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KAPA officials face securities regulation violation, but no estafa complainant yet

THE NATIONAL Bureau of Investigation (NBI) said complaints may be filed against the founder and officers of the Kapa-Community Ministry International, Inc. (KAPA) for violation of the Securities Regulation Code, but no complainants have so far come forward for an estafa charge. “As of this time wala pa (there are none). Wala pang private complainants or victims na gustong mag-file ng reklamo (There are still no private complainants or victims who want to file a complaint),” NBI-National Capital Region Director Cesar A. Bacani said. “One of the elements of estafa is damage,” he added. KAPA, a non-stock and independent religious corporation, was found by the Securities and Exchange Commission (SEC) to be soliciting investments from the public without the secondary license to be authorized for it. SEC issued a cease-and-desist order against KAPA in February but it still continued to operate. Its certificate of registration was revoked in April. The Court of Appeals has also issued a freeze order on KAPA’s several accounts and assets. President Rodrigo R. Duterte on Thursday warned the Land Reform beneficiaries in the southern part of Mindanao that if they sell their lands and invest their money in KAPA, he will “punch” them one by one. “Ayaw lagi mo ana (Do not do it)… because KAPA is a continuing [crime]…. Large scale estafa is non-bailable,” Mr. Duterte said in his remarks in General Santos City after the distribution of certificates of land ownership to Agrarian Reform beneficiaries there. — Vann Marlo M. Villegas and Arjay L. Balinbin

Comelec extends SOCE deadline

THE COMMISSION on Elections (Comelec) yesterday extended by several hours its deadline for the filing of campaign contributions and expenses by candidates in the May 13 midterm elections. Comelec Director Education and Information Director Frances A. Arabe told reporters in a message that the poll body’s Campaign Finance Office (CFO) would be open until 8 p.m., instead of the regular 5 p.m. closing, to receive the Statement of Contributions and Expenditures (SOCE) of candidates. By around noon on June 13, only five elected senators submitted their SOCEs: Pilar Julian “Pia” S. Cayetano, Christopher Lawrence “Bong” T. Go, Grace Poe-Llamanzares, Cynthia A. Villar, and Maria Lourdes Nancy S. Binay. Around the same period, the Comelec CFO has received only 82 SOCEs out of all the senators, party list groups, and political parties involved in the 2019 elections. Under Comelec rules, a penalty of P10,000 will be imposed on senatorial candidates, political parties, and party-list groups who file late. An exemption is given to winning candidates, who can submit their SOCEs within six months after the May 13 elections but will not assume office until they comply with the requirement. — Gillian M. Cortez

President hints on abolishing ‘exploited’ party-list system

PRESIDENT RODRIGO R. Duterte has said that the party-list system is being exploited by wealthy politicians, citing that many of the party-list leaders do not represent the marginalized sectors. “The rich people fund the party-lists. They are named after laborers but their nominees are…millionaires,” he said in his speech in Cagayan de Oro on Wednesday night. The President did not name names. Based on the summary of Statements, Assets, Liabilities, and Net Worth (SALN) of congressmen as of December 2018 released on Wednesday, Rep. Michael L. Romero of the One Patriotic Coalition of Marginalized Nationals (1 PACMAN) Party-list remained the richest member of the House of Representatives with a P7.858-billion net worth, up from P7.291 billion in 2017. Sought for comment during a press briefing at the Palace on Thursday, Presidential Spokesperson Salvador S. Panelo said that it could be possible that the President wants the party-list system in the country abolished. “Baka papunta roon kung ganyan ang sentimyento niya or baka gusto niya na iyong nagre-represent (Perhaps that is where his sentiment is going, or maybe he wants that representative should be) coming from the sector[s],” Mr. Panelo said. Mr. Panelo, however, said the matter is up to the Commission on Elections (Comelec) and that the President was just floating an idea. “He is expressing an idea and that’s for the Comelec to respond to it.” — Arjay L. Balinbin

Nation at a Glance — (06/14/19)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Nation at a Glance — (06/14/19)

Raptors take 2nd crack at title in Oracle Arena

OAKLAND, CALIF. — The Toronto Raptors hope to celebrate the closing of Oracle Arena with a party of international magnitude when they take a second shot at the championship (today) in Game 6 of the NBA Finals against the Golden State Warriors.

