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Competition watchdog further reviews San Miguel-Holcim deal

THE Philippine Competition Commission (PCC) is conducting a further review of San Miguel Corporation’s (SMC) $2.15-billion acquisition of Holcim Philippines Inc. (HPI), if the deal will lessen competition in certain markets in Luzon and Mindanao.

“The initial market investigation conducted by MAO (Mergers and Acquisitions Office) indicates that the Transaction may affect competition in the candidate markets for grey cement, clinker, ready-mix-concrete, and aggregates within the Northeast Luzon, Northwest Luzon, Central Luzon, National Capital Region, Southern Luzon, Northern Mindanao and Southern Mindanao Markets,” the competition watchdog said in a Sept. 6 statement released on Sept. 7.

After the Phase 1 review ended on Aug. 22, the MAO began the Phase 2 review on Aug. 23. It has 60 calendar days to complete the review.

“The second-level inquiry is set to determine if the merger of two of the biggest cement manufacturers in the country — SMC’s cement-manufacturing subsidiaries and Holcim — will likely lead to a substantial lessening of competition in the relevant markets,” the PCC said.

The commission said the Phase 2 review also seeks to find out if “there will be an increased likelihood of cartel-like coordination among cement firms in the identified geographic areas.”

“The PCC notes that cement is a commodity with low product differentiation where brands undergo the same quality standards,” the commission said.

“While the transaction is national in scope, the initial review shows that geographic markets by region affect retailers and consumers differently in terms of production, distribution and price,” it added.

SMC and HPI announced on May 10 the $2.15-billion deal, which is considered a notifiable transaction under the Philippine Competition Act of 2015.

First Stronghold Cement Industries Inc. (FSCI), a subsidiary of San Miguel Equity Investments, Inc., will buy 85.73% of the local arm of Switzerland-based LafargeHolcim, Ltd.

FSCI has ownership stake in Northern Cement Corp., and joint venture interest with Northern Cement and subsidiary Oro Cemento in two planned cement plants.

Also, SMC President and Chief Operating Officer Ramon S. Ang is the majority owner and chairman of Eagle Cement Corp.

To recall, the PCC also launched an investigation into the cement industry in 2017, in response to a complaint lodged by former trade undersecretary for consumer production Victorio Mario A. Dimagiba, who alleged that members of the industry entered into anti-competitive agreements.

Prohibited under the Philippine Competition Act are anti-competitive agreements that restrict “competition as to price or components thereof or other terms of trade; fix price at an auction in any form of bidding including cover bidding, bid suppression, bid rotation, and market allocation,” among others.

Also, the abuse of dominant market positions by engaging in activities that will bring about a substantial lessening of competition is also prohibited.

The PCC has yet to release the report on the findings on the cement investigation. — J.P.Ibañez

Mercedes-Benz rolls out new CLA

By Manny N. de los Reyes

LOCAL MERCEDES-BENZ importer and distributor Auto Nation Group unveiled last week at the hip Versus Barcade in Uptown Mall in Bonifacio Global City the new second-generation CLA Class — a compact sedan that features a sporty yet elegant design with its coupé profile.

For the first time, the CLA comes with the acclaimed Mercedes-Benz User Experience (MBUX) infotainment system, ushering a new era of the Mercedes-Benz driving and riding experience.

Solely available as a CLA 180 Progressive variant, the new CLA Class comes with a price point of P3,190,000 and is now available at all Mercedes-Benz dealers nationwide.

The choice of a vibrant bar/arcade was apt as the atmosphere perfectly reflected the fun and active persona of the new CLA, which now sports a sleeker, sportier, and more high-tech character — from its evocative styling to the aforementioned MBUX system.

“As a four-door coupé, the new CLA intrigues with its puristic, seductive profile and brings the design DNA of ‘sensual purity’ to a new level. It is compelling for its perfect proportions, which are very close to the initial design sketches: a long, stretched bonnet, a compact greenhouse, a wide track with flared wheel arches and our typical GT rear end with a pronounced ‘Coke-bottle shoulder’,” says Gorden Wagener, Chief Design Officer of Daimler AG.

A premiere model from the Mercedes-Benz front-wheel drive family, the new CLA presents a strikingly sensuous exterior with its coupé-like silhouette, making it the most expressive car in its segment. The design underlines the coupé character with its stretched form and the design elements such as the hood with powerdomes. It cements its predecessor’s status as a design icon in the compact luxury class.

