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Professionals exempt from business permit fees for offices, clinics

PROFESSIONALS are now exempted from paying fees to obtain business permits for the operation of their offices or clinics under a new circular of the Department of Finance (DoF).

In a statement on Tuesday, the DoF said that “while professionals still need to secure business permits from LGUs (local government units), such should be at no cost at all during the registration or renewal of the operation of their clinics or offices, given that such permits cannot regulate the practice of their profession,” in reference to the Local Finance Circular (LFC) 001-2019.

“This is because regulations for the practice of professions are within the exclusive domain of the respective agencies or regulatory boards empowered by law to supervise and regulate professions.”

The DoF clarified that local governments may impose local business tax on professionals who conduct trading and other business activities that are outside the scope of their professions, payment of which can be collected during registration or renewal.

The same circular also covers imposition of the professional tax on professionals employed in the private and public sectors.

Professionals who are employed exclusively by the government are exempted from paying professional tax “unless he or she has been duly authorized to practice the profession outside of one’s official functions”.

An individual or corporation employing a person subject to the professional tax should require payment by that person of the tax on his/her profession before employment and annually thereafter.

In case the individual practices multiple professions — a certified public accountant and a lawyer at the same time, for example — he or she is required to pay the professional tax imposed on both professions, according to the circular.

The professional tax, however, should “not exceed P300 or the rate provided under a duly enacted local ordinance, subject to adjustment not exceeding 10% every five years.”

The circular also stated that the community tax on individuals, including professionals, and corporations does not cover general professional partnerships, which are therefore exempt from paying this levy.

Moreover, the community tax will be “P5 plus P1 for every P1,000 of income from the exercise of profession” but should not exceed P5,000.

The circular also states that LGUs may collect garbage fees, occupancy permit fees and sanitary inspection fees and other charges, “the amount of which shall be reasonably commensurate to the cost of regulation or provision of service… provided under a duly enacted local ordinance,” provided that no service charge will be based on capital investments or gross sales or receipts of the persons or businesses concerned.

In the statement, DoF Undersecretary Antonette C. Tionko — who heads the department’s Revenue Operations Group — said that the circular was issued in order to address complaints about improper imposition of local taxes and other charges on professionals. — RJNI

Reorganization of leadership at DICT under way

By Denise A. Valdez
Reporter

A REORGANIZATION of senior officials is under way at the Department of Information and Communications Technology (DICT), said newly appointed Secretary Gregorio B. Honasan II, who assumed office on Tuesday.

In his first day on the job and first press briefing as DICT secretary, Mr. Honasan said he was given authority by President Rodrigo R. Duterte at the Cabinet meeting Monday night to make changes in the composition of the department’s brass.

“That is the free hand that we are trying to ask from the President. And that was given categorically last night,” Mr. Honasan said at a briefing Tuesday morning, when the DICT inaugurated a free public WiFi access point at the Quirino Memorial Medical Center in Quezon City.

“We will harness the (department’s) technical capability, because this is the Department of Information and Communications Technology. Not to remove people, but to put them in their proper places where they can help the department.”

RIO’S ‘POLITICAL INTERPRETER’
To start the changes, former Acting Secretary Eliseo M. Rio, Jr. was appointed by the Malacañang as DICT undersecretary for operations.

Mr. Honasan said he will be the “political interpreter” of Mr. Rio as he continues to play an active role in the department.

Mr. Rio, who joined Mr. Honasan at the briefing, said the entry the former senator and retired army colonel to DICT is fitting for “what’s been lacking right now in the department.”

“My weakness, really, is management. Since my professional career, I’ve always been concentrating on technical matters. DICT needs management… The entry of Secretary Honasan is a very welcome development. It completes more or less what the department really needs: his management expertise,” Mr. Rio said.

Rules IV-VI of Republic Act No. 10844, or the DICT Act, enumerates the leadership composition of the department, consisting of a secretary, three undersecretaries and four assistant secretaries.

Aside from Mr. Rio who sat as acting secretary, the DICT is composed of Undersecretary for Special Concerns Denis F. Villorente, Undersecretary for Development and Innovations and for Management and Operations John Henry D. Naga and Officer-in-Charge Undersecretary for Regional Operations and Countryside and ICT Industry Development Ivin Ronald D.M. Alzona.

Mr. Alzona also sits as the assistant secretary for Management and Operations, joined by Assistant Secretary for Cybersecurity and Enabling Technologies Allan S. Cabanlong and Assistant Secretary for Infostructure Management and Other Special Concerns Alan A. Silor to complete the lineup.