The Raptors were two minutes away from securing Canada’s first-ever NBA title Monday in Game 5 before falling victim to a barrage of 3-pointers from Klay Thompson and Stephen Curry in a 9-2 finish that was historic on at least two levels.

The 106-105 final not only produced the first one-point Finals margin since 2007, but it also made the Warriors just the sixth team in NBA history to win a potential elimination game on the road.

History remains on the Raptors’ side entering Game 6, even though the scene has shifted back to Oakland. Of the 34 teams that have led a Finals 3-1, 33 have gone on to win the championship. The only exception was the Warriors in 2016, when the Cleveland Cavaliers rallied to win in seven games.

“We understand that the moment is the moment, but we still are staying in it,” Raptors guard Kyle Lowry said Wednesday. “We’re not too up, we’re not too down. We’re just one game, hey, we lost it, now we got to move on to the next one.”

The Warriors move on without Kevin Durant, who returned from a calf injury to score 11 points in 12 minutes in Game 5, only to sustain a ruptured Achilles in the same leg. The Warriors led 39-34 at the time of the season-ending injury.

Durant confirmed Wednesday from New York that he had undergone surgery to repair the rupture.

“I expect our fans to be the loudest they have ever been, especially in the name of Kevin and bringing his type of spirit he would bring to the fight and the competitiveness,” Warriors guard Klay Thompson said Wednesday. “I know our fans will do that because we deserve it, but more importantly, Kevin does for what he gave this team, this organization. There wouldn’t be banners if it wasn’t for his presence.”

The game will be the Warriors’ last at Oracle Arena, which opened as the Oakland Coliseum Arena 47 years ago. Golden State will move to the Chase Center in San Francisco next season.

“This has been just an incredible environment in which to coach and play back in the day,” Warriors coach Steve Kerr said Wednesday. “Even when the Warriors weren’t any good, to come in here as a visitor and feel the energy in this building, you could tell that the fans loved the game.

“This was a basketball hotbed. And just the atmosphere out there, the energy, the noise, over the last five years with our team’s rise, combined with that organic energy that this place has always had, it’s just been an incredible experience to coach here.”

That energy wasn’t enough to prevent Raptors wins in Games 3 and 4 after the Warriors earned a split in the two series-opening games in Toronto.

Raptors coach Nick Nurse said Wednesday he’s not surprised the road team has won four of the first five games in the best-of-seven.

“Both teams are really good road teams and have been all season,” he said. “Two really tough-minded teams playing, and you got to be a little more tough-minded on the road. And I think a lot of those games probably could have went either way.”

The team that had the upper hand in 3-point shooting has prevailed in the first five games of the series.

The Raptors outscored the Warriors 120-96 from beyond the arc in their three wins, while Golden State had a 99-57 dominance in long-range points in its two victories. — Reuters

Winless San Miguel, Magnolia look to catch a break

STILL WINLESS in the ongoing Philippine Basketball Association Commissioner’s Cup after two games, the San Miguel Beermen and Magnolia Hotshots Pambansang Manok look to barge into the win column when they take on separate opponents in league action today at the Mall of Asia Arena.

The Beermen (0-2) play league-leading Blackwater Elite (5-1) in the 4:30 p.m. curtain-raiser while the Hotshots (0-2) take on the NLEX Road Warriors (0-5) in the main game at 7 p.m.

Admitting to still finding its collective groove in the midseason PBA tournament, Philippine Cup champion San Miguel has struggled in its first two games, falling prey to Northport Batang Pier and TNT KaTropa, in that order, with an average losing margin of 23 points.