The new CLA sports high-performance LED headlamps with daylight running lamps. These complement the low-slung hood and diamond grill, creating the car’s compelling visage, which echoes those of classic Mercedes-Benz sports cars. The new narrow slanted tail lamps and the number plate housed in the bumper on the rear emphasize the width of the new CLA, which thus appears flatter and sportier and has an especially strong presence on the road with its 18” multi-spoke light alloy wheels. The combination of the long, stretched entry line above the windows and frameless doors give the CLA Coupé its unmistakable sporty and elegant character.

Inside the new CLA, all elements are arranged according to the overarching design themes of “high tech” and “youthful avant-garde” from the leather multi-function steering wheel and new touchpad to the Artico leather seats and other design enhancements in the dashboard. The driver seat can be electrically adjusted with three memory functions.

The new CLA has notably more space at many spots in the interior. At the front, for example, headroom has increased by 17mm and elbowroom by 35mm. Thanks to a wider opening (up by 262mm), the trunk is now more convenient to load compared to its predecessor. For more space and storage, the CLA offers comfort seats with seat cushions adjustable for depth and angle, with a 40:20:40 split-folding rear seat backrest.

As seen in the latest models of the A-Class and the GLE, the new CLA showcases the latest generation of the Mercedes-Benz User Experience (MBUX) infotainment system with two 7-inch digital screens for the instrument cluster and the media display.

At the heart of the MBUX system is a highly intelligent virtual assistant activated by pressing a button in the steering wheel or by simply saying “Hey Mercedes” from anywhere in the cabin. It caters to voice commands to attend to infotainment functions such as destination input, phone call, music selection, and climate control. MBUX comes with a natural speech recognition program that helps it to recognize and understand nearly all sentences from the fields of multimedia and vehicle operation. The infotainment system also offers seamless Apple Carplay smartphone integration for a more hands-free driving experience.

Included in its roster of driver-assist and safety features are Active Parking Assist with rear-view camera, Active Brake Assist, Adaptive brake lights, Anti-lock braking system (ABS), Electronic Stability Program (EPS), Acceleration Skid Control, and Hill-Start Assist, among others. It’s also equipped with a Pedestrian Protection Active hood as well as multiple air bags for the driver and front passenger including windowbags and kneebag for the driver.

This sexy sedan from Stuttgart is powered by a 136hp/200Nm 4-cylinder engine mated to a 7G-DCT 7-speed dual-clutch automatic transmission.

It comes equipped with Dynamic Select that allows the driver to shift between various driving modes that suit their driving style, the weather, and road conditions. The CLA is also equipped with a comfort suspension package and direct steering assist.

The stylish new CLA comes in Polar White, Digital White, Night Black, Mountain Gray, Denim Blue, Sun Yellow, Jupiter Red, Mojave Silver, and Cosmos Black.

Malingkat: Honoring the makers’ hands

A NAME drapes over your destiny much the same way clothing does. Your name can say a lot about your story in the same manner that clothing can. For Fawzia Maridul, founder of Malingkat, destiny can be found in both her own name and the brand’s: “Fawzia” means “successful” in Arabic, while “malingkat” means “beautiful” in Tausug.

“I’m Tausug on my father’s side,” she said proudly during a luncheon on Aug. 28. Ms. Maridul heads Malingkat, a cause-driven brand that aims to highlight Philippine textile traditions by way of Mindanao, a place her heart calls home. Ms. Maridul sells home and personal accessories woven by partners in Mindanao, particularly the Yakan and the Maranao people.

Ms. Maridul doesn’t quite like the social enterprise tag, though she is a finalist in BPI Foundation’s Sinag competition for social enterprise. It’s simply because she felt that she hasn’t ticked off all the boxes for herself to qualify as a social enterprise. “In terms of doing more for the community, in terms of really being entrenched in the community, doing social services or something — but we’re not that. Although we try in our own little way to address the needs of our community,” she said.

The cause that drives Malingkat is preserving textiles through preserving the stories behind them. For example, she mentioned a pattern by the Yakan people, made to resemble crabs, which points to the fishing traditions of that group. A pattern by the Maranao people, meanwhile, point to the waves of Lake Lanao, where their people thrived. “Those are the stories we try to convey.”

Oddly enough, even though her father belongs to the Tausug people, she has not produced a piece done with pis, the traditional textile of the Tausug. “[It’s] one of the most beautiful handwoven textiles in Mindanao — and I’m not being biased,” she said.

“It’s really precious, that’s why I’m taking my time. I really want to make it special.”

When you do business in Mindanao, it’s hard to divorce yourself from the Mindanao conflict, a reality that she faces when she’s sourcing: “Although I go to Jolo — I still have family there — there is a challenge in terms of going to the outskirts, even for my cousins who live there. They’re a bit concerned.”

But that’s precisely why, for her, Malingkat is a story that needs to be told. When you love something, you protect it, and for you to love something, you have to know about it. In keeping the traditional textiles alive, and telling their stories as honestly as possible, the thought of why Mindanao matters becomes more tangible to the consumer. “They are able to see that the Abu Sayyaf isn’t the only thing in Mindanao,” she said in a mixture of Tagalog and English.

This stretches beyond the idea of Mindanao but also in appreciating textiles beyond their aesthetic value. “Really, handwoven textiles come about because there’s an inspiration from outside the weaving process,” she said.

“It’s important to honor the hands that made them.”

Malingkat is available through Instagram @malingkatweaves, and on Facebook as Malingkat Weaves. — Joseph L. Garcia

PHL, Morocco agree on direct flights

By Denise A. Valdez
Reporter

THE Philippine and Moroccan governments started air talks last week and agreed to allow direct flights between the two countries.

The Department of Transportation (DoTr) said in a statement over the weekend the two governments signed a memorandum of understanding (MoU) for rights to fly directly between the Philippines and Morocco.

The MoU is for full third and fourth freedom traffic rights for both passenger and cargo services, which in aviation means being allowed to operate direct flights coming from either countries but with restrictions.

In a text message to BusinessWorld, Transportation Undersecretary for Aviation Manuel Antonio L. Tamayo said the MoU allows for seven passenger flights a week and unlimited cargo flights between the two countries.

Aside from the MoU signing, the DoTr also started talks on the Air Services Agreement (ASA) between the Philippines and Morocco. Mr. Tamayo said the ASA “will define the aviation relationship and exchange of traffic rights between the two countries.”

The ASA will “result in further increase in tourism figures and people-to-people exchanges between the two countries, and boost economic and social relations,” the DoTr said.

A third country code sharing was also initiated by the two governments, Mr. Tamayo said. Code sharing in aviation means designated airlines will be allowed to sell tickets for flights that will be operated by other carriers. This will allow for more seamless connections to destinations that do not have direct flights from a country.

The ASA with Morocco would be the seventh for the Philippines in the African region. A tourism cooperation agreement is set to be signed between the two countries, and a Philippine embassy is likewise targeted to be opened in Morocco next year.

Earlier, Civil Aeronautics Board Executive Director Carmelo L. Arcilla said there is not much demand from the Philippines for direct flights to Morocco. But the air talks were being conducted with the intention of strengthening the Philippines’ diplomatic relationship with the country.

Aside from Morocco, Mr. Arcilla said the air talks this year with Chile, Timor-Leste and Jordan are for discussions of the same nature: improving bilateral relations.

Isuzu unveils new top-of-the-line pickup

By Manny N. de los Reyes

A LITTLE OVER a decade and a half has passed since Isuzu introduced what would become one of its most iconic diesel workhorses — and now the Japanese commercial vehicle specialist rolls out the most stylish and fully equipped iteration of its pickup yet, the D-MAX LS-A.

The D-MAX LS-A represents nearly a hundred years of Isuzu’s experience and innovation in the design, engineering, and manufacture of diesel-powered utility vehicles. The D-MAX LS-A is infused, as well, with features that address the demands of a market that value both hard work and play, and business with leisure.

At the heart of the D-MAX LS-A is the powerful and fuel-efficient 4JJ1-TCX 3.0-liter 4-cylinder Blue Power Diesel engine with VGS turbo intercooler that generates 177ps and 380Nm of torque. Initially available only as a 4×4 variant, Isuzu announced that the LS-A will also be offered in 4×2 variants in the coming months. Both variants will have a choice between a 6-speed automatic transmission with sequential shift or a 6-speed manual with gear shift indicator.

The powerplant and drivetrain, however, are just the starting points for what makes the new D-MAX LS-A perfectly suited for the evolving modern demands of the market. Inside and out, the LS-A comes in a complete package of features that cater to the modern Filipino lifestyle — the lifestyle that maximizes the best qualities of the urban professional and the weekend adventurer.

Boasting contemporary exterior styling, the LS-A has a dark gray grille and bumper, coupled with side step board and rocker panel, cargo extender and roof rails.

Inside the LS-A, you’ll find auto-climate control air-conditioning system, passive entry/push start-stop system, a 12-volt accessory socket, three USB charging ports, plus no less than 15 storage compartments and 10 cupholders.

IPC President Hajime Koso describes the concept behind the D-MAX LS-A: “Introduced in 2003, the Isuzu D-MAX pickup has sold more than 46,000 units so far and continues to be one of the country’s most popular pickup models for its durability, fuel efficiency, and overall value for money. The new Isuzu D-MAX LS-A joins the ranks of premium pickups with its stylish yet functional design and competitive pricing without compromising the D-MAX’s core value of being “Tough Enough for Anything.”

In his special message at the launch, Isuzu Motors Limited Sales Executive Officer Hirokazu Okubo traces Isuzu’s experience with the pickup design to nearly a century back: “The first vehicle Isuzu produced in the market in 1922 was a pickup truck, taking note of our expertise on the product and most especially on diesel engine technology.”

He added: “Worldwide, the Isuzu D-MAX is trusted in countries like Thailand, Australia, and the United Kingdom, certainly because of its design and functionality that have gone through rigorous testing and development. The new Isuzu D-MAX LS-A variant will be a great addition to the very competitive local pickup truck market.”

The new D-MAX LS-A comes in Cosmic Black, Sapphire Blue, Titanium Silver, Red Spinel, Splash White, and Silky Pearl White. Prices start at P1,630,000 for the 4×4 MT and P1,700,000 for the 4×4 AT.

SM goes drag

THE winner of the 10th season of RuPaul’s Drag Race and all-around fashionista, Aquaria has become the first drag queen to endorse The SM Store as she was chosen by the company for her quirky and over-accessorized fashion sense.

“It was pretty much a no-brainer [getting Aquaria for The SM Store]. She was always at the top of our list, and we’re big fans [of hers],” Fiona Araneta, senior marketing manager at the SM Store told BusinessWorld during a press conference on Sept. 2 at the Prestige Lounge of SM Megamall in Mandaluyong City.

“It’s really about what she’s achieved at her age and in this world that we’re in now,” Ms. Araneta added.

Based in New York, Aquaria (born Giovanni Palandrani) first made waves after she was crowned the youngest winner of drag reality competition show RuPaul’s Drag Race in 2018. She was 22.

She went on to appear in various global campaigns for brands like Moschino and MAC Viva Glam, and has graced the covers of Vogue Italia and Paper Magazine. She was also the first drag queen to walk the Met Gala red carpet. (Though one must note that it was a year that many drag queens, including RuPaul Charles himself, attended the Met Gala whose theme for the year was “Camp.”)

“We were almost a bit overwhelmed and a bit taken aback at how positive all the feedback was,” Geo Custodio, marketing manager of The SM Store, said in the same interview.

And because the company wanted to promote “self-expression through fashion, regardless of who you are, and whatever style you go for,” according to a press release, Aquaria was given a free hand to curate the clothes used in the campaign.

“Those are all her looks and she chose the shoes, bags, and accessories herself… everything you see — the visuals, the pictures, all of them are Aquaria-approved. So she’s really, really involved,” Ms. Custodio said.

“I’ve always been inspired by the nightlife and some of the legends of the past, the current, and the future. I think the fashion and the club are always so on the edge of every trend and definitely is the heart of a lot of style for a lot of New Yorkers,” Aquaria said during the conference, where she was wearing a black leather bodysuit, thigh-high boots, and a bright yellow fluffy coat. She said it took her three hours to prepare her look for the occasion.

Aquaria had attended the Fashion Institute of Technology for two semesters before dropping out. Some of her style influences include her “drag mother,” Sharon Needles, who has a penchant for a black witch aesthetic and horror.

“I love a lot of red, I love animal prints,” said Aquaria of her personal style.

Aquaria might be the first drag queen to become an endorser for The SM Store but she probably won’t be the last as both Ms. Custodio and Ms. Araneta cryptically said that there’s more in store in the coming campaigns. — Zsarlene B. Chua

RedDoorz to open new properties in key cities

HOTEL management and booking platform RedDoorz is expanding to major cities and tourist destinations in the Philippines this year.

In a statement, RedDoorz said it will add 5,000 room nights from now until the end of 2019, as it opens hotel properties in Visayas and Mindanao. Room nights are the number of rooms occupied at any given time.

“Because RedDoorz standardizes hotel accommodations across the country with fine, affordable and quality accommodations, we are able to open up the travel experience to more and more people across a wide social strata,” the company said.

RedDoorz will open new properties in tourist destinations such as Boracay, Bohol, Antique, Capiz, Dumaguete, Tacoban, and Negros Occidental. Mindanao properties will follow in the fourth quarter.

RedDoorz has over 200 hotels in more than 20 cities in Philippines. The properties offer standardized services, including Wi-Fi connectivity, clean rooms, and essential amenities. Customers can upgrade to RedDoorz Plus and RedDoorz Premium for additional services.

RedDoorz partners with local hotels and private accommodations. They standardize their rooms and amenities, then connect them to customers through the RedDoorz mobile site or app.

“By helping our partners grow, we also help increase the knowledge and skills of people who work in the hospitality industry, and thus support both domestic and international travel,” the company said.

Founded in 2015, RedDoorz now has operations across the Philippines, Singapore, Vietnam, and Indonesia. — Jenina P. Ibañez

Subaru ushers in the ‘Ber’ months with special deals on the XV

MOTOR IMAGE PILIPINAS, Inc., the exclusive distributor of Subaru vehicles in the Philippines, embraces the spirit of holiday giving with special offers for the Subaru XV starting this September. Select which variant and corresponding deal suits you best:

On top of these, customers also get to drive with more confidence because of Subaru’s comprehensive 5-Year Warranty coverage that comes standard in every purchase. Don’t miss out on this exclusive promo and visit your nearest Subaru dealer nationwide.

Lazada kicks off series of sales today

SOUTHEAST ASIAN e-commerce retailer Lazada is kicking off a series of sales until yearend with its 9.9 Big Discovery Sale today, Sept. 9, featuring “9 million deals, [some up to] 90% off” from local and international retailers alongside new app features such as bills payment and a pre-sale option for sale items.

“9.9 is an important sale event for us as it kicks off the region’s biggest e-commerce shopping season of the year ahead of 11.11 [on Nov. 11] and 12.12 [on Dec. 12]. It offers a great opportunity for sellers, brands, and consumers to try out new features and offerings in preparation for the upcoming mega sales, and that is why this 9.9 is all about discovery,” said Raymond Alimurung, Lazada Philippines CEO, in a statement.

One of the new features is the pre-sale option where users are allowed to see sale items ahead of the Sept. 9 sale, with the option to put a downpayment (“usually about 10% of the sale price,” according to Mr. Alimurung) and pay for the item on sale day.

This feature was created because Mr. Alimurung noted that “some items go so fast during the first few minutes of the sale” (the sale usually starts at midnight of the day itself) and this is to ensure customers get the product they want without having to race against each other.

“This new feature comes on the back of a successful pilot in Malaysia during Lazada’s Mid-Year Festival earlier this year. By placing a non-refundable deposit, shoppers can secure products at great discounts well ahead of sale day,” said the company statement.

Another new feature is the bills payment option where customers can pay their bills via the Lazada app. Among the bills which can be paid via the app are Meralco, Maynilad, Manila Water, Albay Power & Energy, Davao Light, VECO, Metropolitan Cebu Water, and Prime Water.

“This is what our customers asked of us,” Mr. Alimurung explained.

Lazada is also introducing new collection points that allow shoppers to go and pick-up their items at their preferred time by clicking pickup instead of delivery when checking out their items. Several collection points are located in Metro Manila at select SM Mall and GrowSari branches.

In previous sales, Lazada toyed with the idea of selling big-ticket items on the app, including downpayment for houses and cars. This time, the site is offering helicopter rides in partnership with Ascent. The helicopter tours will offer Metro Manila or Tagaytay tours from P7,992 for a 15 minute Metro Manila tour for one person to P87,992 for a Taal Volcano tour for five people.

Beyond helicopter tours, Mr. Alimurung noted that Lazada will soon be offering other digital products and online vouchers for everything from dog-walking to salon appointments.

“Basically everything where one can use coupons or vouchers,” he said as they are currently developing a feature that will generate individual coupon codes for merchants in-app so partner merchants won’t need to invest in their own coupon generators. — ZBC

Seven-year bonds may fetch lower yields

SEVEN-YEAR Treasury bonds (T-bond) on offer on Tuesday are seen to fetch slightly lower rates on bets of fresh monetary easing by the central bank later this month and ahead of initial trade talks between the United States and China.

The Bureau of the Treasury will be offering P20 billion worth of reissued seven-year T-bonds tomorrow with a remaining life of six years and five months.

Two traders interviewed said the bonds’ yields may fall within the 4.3% to 4.4% range, lower than yields seen during the previous auction.

“Yields have been going up, especially on the long end. Traders remain cautious due to a lack of strong catalysts to drive the market. Now, most of the traders are waiting on RRR (reserve requirement ratio) cut or potential cut on monetary policy [rates] (by the Bangko Sentral ng Pilipinas),” a bond trader said by phone on Friday.

Amalgamated Investment Bancorporation fixed-income peso trader Rocky A. Bautista said improvements overseas have driven rates higher, with players locking in gains as yields on US government securities rose as the US and China said they will hold fresh trade talks in October.

“We can still expect strong demand in this coming auction as domestic liquidity is very much still there,” Mr. Bautista said.

The Treasury raised P20 billion via the reissued seven-year T-bonds it auctioned off on July 16 as the offer was more than thrice oversubscribed, with total bids reaching P74.94 billion.

The bonds, which carry a coupon of 6.25%, fetched an average rate of 4.845%, 89.8 basis points (bps) lower than the 5.743% rate logged on May 15.

At the secondary market on Friday, the seven-year papers were quoted at 4.459%, according to the PHP Bloomberg Valuation Service Reference Rates.

BSP Governor Benjamin E. Diokno has hinted on further cuts to benchmark rates and big banks’ RRR within the year.

The central bank has cut benchmark interest rates by a total of 50 bps so far this year — by 25 bps each on May 9 and Aug. 8 — to 4.25% for the overnight reverse repurchase rate, 4.75% for overnight lending and 3.75% for overnight deposit, partially dialling back the 175-bp cumulative hikes triggered last year by successive multi-year high inflation that peaked at a nine-year high.

Headline inflation slowed to 1.7% in August from 2.4% in July and 6.4% in August 2018, the Philippine Statistics Authority reported on Thursday.

The August reading matched the 1.7% logged in September 2016 and was the slowest in three years or since the 1.3% inflation rate posted in August 2016. Last month’s inflation also fell at the midpoint of the BSP’s 1.3%-2.1% forecast.

Year to date, headline inflation is at three percent, well within the BSP’s 2-4% target range for 2019, albeit still above the central bank’s 2.6% forecast for the entire year.

Mr. Diokno said following the release of data on Thursday that the BSP will take the August inflation print into consideration when the Monetary Board holds its policy meeting on Sept. 26.

On the other hand, banks’ reserve ratios now stand at 16% for big banks and six percent for thrift banks after the phased 200-bp cut implemented after an off-cycle meeting last May. The RRR of rural and cooperative lenders was also cut to four percent from five percent effective May 31.

Reductions to lenders’ reserve ratios were estimated to have released some P200 billion of liquidity into the system.

Mr. Diokno has said he is committed to trim big bans’ RRR to a single-digit rate before his term ends in 2023.

Meanwhile, deputies from the US and China trade teams will talk in mid-September to prepare for negotiations between US Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, and China’s Vice Premier Liu He in early October. Both sides agreed to take actions to create favorable conditions, but gave no details.

Neither side has signaled it would shift from positions that led to the impasse in May, when Beijing revised a draft of the trade deal, removing references to changes in Chinese law.

US officials have previously said that the resumption of talks would depend on China returning to the original May deal text, but there has been no sign that China has agreed to take that step.

The government is set to borrow P230 billion from the domestic market this quarter through T-bills and Treasury 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. — B.M. Laforga with Reuters

Warehouse Receipts Law amendment to allow use of crops as collateral

A MEASURE proposing to allow farmers to use their crops as collateral for bank loans has been filed in the Senate.

Under Senate Bill No. 632, Senator Francis N. Pangilinan sought to update Act No. 2137, or the 107-year-old “Warehouse Receipts Law.”

“The law, as it stands, does not allow farmers to use their crops as collateralize for taking a loan because banks are not able to verify the quantity and quality of crops by virtue of the existing warehouse receipts,” Mr. Pangilinan said in a statement Sunday.

“This, among other modern and technological advances for transparency and efficiency, needs to be accounted for. Hence, we are pushing for this measure.”

The bill among others provides for the creation of an online warehouse receipts registry to serve as a database of warehouse receipts, warehouse operators, and warehouses.

The bill noted that warehouse receipts, issued by accredited operators, serve as evidence of “title over goods stored at a warehouse.”

“This will be an instrument of transparency that will allow the public, banks, and other financial institutions to access relevant data for validation. Warehouse receipts can serve as evidence and farmers will now have a way to credibly prove their harvest thereby allowing them to secure loans,” Mr. Pangilinan said.

The bill also provided for the establishment of a seven-member Warehouse Accreditation Council and a warehouse receipts assurance fund.

The Council is to be led by the Chair of the Security and Exchange Commission, and will include the Secretaries of Trade and Industry, Finance, and Agriculture. The other three members will represent the warehouse industry.

Meanwhile, the proposed warehouse receipts assurance fund will be established to shoulder losses involving warehouse receipts caused by registry-based failures. The funding will be partially sourced from one-fourth of 1% of the assessed value of the goods covered by the warehouse receipt.

“While this measure will also benefit other industries, we certainly hope that it will further improve the agriculture sector. We hope that farmers will be given more financing options to help improve their yield or for other emergency purposes. We reiterate that progress in the agriculture sector must be measured in the improvement in the lives of farmers,” Pangilinan said.

“We must do everything within our power to empower the farmer,” he said. — Charmaine A. Tadalan

Nickel Asia’s stock price soars on earnings prospects following Indonesia’s nickel export ban

By Lourdes O. Pilar
Researcher

INVESTORS took positions on Nickel Asia Corp. following the news of Indonesia’s ban on nickel exports, in which the company is seen to benefit in increase ore production in order to supply the market demand.

A total of P3.063 billion worth of 706.93 million shares were traded from Sept. 2-6, data from the Philippine Stock Exchange (PSE) showed. This made Nickel Asia the most active stock last week.

Shares closed at P4.32 apiece on Friday, up 57.7% week on week from the P2.74 finish on Aug. 30. For the year, the stock has gained 94.6%.

“The stock drew attention following a reported plan of the Indonesian government to impose a ban on its nickel exports next year, which will give a squeeze to supply. [Nickel Asia] is one of the largest nickel miners in the country,” said Philstocks Financial, Inc. Research Head Justino B. Calaycay, Jr. in an e-mail.

Unicapital Securities, Inc. technical analyst Cristopher Adrian T. San Pedro also said that traders and investors bought Nickel Asia shares on the news of Indonesia’s ban on nickel exports, which could “lead to the shortage of minerals and nickel price surge in the global market.”

In addition, Mr. San Pedro noted the possible closure of a plant owned by Metallurgical Corp. of China (MCC) that spilled mine waste into Papua New Guinea’s Basamuk bay.

“[The news of the possible closure] is getting the local and foreign investors to become excited as they pick the Philippines as the next alternative for the source global nickel demand,” Mr. San Pedro said in a separate e-mail.

A nickel processing plant owned by Metallurgical Corp. of China, a unit of China Minmetals, is facing the threat of closure following reports of the plant’s waste spilling into the Basamuk Bay in Papua New Guinea, according to a report by Reuters.

Meanwhile, Indonesia announced last Monday that they would stop nickel ore exports starting Jan. 1, 2020, which is two years earlier than earlier announced, in an effort to produce its own resources at home.

The move is seen to increase nickel production in the Philippines. The country is the world’s second-biggest supplier, estimated to account for a fifth of the global mined nickel supply only next to Indonesia. Of this, Nickel Asia accounts for about half of the Philippines’ nickel ore output.

Nickel Asia reported an attributable income of P566.11 million in the second quarter, 39.4% lower than P934.28 million in the same period in 2018. For the first half, attributable income is P713.75 million, 48.7% than P1.39 billion in 2018’s comparable six months.

“Numbers have been relatively flat to negative for [Nickel Asia], and if the ban does come around, we may see an improvement in its numbers going forward,” Philstocks’ Mr. Calaycay said.

However, he cautioned that this “knee-jerk” reaction in its share price “may need something more concrete than this news to keep it moving higher.”

For Unicapital’s Mr. San Pedro: “The stock is a potential trend reversal candidate as we head towards the fourth quarter. Support is expected at P4.00 and P4.11 while resistance is at P4.69 and P5.10.”

“I expect the stock to remain bullish with a target of P5.74 and P6.00 for as long as it holds above P4.00 in the short term,” he added.

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