While Mr. Honasan did not specify changes that he wants at the department, Mr. Rio said there’s a proposal to add undersecretary and assistant secretary positions.

“Part of the marching orders (of the President is) to reorganize (DICT), harnessing the best and the brightest within the department,” Mr. Honasan said.

“And then if there’s any need to outsource additional expertise, then we’ll do that, whether it’s technical or management or even political.”

He added the President ordered him to “improve connectivity in a faster, cheaper and more secure manner.”

Mr. Honasan took his oath as DICT secretary Monday night, immediately after his last term in the Senate ended on June 30, and months after he was appointed by Mr. Duterte to lead the department in November last year.

Factories faltered worldwide in June; Sino-US trade truce fails to brighten outlook

LONDON/TOKYO — Factory activity shrank across much of Europe and Asia in June while growth in manufacturing cooled in the United States, keeping the world’s policy makers under pressure to avert a recession amid a US-China trade war.

A series of mainly downbeat business surveys and official indicators released on Monday followed Saturday’s warning by Group of 20 leaders who met in Osaka, Japan, of slowing global growth and intensifying geopolitical and trade tensions. The data was collected before the weekend summit.

The United States and China agreed at the summit to restart trade talks after US President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei, providing some relief to businesses and financial markets. But analysts doubt the truce will lead to a sustained easing of tensions while lingering uncertainty could dampen corporate spending appetite and global growth.

“It’s too early to turn optimistic. The two countries just kicked the can down the road and there’s no knowing what could happen next,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute in Tokyo.

“Global manufacturing activity hasn’t hit bottom yet. US business confidence, particularly that of manufacturers, has been weakening and if this continues, it may hurt economies across the world.”

Factory activity in the euro zone shrank faster last month than previously thought, in a broad-based downturn, according to IHS Markit’s Manufacturing Purchasing Managers’ Index (PMI), which also suggested there would be no quick turnaround.

Germany’s export-dependent manufacturing sector contracted in June for the sixth time in a row, Italian activity declined for a ninth month and Spain’s contracted at its fastest rate in more than six years.

Growth in US manufacturing activity slowed to its lowest level in more than a two-and-a-half years in June, with a measure of new orders received by factories tumbling, according to the Institute for Supply Management.

“The global manufacturing sector has continued to deteriorate, which will weigh on export orders,” said Thomas Pugh at Capital Economics.

In China, Asia’s economic engine, the Caixin/IHS Markit PMI came in at 49.4, falling short of market expectations and the worst reading since January. It was the first time in four months the keenly watched index has fallen below the neutral 50-mark dividing expansion from contraction on a monthly basis.

Japan also saw manufacturing activity contract in June to hit a three-month low, offering fresh evidence of an economy under the pump as global demand weakens.

Separately, a Bank of Japan (BoJ) survey showed big manufacturers’ confidence hit a near three-year low, keeping its central bank under pressure to maintain or even ramp up a massive stimulus program.

In South Korea, factory activity shrank at the fastest pace in four months in June as the global trade slowdown deepened, prompting companies to cut production.

Activity fell in Malaysia and Taiwan, a sign the US-China trade conflict’s impact on the rest of Asia was broadening.

In India and Indonesia, where factories are less dependent on external demand for business, activity continued to grow albeit at a slower pace.

Vietnam’s factory activity expanded at faster rate although new orders rose at their slowest since February. The Southeast Asian economy has been a rare beneficiary of the trade war as manufacturers shift their Chinese operations there to sidestep US tariffs.

DWINDLING POLICY AMMUNITION
The US-China trade war has hurt business sentiment, threatened to disrupt supply chains and jolted financial markets, drawing warnings by policy makers over the widening fallout on the global economy.

International Monetary Fund Managing Director Christine Lagarde welcomed the resumption of trade talks between the two countries, but warned more needs to be done to resuscitate a global economy that had already hit a “rough patch.”

Heightening worries over global growth have forced some central banks, such as those in Australia, New Zealand, India and Russia to cut interest rates.

While G20 leaders said they stand ready to take further action to prop up growth, many major economies have little fiscal and monetary space to battle another recession.

Expectations of a US Federal Reserve interest rate cut have put pressure on the European Central Bank (ECB) and the BoJ to follow suit, despite their dwindling options to arrest stalling growth.

“If the Fed cuts rates, the BoJ and the ECB must do something more powerful to contain currency appreciation,” said Sayuri Shirai, a former BoJ policy maker who is currently a professor at Japan’s Keio University. — Reuters

Stock exchange ends 1st half with 7% rise

PSE BGC bells
THERE were no initial public offerings during the first half. — SANTIAGO ARNAIZ

THE Philippine Stock Exchange index (PSEi) finished the first half of 2019 with gains of 7.1%, propped up by net inflows from foreign investors as well as improvements in the economy during the period.

Considered a measure of local and foreign investments in the country, the PSEi ended at 7,999.71 on June 28, compared to its close of 7,489.20 on Jan. 2. The broader all-shares index also went up 8.3% to 4,893.78.

This makes the PSEi the third best performing stock barometer in the Association of Southeast Asian Nations, according to bourse operator Philippine Stock Exchange, Inc. (PSE).

Four sectoral indices were higher by the end of June, led by the services sector which jumped 18.6%. In contrast, the mining and oil and financials counters dropped 7.4% and 3.4%, respectively.

“The stock market benefitted from a mix of positive internal and external factors. On the domestic front, we saw inflation stabilize which prompted an interest rate cut and a reduction in reserve requirement by the Bangko Sentral (ng Pilipinas),” PSE President and Chief Executive Officer Ramon S. Monzon said in a statement.

“The PSE is among the emerging markets that benefitted from foreign fund inflows which are looking for attractive returns as US interest rates remain steady.”

Foreign investors recorded net purchases of P21 billion from January to June, reversing the net outflows amounting to P65.84 billion seen in the first half of 2018. Average daily value turnover likewise improved by 9.7% to P7.84 billion.

With this, the local market’s capitalization stood at P14.69 billion, 8.4% up from the start of the year.

Amid the absence of initial public offerings for the first half, the PSEi tallied P37.89 billion worth of capital raised during the period.

“After the back-to-back listings in the last week of June, we are looking to more fund-raising activities in the coming months,” Mr. Monzon said.

Companies that raised funds through the stock exchange include Petron Corp., which offered P20 billion worth of preferred shares on June 25. Niche property developer Arthaland Corp. also raised P1 billion in preferred shares on June 27.

In January, four firms also tapped the equity market for additional funds. Ayala Corp. raised P8.069 billion through private placement in Jan. 23. Boulevard Holdings, Inc. and DFNN, Inc. also had private placements worth P170.42 million and P650.93 million, respectively.

Meanwhile, Philippine Savings Bank issued P7.999 billion worth of shares in a stock rights offering on Jan. 18. — Arra B. Francia

Megawide expects income growth to be flat this year

By Arra B. Francia, Senior Reporter

DIVERSIFIED engineering conglomerate Megawide Construction Corp. sees flat net income growth for 2019, as it expects lower contributions from its airport business.

Megawide Chairman, President, and Chief Executive Officer Edgar B. Saavedra said they will see a recovery in the construction business this year but this will be offset by the weaker performance of the airport segment.

“Flat siya sa consolidated because airport, full-year ang depreciation and interest expense recognition. That’s a factor also,” Mr. Saavedra said in a press conference before its annual stockholders’ meeting in Pasig Tuesday.

The listed firm operates the Mactan-Cebu International Airport (MCIA) Terminal 2, which opened in July last year. The new terminal increased the airport’s capacity by 4.5 million to 12.5 million passengers annually. It also has 6,000 square meters (sq.m.) in gross leasable area (GLA) for retailers.

Meanwhile, the construction business is seen to bounce back to its 2017 level, where it contributed P1.08 billion to consolidated net income. The construction segment generated a profit of P763 million in 2018, 30% lower year on year, due to delays in the start of some contracts.

“We’re looking at 2019 to recover, same as two years ago in 2017. Then in 2020, dun ang mas mataas,” Mr. Saavedra said.

The top executive said Megawide expects to add P20 billion worth of new contracts to their order book this year, coming from a combination of office buildings and infrastructure projects.

Megawide’s third business segment, which comes from the operations of the Parañaque Integrated Terminal Exchange (PITX), has yet to contribute significant revenues for the company. It expects the business to account for at least 12% of EBITDA (earnings before interest, taxation, depreciation, and amortization).

Aside from the terminal that has a daily capacity of up to 100,000 passengers, Megawide will also generate revenues from PITX’s retail areas. It will house four office towers covering 72,000 sq.m. of GLA, in addition to 12,000 sq.m. for retail and commercial spaces.

“This year, we’re doing the operation of terminal. Lease rental will start second and third quarter, so full annual revenue will start next year pa. But we’ll collect half this year,” Mr. Saavedra explained, adding that the first two towers will open in the middle of July.

The PITX will also help the company achieve its goal of having a 50-50 contribution from recurring income sources and the construction business, as Megawide looks to combat the cyclicality in the latter.

UNSOLICITED PROPOSALS
Mr. Saavedra said they continue to be active in participating in the government’s infrastructure program through unsolicited proposals. The company currently has proposals pending with the National Economic and Development Authority, such as the construction for the second runway of the MCIA.

The company also looks to develop its expertise in operating transport terminals like PITX, with the aim of duplicating such projects.

“Eventually we can duplicate that, not only in Metro Manila, even in other cities such as Cebu, and second tier cities. We think we need this kind of transportation system to solve most of the traffic issue we have, not limited to Manila, even in other cities in the Philippines,” Mr. Saavedra said.

He added that the construction of new terminals can be done through local private public partnerships.

Shares in Megawide went up 0.52% or 10 centavos to close at P19 each at the stock exchange on Tuesday.

ABS-CBN dominates nationwide TV ratings — Kantar Media

ABS-CBN Corp. reported leading nationwide television ratings in June with an average audience share of 44% during the period, besting its rival GMA Network, Inc.

In a statement Tuesday, the Lopez-led media giant said it beat its rival which tallied a 32% audience share on the national scale last month, based on data from Kantar Media that surveyed 2,610 urban and rural homes.

But for the battle to capture the audience in urban areas, both companies claimed to dominate the ratings, citing different measurement providers.

In its statement, GMA said it maintained a 35.3% average total day people audience share in Urban Luzon from June 1 to 29, beating ABS-CBN’s 30.7%, based on data from Nielsen TV Audience Measurement.

GMA added that its average total day people audience share in Mega Manila from June 1 to 22 was at 36.3%, versus ABS-CBN’s 28.8%.

But ABS-CBN, citing Kantar, said it dominated the television audience in both urban and rural homes last month. The Lopez-led firm grabbed a 42% audience share in Metro Manila against GMA’s 26%, and a 36% share in Mega Manila versus GMA’s 32%.

Including rural areas, ABS-CBN said it gained the bigger audience share in Total Luzon at 40% against GMA’s 35%, in Total Visayas at 53% against GMA’s 24% and in Total Mindanao at 52% against GMA’s 28%.

In terms of time slots, both companies again claimed to lead TV ratings at different times of the day.

GMA said it led the afternoon block with 36.3% audience share beating ABS-CBN’s 32.9%, and the evening block with 38.1% audience share to win against ABS-CBN’s 30%.

On the other hand, ABS-CBN said it led time block ratings across-the-board, with a morning block rating of 39% versus GMA’s 28%, a noontime block rating of 44% versus GMA’s 33%, afternoon block rating of 48% versus GMA’s 31% and primetime block rating of 45% versus GMA’s 33%. — Denise A. Valdez

SEC issues advisory vs Requiza Poultry, Unlishop

THE Securities and Exchange Commission (SEC) has advised the public to be cautious in dealing with Requiza Agricultural Products Trading (Requiza Poultry) and Unlishop E-commerce Advertising Company (Unlishop) since neither are allowed to solicit investments.

In an advisory, the corporate regulator said it has found Requiza Poultry to be offering an investment with returns of 40-50% of the capital every 60 days.

Under the scheme, investors are invited to buy at least 35 chicks for P3,500. They will then wait for 60 days to get back their capital in addition to 50% returns. A capital worth P500,000 will allow an investor to buy 5,000 chicks, then get P750,000 in returns after 60 days.

Investors are also given three options for every harvest period, wherein they can withdraw the capital and profit, withdraw the profit and retain the capital, or retain the capital and profit to acquire more chicks.

Requiza Poultry further offers a referral bonus program for accounts with at least 3,500 active purchases. Investors can get five percent of the investment of their referral if they have a capital of less than P100,000, while those who invested more than P101,000 will get eight percent of their referral’s investment.

The SEC said that Requiza Poultry is not a registered corporation and does not have the necessary license to solicit investments from the public.

Meanwhile, the commission also flagged investments in Unlishop since it has been encouraging the public to sell online account codes and recruit other individuals into the system.

Unlishop’s scheme involves the investor creating an account for their website with an activation code worth P1,000. Each account can have up to 31 accounts. Once the account is activated, the user will receive P1,000 as a welcome reward.

The investor can earn through a daily download bonus, wherein they can earn P100 per e-book they download from the system. This can be done every day for up to 10 days, or a maximum of P1,000.

They may also earn P100 for every person recruited into the system, as well as indirect referral bonus of P15 per invite for the people recruited down the line up to the 15th level.

While Unlishop is a registered partnership headed by Hector John Hemady Dollero and Ryan Guerrero Hemady, the commission noted that it is not authorized to solicit any form of investment.

Both Requiza Poultry and Unlishop may be penalized up to P5 million or sentenced to prison of up to 21 years for their investments schemes, as per the Securities Regulation Code.

The commission is thereby requesting the public to “exercise caution before investing in these kinds of activities.” — Arra B. Francia

AirAsia partners with cloud applications provider Workday

The AirAsia group has been transforming all areas of its business to help increase efficiency, strengthen customer focus, and boost growth prospects.

By Josielyn B. Luna-Manuel, Special Features Editor

AS part of its transition into a travel tech company, Asia’s largest budget carrier AirAsia Group Bhd. recently partnered with enterprise cloud applications provider Workday Human Capital Management (HCM) to manage its employee data, including career information, technical skills, and trainings.

“We are now more than just an airline. We are leveraging the power of our data, our flight network, and our people,” Varun Bhatia, chief people and culture officer at AirAsia, said at the partnership’s media launch at the AirAsia RedQ (headquarters) in Sepang, Malaysia last week.

Operating flights to more than 140 destinations spanning 22 markets, AirAsia has been transforming all areas of its business to increase efficiency, strengthen customer focus, and boost growth prospects.

Mr. Bhatia emphasized that the “Allstars”, AirAsia’s term for its employees, are at the center of its business. AirAsia currently employs more than 22,000 employees globally.

Happy employees form a productive workforce that serves the airline’s 100 million customers every year, he said.

“AirAsia’s digital transformation journey encompasses our people and culture as much as it does our business model. In doing so, we have looked closely at each stage of our Allstars’ careers to see how best to leverage technology and use data,” Mr. Bhatia said.

He added that Workday met the airline’s criteria for an enterprise-level, integrated and cloud-based mobile HCM platform with strong reporting and analytics.

Specifically, some of the benefits of the Workday system for managers include more convenient evaluation, appraisal, and salary planning of employees, as well as easier posting of recruitment needs.

For employees, benefits include less complicated filing of leaves, and finding promotion and training opportunities through Workday’s app.

All AirAsia employees also have the chance to see the global organizational structure of the company that will result in more understanding of the business and greater collaboration among the airline’s people.

“We are proud to be a partner to AirAsia, one of the most people-centric airlines in the world and a company that shares our vision of digital innovation and empowering people. We will be working closely with AirAsia in its journey to transform its employee experience and maintain its position as one of Asia’s largest and leading low-cost airlines,” Rob Wells, president for Asia at Workday, said.

Asked about the security of the Workday system, Mr. Wells stressed that the system is very secure and strictly follows data privacy rules. For example, the Workday app indicates the name of the person who made the change and update in the system, making sure there is transparency and accountability in the process.

AirAsia’s people-centricity is also proven through the company’s other internal initiatives for Allstars such as the RedQ (AirAsia’s headquarters) facilities including eSports and game rooms, mostly free food at the pantry area, kids’ room where employees can leave their babies and toddlers, salon, clinic, pool, gym, sports facilities in the RedDeck (RedQ’s roof deck), and an active rehabilitation center for neck, back, knee and shoulders.

The company also regularly holds fun and engaging town hall meetings, recognizes excellent employees, and even provides special grants for employees’ families who need funding for their small businesses.

Allstars also have the opportunity to express concerns to the management through Facebook Workplace. For instance, the management granted the employees’ united request to retain the dogs who were living in the area where RedQ was built. At present, RedQ has a “DogQ” located at the parking area of RedQ where the said dogs are being taken care of.

Workday plans to boost its global growth strategy and build a stronger presence in Asia.

Sta. Lucia to develop 97-hectare community in Davao

STA. LUCIA Land, Inc. (SLI) will be developing a 97-hectare property in Davao City into a masterplanned community.

In a statement issued Tuesday, the listed property developer said it has launched Las Colinas Verdes in Eden, Davao City. The project is targeted toward families and individuals looking for a primary home or a second home outside the city.

The development will feature a 2.7-hectare man-made lake, as well as amenities including a community clubhouse with multipurpose function hall, swimming pool, basketball court, and children’s playground.

SLI said it is scheduled to complete the project by 2022.

The company earlier said it will launch 28 new residential projects, as well as five condominium/hotel projects this year that will generate P20 billion in reservation sales for the next three years.

Its projects include Sotogrande Fairview and Acropolis Loyola in Quezon City; Orchard Towers in Pasig City, Golden Meadows Phase 2D in Laguna, Woodside Garden Village in Pangasinan, Metropolis in Iloilo, and Valle Verde in Cebu.

To support its expansion, SLI has committed to spend P20 billion in capital expenditures over the next three years. Of this, P16 billion will go for the development of projects in Metro Manila and in Bulacan, Rizal, Batangas, Iloilo, Pangasinan, Palawan, Cebu, and Davao.

The remaining P4 billion will be spent on land acquisitions. The company has been aggressively expanding its land bank with the acquisition of more properties in Laguna, Davao City, Iloilo, Negros Oriental, Palawan, and Pasig City, according to a disclosure to the stock exchange on May 17.

SLI’s net income attributable to the parent grew 28% to P338.48 million in the first quarter of 2019, as gross revenues also firmed up 30% to P1.27 billion.

Shares in SLI were unchanged at P1.97 apiece at the Philippine Stock Exchange on Tuesday. — Arra B. Francia

Inspiration from the outdoors and lessons from a National Artist

ARTIST Ivan Acuña stands in front of one of his massive works at the New World Hotel in Malate, Manila.

PAINTINGS by National Artists Arturo Luz, Fernando Amorsolo, and Benedicto “BenCab” Cabrera hang on the walls along the entrance hallway of Ivan Acuña’s apartment in Mandaluyong. In his living room, more of his painting collection is stacked on the floor. Across them are pieces of Chinese porcelain displayed above cabinets against the window. The collection of paintings and cityscape view from his apartment are where he draws inspiration for his own abstract paintings.

WEEKENDS WITH JOYA
Mr. Acuña’s exposure to the visual arts began as a child when he made friends with his neighbor, Alex Baldovino, who happened to be a nephew of National Artist for Visual Arts Jose Joya.

From the first grade onwards, he and Alex would visit Mr. Joya in his studio on weekends to observe the late painter while he worked.

Mr. Acuña recalled that Mr. Joya would order 3M Pizza along with Fress Gusto root beer soda for them as they sat quietly to watch him work. “That’s where I started to accumulate the techniques and styles. Eventually, I grew to like abstract,” Mr. Acuña told BusinessWorld in an interview on June 14 in Mandaluyong city.

ON ABSTRACTS
As an abstract expressionist who took note of the techniques of a National Artist, he adapted Joya’s impasto painting style or the application of thick paste to create texture.

“There no plan. From a white blank canvas to a heavy impasto colored canvas,” he said of his creative process.

He draws most of his inspiration from the outdoors, citing walls of old buildings, and old cities as scenes with “a lot of character.”

Mr. Acuña pursued a degree in Fine Arts at the University of the Philippines. In the 1990s, he attended art workshops in Brisbane, Australia. His notable exhibits include one at Prestige Motors BMW in Makati in 2004.

Since then, Mr. Acuña has specialized on beautification of spaces.

As an artist, he prefers to collaborate with designers, architects, and real estate developers rather than hold exhibits in galleries. His paintings are often collaborations with interior designers Budgi Layug and Anton Mendoza, and architect Gil Cosculuela.

“It has something to do with my photography,” he said, stating that he began his career as an interior photographer before trading the camera for the canvas and paint brush.

ACCIDENTAL PAINTING
One of his memorable works with which he noted the use of an “accidental technique” was his a canvas in his Metalscape series of 2006.

Sometime in the 2000s, he had to travel from Baguio (where he was based at the time) to Manila to show a sample painting for a hotel. He was driving a pickup and placed the painting at the back of the vehicle. The artwork only needed a final layer which he planned to finish in Manila. “But what happened was, the canvas fell on the road in Pangasinan. After more than a kilometer, somebody noticed that the canvas fell [off],” he recalled.

“Pag kita ko, napunit (when I saw it, there was a tear on the canvas). But I had no time. When I reached Manila, I had to present it.” He had to quickly cover the torn portion with thick impasto.

Mr. Acuña showed this writer a photo of the artwork on his phone. The gold canvas had a straight cut off on one side. When his client saw the work he said, “Fantastic!”

The canvas is on view on a wall above the escalators at the lobby of New World Manila Bay Hotel.

“Basically with abstract, wala naman figure ’yun eh (There is no figure in it). So you have to let your audience feel [it] and call their attention,” he said.

Mr. Acuña’s ongoing series — titled Metalscape and Hamilo Coast — are distinguished by the use of gold paint and a combination of bold color accents.

Falling off a pick-up truck is not part of their creation. For more information on the artist and his works, visit https://www.facebook.com/ivanacunapaintings/. — Michelle Anne P. Soliman

Landlords are big winners as the Philippines bets on continued Chinese gaming boom

MANILA — Tessie, her husband and their adult son recently vacated their home of 37 years in a Manila suburb to make way for some unfamiliar tenants — 20 Chinese nationals.

It wasn’t an easy decision to let out their 5-bedroom home, but for P140,000 ($2,730) a month in rent — nearly three times the norm in their middle-class neighborhood — it was an offer too good to refuse, said Tessie. She declined to be identified by her full name.

Like Tessie, many Filipino landlords are laying out welcome mats for the surging number of Chinese coming to Manila to work in online gaming companies taking sports and casino bets, undeterred by simmering anti-China sentiment and a common perception that Chinese are taking Filipino jobs.

“I was afraid at first because I heard so many bad things abut Chinese tenants but I was convinced later on when my friends told me they were doing the same,” said Tessie.

“It’s benefiting people like me who need to earn,” said the 63-year-old housewife.

Her home is close to a two-tower office building where five of the nine floors are used by Chinese gaming firms. A Chinese restaurant and Chinese tea shop downstairs do brisk trade.

Such arrangements are now commonplace across the business hubs of Manila, where Chinese gaming firms are capitalizing on the Philippines’ liberal gaming environment and an insatiable appetite for gambling in China, which forbids all types of betting.

The influx started in 2016, coinciding with the rise of Philippine President Rodrigo Duterte, who since coming into power has pursued warmer ties with China, and the gaming regulator’s move to license these internet gambling operators.

The number of Chinese work permit holders nearly quadrupled in two years to 109,222 in 2018, government data showed, making China the biggest source of expatriate workers in the Philippines.

In comparison, there were 4,477 work permit holders from Japan and 622 from the US last year.

The arrival of Philippine offshore gaming operators, better known as POGOs, has become a major boon for the property market just as it was getting crimped by a slowdown in the country’s $24-billion outsourcing sector.

“POGOs came in and saved the office market,” said Dom Fredrick Andaya, a director at Colliers International Philippines. “We would have had double-digit vacancy rates by 2017 if POGOs did not come.”

Philippine gaming regulators have so far licensed 56 POGOs from 35 in 2016. They have also accredited 204 gaming support providers that market their products and render customer service to players abroad, among other services.

Reuters requested comment from at least two POGOs whose contact details were available online but they did not respond. Reuters also visited at least one gaming tenant in a building in the main Makati business district but was denied entry.

POGOs will likely take up 1 million square meters of office space in Manila by yearend, Mr. Andaya said, nearly 12 times more than in the last quarter of 2016.

Office rents in the Manila Bay area, which has the highest concentration of POGOs, have risen as much as 150% over the past two years, with some renting up for P1,500 per square meter, Mr. Andaya said, comparable to rents in Makati.

Alongside, the influx of Chinese workers has fueled a surge in demand for residential space, lifting condominium and housing rents by as much as 50% in areas where POGOs operate, said Pronove Tai International Property Consultants.

“The sales market increased with investors buying bulk units…which they lease to Chinese companies as staff housing,” Pronove Tai said.

Chinese accounted for close to 50% of local developers’ foreign sales, Colliers said, helping drive residential property prices higher.

Shop signs and names of restaurants, spas and pharmacies in Mandarin have become increasingly common around the capital, and many retail stores are now using Chinese digital payment apps WeChat Pay and AliPay.

But lawmakers are growingly worried that the rising number of Chinese workers could lead to local strife and increase the competition for jobs when 2.29 million Filipinos are unemployed.

The issue is being compounded by the arrest of hundreds of undocumented Chinese workers in illegal online gambling outfits and construction sites and the discovery by authorities that some of these entities have not been paying correct taxes.

But Mr. Duterte has called for tolerance.

“The Chinese, let them work here. Let them be. Why? We have 300,000 Filipinos in China. That’s why I can’t just say, leave, or have them deported. What if they make all the 300,000 (Filipinos) leave,” Mr. Duterte said in a speech in February.

Filipino businessman JP Gaspar, who is renting out his family’s four-bedroom home to Chinese nationals for P100,000 a month, said he is aware the country’s embrace of China may not last longer than Duterte’s six-year term in office.

“In the meantime, I’ll grab the opportunity,” Mr. Gaspar said. — Reuters

Gov’t makes full award of 3-year T-bonds

THE GOVERNMENT fully awarded the fresh three-year Treasury bonds (T-bond) it offered on Tuesday on the back of strong demand from the market due to additional liquidity from recent cuts to banks’ reserve requirement ratio (RRR).

At its first auction for the quarter, the Bureau of the Treasury (BTr) raised P20 billion as planned from its offer of fresh three-year bonds maturing on July 4, 2022.

Total tenders reached P65.911 billion, more than thrice the government’s offer.

The bonds, which carry a coupon rate of 4.75%, fetched an average rate of 4.803% at yesterday’s auction, 33.3 basis points (bp) lower than the average rate of 5.136% for the three-year T-bonds awarded last Aug. 29.

At the secondary market on Tuesday, the three-year bonds fetched a rate of 4.953%.

“We had a very healthy auction today given that more than the three times oversubscribed we received offers of P65 billion. See also na yung (There was a) decline in the rates given that first, last June 28, may (there was an) additional 50 bps [cut to banks’ reserves]…and then…there will be another cut end of July, the other 50 bps,” National Treasurer Rosalia V. De Leon told reporters after the auction on Tuesday.

“And of course the consensus on inflation for June would be around 2.9%, 2.8%. So given all these considerations, the bids came in much lower than even the secondaries and from there, it’s about 33 bps lower than the previous auction,” Ms. De Leon said.

After a 100-bp RRR cut across all banks last May 31, the Bangko Sentral ng Pilipinas (BSP) trimmed the reserve ratios of universal and commercial lenders and thrift banks by another 50 bps last Friday to 16.5% and 6.5%, respectively.

Another 50-bp reduction will be implemented on July 26 to finally bring the RRR of big banks to 16% and thrift banks to 6%, which completes the phased cuts the BSP announced in May.

Meanwhile, inflation likely eased anew last month due to declines in food and fuel prices following a surprise uptick in May, according to a BusinessWorld poll.

A poll among 12 economists yielded a 2.9% estimate median for June inflation, close to the ceiling of the BSP’s 2.2-3.0% range for the same month. If realized, this would match December 2017’s pace and would be the slowest since the 2.6% clocked in August the same year. It also compares to actual inflation of 3.2% in May and 5.2% in June last year.

The Philippine Statistics Authority is scheduled to report official June inflation data on July 5.

“The market continued to show preference on short-end sector of the curve, given the sustained perspective for moderating inflation. Dealers and investors may also be putting their excess liquidity to good use, thanks to the second tranche of the RRR cut which took effect last June 28,” Robinsons Bank Corp. peso sovereign debt trader Kevin S. Palma said.

The government plans to borrow P230 billion from the local market from July to September, broken down into P60 billion in Treasury bills and P140 billion in T-bonds.

SAMURAI BONDS
Meanwhile, Ms. De Leon said the government is still looking to sell as much as $1 billion in yen-denominated bonds given strong appetite from Japanese investors.

“We also saw strong appetite of Japanese investors for the issue because there would really be a strong pickup coming from where current benchmarks right now in the samurai market. In terms of the schedule, we still have to do several like market-sounding,” Ms. De Leon said.

“They are very bullish on the Philippines coming from the S&P [Global Ratings] upgrade, obviously, and they would also see the liquidity in the market… If we are going to do more frequent issuances, then we can also be in the index for samurai bonds,” Ms. De Leon added, noting that the country has to maintain its presence in the yen bond market.

Last April, S&P Global Ratings raised the Philippines’ credit rating by one notch to “BBB+” from “BBB” with a stable outlook, citing above-average growth and strong external and fiscal position which have boosted the country’s economic profile.

Ms. De Leon said the government has to assess developments in the samurai market to determine whether or not to proceed with the bond sale.

“We have to watch market developments, benchmark rates, also from our arrangers. We have to find out the feedback from the investors that we saw during the NDR (non-deal road show).”

The government 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. Of the amount, 75% will be sourced domestically while the balance will be from foreign creditors. — R.J.N. Ignacio

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