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PSE plans another share buyback

THE PHILIPPINE Stock Exchange, Inc. (PSE) is planning to launch another share buyback before the year ends in line with reducing broker ownership in the local bourse to 20%.

PSE President and Chief Executive Officer Ramon S. Monzon told reporters last week the stock market operator is doing a second round of compliance with the Securities Regulation Code through a directed buyback of shares.

“I just need to buy back about one million shares for the second round,” Mr. Monzon said.

The Securities Regulation Code limits to 20% the ownership and control of the PSE by an industry or business group. The PSE has been trying to comply with the law for years, but Mr. Monzon said brokers still own 23.87% of the local bourse today.

Last month, the PSE was able to complete buying back P445.10 million worth of shares from brokers when it purchased 2.419 million shares priced at P183.93 each.

The roughly 1 million shares it will be buying back for the second round will cover about 0.47% of the excess 3.87% owned by brokers. The remaining 3.4% is held by one broker, First Metro Securities Brokerage Corp., which the PSE is in talks with for a possible divestment plan.

He explained the First Metro shares were absorbed by the broker “unwillingly” due to its failure to place all its allocated shares to investors when the PSE conducted a stock rights offering earlier. “Since they have a firm underwriting agreement with PSE, they had to absorb the shares,” Mr. Monzon said.

The PSE initially planned to do a swapping of common shares to non-voting preferred shares, but the Securities and Exchange Commission (SEC) warned this couldn’t be approved because holders of such shares would still have rights to vote on certain corporate matters such as incurring of debt and increasing of authorized capital stock.

Mr. Monzon also said they cannot compel First Metro to sell its shares as this would translate to about P200 million in losses for the broker. “They absorbed the shares of P250 to a share, which was the stock rights offering price. As you know now, the price of PSE shares is P180. So ang laki ng lugi na ng First Metro (First Metro is losing so much),” he said.

“So we’re trying to find a way how to address that First Metro block. Kasi other than that, complied na kami eh (we’re already compliant),” the PSE top chief said. “I have a deadline na (that) by the end of the year, we should be complied so we can move forward with our plans.”

The PSE has several applications pending at the SEC, such as the guidelines for short-selling transactions and a listed derivative products plan, among others, which haven’t been moving as planned. While Mr. Monzon refused to categorically link the delays to the PSE’s failure to comply with the broker ownership requirement, he said the PSE wants to be “perceptive” about the situation. — Denise A. Valdez

Manila FAME 2019 pays homage to heritage

CHANDELIERS, wallcoverings, doors, and mirrors adorned with laminated capiz shells (windowpane oyster) are among Shell Arts Co. Inc.’s houseware pieces that have been showcased since Manila FAME began in 1983.

“If you can produce it, if you want to do it. For me, that’s amazing,” Meyte Chan, third generation designer of Shell Arts Co. Inc., told BusinessWorld shortly after last week’s Manila FAME 2019 press launch at Seda Hotel in BGC, Taguig City.

The company, which was then called Shell Crafts, was established in 1929 by an American businessman. Ms. Chan’s grandmother worked at Shell Crafts for 20 years, starting in 1966, and later bought the company when the owner died and his family moved back to the United States.

“From there, it became our own interpretation of how to show a Filipino design,” Ms. Chan said.

“Even whether we’re doing well in business, or we’re not doing well, we should always exhibit and get our name out,” she said was one of the lessons they learned from their grandmother. “There can be people who are sick of looking at shells. It’s a tricky product. Just constantly show the product so that it’s not forgotten.”

The housware brand joins the annual design trade exhibits at the Messe Frankfurt and the Ambiente Trade Show in Dubai to promote new developments and innovations.

Its new designs will be featured in this year’s 70th edition of Manila FAME, the country’s premier lifestyle and design trade event which runs from Oct. 17 to 19 at the World Trade Center in Pasay City.

This year’s theme, “Heritage Reimagined,” aims “to infuse time-honored of Filipino craftsmanship with modern interpretations to suit the evolving tastes of a modern market,” a press release said.

For this year, Shell Arts Co. Inc. pays homage to the vintage design trends of the 1970s.

“During the ’70s, we created everything you would see in the house,” Ms. Chan said. “[For this show,] we made it look like a house that was very reminiscent of ’70s architecture.”

“I showed an American side of architecture from the outside. But when you go inside, it’s full of capiz. The products are still very Filipino,” she added.

THE 70TH SHOW
Since it started in 1983, Manila FAME has served to catapult the careers of designers such as Kenneth Cobonpue, Josie Natori and Budji Layug, Tony Gonzales, and Tes Pasola.

Aside from Shell Arts Co. Inc., this year’s event will feature over 300 home and lifestyle brands. It also supports local small- and medium-scale enterprises in promoting high-quality and design-oriented home, fashion, holiday, architectural, and interior products.

“Our 70th edition seeks to unite the tradition of excellence and creativity with the changing demands and tastes of today’s market. We want Manila FAME to continue being home to fresh and innovative design, and find ourselves fortunate to carry on,” said Pauline Suaco-Juan, Executive Director of the Center for International Trade Expositions and Missions (CITEM), the export promotion arm of the Department of Trade and Industry.

“We have a wealth of inspiration and an abundance of skilled talent imagination, to find new meaning in our heritage, and transform them into new products that will carry Filipino design to the future,” she added.

The flagship merchandise development program, Design Commune, will mount a curated exhibition under the creative direction of Vince Uy, with support from seasoned design consultants such as Stanley Ruiz, Andre Chang, Nix Alañon, Kitty Buñag, and Mia de Lara.

Returning features are the Artisans Village with regional products from Antique and Marawi; the Fashion E-Tailers, that showcases styles from emerging online fashion retailers; and the Eco-Lifestyle Pavilion which has eco-friendly, and beauty and wellness products.

Ms. Suaco-Juan hinted that beginning in 2020, Manila FAME will hold one show annually every October as CITEM continues to evaluate its business model and marketing strategies to make the event “a digital-driven and multi-platform experience.”

“Our presence in the overseas trade fairs will also be more strategic, aiming to remind buyers that the Philippines is a top source for quality products. Our marketing communications initiatives will challenge the notion of on and off peak seasons to become available to buyers and exporters at any season,” she said.

Further developments have yet to be finalized.

For tickets and more information, visit manilafame.com and follow its social media accounts at @ManilaFAMEofficial on Facebook, @TheManilaFAME on Twitter, and @manilafame on Instagram. — Michelle Anne P. Soliman

Meat industry sees holiday ham shortage in Mindanao, Visayas due to ASF bans

THE PHILIPPINE Association of Meat Processors, Inc. (PAMPI) said it forecasts a shortage of ham in the Visayas and Mindanao due to local bans on pork products from Luzon, where the African Swine Fever (ASF) outbreak is centered.

“While Cebu and Cagayan de Oro have their own ham production capabilities, their total production will not cover the needs of the region unless the ban on Luzon-produced pork-based processed meats is rationalized,” Jerome D. Ong, vice president of PAMPI, said in a statement.

He said Christmas Hams are seasonal products and production capacity for this item is limited.

“Even in our biggest meat processing companies, ham production operations are normally a quiet nook at the far corner of the plant,” he said.

“… no company will allocate much resources to this because it will not make much business sense,” he added.

PAMPI noted that the Visayas and Mindanao account for about 35% to 40% of total sales of processed meat products, worth about P300 billion a year. Pork-based processed meat accounts for 40% of processed meat production. The industry generates about 42% of its total volume during the last quarter of the year.

“We are seeing a setback of at least P18 billion for this season,” Mr. Ong noted.

According to PAMPI’s monitoring, 46 of 81 provinces have restricted the entry of Luzon pork-based products to prevent the spread of ASF. Cebu and Bohol have both banned shipments of pork products from Luzon, followed by local governments in Romblon, Aklan, Northern Samar, Samar, the Zamboanga peninsula, and various parts of Davao. Some 26 local governments implemented conditional bans like Leyte, Northern Leyte, Misamis Oriental, Puerto Princesa, Negros Oriental, Dumaguete, and Bukidnon.

The Department of Agriculture (DA) said ASF has been detected in more than 20 barangays in Luzon, particularly in Rizal, Bulacan, Quezon City, and Pampanga, with 12,000 pigs found positive for the virus.

PAMPI is also is pushing the government to draft rules governing the movement of pork products as more local governments in the Visayas and Mindanao ban the entry of Luzon products.

“We beg the national leadership, our President Rodrigo (R.) Duterte to get the four agencies, the DA, the DoH (Department of Health), DTI (Department of Trade and Industry), and the DILG (Department of the Interior and Local Government) to draft policies and regulations as one body, and most importantly to have these implemented,” Mr. Ong said. — Vincent Mariel P. Galang

Chevrolet launches new Colorado Trail Boss

THE COVENANT Car Company, Inc. (TCCCI), the exclusive importer and distributor of Chevrolet automobiles and parts in the country, introduces a new icon of toughness to further strengthen its already powerful selection of pickup trucks — the new Chevrolet Colorado Trail Boss.

The new Colorado Trail Boss, which has a retail price of P1,368,888, was launched at the recent Cebu Auto Show at the Sky Hall SM Seaside City Cebu. The Cebu Auto Show is considered to be the biggest automotive event in the Visayan region.

“For more than 100 years, Chevrolet has relentlessly brought to the global stage legendary and dependable trucks that are built to last,” says Atty. Albert Arcilla, president and chief executive officer of TCCCI. “The introduction of the Colorado Trail Boss to the Philippine market provides exciting opportunity for Filipinos to experience the next level of adventure.”

The Colorado Trail Boss’s powerful drivetrain, superior performance and bold American styling will make daily commutes and weekend adventures more exhilarating by enabling drivers to overcome challenging obstacles along the way.

Breaking the rules of ordinary pickup trucks, the Colorado Trail Boss is equipped with an inline 4-cylinder 2.8-liter Duramax with Variable Geometry Turbo that delivers 200 horsepower and 500Nm of torque. It’s paired with a 6-speed automatic transmission and a sturdy 4×2 drivetrain.

The new pickup truck offering from Chevrolet is fully equipped for adventure with its 800mm water wading capability, one-ton payload capacity, and 3-ton towing capacity.

(L-R) Atty. Albert Arcilla, president and CEO, TCCCI; Franklyn Ong, president and CEO, Genesis Motors Corp.; and Emily Ong, EVP and COO, Genesis Motors Corp., pose beside the new Colorado Trail Boss.

The new Colorado Trail Boss sports a bold design that reflects its American truck heritage. Its exterior design enhancements include a tough and tactical sport bar, aggressive fascia with black Chevrolet bowtie badging on a black grille, sport alloy wheels with 18-inch tires and an impressive Colorado black decal on the tailgate, as well as a Trail Boss badge.

Other highlights of the Colorado Trail Boss include the Chevrolet MyLink infotainment system that provides plug-and-play smartphone connectivity with available Apple CarPlay and Android Auto integration, and electric power steering that provides convenience, accuracy and sharp control.

The new Chevrolet Colorado Trail Boss comes packed with safety features, including dual air bags, Anti-lock Braking System, Electronic Brakeforce Distribution (EBD), Limited Slip Differential (LSD), and engine immobilizer.

The new pickup truck is backed by the Chevrolet Complete Care Program to give customers a worry-free drive. It comes with a special 5-year warranty coverage (3-year bumper-to-bumper warranty plus a 2-year warranty on the powertrain or 100,000 kilometer, whichever comes first).

Chevrolet owners are automatically enrolled in the 24/7 Chevrolet Emergency Roadside Support for 3 years, with an option to renew on the fourth year of ownership. They are also given access to 24/7 Customer Care Hotline and are guaranteed one-hour express service for select services and non-stop service in select service centers.

The new Colorado Trail Boss is now available at all authorized Chevrolet dealerships nationwide.

Cebu Pacific to launch Clark-Guangzhou flights

BUDGET CARRIER Cebu Pacific said it is set to launch in November direct flights between Clark in Pampanga and Guangzhou, China amid increasing demand for leisure and business travel.

“Cebu Pacific will launch next month direct flights between the Clark International Airport and Guangzhou, China, becoming the first Philippine carrier to link the two cities,” the low-cost carrier said in a statement on Saturday.

Flights between Clark and Guangzhou will be operating four times a week beginning Nov. 11: Monday, Wednesday, Friday, and Saturday.

“The flight departs Clark at 11:35pm; while the return flight departs at 3:15am of the next day,” it said.

Cebu Pacific said the new route will cater to “increasing demand for leisure and business travel” and it will “further enhance the potential for investments in the special economic zones in Central Luzon, including the 9,450-hectare New Clark City.”

It noted that the Clark International Airport is within proximity to Manila-Clark passenger railway connecting Manila to Clark and a cargo railway connecting Subic to Clark, which are both expected to be operational by 2022.

“With direct air service between Clark and Guangzhou, it will be easier for entrepreneurs and businessmen in the e-commerce space to meet up with suppliers, Cebu Pacific Vice-President for Commercial Alex B. Reyes was quoted as saying in the statement.

Guangzhou, one of China’s nine National Central Cities, is a wholesalers’ “haven for retail and popular consumer goods,” the budget carrier noted.

The low-cost airline currently flies 27 times weekly between the Philippines and mainland China, with direct flights between Shanghai, Manila and Cebu; as well as Manila and Beijing, Guangzhou, Xiamen and Shenzhen.

Cebu Pacific operator Cebu Air, Inc. recorded a 116% growth in its net income in the first half to P7.14 billion, driven by its increased passenger volume and higher average fares.

Shares in Cebu Air went up 20 centavos or 0.22% to close at P92.20 apiece on Friday. — Arjay L. Balinbin

Fresh five-year Treasury bonds to fetch lower rates on inflation

FIVE-YEAR Treasury bonds (T-bond) on offer tomorrow are expected to fetch lower rates as inflation continues to ease.

The Bureau of the Treasury (BTr) is looking to raise P20 billion via fresh five-year T-bonds on Tuesday.

A bond trader interviewed on Friday expects the coupon of the five-year papers to settle within the 4.25-4.75% range, while Robinsons Bank Corp. peso debt trader Kevin S. Palma sees it falling between 4.25% and 4.375%.

“For the auction, indicators show that it will settle between 4.25% to 4.75%. The market will price in, of course, the low inflation [data],” the trader said by phone.

At the secondary market on Friday, the five-year debt notes were quoted at 4.379%, based on the PHP Bloomberg Valuation Service Reference Rates published on the Philippine Dealing System’s website.

The government last offered five-year T-bonds on Nov. 21 last year, where it auctioned off P15 billion in reissued papers with a remaining life of four years and three months. It made a full award of the offer. The bonds, which carry a coupon of 5.5%, were issued at an average rate of 7.003%.

Inflation slowed to 0.9% in September amid lower food and electricity costs, the Philippine Statistics Authority (PSA) reported earlier this month.

Prices of widely-used goods and services in September further cooled from 1.7% in August due to “softer price adjustments observed in nearly all commodities and base effects, coming from 6.7% in the same period in 2018.”

The September reading was the slowest since the 0.7% logged in April 2016, but matched the 0.9% in May 2015 and May 2016.

Last month’s headline print fell at the low end of the Bangko Sentral ng Pilipinas’ (BSP) 0.6%-1.4% forecast for September.

For the nine months to September, headline inflation averaged at 2.8%, well within the BSP’s 2-4% target range for 2019 but still above the full-year forecast of 2.5%.

The trader said a huge volume of government securities are maturing next month, which will provide additional liquidity to the market.

“In fact, there’s an upcoming maturity in November, a big maturity…then the cues from abroad,” the trader added.

Aside from huge BTr redemption in November, Mr. Palma said there will be an “abundance” of liquidity in the market as the fresh 100-basis-point (bp) reduction in banks’ reserve requirement ratios (RRR) will also take effect next month.

“This auction could potentially have a very strong reception as investors anticipate an abundance of liquidity by November, fostered by the effect of the reserve requirement ratio cut coupled with a jumbo bond redemption,” Mr. Palma said.

The BSP announced last month that it will reduce lenders’ RRR by another 100 bps effective November to bring the reserve requirement of universal and commercial banks to 15% from 16%. The reserve ratios of thrift banks will also be cut to five percent from the current six percent, and to three percent from four percent for rural and cooperative banks.

BSP Governor Benjamin E. Diokno last week said the central bank remains open to another round of RRR cuts within the year, but noted this will be data-dependent.

Meanwhile, the BSP is done cutting benchmark rates for now, he said.

The Monetary Board has two more policy meetings left for the year — on Nov. 14 and Dec. 12 — although it can act on the reserve requirement in any of its weekly meetings.

On the external front, Mr. Palma said “demand for emerging market assets could also improve after the US and China reportedly agreed to a partial trade deal”.

The government is set to borrow P220 billion from the local market this quarter, broken down into P100 billion in Treasury bills and P120 billion via T-bonds.

It is looking to raise P1.189 trillion this year from local and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — Beatrice M. Laforga

Normann Copenhagen’s cheerful Danish design arrives in the Philippines

DANISH furniture company Normann Copenhagen has opened its first franchise store and its Asian flagship store in Bonifacio Global City in Taguig in recognition of the growth it has experienced in the region.

“Over the last five years, Normann Copenhagen has enjoyed an average growth rate of 20%-25% [within] the Asian market and it is focusing its attention on this blossoming area. Manila… is the nerve center of Southeast Asia and with the new store, Normann Copenhagen hopes to strengthen its position and visibility in the market,” the company said in a statement.

The 200-square meter store is located at the upper ground floor of One Uptown Residences. The brand is franchised in the Philippines by Mattony Inc. which distributes Danish design brand Vipp and Portuguese paper company Renova, among others.

“Normann Copenhagen is one of the younger, more trendy brands [of] Danish Scandinavian design… and we’ve always been known as the crazy side of the Nordic [design style]. We don’t have the same very simple colors… we are a very diverse brand both in colors and design. You have a very, very broad selection,” Iben Schwaner, business development director, told BusinessWorld during the launch on Oct. 3.

She said that their market would be people who want “something fresh and have good quality that can last for many years.”

The 20-year-old company was started by Poul Madsen and Jan Andersen in their native Denmark and while it retains the minimalist style philosophy of Scandinavia, it plays around with bold colors and designs “that oozes with personality and character,” the statement said.

“A Normann Copenhagen product is playful and has a light-hearted feel and welcoming look. It has a simultaneously familiar and novel expression,” it added.

Normann Copenhagen boasts of a “premium yet still accessible” price point for its designs, according to Ms. Schwaner. And while the company started with residential and retail customers, Ms. Schwaner said that today “about 60%” of their business is company or enterprise orders, especially in Asia and the US.

“We work a lot in the office sector. We just did the new Adidas headquarters in Shanghai, for example. In other places around in Asia and Europe, we are very strong in the hotel business,” she said before noting that China is one of their strongest markets.

The Philippines will have “a wide selection” of Normann Copenhagen design items — Ms. Schwaner figured that “60% to 70% of the furniture” is currently on display at the showroom.

“During the next month, we will evaluate the demand and the things that fit here,” she said.

For more information about Normann Copenhagen Manila, contact the showroom at 0917-627-8478 or via www.normann-copenhagen.com. — Zsarlene B. Chua

Compensation for culled hogs raised to P5,000

PRESIDENT Rodrigo R. Duterte has approved a proposal to increase financial assistance for backyard hog raisers whose pigs were culled due to an outbreak of African Swine Fever (ASF), raising compensation to P5,000 per head from P3,000.

According to the Department of Agriculture’s (DA) Swine Bulletin No. 11, the increased payouts were approved during a Cabinet meeting on Oct. 11.

“President Rodrigo R. Duterte approved the recommendation of Agriculture Secretary William D. Dar to increase the financial assistance given to backyard raisers whose hogs were culled due to African Swine Fever (ASF), from P3,000 to P5,000 per head. This means previous recipients will receive an additional P2,000 per culled pig,” it noted.

The Cabinet members also approved measures to prevent the spread of the virus to other areas in Luzon. These include the imposition of “lock down” procedures in Bulacan and Pampanga to control the movement of pigs and pork products in affected areas; and prosecuting hog raisers and traders caught trading in and transporting live hogs, as well as slaughtering ASF-infected pigs and selling ASF-infected products.

“We must step up our surveillance and monitoring of transport of live pigs as well as pork products,” Mr. Dar said.

The DA reported that about 12,000 pigs in more than 20 barangays in Luzon, specifically in Rizal, Bulacan, Quezon City, and Pampanga, were confirmed to be infected by ASF.

The DA has been enforcing the 1-7-10 protocol in ASF-infected areas together with local government units, the military, police, and other government agencies to manage and contain the virus. Hogs within a one-kilometer radius are immediately culled and buried while area is disinfected. The seven-kilometer radius is a surveillance zone for sampling and testing of other pigs. Within 10 kilometers, entry and exit of animals is restricted. — Vincent Mariel P. Galang

Triumph bikes, Shelby added to Autohub range

Text and photos by Kap Maceda Aguila

THE PERFORMANCE brand founded by the late great American automotive designer, racer, and entrepreneur Carroll Shelby; and the iconic British motorcycle maker Triumph — are seemingly disparate entities that now have something in common. They both have found a Philippine partner in the Autohub Group.

Last Wednesday, Autohub Group President Willy Tee Ten broke the good news to the media. The day before, the company had been confirmed as the exclusive, authorized Philippine distributor of the two sought-after brands.

“We’ve just been given the go signal to announce: We will be the distributor of Shelby American, Inc. which produces the aftermarket styling (kits and sideskirts) and performance parts (superchargers),” he said. This means that all Shelby-branded auto parts, accessories, upgrades can be handled by the Autohub Car Care Services (ACCS) — under which the brand now falls under in the Philippines.

“We can install Shelby kits and superchargers on the Ford Mustang. We’ll be sending our technicians to the US for training. When they come back, they can work on V8 Mustangs to fit them with kits and superchargers — making them official Shelby GT or Super Snake vehicles with the papers to prove it,” added Mr. Tee Ten. “For non-V8 Mustangs we can install official and authorized Shelby kits only.”

A member of the Shelby family will be coming over for the Philippine launch slated in, hopefully, February next year. “By next month we’ll be at SEMA in Las Vegas and we’ll firm up details,” he intimated. Overseeing Shelby operations here will be Allen Pascual, presently ACCS head.

Mr. Tee Ten told Velocity that he wanted to bring in Shelby because, “everybody’s talking about it.” He maintained, “Shelby is very popular and many were asking us for accessory kits. It started with the kits, and there are a lot of fake kits out there. We researched and found out that the original (company) holds office in Las Vegas — so we contacted them and asked them if we could bring the kits through our aftermarket company (ACCS), not through Ford.” It, of course, helped that Autohub is a Ford dealer — which makes it a natural fit.

The Shelby Philippines showroom is expected to rise in Eastwood City, Quezon City. “That would be a great location for Shelby,” enthused the executive. The facility is expected to be open by March 2020, and ACCS is already arranging to have technicians sent to Las Vegas for training. “We can accept orders already, but we need a little time.”

Meanwhile, it took Autohub four long years to be confirmed as Triumph’s country partner. “Triumph is a British brand which started producing motorcycles in 1902 and has, ever since, been producing iconic motorcycles. They are the number three manufacturer in Europe after KTM and BMW, and number two in terms of big bikes. We know the competitors here. Finally, we have the only missing premium brand,” said Triumph Philippines General Manager Sammy Montecastro. “We’ll make sure that warranty and servicing will be taken care of.”

While previously acquired Triumphs can be received and serviced, those bought outside of the official dealerships after Autohub’s appointment might not readily be honored. Declared Mr. Tee Ten: “If there’s anybody planning to buy a Triumph, wait for us. We’re probably going to start selling by December.”

Up to 90% of our domestic supply of Triumph motorcycles will come from Thailand, which allows the company to realize the benefits of a free-trade agreement — resulting in more affordable retail pricing. The remainder, comprised of more expensive, higher-end bikes, will be sourced elsewhere, he told Velocity.

When asked why he went after Triumph, Mr. Tee Ten replied, “We already have an Italian scooter brand (Vespa). Just like Autohub in the four-wheel segment, we have mass-market brands, and we have premium brands. The direction of Autohub is always to have different levels. When somebody comes into the showroom, whatever he or she wants, we have something to offer. But in the two-wheel segment, we don’t have a premium brand to offer — although the two-wheel brand we have now is also premium (though smaller)… We thought four years ago, why not after this brand? And remember: Mini, Lotus, and Rolls-Royce are all British brands.”

Mr. Tee Ten revealed that the first Triumph showroom will be located in Greenhills — Ortigas Ave. corner Roosevelt in San Juan to be precise. “We have car dealerships there now. The two brands will be transferred, and the whole area will be converted into the main store of Triumph. Maybe October next year, the second branch will be up in BGC (Bonifacio Global City) near Uptown Mall.”

Owee Cruz, Autohub Group VP for Public Relations and Marketing, said that lifestyle items of the two brands will also be made available to the public.

Triumph Philippines should have pricing available by November, and the public will be able to place orders by December. “But official launch is in January… We need to plan for the launch,” concluded Mr. Tee Ten with a smile.

Yields on government debt end flat ahead of RRR cuts

YIELDS ON government securities (GS) ended flat last week on expectations of another cut on banks’ reserve requirement ratios (RRR) and as inflation slows further.

On average, GS yields, which move opposite to prices, dropped by one basis point (bp) week-on-week, based on the PHP Bloomberg Valuation Service Reference Rates as of Oct. 11 as published on the Philippine Dealing System’s Web site.

Jose Miguel B. Liboro, head of fixed income at ATRAM Trust Corp., said rates of debt papers ended mixed on the back of easing inflation and expectations that prices will “gradually move higher moving into 2020.”

At the short end of the curve, securities continued to receive demand and benefited from additional liquidity as the market expects further reductions in banks’ reserve ratios, Mr. Liboro said.

“The yield curve has continued to steepen; yields on short tenor securities have consistent demand and have seen an increase in interest due to expectations of additional cuts to the reserve requirement rate. Short-tenor securities tend to benefit from the additional liquidity,” Mr. Liboro said in an email over the weekend.

Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc. said in an email that yields remained on a downward trend following “positive news” abroad.

“It is probable that investors are taking profit, but some are still taking a longer view. It seems that the trend is still a decline with more positive news from external trade issues. Note that there were many external trade related news last week aside from the optimism because of the trade conflict,” Mr. Asuncion said.

Inflation slowed to 0.9% in September amid lower food and electricity costs, the Philippine Statistics Authority reported earlier this month.

Prices of widely-used goods and services in September further cooled from 1.7% in August due to “softer price adjustments observed in nearly all commodities and base effects, coming from 6.7% in the same period in 2018.”

The September reading was the slowest since the 0.7% logged in April 2016, but matched the 0.9% in May 2015 and May 2016.

Last month’s headline print fell at the low end of the Bangko Sentral ng Pilipinas’ (BSP) 0.6%-1.4% forecast for September.

For the nine months to September, headline inflation averaged at 2.8%, well within the BSP’s 2-4% target range for 2019 but still above the full-year forecast of 2.5%.

Meanwhile, the BSP announced last month that it will reduce lenders’ RRR by another 100 bps effective November to bring the reserve requirement of universal and commercial banks to 15% from 16%. The reserve ratios of thrift banks will also be cut to five percent from the current six percent, and to three percent from four percent for rural and cooperative banks.

BSP Governor Benjamin E. Diokno last week said the central bank remains open to another round of RRR cuts within the year, but noted this will be data-dependent. Meanwhile, the BSP is done cutting benchmark rates for now, he said.

Meanwhile, ATRAM Trust’s Mr. Liboro said the yields on longer tenors rose as investors became more cautious due to upticks in global bond yields.

“Additionally, the uptick in global bond yields has also prompted investors to be more cautious — longer-tenor securities have adjusted higher on the back of this,” he said.

The US Federal Reserve’s preferred measure of the yield curve on Friday uninverted for the first time since mid-July, as progress in US-China trade talks boosted the US economic outlook.

The spread between three-month and 10-year Treasury yields widened by the most since May 6 and moved into positive territory. It had been inverted since late May save for two intraday pops in mid-July.

US President Donald Trump said on Friday the United States and China had come to a substantial phase-1 trade deal, reaching agreement on intellectual property, financial services and big agricultural purchases.

The two sides are very close to ending their trade war and it will take up to five weeks to get the deal written, Mr. Trump said, speaking to reporters after talks with Chinese Vice Premier Liu He.

At the secondary market on Friday, the 91-day Treasury bill edged down by 0.1 bp to yield 3.064%. Rates of the 182- and 364-day papers also went down by 0.3 bp and 4.8 bps to 3.237% and 3.616%, respectively.

Meanwhile, rates of the two-, three- and four-year Treasury bonds (T-bonds) went up by 0.2 bp, 0.2 bp and 0.1 bps to 3.961%, 4.106% and 4.245%, respectively. The yield on the five-year debt papers inched up by 0.4 bp to 4.379% while the rate of the seven-year papers declined by 2 bps 4.581%.

For the 10-, 20- and 25-year T-bonds, rates went down by 1.5 bps, 0.4 bp and 0.6 bp to 4.782%, 5.072% and 5.058%, respectively.

For this week, Mr. Liboro sees a “consolidation with an upward bias,” adding that “while prospects for local fixed income remain positive over the medium term, much of this positivity has been priced in at current levels.

“Some profit taking moving towards year-end given the risk of higher global bond yields and a gradual move higher in inflation after October seems likely,” he said. — Beatrice M. Laforga with Reuters

Agus complex rehabilitation plan encounters delays

THE NATIONAL Power Corp. (Napocor) has encountered delays in moving forward a plan to rehabilitate the Agus hydroelectric power complex in Mindanao after the country rejected funding from France, one of 18 countries that backed a resolution calling on a United Nations council to monitor human rights in the Philippines.

“Nagkaroon ng problema doon (It encountered a problem there),” Pio J. Benavidez, Napocor president and chief executive officer, told reporters, referring to the funding that was for a study on the best option for the plant.

“Itong country na ito, hindi puwede sa Pilipinas kasi sumuporta (This country does not qualify in the Philippines because of its support to the resolution),” he added.

France was reportedly a co-sponsor of the resolution before the United Nations Human Rights Council initiated by Iceland on the promotion and protection of human rights in the Philippines.

Mr. Benavidez said an initial funding of $2 million was supposed to come up with an initial study, during which the World Bank was to submit to Napocor the best option in rehabilitating the Agus complex.

“Na-delay lang nang kaunti (It was slightly delayed),” he said, adding the issue has since been settled.

The Agus hydro power asset has an installed capacity of at least 700 megawatts (MW), with the biggest coming from the 200-MW Agus VI in Iligan City, Lanao del Norte. Agus VI has five operating units, two of which have a capacity of 25 MW each and the remaining three with 50 MW each.

Of the seven separate sites for the Agus hydro power plants, only one, Agus III, has not been completed. However, most of the plants within the complex are operating below their rated capacity, giving plant operator Napocor a lower dependable power output.

The complex, which is owned by the Power Sector Assets and Liabilities Management Corp., remains in government hands after the passage of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001.

Mr. Benavidez said Napocor was looking at three options for the Agus plant: attain the rated capacity; increase it by 10%; and improve the water efficiency.

