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Here come the Wheat Whiskies

ALL WHISKEY is made from grain, but in the US, we tend to reserve our wheat supply for bread and breakfast cereal, not spirits. Which is a shame, because when used in a whiskey mash bill, wheat adds a unique, fruity sweetness and a subtle spicy flavor profile. It’s what Bill Samuels added to the Maker’s Mark recipe back in the 1950s to distinguish it from other bourbons, and it was such a hit that it hasn’t changed at all since. Some say the wheat ingredient is what draws fans to Pappy Van Winkle bourbons from Sazerac Co.’s Buffalo Trace, those highly allocated, semiannual releases at 12-, 15- and 23-year age statements that draw an annual frenzy — and attention from bandits. And it’s what disappointed drinkers look for in other, less elusive bourbon bottlings if they can’t find it.

American whiskey sales in 2018 rose 6.6%, or $224 million, to $3.6 billion worldwide, according to the Distilled Spirits Council. However, unlike “wheated” whiskeys such as Pappy or Maker’s, wheat whiskey has accounted for only a tiny fraction of that figure. That could be changing. Straight wheat whiskey contains 51% or more of wheat in its mash bill, as 51%-plus corn is to Kentucky bourbon and rye is to, well, rye.

Brown-Forman Corp.’s Woodford Reserve is no stranger to experimentation, but it’s taken decades for the distillery to come around to making a wheat whiskey. This summer, Woodford Reserve debuted its first straight wheat whiskey, simply known as “Wheat” (45.2% alcohol by volume, $35), as a permanent part of the brand’s portfolio. It contains 52% wheat, 20% malted barley, 20% corn, and 8% rye in its mash bill.

“Coming out of Prohibition, the federal government provided guidelines for four types of American whiskey — bourbon, malt [barley], rye, and wheat,” says Woodford Reserve master distiller Chris Morris. “We wanted to honor all four expressions, and we now have all four in our permanent family of Woodford Reserve brands.” (The others are a straight bourbon, a straight rye, and a straight malt.)

Morris says the whiskey serves to round out the range of characteristics available among all the Woodford spirits. “Double Oaked [bourbon] is sweet. Rye is spicy. Malt is nutty. And Wheat is fruity.” Morris also notes that because so few straight wheat whiskeys exist on the market, he sees a competitive edge to this portfolio addition. Until now, the best-known bottling of American straight wheat whiskey has been Heaven Hill’s Bernheim brand, and even that recently got a makeover (more on this below) to bring it more on trend.

The difference is noticeable on the palate right away. Not only is the whiskey fruity, as Morris describes it, but it also has a soft, creamy mouthfeel, unlike many typical American whiskeys. It tastes like a boozy, liquid version of hot cereal (yes, you could say Cream of Wheat) topped with stewed apples and fresh bananas, rounded out by a puff of charcoal flavor from the new charred oak barrels the whiskey is aged in.

Bartender Steven Wicker of Sweet Liberty in Miami says he appreciates the softness of wheat whiskey in cocktails. After tasting the Woodford Reserve Wheat, for example, he says, it would be a good “gateway” whiskey for someone who isn’t used to the more robust characteristics of traditional bourbon or rye. “I would reach for the WR Wheat to sub it out as base in traditionally boozy, whiskey-based cocktails (Old Fashioneds, Manhattans, etc.) because it would mellow out some of the harsh tones customers may not be accustomed to having yet.”

Wheat whiskeys in general have less sweetness than corn-based whiskies and are less floral and spicy than a rye, echoes Sweet Liberty’s bar manager, Fraser Hamilton. On mixing: “I think it goes with fall fruit flavors — apples, pears, some darker stone fruit. It gives cocktails that toffee, dark burnt-sugar complexity.”

Some wheat whiskeys on the market contain 100% wheat, while others opt to include it as the dominant grain in the mash bill. It’s worth experimenting with a few, both neat and in cocktails, to discover which one works best for individual palates.