Returning import Charles Rhodes is leading the way for the Beermen with averages of 23.5 points and 11.5 rebounds with June Mar Fajardo adding 16 points and nine rebounds per ball game.

Reserve guard Von Pessumal is also off to a good start with 17.5 points per game.

But as a team San Miguel has yet to find its rhythm, something it hopes to finally notch when it collides with Blackwater, which has been playing solid ball under new coach Aris Dimaunahan and boosted by import Alex Stepheson (22.2 ppg and 22 rpg) and rookie Ray Parks Jr. (23.5 ppg, 4.8 rpg and 3.3 apg).

Despite their struggles, the Beermen are not deterred by it, recognizing that they have been in similar starts before and just need to put in the needed work and effort to turn things around.

MAGNOLIA
Magnolia, for its part, is out to get into the upswing as well after a rough going to begin its campaign.

Its latest loss came just last Wednesday against Northport, 102-99.

They had a better showing in said game, parading a new import in James Farr, than their opener but the result was similar with the team at the raw end of things.

Ian Sangalang top-scored for Magnolia with 21 points in the loss with Robbie Herndon adding 18.

Mr. Farr had 11 points and 14 rebounds in his PBA debut.

Magnolia coach Chito Victolero said that despite the loss, the Northport game provided some positives from which they could take cue from.

“We had a good start but just could not sustain it. We were able to recover in the end but just did not have enough time. The team rhythm is not yet there but hopefully come next game we will play better,” Mr. Victolero said postgame.

Out to stop Magnolia is NLEX, itself struggling to five defeats sans a win to this date.

Import Tony Mitchell is leading the squad with numbers of 31 points, 11.7 rebounds and three assists per game.

The Road Warriors recently acquired the services of explosive guard Jericho Cruz in a three-way trade involving Northport and TNT to help their cause. — Michael Angelo S. Murillo

Basketball journey continues for Cariaso with values-driven programs

By Michael Angelo S. Murillo
Senior Reporter

NEARLY a decade removed from playing in the Philippine Basketball Association, the hoops journey continues for Jeffrey Cariaso through two values-driven programs which he takes much pride in to be part of.

The director of the Alaska Basketball Power Camp and one of the proponents of the Jr. NBA Philippines program, Mr. Cariaso, also assistant coach with the Aces in the PBA, shared that while he did not envision his post-playing path to chart such a direction, he nonetheless is not complaining, especially since it affords him the opportunity to inspire and make a difference in other people’s lives in a different capacity.

“To be honest, I didn’t envision this or predicted it. There was always a part of me that enjoyed — in high school and college — being with kids; guiding, teaching, whether as mentor, counselor or coach, but this is something I did not dream of,” Mr. Cariaso said in an interview with BusinessWorld.

“But I’m happy that the cards fell the way they did. It really improves me as a coach because, for me, for you to be able to coach at this level (PBA) you have to be able to experience teaching young kids. To be able to set up a program and see their development with an organized blue print is something I am happy and proud of,” he added.

Just finished his fifth year of handling the Alaska Basketball Power Camp, which is Alaska’s basketball summer activity program, Mr. Cariaso said he is very satisfied with how things are evolving for it, guided by their core values of respect, integrity, hard work and determination.

“Through the years the program has gotten more detailed and enhanced. Apart from providing campers with the best basketball clinic possible and teaching them to play on both ends of the court, important for us as well is playing the right way and develop values like respect, integrity, hard work and determination which they could use not only in basketball but outside of it as well,” said Mr. Cariaso, who took over from fellow Alaska legend Jojo Lastimosa as Power Camp head.

Adding, “Nutrition is also important and something we share as well at the camp, like eating the right food and taking care of your body.”

As to their partnership with the National Basketball Association for the Jr. NBA Philippines program, which is running for 10 years now, the seven-time PBA champion said it is a tie-up that is very fitting for the many commonalities in the groups’ vision and mission.

