is selling its 100% equity in US subsidiary Spence & Co. Ltd. and the land and building assets of its subsidiary PT International Alliance Food Indonesia.

Massachusetts-based Spence & Co. will be sold to Acme Smoked Fish of Massachusetts LLC, while the assets in Indonesia will be acquired by PT Multi Nabati Sulawesi, a subsidiary of Wilmar International Ltd.

“Ninety percent of our business is in the Philippines and New Zealand. Growing our operations and maintaining our profitability in these countries is our priority in the medium term,” Alliance Select President and Chief Executive Officer Raymond K.H. See said in the statement.

“To ensure the sustainability of our results, we must consolidate our gains and make decisions that are consistent with our objectives,” he added.

Proceeds from the divestment will be used for capital expenditures and debt reduction.

“Alliance Select is a stronger company today and the goal is to continue this positive momentum. We have a healthier balance sheet and are ready to further invest in our future,” Mr. See said.

In the first half of the year, the attributable profit of Alliance Select plummeted 99.7% to $7,269, as net sales declined 10% to $43.094 million. The General Santos City-based firm’s profits and sales were affected by the lower market price of raw fish and manpower issues. — Denise A. Valdez

AC launches $400-M perpetual notes

By Denise A. Valdez, Reporter

AYALA CORP. (AC) has finalized the terms for its dollar bond market return, setting the aggregate principal amount of its fixed-for-life perpetual notes at $400 million.

The listed conglomerate told the stock exchange yesterday the dollar-denominated senior (non-deferrable) notes will have a fixed coupon rate of 4.850% with no step-up and no reset, and will be payable semi-annually.

AC’s wholly owned subsidiary AYC Finance Ltd. will issue the notes, which will be unconditionally and irrevocably guaranteed by the parent company.

“The bonds were priced at par with a re-offer yield of 4.850%, reflecting a 27.5 basis points compression from the initial price guidance,” it said.

As a fixed-for-life perpetual note, investors in the security will not redeem their investment in the bond but will instead be paid a steady stream of interest payments according to the coupon amount.

Allocation of the order book, which was four times over-subscribed, was mostly to Asia and with the rest to Europe. By investor type, more than half was allocated to fund managers, insurance companies and pension funds, about one-fourth to banks and financial institutions, and the rest to private banks.

“The successful fixed for life issuance will further support our thrust for sustainable growth and enable (AC) to diversify our liquidity sources and strengthen our balance sheet,” AC Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala said in the statement.

AC Chief Financial Officer Jose Teodoro K. Limcaoco said the issuance will provide the company with “additional flexibility to lengthen (its) maturity profile and support strategic initiatives.”

The company is targeting to settle the transaction by Oct. 30.

AC said the issuance will be the second fixed-for-life notes in Asia Pacific this year and the lowest yielding of its kind out of Southeast Asia in history. The proceeds will be used to refinance AYC Finance’s maturing dollar-denominated obligations and to fund AC’s investments or its offshore subsidiaries.

In 2017, AC launched its maiden fixed-for-life perpetual bond issuance worth $400 million. It had an annual coupon rate of 5.125% for life with no step-up.

Earlier this week, the company said it is tapping Hongkong and Shanghai Banking Corp. Ltd. (HSBC) as sole global coordinator for the issuance, with BPI Capital Corp., Credit Suisse (Hong Kong) Ltd., HSBC (B&D), J.P. Morgan Securities plc. and UBS AG Singapore Branch as joint lead managers and joint bookrunners.

China Bank Capital Corp. and BDO Capital & Investment Corp. were announced as domestic lead managers for the planned transaction.

AC is the country’s oldest conglomerate which controls several businesses such as Ayala Land, Inc.; Bank of the Philippine Islands; Globe Telecom, Inc.; Manila Water Co., Inc.; AC Energy and AC Industrial Technology Holdings, Inc.

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