WHEAT WHISKEY
BOTTLE-BUYING GUIDE

• Bernheim Original Kentucky Straight Wheat Small Batch. Previously released as a no-age-statement spirit for decades, this OG straight wheat has carried a seven-year age statement since 2014, and this year, gets new packaging. Named for Woolfe Bernheim, the 19th century founder of Bernheim Distillery in Louisville, Ky., and now owned by Heaven Hill Distilleries, Inc., the liquid is aged in Nelson County rickhouses and is noticeably more robust and spicier than the Woodford recipe. Try it in a terrific Manhattan variation. 45% ABV, $35

• Dry Fly Straight Washington Wheat. Based in Spokane, Wash., Dry Fly Distilling goes all-in on the wheat front, using 100% locally sourced winter wheat, then aging the distillate a minimum of three years in oak barrels with a medium char. There’s a marshmallow-like sweetness to it, with a hint of espresso bean in the finish. 40% ABV, $45

• Breuckelen 77 NY Wheat. Another 100% wheat whiskey — this time with grain grown in upstate New York, then distilled in Brooklyn and aged in new American oak for one to two years. The whiskey is hot and sweet, with cinnamon toast aromas and maple syrup on the palate, ending with a spicy pepper jam kick. 45% ABV, $44

• Journeyman Whiskey Buggy Whip Wheat. The Featherbone Factory in Three Oaks, Mich., manufactured two of the biggest necessities of the late 19th century — corsets and buggy whips. Now repurposed as a distillery, its 100% Michigan-grown wheat whiskey is far more au courant. The grain is hand-milled and distilled on site, then aged for an undisclosed amount of time in new oak barrels from Minnesota. For those who enjoy the kind of bracing whiskey cinematically portrayed in Old West saloons, this big kicker is the one for you. 45% ABV, $50

• Starward Two-Fold Double Grain Whisky. Australia has been going through a craft spirits boom similar to that in the States. This new release from the Melbourne distillery comprises 60% wheat whisky and 40% single malt whiskies — for a 60-40 wheat-to-malted barley blend — that are distilled and matured separately on site in Australian red wine barrels before bottling. Warm and comforting flavors of baked orchard fruits are swathed in vanilla, with a black tea and pie spice finish. It’s available in 35 US markets for now, with a bigger launch coming this fall. 40% ABV, $33 — Amanda Schuster, Bloomberg

Waterfront to continue fighting SSS in 20-year-old claim case

GATCHALIAN-LED Waterfront Philippines, Inc. (WPI) plans to appeal before the Supreme Court the P840-million claim of the Social Security System (SSS) against the company and two other units.

“WPI will move for the reconsideration of the Decision or elevate the matter to the Supreme Court,” the company said.

The case, which also involves listed firm Wellex Industries, Inc. and The Wellex Group, Inc., started when WPI secured a five-year loan from SSS worth P375 million in 1999 to complete its network of Waterfront hotels. The company’s loan obligations rose to P605 million in August 2003, including penalties and interest.

SSS then executed a foreclosure proceeding on WPI’s properties since the company was considered in default with payments.

Unable to pay the loan, SSS sued the Gatchalian group for its inability to settle payments.

The Quezon City Regional Trial Court (RTC) in a decision dated Jan. 13, 2015 declared the contract of loan and related mortgages entered into by WPI and SSS null and void, enjoining the company to return the principal amount of the loan worth P375 million. The state-run fund was also directed to return WPI’s titles and documents which were held as collateral.

The Court of Appeals, however, reversed the RTC decision last month, ruling that the “contract of loan with real estate mortgage and assignment of shares with option to convert to shares of stock” in 1999 was valid. It then ordered WPI to settle P841.57 million due to SSS as of April 30, 2010.

The amount will earn the interest and penalty charges as stated in the 1999 contract, until the decision has been made final.

WPI saw its net income attributable to the parent drop by 19% to P187.59 million in the first six months of 2019, after gross revenues declined five percent to P948.26 million.

Shares in WPI closed flat at 70 centavos each at the stock exchange on Wednesday. — Arra B. Francia

Fitch warns on $23B of Dubai debt held by banks

A “significant portion” of $23 billion in loans made to Dubai government-related companies maturing at the end of 2021 may need to be restructured — again, according to Fitch Ratings Ltd.

Banks in the United Arab Emirates — still suffering the fallout of Dubai’s 2010 property crisis — are at risk once again due to falling home prices and non-performing loans, the ratings agency said in a report on Tuesday.

Oversupply, weaker consumer sentiment due to lower oil prices and a less supportive economic environment are all impacting prices, according to Fitch. Foreign buyers have also been deterred by the U.A.E. dirham appreciation and geopolitical tensions.

Property prices in Dubai, the country’s tourist and financial services hub, have fallen 27% since a five-year peak in October 2014. Banks are said to be renegotiating more than $3 billion of bad loans with the Al Jaber Group, Amlak Finance PJSC and Limitless LLC. The ongoing slump is a stark reminder of the 2009 global financial crisis when state-owned Dubai World restructured $23.5 billion of debt and property developer Nakheel PJSC had $10.5 billion of unpaid bills.

2010 FLASHBACK
“Loan restructuring in the real estate, contracting and other related sectors has increased — a sign of weakening asset quality,” Fitch said. The company expects more restructuring and a rise in so-called Stage 3 loan ratios in the next 12-18 months.

Banks “have not fully recovered” from the 2010 crash and “smaller banks are more vulnerable to deterioration in credit conditions due to thinner capital buffers and lower revenue generation,” according to Fitch.

Still, not everyone shares Fitch’s concerns. A day before the company’s report, the U.A.E. central bank Governor Mubarak Al Mansoori said lenders in the country still have room for more real estate lending.

“Real estate — in terms of exposure — is not excessive and it’s not alarming in terms of the overall picture. Banks have been cautious and have taken the appropriate provisions,” he said in interview in Kuwait City on Monday.

Non-performing loans at U.A.E. banks climbed to 4.99% of gross loans at the end of 2018 compared to 4.01% in the preceding year, according to data compiled by Bloomberg Intelligence. That compares with 1.5% in Saudi Arabia and 1.9% in Qatar at the end of 2018, the data show.

Abdul Aziz Al Ghurair, the chairman of the U.A.E. Banks Federation and chief executive officer of Mashreqbank PSC, said in March that banks need to give customers more time to repay loans to protect the economy and the banking system because of the ongoing property downturn.

Real estate and construction accounted for about 20% of banks’ gross loans at the end of the first quarter, Fitch said. The true exposure may, however, be higher as central bank data excludes retail mortgage lending and some lending to investment companies that finance development, it said. — Bloomberg

Virtual streamers now Japan’s biggest YouTube attraction

KIZUNA AI, the most popular streamer in Japan, is an anatomically exaggerated, perpetually adolescent girl in frilly thigh-high socks and a pink hair ribbon. She’s also an entirely virtual character, given life by the actions and voice of an invisible actress.

In the home of anime and “Ghost in the Shell” futurism, millions now follow Kizuna Ai online, and that success has spawned thousands of copycat acts and a cottage industry catering to so-called virtual YouTubers, or VTubers. Defying the Western streamer blueprint of young male gamers like PewDiePie and Ninja, Japan has invented a new class of streaming star that’s equal parts digital avatar and interactive anime.

“What separates VTubers from regular anime characters is that you can believe they actually exist,” said Takeshi Osaka, founder of Activ8 Inc., the Tokyo-based company behind Kizuna Ai. “That presence is an important part of what makes them so appealing.”

Sidestepping the labor-intensive and time-consuming process of traditional animation — ill-suited to the fast-paced world of YouTube content — Activ8 uses Hollywood-grade motion capture equipment to crank out music videos, skits and game streams just about every day for more than 4 million subscribers.

The technology allows Kizuna to interact with fans in real time at exhibitions, give interviews on live TV and perform in concerts. It’s a virtual influencer that can patronize real-world events.

While Activ8 doesn’t disclose technical details, its product is an almost seamless combination of lifelike movements, gestures and facial expressions, all of which contribute to the suspension of disbelief.

“The innovation here is in how they combine real-time 3D computer graphics, motion capture and video streaming sites like YouTube to create two-way interactions with audiences,” said Eiji Araki, a senior vice president at Gree Inc. who heads a division specializing in VTubers.

Kizuna Ai debuted on YouTube in December 2016 and was responsible for coining the term “VTuber.” The technology that opened the door for its many imitators arrived that same year, in the form of the first commercial virtual reality goggles. Designed to do precise head and hand tracking, the VR kits from Facebook Inc.’s Oculus and HTC Corp.’s Vive turned out to be perfect animation rigs for VTuber aspirants on a budget. With free-to-use animation engines and 3-D models from the likes of Unity Technologies, anyone could create a virtual puppet studio for cheap in their living room.

It’s no accident that VTubers found fertile ground in Japan. The country has a long history of user-generated content centered on anime, and performances by virtual idols like Hatsune Miku have drawn real-world crowds for more than a decade. While international audiences may prefer more photorealistic characters — which are more difficult to create and animate — their Japanese counterparts raised on comic book heroes have no problem with cartoonish looks.

The VTuber phenomenon has so far been almost exclusively Japanese, however its underlying technology and formula of combining popular culture with increased interactivity — and thus believability — are universal. And Activ8 already has ambitions to expand its VTuber portfolio beyond Japan.

While Japan’s global tech leadership may have faded since the days of the Walkman, its trendsetting habits remain strong in the gaming realm. Three out of four gaming consoles sold in the world today are made by Nintendo Co. and Sony Corp., while free-to-play mobile games are taking over the globe with monetization techniques pioneered by Japanese companies. And then there are globally beloved game series like Super Mario, Zelda, Monster Hunter and Pokémon. Anime, another major Japanese cultural export, is a $20 billion industry whose products range from Oscar-winning high-brow works by Hayao Miyazaki to action-packed light entertainment like “Battle Angel Alita,” which recently got a Hollywood remake. VTubers are a cross between these two Japanese pastimes.

Market researcher User Local Inc. estimates there are now over 9,000 VTuber channels. The most popular ones are produced by a handful of professional studios like Activ8, each managing dozens of characters. In the space of less than three years, virtual streamers have morphed from an obscure subculture to a big business. Kizuna Ai can now be found in ads for instant cup noodles and eye drops, appearing at local carrier SoftBank Corp.’s launch event and helping the Japan National Tourism Organization’s promo campaigns.

“There is no doubt that this will change the future of entertainment,” said Hironao Kunimitsu, the founder of Gumi Inc., an early investor in Activ8 and about 70 other VR start-ups. He cautions, however, that “for this type of content to resonate outside of Japan, it will have to be adapted to local tastes and sensibilities.”

For now, Japanese VTubers are taking the path of least resistance and exporting their characters to China’s large and underserved anime market. Activ8 earlier this year introduced a Chinese version of Kizuna Ai, changing its dress and voice, and now it has close to 820,000 followers on the country’s Bilibili video-sharing service.

Ultimate success for Activ8’s chief means making it into Hollywood, which is already a well-trodden path for Japanese gaming franchises like Resident Evil, Pokémon and Sonic the Hedgehog. Given the world’s appetite for Japanese culture, VTubers might not even have to dilute their product very much.

“I started this virtual entertainer business because I believe it can be done worldwide,” Osaka said. “Our goal is to become the next-generation Disney.” — Bloomberg

Secret Superhero: The Barista

YOU MIGHT think that a barista is simply the guy who hands you your coffee at the counter, but after attending the first Philippine National Barista Assembly at BGC last week, well, we certainly got an education.

The coffee conference was attended by coffee enthusiasts, coffee companies, coffee producers, 2014 World Barista Champion, Hidenori Izaki, 2018 World Barista Champion Head Judge Ross Quail, and all sorts of important names in the coffee world. In pockets throughout the SMX Convention Center in SM Aura, Taguig, competitions were under way, and in the sidelines of the Ultimate Barista Challenge, we talked to the guy who envisioned the assembly, Michael Harris Conlin, president and CEO of Henry & Sons, and the country’s 2019 National Barista Champion.

“What I really want to do is to create a fully sustainable coffee economy here in the Philippines, where everybody works together towards a beautiful coffee future,” he said.

As for the Ultimate Barista Challenge, Gian Carlo Valencia took home the top prize, and will receive training and ambassadorship under Henry & Sons. The training program aims to send the winner to the Nationals, and after that, presumably the World Barista Championships (if it all works out).

Mr. Conlin’s advocacy of helping coffee farmers through the Foundation for Sustainable Coffee Excellence is already known in coffee circles (his entry in the World Barista Championship was a cup from his Benguet farming partners), but “Now we feel that it’s up to the barista to become the ambassadors of great coffee,” he said. “We’re basically empowering the baristas with the knowledge and skill to be able to translate the hard work of our coffee farmers and the entire value chain to the consumer.” In taking up this mindset, your barista is not just handing you a cup, but summarizing the work of half a decade or so — you’re drinking the foggy mornings, the logistics of transportation, and many other things that worked together to cheer you up with a caffeine kick in the morning.

Since a cup is consumed every morning in some corner of the world, coffee as an end-product derived from real hard work is hard to distance from its status as a commodity. “The sad thing is that commodity markets are not in the hands of the farmers. It’s also not in the hands of the barista, or even the players in the coffee value chain,” said Mr. Conlin. “It’s actually in the hands of speculators. For no reason at all, coffee prices can go all the way down to less than production cost of the farmer, all the way up to crazy prices.

“What we’re doing is increasing the quality of the coffee, and by making Philippine coffee a specialty, we don’t fall under the commodities market. It becomes how much the consumer wants to pay for it.” — Joseph L. Garcia

IPOPHL wants malls, online shops liable for counterfeit goods sold

THE Intellectual Property Office of the Philippines (IPOPHL) is proposing legislation that will hold online platforms and malls responsible for the sale of counterfeit goods, IPOPHL Director-General Josephine R. Santiago said at a press briefing on Wednesday.

IPOPHL has submitted proposed revisions to the Intellectual Property Code that includes third-party liability to the Senate committee on trade. They have also had discussions with the committee on trade at the House of Representatives.

Under the proposed law, mall landlord-leasee liability will extend to trademarks. Previous versions of the Intellectual Property Code only cover copyright.

Copyright covers creative work including literature, art, and dissertations. Trademark protects brands, logos, and slogans.

“Those that you see in terms of articles of footwear, bags, and all you see in malls — that will already be hit by the bill,” Ms. Santiago said.

Penalties for malls would increase to between P50,000 to P150,000 for the first offense, and up to P1 million in succeeding offenses.

Penalties for violations that pertain to public health and safety would be increased further.

IPOPHL is also proposing that e-commerce sites found complicit will be shut down. They also plan to disrupt payment gateways, participating in a “project chargeback” strategy that returns funds to consumers.

“The good thing with popular [online] platforms, they work with government trying to self-police the products, the sellers that are going through their platforms,” Trade Secretary Ramon M. Lopez said.

He noted that Department of Trade and Industry’s consumer protection group has already received between 300 to 400 consumer complaints about e-commerce platforms.

Ms. Santiago said that the revised Intellectual Property Code includes between 10 and 20% of substantive changes from the previously submitted code.

The National Committee on Intellectual Property Rights (NCIPR) on Wednesday held its high-level meeting with member agencies to discuss the implementation of its 2019-2022 Action Plan. — Jenina P. Ibañez

Europe’s funds are hunkering down in bonds for coming recession

WOEFUL. Bad. Shocking. That’s how investors and strategists described Europe’s latest economic data, leaving them fearing the worst and betting this year’s record bond rally has further to run.

The prospect of an oncoming recession has some of the region’s biggest fund managers seeking safety by ratcheting up positions in Europe’s debt, including negative-yielding German securities. Yields look to be heading back down toward historic lows, despite the best efforts of the European Central Bank to stave off a contraction.

“Dipping in and out of recession could become the norm in Europe,” said Luke Hickmore, a money manager at Aberdeen Standard Investments, who has boosted the duration of his portfolios. “I think Germany is in a recession now but for the whole of Europe I would put the probability at close to 60% over 2020.”

This year’s surge in European bonds stalled before the latest round of economic data this week. Now the rally is back on, as manufacturing in the region’s largest economy faces its worst slump since the financial crisis. That renews fears Europe is going the way of Japan — a world of permanently low growth, inflation and bond yields.

The drop in the euro-area’s Purchasing Managers’ Index for services to an eight-month low of 52 in September was “a shocking set of numbers” for Robeco Institutional Asset Management’s Martin van Vliet. Any further fall to below 50, the dividing line between expansion and contraction, will be key to whether German yields slide even lower, according to Mediolanum SpA money manager Charles Diebel.

“The data is BAD,” Diebel said in a written response to questions, putting the chance of a recession in the euro area at 50% over the next 18 months. “We’re still looking for bull mode to be sustained in general.”

Further signs of weakening sentiment came Tuesday, with business expectations this month in Germany falling to the lowest in a decade. The mood among factory executives was the main reason, with the Ifo institute, which compiles the sentiment report, saying the only direction was “downward.”

Indeed, the Citi Economic Surprise Index, a gauge of whether economic data beats or falls short of analyst expectations, plunged to its lowest level since February this week, adding fuel to the market rally. ADM Investor Services global strategist Marc Ostwald described the latest manufacturing figures as “woeful.” Next in focus will be regional economic confidence data on Friday.

German 10-year yields dropped to -0.62% Wednesday, having touched an all-time low of -0.74% earlier this month. Those in Italian, Spanish and French debt have also fallen this week. Euro-denominated investment grade bonds have returned investors 8.5% this year.

NEW LOWS
Amundi Asset Management, Europe’s biggest fund manager, thinks now is not the time to dip toes back into global bonds, as markets are pricing in too much monetary easing, according to Pascal Blanque, its group chief investment officer. It has cut exposure to long-dated U.S. Treasuries.

Still, while the jury is out on further Federal Reserve rate cuts, support for bond gains in Europe is set to come from the ECB’s fresh package of quantitative easing, starting in November at a pace of 20 billion euros ($22 billion) per month. ABN Amro Bank NV expects an increase in the pace of net asset purchases as well as another cut in its deposit rate.

The institution’s new tiering measure to ease the profit-squeeze on banks may allow it to cut rates deeper into negative territory in the future, despite some confusion in the short-term.

ECB President Mario Draghi has called on governments to help out to boost growth, though there are no imminent signs Germany will heed the call as it sticks to strict fiscal limits. Even the prospect of bigger budget spending is unlikely to turn the tide in rates, according to ING Groep NV, which recommended investors buy German debt.

“Economic weakness and a new round of stimulus suggest that long rates and government bond yields will see a new leg down and will eventually surpass previous record lows,” said ABN strategists Aline Schuiling and Nick Kounis. — Bloomberg

Southeast Asian nations weigh unified approach to regulating Big Tech firms

BANGKOK/JAKARTA — Southeast Asian governments are banding together to take on global tech giants on issues including “fake news” and taxation, marking a new stage in the region’s approach to the internet’s explosive growth.

The stakes are high both for the governments, which are counting on the digital economy to drive growth and innovation amid domestic political tensions, and the companies, which view Southeast Asia’s social-media-loving population of 641 million as a key growth market.

The new initiatives, which have not previously been reported, include an effort by Indonesia to join forces with Thailand, Vietnam and the Philippines in demanding action from Google, Facebook and other companies on content regulation and tax policy.

“Together, we are 80 percent of the region,” Indonesian communications minister Rudiantara told Reuters. Indonesia is already preparing legislation requiring tech companies with online services to pay value-added tax on local sales, even when they are booked offshore.

Meanwhile, Thailand’s telecom regulator, in a late-August meeting with regional counterparts, proposed that all 10 members of the Association of Southeast Asian Nations (ASEAN) require internet and streaming video firms to set up domestic “verification centers” to combat fake news.

Thailand also urged discussion of how to demand “economic contributions” from the internet firms, whether through taxes or fees, according to a copy of a speech seen by Reuters.

The council of ASEAN telecoms regulators has accepted Thailand’s proposal for the centers, and a separate document with guidelines for economic contribution is expected to be formally adopted at the November ASEAN summit, a source in the Thai regulatory agency with knowledge of the talks told Reuters.

“ASEAN as a group gives us enough leverage, and our combined user base on services like Facebook is big enough to lend us negotiating power,” the source said.

The initiatives reflect widespread concern that Internet services, to which most people in the region have gained access only in the past few years, are fanning ethnic and religious animosities while avoiding paying their fair share.

Activist groups are nervous about the potential for institutionalized censorship. According to Freedom House’s 2018 Net Freedom survey, all Southeast Asian countries rank as either not free or partly free.

Emilie Pradichit, director of Thailand-based Manushya Foundation, which advocates for online rights, told Reuters governments in the region could use the label “fake news” to target dissidents. She called on companies to resist such attempts.

“We believe the governments should themselves not use untrue information to achieve goals that are to their advantage, and private sector organizations, such as Facebook, should take the lead in protecting netizens’ online freedom,” Pradichit told Reuters.

The Asia Internet Coalition, which counts internet giants Facebook, Google, Amazon, Twitter and messaging app Line among its members, said ASEAN risks hurting the digital economy unless the new policies are “right.”

“The potential of the region’s digital economy … will likely be blunted by overregulation or indiscriminate taxes and fees,” AIC director Jeff Paine told Reuters, urging governments to focus on “industry partnerships and collaborations.”

CONSENSUS DISPUTED
It is not yet clear what level of support the new proposals enjoy and how they might be implemented in coming months.

Indonesia’s plan follows its successful effort to get Alphabet Inc’s Google to pay taxes on Indonesia-related advertising revenue booked at its Asia headquarters in Singapore.

“Other countries asked me how we were able to achieve that, so I offered to them that they piggyback off Indonesia to deal with the platforms,” Rudiantara said. He said he also persuaded social media giants Telegram and Tik-Tok to establish content monitoring teams in Indonesia.

Rudiantara is now planning a “three letter system” in which if a platform fails to respond to three government requests to engage on an issue, he’ll ban them. The proposal to neighboring countries includes a shared channel to communicate with the companies.

The Thai regulator wants to require internet companies to set up and fund “verification centers” in each Southeast Asian country.

Singapore has already passed a complex “fake news” law requiring internet companies to label or remove content deemed untrue.

The Thai proposal aims to ensure that companies take quick action on fake news and fake accounts. Facebook, Twitter and Google’s YouTube all have elaborate policies on what is allowed on their platforms and generally ban fake accounts, deceptive practices and hate speech. Content that is simply false, however, is usually allowed.

“They said they already have a fast process to tackle issues, but we insisted it’s still too slow,” said Takorn Tantasith, secretary general of Thailand’s National Broadcasting and Telecommunications Commission.

Officials in Cambodia, Indonesia, and the Philippines told Reuters they support the verification center plan, saying fake news was a core national concern.

Philippines communications technology undersecretary Eliseo Rio said the country’s authorities are also working on a “one-stop” content reviewing mechanism, where if one country decided it is disinformation, the company would remove it altogether and not just block it locally.

“The individual governments can conclude these are fake,” he added.

Rights watchdogs have warned that media freedom is declining in the Philippines, with several officials accused of propagating disinformation campaigns against opponents.

Sources familiar with the regulators’ proceedings, however, said support for the verification centers was not unanimous across Asia.

Three executives at targeted companies said they didn’t believe the idea would work, in part because it includes a wide range of global companies.

Facebook, Line Corp., Amazon, Netflix and Walt Disney were among those that attended a meeting in August with regulators to discuss the proposal.

Google and Netflix declined to comment, while Amazon, Facebook, Line and Walt Disney did not immediately respond to requests for comment.

Both Singapore and Indonesia already plan to impose GST taxes on foreign companies offering digital services, and talks are ongoing among Southeast Asian regulators for a region-wide effort. That topic was also discussed in the industry meeting. — Reuters

PSE to buy P200M worth of SCCP shares

THE Philippine Stock Exchange, Inc. (PSE) will buy P200 million worth of shares in one of its units to finance the acquisition of a new clearing and settlement system.

In a disclosure on Wednesday, the bourse operator said its board of directors has approved its subscription to two million shares in its wholly owned subsidiary Securities Clearing Corporation of the Philippines (SCCP) priced at P100 each.

“The additional investment will be used by SCCP to partially fund its new clearing and settlement system,” the PSE said.

“The new clearing and settlement system of the SCCP will ensure a smoother and more efficient clearing and settlement process.”

SCCP acts as the central securities clearing institution in the country, managing and supporting the clearance of trades in securities at the PSE and other official securities markets.

The payment will be made in cash, depending on SCCP’s funding requirements.

The PSE also said it will settle its outstanding subscription in SCCP worth P50 million.

SCCP’s board of directors approved the issuance of the shares to PSE last week. — Arra B. Francia

Dining Out (09/26/19)

Chocolate mooncakes

CITY OF DREAMS Manila celebrates the Mid-Autumn festival with uniquely handcrafted chocolate mooncakes this September at The Garage’s Chocol8. The mooncakes, stamped with City of Dreams Manila’s logo, are made from pure chocolate, consisting of exclusively blended Swiss dark chocolate fashioned in a mould resembling the traditional mooncake’s pastry skin, which are then filled with different flavors of ganache that mirror the yolk of a salted egg. The varieties are: Lemon-Caramel, which is composed of lemon ganache complemented by caramel ganache; Orange-Almond, which melds orange ganache, caramelized roasted almonds, and almond ganache; and Mango-Pistachio, which harmoniously blends mango ganache, caramelized pistachios, and pistachio ganache. The mooncakes come in a two-color toned box for P780 net per box. For inquiries, call 800-8080 or e-mail guestservices@cod-manila.com or visit www.cityofdreamsmanila.com.

Promo on hold

AFTER THE “overwhelming response” to McDonald’s McDelivery Moon Coupon promo last Friday caused “technical difficulties,” the fast food giant is postponing its next Moon Coupon releases which were originally scheduled on Sept. 24 and 29. The McDelivery’s Moon Coupons were meant to give customers discounts based on the moon’s phases through the McDo App,

P28 beer at Dencio’s

DENCIO’S continues its 28th anniversary celebration this September with a special deal: for one night only, on Sept. 27, get an ice-cold bottle of San Mig Light for only P28.

Marriott’s anniversary deals

THE Marriott Manila turns 10 in October and will be offering special promos to mark the occasion. The Manila Life Café and Greatroom will offer P10 food picks. Manila Life Café will offer a Street Food Platter sampler (kwek-kwek, fish ball and chicken fritters) for P10, while the Greatroom will serve Limited Signature Tapas at P10 each (minimum of 10 orders). Meanwhile, the Greatroom and Still will hold happy hours that start at 10 p.m. featuring everything from hand crafted concoctions to premium whiskeys. The Marriott Café will celebrate Throwback Thursdays, offering its hefty buffet on all Thursdays of October at the same price from 10 years ago (lunch from noon to 2:30 p.m. for P1,350 nett, and dinner from 6-10:30 p.m. for 1,500 nett). Meanwhile, a minimum spend of P10,000 when dining at Cru Steakhouse will come with a bottle of wine, on the house.

Beer fest at RWM

AS PART of its 10th anniversary celebrations, Resorts World Manila (RWM) will features over 30 craft beer brewers from the Philippine Craft Beer Community (PCBC) in its October Fiesta. The celebration will be on Oct. 4 and 5, 4 p.m. to midnight, at the 2/F Retail Area of the Newport Mall. Guests may choose from a selection of over 30 craft beers during the two-day event which they can “mix and match” them with signature RWM pulutans (bar chow) including Franks’ Pinoy Hotdogs, Franks’ Sisig Wrap, RWM Fiesta Ham, and Bolahan’s selection of tusok-tusok favorites. There will also be musical entertainment with featured artists including Paolo Santos, Migz Haleco, Davey Langit, New Maincast, and Julius on Oct. 4; and Hans Dimayuga, Tiara Shaye, Juno, and Hello Ceasar on Oct. 5. The door charge for October Fiesta is P1,000 inclusive of five RWM pulutan, three local craft beer servings, and one raffle coupon. Meanwhile for P400, guests may enjoy two local craft beers samples, and one souvenir pilsner glass. Visit www.rwmanila.com for details.

Fear of retirement poverty drives Japanese to private pensions

JAPANESE households are rushing to private retirement products after a government report fueled fears that the national pension system won’t be enough to support them during old age.

SBI Securities Co. and Monex Group Inc. have seen applications for defined contribution pension plans surge since the report was released in early June. The document, published on the Financial Services Agency’s website, sparked angst after showing that a couple in their sixties may need as much as 20 million yen ($186,000) on top of their public pension to cover living expenses.

Governments around the world are grappling with how to sustain retirement systems as their populations age and interest rates plummet. The problem is most acute in Japan, where people live longer than almost anywhere else and remain averse to investing more of their $17 trillion of financial assets, despite earning virtually zero interest in bank accounts.

Now, nervousness over the future of the pension system is prompting some to finally take action, providing an unexpected boon to local securities firms.

“The 20 million yen issue is a tailwind for us,” said Ryugo Hashimoto, who heads the investment trust and fixed-income department at SBI Securities. “The era of 100-year lifespans is approaching, and so people are becoming aware that they may have a retirement savings shortfall that they need to prepare for.”

Tomoko Minegishi, a 47-year-old school teacher’s aide, is among people who are considering an individual-type defined contribution pension plan known as iDeCo.

“I’m concerned whether our public pension benefits will be sufficient,” Ms. Minegishi said. “I don’t think my salary will rise much, so I want to save on taxes” through iDeCo, she said.

Similar to 401(k) plans in the U.S., under iDeCo people pay a fixed amount each month to make long-term investments in financial products such as funds that buy stocks and bonds. Contributions are tax deductible.

The number of applications for iDeCo accounts at SBI and Monex increased about 50% in June and July from May, according to the two online brokerages. Overall, new enrollments rose 8.5% from a year earlier to 36,778 people in July, data from the National Pension Fund Association show.

Applications for a small-lot, tax-free investment program called the installment-type Nippon Individual Savings Account also increased in June and July from May, SBI and Monex said.

Japanese workers are among the worst prepared for rising life expectancy because of their tendency to hoard cash savings rather than invest, a World Economic Forum report showed in June. Households in Japan have 53% of their financial assets in cash and deposits, compared with 13% in the U.S. and 34% in the euro area, Bank of Japan data show.

MONEY IN THE BANK
One key to sustaining the recent spate of investment is boosting financial literacy, according to Hiroaki Muto, chief economist at Tokai Tokyo Research Institute Co. in Tokyo. Japan hasn’t provided enough financial education programs at schools, and people remain deterred from investing after the nation’s asset-price bubble burst in the early 1990s, he said.

“There’s a myth that savings are the safest and stocks are seen as gambling,” Ms. Muto said.

To avoid a tough retirement, more people like Minegishi may find that it’s a punt worth taking.

“To supplement my pension, I think I’ll have to work as long as I can,” she said. “I’m worried if we’ll be OK.” — Bloomberg

How PSEi member stocks performed — September 25, 2019

Here’s a quick glance at how PSEi stocks fared on Wednesday, September 25, 2019.

 

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