Both Alaska and Jr. NBA champion core values, or in the case of the latter its S.T.A.R (Sportsmanship, Teamwork, positive Attitude and Respect) values, as main motor.

They, too, are also a making a conscious effort to make the partnerships’ dynamic as seamless as possible.

“Our relationship is very fluid. We share our ideas with one another. In the last two years they have trusted us in leading the coaching in the clinics and it means a lot for us in Alaska. The trust that they are showing in our capabilities,” Mr. Cariaso said.

Moving forward, Mr. Cariaso said he is very excited for the continued development of the Alaska Power Camp and the Jr. NBA Philippines program, and, ditto, his own growth at this stage of his basketball journey.

“I’m really excited for the future and being part of the journey of these kids. We are seeing the fruits of what we are doing and we are very happy with that. And yes we are looking forward to continue producing not only outstanding players who can play at the highest levels, but also individuals,” he said.

Le Tour de Filipinas rolls off in Tagaytay

FROM picturesque Taal to majestic Mayon, the Le Tour de Filipinas celebrates “10 Years of Cycling” with an explosive race starting with Stage 1 today of the now five-stage International Cycling Union (UCI) event.

Two of the Philippines’ iconic tourist attractions — Taal Volcano and Mount Mayon — serve as backdrop for the kickoff stage and the coronation ride come Stage 5 on Tuesday in Legazpi City.

“What a way to celebrate a decade of Le Tour de Filipinas — by showcasing the best of the Philippines,” Donna Lina, chairman of the Le Tour de Filipinas, said.

The Le Tour de Filipinas kickoff stage in 2009 was in the very same route for the 2019 edition — the hilly roads in and around Tagaytay City and Batangas.

Irishman David McCann won the inaugurals of the race that has become the forerunner of UCI-calendared Philippine races to date.

Fourteen teams are seeing action in the 10th edition led by the Philippine National Team of defending champion El Joshua Carino, who won last year — the third Filipino champion of the race — with Philippine Navy Standard Insurance.

Marcelo Felipe, winner of a previous UCI race in Subic, powers 7-Eleven Cliqq-Air21 By Roadbike Philippines while Best Young Rider in 2018, Daniel Ven Carino, banners Go For Gold.

Mark John Lexer Galedo, the 2014 winner, will be riding for Celeste Cycle, while Michael Angelo Ochoa will spearhead Bike X Philippines.

The foreign field in the race — which is expected to be flagged off for Stage 1 by Tagaytay City Rep. Abraham “Bambol” Tolentino and Mayor Agnes Tolentino — was reduced to nine following the last-minute withdrawal of the Hongkong National Team.

Out to challenge the Filipino teams are Nex Cycling Team (Singapore), PGN Road Cycling Team (Indonesia), Oliver’s Real Food Racing (Australia), Terrenganu Cycling Team (Malaysia), Taiyuan Moigee Cycling Team (China), Team Nero Bianchi (Australia), Team Ukyo (Japan), Team Sapura Cycling and Thailand National Team.

To mark a decade of racing, organizer Ube Media Inc., headed by Ms. Lina, has modified the colors of the jerseys for the various categories.

From the traditional yellow, the general classification jersey is now the Air21 Purple Jersey, the polka dot has become the NMM Blue Jersey for the King of the Mountain, the green is now the Cargohaus Orange Jersey for Points Classification, the white jersey is now the Ufreight Red Jersey for the Best Young Rider and the then purple is now the SPL Pink Jersey for the Best Filipino Rider.

Friday’s kickoff Stage 1 is a short and demanding 129.50-km Stage 1 on an out-and-back course in Tagaytay City, followed by the 194.90-km Stage Two on Saturday, June 15, from Pagbilao in Quezon to Daet in Camarines, Norte.

Stage Three on Sunday will be 183.70 kms from Daet to Legazpi City and Stage Four will cover 176.00 kms from Legazpi City via Sorsogon and Gubat and back to the Albay capital.

Stage Five on Tuesday will also be out-and-back in Legazpi City but this time it will be via Donsol in Sorsogon for a total of 145.80 kms — a crucial final leg where the cyclists will have to endure pedalling over rolling hills and strong winds.

Second chance

When the Raptors go for the jugular today, their will be determined to move past the literal and figurative near misses they had in Game Five of the Finals. They were up by six points with three minutes and change to go, prompting behind-the-scenes preparations for their coronation as the finest of the finest of the National Basketball Association. Instead of firming up their date with living legend and Larry O’Brien Trophy presenter Bill Russell, however, they found themselves snatching defeat from the jaws of victory. They called back-to-back timeouts that stunted their momentum. They missed five of their last six shots, including a wide-open three point attempt, and committed a costly turnover that helped the defending champion Warriors complete a comeback for the ages.

To be sure, the Raptors have ample reason to remain supremely confident of their chances to claim the championship. It isn’t just because they have the superior roster vis-a-vis that of the depleted Warriors. And despite being on the wrong end of a spate of developments in crunch time of their immediate past match, they know well enough to withstand pressure and preform to expectations. If nothing else, they have Kawhi Leonard, the series’ most transcendent player by far, to lean on, and, for motivation, a pristine 3-0 slate at the Oracle Arena through their 2018-19 campaign and heading into today’s set-to.

In other words, the Raptors are ready. In acknowledging that closeout contests are the hardest to take, they’ve steeled themselves for the worst possible eventualities. And, in this regard, it helps that they possess some leeway; they’re using the second of three chances to forge their desired outcome, with the first having imparted critical lessons and the last serving as a release valve that eases the pressure of performing under the gun. They know they’re favored to win, why they’re favored to win, and how they need only be themselves to win.

Parenthetically, the Toronto Raptors cannot but assume to encounter the Golden State Warriors’ best today, and in hostile territory to boot. The last thing they want is to underestimate the capacity of the hosts to rise to the moment and overachieve. Rather, they would do well to be mindful of the task at hand. Respect of their competition is critical to attaining respect from all and sundry. Opportunity beckons, and the extent of their answer will determine their place in history.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

RedDoorz boosts occupancy rate of partner accommodation providers

It is a longstanding issue for local boutique hotels, inns, apartels, condoles, and other privately-owned accommodations to increase occupancy rate on weekdays and off seasons. They need to juggle a variety of tasks, from marketing the business to creating exclusive packages and deals.

While it is getting challenging for these businesses to meet the changing demands and preferences of the customers, new innovations in the hospitality industry have helped them reach and attract possible guests.

Taking the path of other tech-enabled service platforms, Singapore-based RedDoorz is bringing a significant change in the local affordable hotel market by working with different property owners to standardize their accommodation offerings.

EMPOWERING SMALL PROPERTY OWNERS

Property owners who partner with RedDoorz not only benefit from the company’s growing brand but also to its creative marketing strategies, online booking platform and top-class hotel management professionals, which help them increase potential for growth.

With its combined expertise in hospitality and e-commerce, RedDoorz prides itself in having the capacity to boost its partners’ occupancy rate to up to 70% in just two months.

Vicente Rodriguez, RedDoorz owner along Aurora Street in Pasay City, said that his business has performed well since he partnered with RedDoorz, registering a full occupancy on weekends and at least 60% occupancy on weekdays.

RedDoorz, according to Mr. Rodriguez, was able to boost the occupancy of his hotel with large margin compared to the days he operated the business on his own. This has left Mr. Rodriguez in surprise, knowing that his property is located in a secluded section of the city.

“Now, it’s better with RedDoorz,” Mr. Rodriguez said. “We save money because we don’t need to have our marketing cost. And of course, we get our target revenue all the time. No hassle.”Same is the case with Marlon Cunanan, RedDoorz owner on Samat Street in Mandaluyong City. He said that it is now easier to manage his accommodation business with RedDoorz.

“I don’t look for marketing anymore, they do the marketing for us,” Mr. