AgriNurture, Inc. (ANI) marked its 10th listing anniversary as a publicly listed company with a special bell ringing ceremony at the Philippine Stock Exchange (PSE) on Wednesday. In photo: (from left) ANI Director Ciara Mae Ong-Lim; ANI Corporate Secretary Lisette M. Arboleda; ANI Chairman Antonio L. Tiu; PSE Chairman Jose T. Pardo; PSE President and CEO Ramon S. Monzon and PSE Director Roberto Cecilio O. Lim.
SHENZHEN, China/SHANGHAI — When Tencent Holdings Ltd. made its first big foray overseas with an adaptation of its blockbuster mobile game Honor of Kings in the summer of 2017, executives thought they had a sure-fire success on their hands.
The multi-player role-playing game, in which players hack and slash their way through battle arenas, had 55 million daily active users in China and was raking in roughly $145 million a month, making it the company’s top grossing game.
But missteps in development and marketing, exacerbated by a rift with Tencent’s US-based Riot Games subsidiary, has seen the international version, called Arena of Valor, flop in Europe and North America.
Tencent has now all but written off its original plans for Arena of Valor and disbanded the game’s marketing team for Europe and the United States, two company sources with direct knowledge of the matter said.
“In those markets, we are really just letting it live or die on its own course,” one source said, adding the game currently has just 100,000 daily active users in Europe and 150,000 in North America.
The sources were not authorized to speak to media and declined to be identified.
The company has since revamped its approach to overseas markets, paying more attention to local needs and turning to partnerships, such as the one forged with Singapore-based Sea Ltd to handle marketing. It is also expanding further into desktop and console-based games.
But the sobering failure of Arena of Valor raises questions about Tencent’s international savvy at a time when it is trying to expand its WeChat messenger and other services beyond China.
“Tencent lacked distribution channels and experience in user demographics, so they did not know how to compete,” said IHS Markit games analyst Cui Chenyu.
Tencent declined to comment.
The company, which drew one-third of its 85.5 billion yuan ($12.4 billion) in revenue last quarter from video games, is eager to boost growth abroad as it grapples with problems in its home market.
Beijing has intensified efforts to regulate games it sees as too addictive, while an overhaul of regulatory bodies in China has hurt the industry, with a nine month-long freeze in approvals for new games only just starting to thaw.
INTERNAL TENSIONS
Trouble came early for Tencent in its marketing plans for Arena of Valor.
Its homegrown games operation had long had a strained relationship with US unit Riot, whose employees view Honor of Kings as a knock-off of Riot’s League of Legends — the world’s most popular desktop-based game, the two Tencent sources and one Riot source said.
Those tensions grew when Tencent developed Arena of Valor and promoted it in Europe with esport tournaments featuring gamers such as Spain’s Xpeke and France’s YellOwStaR, best known for their exploits in League of Legends competitions.
Incensed that its own brand was being undermined, Riot complained to a senior Tencent executive group, resulting in a 2-month freeze in marketing for the game, the sources said. Riot was later granted the right to review all marketing plans, even the design of posters, and veto use of certain celebrity gamers.
“We had complaints before about the China market from Riot, but nothing on this scale. Maybe they think we had gone too far by taking the game overseas,” said the source.
For a game that failed to get off the ground, the promotion efforts were costly, the sources said, noting that one of the tournaments cost $4.5 million and a top prize could be a Tesla car. “We burnt a lot of cash,” a source said.
FALSE ASSUMPTIONS
Other mistakes were more fundamental. One blunder, the Tencent sources said, was to replace the Honor of Kings characters, which are inspired by Chinese mythology with figures from European folklore and Western comic-book heroes like Batman and Superman.
“In retrospect, this was meaningless and is actually now hurting us,” said one source, adding that the company should have been more confident in the appeal of Chinese culture.
“Because the game is different in China and overseas markets, it’s difficult for us to organize an international tournament of the game.”
Tencent also realized too late that hardcore gamers in the West prefer desktop-based games and that many consumers in Europe and the United States did not have access to 4G internet connections needed for sophisticated mobile games, the sources added.
The popularity of Honor of Kings also owes much to its huge community with players connected by Tencent’s WeChat and QQ platforms. But efforts to replicate that on Facebook fell flat as not enough PC gamers were on the platform, they said.
In contrast to its European efforts for Arena of Valor, Tencent has outsourced the marketing and operation of the game in Southeast Asia to Sea, which has used its extensive and relatively low-cost sales force to promote the game. Sea said last August the game had achieved daily active users of 14 million.
Tencent has also become more conscious of local sensibilities in the wake of its marketing missteps for Arena of Valor. It made sure to gain the support of the Dubai government for a marketing event of PlayerUnknown’s Battlegrounds Mobile and took care to link the desert portrayed in the game with the local area, a source said. The event drew 60 million views online and 5,000 attendees.
To strengthen its presence in the West, Tencent is publishing more independently developed games and has launched its WeGame X gaming platform of mostly Chinese developed games in overseas markets.
Relations with Riot are also on a firmer footing, with sources saying they have been working on a mobile version of League of Legends for more than a year.
“At the end of the day, we are still one family,” one source said. — Reuters
THE US TREASURY added Singapore, Malaysia and Vietnam to a watch list for currency manipulation, putting their foreign-exchange policies under scrutiny.
Singapore made the list because of its large current account surplus and net foreign currency purchases of at least $17 billion in 2018, equivalent to 4.6% of gross domestic product (GDP), according to the Treasury. Malaysia and Vietnam were cited for their bilateral trade and current account surpluses.
Countries with a current-account surplus with the US equivalent to 2% of GDP are now eligible for the list, down from 3%. Other thresholds include persistent intervention in markets for a nation’s currency, and a trade surplus of at least $20 billion. Countries that meet two of the three criteria are placed on the watch list.
Being labeled a currency manipulator doesn’t come with immediate penalties but can rattle financial markets.
The Treasury said Singapore should undertake reforms that will lower its high saving rate and boost low domestic consumption, while striving to ensure that its real exchange rate is in line with economic fundamentals, to help narrow its large and persistent external surpluses.
Singapore’s central bank said in a statement that “it does not manipulate its currency for export advantage.” The Monetary Authority of Singapore uses the exchange rate to ensure price stability and can’t use it to gain an export advantage or achieve a current account surplus, it said.
Malaysia was cited for its bilateral trade surplus with the US of $27 billion last year and its current account surplus of 2.1% of GDP. The Treasury noted Malaysia intervened in foreign currency markets in both directions in the past, and had net sales of foreign exchange equivalent to 3.1% of GDP last year to resist the depreciation of the ringgit.
Malaysia’s central bank said the country supported free and fair trade and didn’t have unfair currency practices, adding that inclusion on the list had no consequences for the country’s economy.
“The ringgit exchange rate is market-determined and is not relied upon for exports competitiveness,” Bank Negara Malaysia said in a statement.
The other two Asian countries on the list are Japan and South Korea. India was removed from the watch group, given that it’s met only one of the three criteria — a “significant” bilateral surplus with the US — for two straight reports.
Vietnam was at risk of meeting all three of the Treasury’s new criteria for the currency manipulator tag. The Treasury excused Vietnam’s recent currency intervention, citing movements in both directions and net foreign exchange purposes that had “reasonable rationale” to rebuild reserves. — Bloomberg
SOLAIRE presents “Culinary Masters: Chef Jun Yukimura” as the 3 Michelin Star chef takes over the kitchen of Yakumi on June 6 to 8, from 7 to 10 p.m. “Culinary Masters” is a series of special dinner events that feature the ingenuity of some of the most prominent chefs from all over the globe. Mr. Yukimura’s culinary excellence was sharpened by 25 years of training in the former capital of Japan. Known for his imaginative take on the tradition of Kyoto cuisine, he opened Azabu Yukimura in 2000 which has garnered three Michelin Stars and propelled his restaurant into a must-visit in Tokyo. Mr. Yukimura is bringing his signature touch to Yakumi together with the restaurant’s Executive Japanese chef Norimasa Kosaka for a bespoke eight-course Kaiseki menu which will also features sakes that will complement each course. A traditional Japanese Koto player will provide the music. The Kaiseki dinner is at P10,000++ per person. For inquiries and reservations, call 888-8888 or e-mail restaurantevents@solaireresort.com.
IN HONOR of International Pineapple Day on June 1, Discovery Shores Boracay will be joining other independent member hotels of Preferred Hotels & Resorts around the world for a week-long celebration of the pineapple as the emblem of hospitality. From June 1 to 9, visitors can try the Lazy Piña, an original, limited-time only pineapple cocktail at the hotel’s San Bar for P390++ per glass.
UNTIL July 15, enjoy a 40% discount on the lunch, dinner, or Sunday Brunch buffet when dining at Flavors Restaurant on a Monday, Wednesday, or Sunday. Flavors, the all-day dining restaurant of Holiday Inn & Suites Makati offers a selection of Western, Filipino, and South East Asian fare including US roast rib-eye, Flavors lechon, and Salmon coulibiac, Bicol Express, Pinangat, Singaporean chili crab, Nasi Lemak, and Malaysian Massaman Beef Curry. Lunch and dinner buffet is priced at P1825 nett while Sunday Brunch is priced at P2,050 nett. Reservations are required using promo code: Flavors 40. Holiday Inn & Suites Makati is located in the Ayala Center, adjacent to Glorietta. For details call 909-0888 or visit www.holidayinn.com/makati.
MARCO POLO Ortigas Manila will offer authentic Thai dining care of guest chef Nontra-Udon Buapha. With almost 40 years of culinary experience, the guest chef from Prince Hotel Hong Kong is well-known for his authentic specialties and friendly character. From June 4 to 23, Mr. Buapha is bringing flavorful Thailand to the hotel’s Cucina restaurant. Thai beef and seafood salad, Thai steamed fish, Minced pork, and Thai crab yellow curry will be served for lunch and dinner along with the staple Pad Thai. There will also be a Thai Snack Platter featuring fish cake, shrimp cake, spring roll, and chicken with pandan leaf at Vu’s Sky Bar and Lounge. Café Pronto is showcasing its Thai Chicken Wrap, while special cocktails will be served at the Connect Lounge. For details call 720-7777 or e-mail restaurant.mnl@marcopolohotels.com.
Here’s a quick glance at how PSEi stocks fared on Wednesday, May 29, 2019.
FORTY-SIX government-owned and controlled corporations (GOCCs) remitted a total of P38.9 billion worth of dividends to the Treasury in the five months to May, or just 3% less than the record P40.17 billion remitted in all of 2018, the Department of Finance (DoF) said.
In a statement Wednesday, the DoF said the dividends remitted in the first five months of this year is higher by 45% than the P26.8 billion recorded in the same period of 2018.
Finance Secretary Carlos G. Dominguez III, in a statement, attributed the GOCCs’ performance to “the efficient monitoring of, and fiscal discipline instilled in, GOCCs by the DoF-CAG (Corporate Affairs Group) as well as by other finance officials sitting on the respective boards of these state-run firms.”
By law, GOCCs are required to remit half of their profits to the Treasury. The single largest dividend of P16.17 billion was turned in the Philippine Amusement and Gaming Corp. (PAGCOR) amounting to P16.17 billion.
This was followed by the Philippine Deposit Insurance Corporation (PDIC) with P4.58 billion, Bangko Sentral ng Pilipinas (BSP), P4 billion, Philippine Ports Authority, P3.51 billion, Manila International Airport Authority, P3.42 billion, and the National Power Corp., P842 million.
The rest of the top 10 are Clark Development Corp. (CDC) with P815 million, Philippine Charity Sweepstakes Office (PCSO) P744 million, PNOC Exploration Corp (PNOC-EC) P699 million, and the Philippine Economic Zone Authority (PEZA) P650 million.
The DoF noted that the P40.17 billion remitted in 2018 was the highest since 1994, when state firms were first required to make 50% dividend payouts.
The 2018 total is 32% higher than the dividends collected in 2017. — Reicelene Joy N. Ignacio
MOODY’s Investors Service cut its Philippine economic growth forecast to 6% for this year from its previous projection of 6.2% due to the delayed approval of the 2019 General Appropriations Act (GAA), which dampened gross domestic product (GDP) growth in the first quarter.
“We did lower our growth outlook as we take into account the budget impasse, the first quarter growth, as well as some of the other things like the external headwinds,” Moody’s Vice President and Senior Credit Officer Christian de Guzman told reporters in Makati on Wednesday, on the sidelines of the Economic Journalists Association of the Philippines (EJAP) and Aboitiz group economic briefing.
“We’re looking at a reacceleration in growth going forward. That means also some degrees in catch-up in terms of budget spending but I think we also want to caution that given the delay, it is probable that they will not be able to fully execute the budget amount, so I think that’s the part of the reason why we think there’s still going to be a deceleration in growth versus 2018,” Mr. De Guzman said.
The economy grew 6.2% in 2018.
The new projection is at the lower end of the government’s target of 6-7% economic growth.
Even though the Bangko Sentral ng Pilipinas reduced policy rates and the bank reserve requirement, Mr. De Guzman said that the central bank is not yet in “easing mode” noting that policy is still currently tight.
The BSP earlier cut its benchmark policy rate by 25 basis points (bps) to 4.5%, and is expected to make the first 100-bp reduction Friday, followed by two 50-bp cut in the next two months, to bring down the reserve requirement rate (RRR) to 16% from 18%.
“Let’s not forget that the policy tightening was 175 basis points. So, the easing so far is 25 bps. I don’t think that it’s quite precise to say that they are in an easing mode yet because the conditions themselves continue to be tighter than they were than this time last year,” Mr. De Guzman said.
“2015, 2014 interest rates were rock solid. We’re not in that situation anymore. We’re looking at a higher rate environment for the Philippines and that actually makes sense… The investment needs of this economy are in excess of its savings and of course interest rates have to go up,” Mr. De Guzman noted.
Meanwhile, Rosemarie G. Edillon, Undersecretary of the National Economic and Development Authority (NEDA), said that the agency wants to work with legislators to press home the need to avoid unnecessary obstacles to spending.
“We have to work with the next Congress in order to redefine what this means… The premise of (an election spending ban) is so you don’t use (the funds) to further your campaign. If this (project) has already been specified for years before, then what’s the point?,” Ms. Edillon said.
The delay in the passage of the 2019 budget forced the government to work with a reenacted 2018 budget until April, when the 2019 Budget was finally signed.
Ms. Edillon added: “What we would need to be is really to be more aggressive in terms of infrastructure projects… With respect to construction, public construction is just on fourth of the entire construction pie. (It will help to) come up with administrative measures like issuing permits faster, more efficiently.”
“If you’re able to bring the private sector to just increase construction by some more, that will actually more than make up for this first quarter delay in public infrastructure projects,” Ms. Edillon said. — Reicelene Joy N. Ignacio
THE Department of Trade and Industry (DTI) said it is working to release within the year an incentive package that will encourage hybrid and electric car manufacturers to set up assembly plants here.
“For (those who import), we’re looking at removal or reduction of tariffs, pero kung i-ma-manufacture (if they manufacture) here, we’re looking at much higher incentives. These are still being formulated,” Undersecretary for the DTI’s Competitiveness and Innovation Group Rafaelita M. Aldaba told reporters on the sidelines of the Toyota Hybrid Electrification forum on Wednesday.
The fiscal incentive program being drafted will follow the pattern of the Comprehensive Automotive Resurgence Strategy (CARS) program with incentives given depending on the production volume and investment committed by the companies as well as other conditions, she said.
Asked about the tariff adjustments, Ms. Aldaba said: “If you have manufacturing ambitions, you will get a better incentive. Siguro (maybe) zero for those who commit to manufacture, then reduced rates for those who will import.”
The DTI may also allow program participants to import vehicles for the first two or three years while the industry, with government support, establishes a market for the product.
She said the incentive package will be an inter-agency effort with the Departments of Transportation, Environment and Natural Resources, Energy and Science and Technology.
The proposed strategy will be comprehensive and include industry development goals, regulations, information, and education especially on the environmental benefits of hybrid and e-vehicles, according to Ms. Aldaba.
Ms. Aldaba said having a manufacturing base for electric and hybrid cars is “very feasible”, considering that the country has the metal resources such as nickel and cobalt to produce the batteries for these cars.
At yesterday’s news conference, Toyota Motor Philippines (TMP) Corp. President Satoru Suzuki said the company’s Prius model as currently imported is “expensive” at P2.2 million.
Nico Bravante, TMP’s vice-president for product planning, said that without the 30% import tariff the Japan-made Prius can sell for as little as P1.6 million.
TMP Senior Vice President for Marketing Jose Maria M. Atienza said the company has sold around 481 hybrid cars, including the Prius and other models from its Lexus brand since 2009.
In 2018, Toyota sold 105 hybrids in the Philippines, up 16.67%.
Mr. Atienza expects hybrid sales to be little changed this year, noting that the priority for the company is to build a market for e-vehicles.
“Our goal now is how to expand it with current activities like this, including working with the government for incentives and looking at launching models. We need more models for affordability. Affordability is very important,” Mr. Atienza told BusinessWorld. — Janina C. Lim
THE Department of Agriculture (DA) said it would rather see pork prices rise as a result of measures adopted to minimize the risk of African Swine Fever (ASF), than allow the disease to enter the country and devastate the P200- billion hog-raisng industry.
“(My) appeal (is to) look at this (from) a more intelligent perspective and tignan natin yung (let us look at the) implications” on the industry,” Agriculture Secretary Emmanuel F. Piñol told reporters.
Asked whether the measures taken to insulate the industry from ASF will make pork more expensive, he said: ”Of course we are looking at the effect of the move on prices, but ang tanong naming diyan, ano ang ipa-prioritize natin? Yung isa o dalawang pisong pag-taas ng baboy o yung pagkasira ng buong industriya na nagkakahalaga ng dalawang daang bilyon? (the question is, what do we prioritize? A one or two-peso increase in the price of pork or the destruction of the P200-billion industry?).”
The Department of Agriculture (DA) is proposing a two-month freeze on pork imports, which could restrict supply and drive prices up, while also allowing the cold storage industry to free up capacity. The lack of cold storage has been cited as a market bottleneck by hog growers, who are thus hindered from distributing their products to consumers.
The current pork inventory in cold storage is estimated to be sufficient for about four to five months.
The Food and Drug Administration (FDA) ordered on May 27 the immediate recall and seizure of pork meat products imported to the Philippines from ASF-affected countries, specifically those manufactured and imported after August 2018.
According to the Philippine Statistics Authority (PSA), in the first quarter, the average farmgate price of hogs for slaughter fell 2.7% year-on-year to P110.52 per kilogram (kg). Hog production was up 1.6% at 567,420 metric tons (MT).
“We are pinning our hopes to our overseas Filipino workers (OFW), our Filipino citizens living abroad na meron tayong binabantayan na matinding sakit ng baboy na maaring makasira sa ating industriya (We are watching out for OFWs in countries that have the disease who might bring in pork products that can wreck our hog industry). Nakiki-usap kami na ipalaganap ninyo yung impormasyon na bawal na magpadala ng (We are asking that you spread the word that they are banned from bringing in] canned goods,” said Mr. Piñol.
The FDA has also warned the public against purchasing and consuming pork products from ASF-affected areas like China, Hungary, Latvia, Poland, Romania, Russia, Ukraine, Vietnam, Zambia, South Africa, the Czech Republic, Bulgaria, Cambodia, Mongolia, Moldova, and Belgium. — Vincent Mariel P. Galang
THE National Economic and Development Authority (NEDA) is currently seeking funding for a plan to mitigate the impact of El Niño, focused on ensuring food and water security.
At a Palace briefing, NEDA Undersecretary Adoracion M. Navarro said the plan requires P14.47 billion to implement, with “the largest investment requirement for food security… P11.55 billion or around 80% of the total investment.”
Water security is the other major item accounting for P2.76 billion, according to Ms. Navarro’s presentation.
Of the P14.47 billion proposed to implement these programs, NEDA is seeking to fund P8.34 billion.
Possible funding sources, she said, are the National Disaster Risk Reduction and Management Fund, the Quick Response Fund, the Bangsamoro autonomous region budget, the private sector, and others that have yet to be determined.
Some components of the plan dealing with energy and public safety “will have no funding requirements sapagkat iyong mga proposed interventions dito ay regular activities ng mga ahensiya, kagaya ng (because the proposed interventions are part of the regular activities of agencies like the) Department of Energy, Bureau of Fire Protection and others.”
At the briefing, government meteorologists also said the El Niño, which is causing a dry spell in many parts of the country, is likely to run until August but could last until the end of 2019.
Flaviana D. Hilario, deputy administrator for research and development at the Philippine Atmospheric, Geophysical and Astronomical Services (PAGASA), said: “According to the different models, it will likely continue until June, July, August of this year with high probability of around 78%. However, there is still a chance that it will continue until the end of this year, 2019… The uncertainty is quite high, so in this regard, we will give you update every month.”
Ms. Navarro said that if the government successfully implements its El Niño mitigating measures, she is “confident” it can hit its target of 6% to 7% gross domestic product (GDP) growth.
She added that NEDA has just attended a number of interagency meetings to find ways to minimize the impact of the 2019 budget delay, which led to the reenactment of the 2019 budget until about mid-April, thereby holding back government spending and dampening first-quarter GDP growth.
“Katatapos lang ng pagpupulong ng mga (We are just coming out of meetings with) critical agencies in implementing a catch-up plan or a catch-up program. Ito iyong mga (These mainly involve) the infrastructure agencies: DPWH, DoTr (the Public Works and Transportation departments).”
She said there was a separate meeting with the Department of Agriculture (DA) for its catch-up plan for accelerating project implementation.
She added the plan also involves “24/7 construction” and compelling agencies in charge of issuing permits for key projects to expedite their approvals. — Arjay L. Balinbin
THE Employers Confederation of the Philippines (ECoP), the largest group of private employers, said Thursday it will work to develop “more balanced” policies on job security and worker protections, on the same week the Security of Tenure Bill made its way through the legislature.
The group also issued a resolution to address possible job losses due to new technologies which it said can be mitigated by helping the work force develop new skills.
On the second day of the 40th National Employers Conference, participants grappled with “creative” and “innovative” practices in business and employment informed by technological advances, and cited the need to ensure inclusive growth.
This year ECoP resolved that “employers… must collaborate with all social partners in developing more balanced policies that will ensure the employment security and social protection of workers, and at the same time ensure sustainability, competitiveness, and responsiveness to rapidly changing global economic, geopolitical and technological developments.”
ECoP said employers must “adopt more creative strategies” such as “massive up-skilling and re-skilling, more proactive industry collaboration, genuine representation in curriculum formation, and the promotion of a mindset for life-long learning that will develop a truly competitive and highly skilled work force in order to mitigate threats of job losses and skills obsolescence due to technological advancement, changing market conditions and consumer behavior, and other influences.”
Employers are gearing up for a potential showdown over the Security of Tenure Bill, which hopes to crack down on “endo” or “end-of-contract,” an employment practice that denies a worker a pathway to permanent employment, typically by terminating employment before six months, the maximum period for probationary employment status under law. Employers have raised concerns that the law will unduly crack down on all forms of contractual employment, making operations less efficient, raising the risk of job losses, and scaring away investors.
ECoP also agreed that employers “must continue to help alleviate poverty and unemployment by engaging all stakeholders through social dialogues in crafting policies… that will translate GDP into inclusive growth.”
The employers also resolved to develop a “modus vivendi… to encourage the growth of entrepreneurs in the micro, small, and medium enterprises (MSMEs) sector.”
They said “employers must foster responsible business conduct and corporate social responsibility by complying with labor laws and standards and adhering to international standards and frameworks.”
Labor Undersecretary Ciriaco A. Lagunzad III represented Labor Secretary Silvestre H. Bello III at the event.
Reading Mr. Bello’s speech, Mr. Lagunzad said: “We need to upgrade, adjust, and retool our technical and vocational education and training programs as emerging jobs will necessitate new and upgraded skills and competencies.”
He added that strengthening apprenticeship programs “provides a faster and more flexible way for both governments and enterprises to meet higher levels of cognitive and manual skills demanded by the Fourth Industrial Revolution.” — Arjay L. Balinbin