He said the option that is likely to be adopted is the retention of the Agus plant’s rated capacity because of the existing power overcapacity in Mindanao.

“Surplus ka na so baka hindi mo maibenta (You have a surplus, so you might not be able to sell the energy capacity),” he said.

“[In] six years, overcapacity pa rin ’yung Mindanao (In six years, Mindanao would still have overcapacity),” he said.

Mr. Benavidez said the cost of rehabilitating Agus could reach P30 billion to P35 billion. He said a feasibility study could be started in March next year, with the bidding for the entity to handle the project possibly happening in the second half of 2020. — Victor V. Saulon

PCCI to submit resolutions on taxation, agriculture, trade to Duterte at forum

THE 45th Philippine Business Conference and Expo on Oct. 16-17 will result in resolutions in a breadth of national concerns including agriculture, taxation, trade, transportation, and tourism.

Organized by the Philippine Chamber of Commerce and Industry (PCCI), the 38 resolutions will be submitted to President Rodrigo R. Duterte at the conclusion of the event in Manila Hotel.

For agriculture, PCCI will be endorsing the lowering of rice import costs while also urging the government to rationalize the importation of sugar in consultation with industry stakeholders.

To improve investment promotion, PCCI recommends the strict implementation of the Ease of Doing Business and Efficient Government Service Delivery Act. The law requires government services to process transactions between three to 20 days.

To address energy concerns, PCCI is looking to improve the Palawan tourism sector with sustained and reliable power. They plan to ask the Department of Energy (DoE) and the National Electrification Administration to fast-track power transmission projects and accelerate the development plan to connect cities and municipalities to the main grid.

PCCI is also submitting resolutions to address environment, climate change, and disaster management. For disaster management, they are calling on local government units to craft disaster and risk reduction ordinances for businesses.

PCCI is urging government agencies to address the growing waste management issue, recommending the DoE and the Department of Natural Resources to implement policies that establish waste to energy facilities.

The chamber is also asking the government to assist micro, small, and medium enterprises (MSMEs). They urge the Department of Trade and Industry (DTI) to strengthen its mentoring program “to cascade valuable initiatives like corporate social responsibility, occupational safety and health, disaster risk reduction and management, strategic thinking and planning.”

PCCI’s taxation resolutions are made up of a threefold recommendation to the Department of Finance (DoF). They are asking the department to issue guidelines on the situs or location of tax for better recording of large tax payers by region, and to come up with simplified taxation for MSMEs.

They are also urging the DoF to increase consultations and analyses of the implications of the TRABAHO bill on labor, human capital, internal revenues, business competitiveness, trade performance, health and education and countryside investment.

The TRABAHO bill is now the Corporate Income Tax and Incentives Rationalization Act or CITIRA bill, which rationalizes tax incentives while reducing corporate income tax.

For taxation, PCCI is asking the Bureau of Customs to grant the district collector of the major trading hub of the Port of Cebu authorities to approve valuation and mark penalties.

To address transportation and logistics, PCCI recommends a number of infrastructure projects, including the extension and construction of railways, as well as the rehabilitation of roads and highways.

The chamber is requesting for the upgrade of regional airports and the Ninoy Aquino International Airport (NAIA). They are asking the government to study the possibility of constructing a third runway at NAIA.

“This will increase airline and airport efficiencies, enhance passenger comfort and experience and elevate NAIA to become a viable transit hub for the ASEAN region,” PCCI said.

PCCI is likewise urging the government to address Metro Manila traffic, recommending a harmonization of traffic rules in the Metropolitan area. They are requesting the national government to pass a comprehensive Traffic Crisis Act.

To improve the tourism sector, PCCI is requesting the government to certify Senate Bill No. 1756 to create a Boracay Island Development Authority to sustain the island’s rehabilitation.

For urban development, PCCI supports the implementation of initiatives of the Manila Bay Rehabilitation Task Force to create a comprehensive master plan for its rehabilitation and development.

The first day of the 45th Philippine Business Conference and Expo will be opened by Vice- President Maria Leonor G. Robredo, followed by a set of plenaries on transforming traditional business models for a digital economy. The plenaries include panel discussions, featuring Department of Labor and Employment Secretary Silvestre H. Bello III and Senator Pilar Juliana “Pia” S. Cayetano.

The day will end with business matching and networking sessions as well as pitching sessions.

The second day will include a talk by former President Gloria Macapagal-Arroyo on China’s Belt and Road Initiative. Following the afternoon’s breakout sessions, there will be a memorandum of understanding signing between the PCCI, DTI, and the Department of Agriculture on an initiative to support farmers.

Mr. Duterte is set to close the program with a keynote speech. — Jenina P. Ibañez

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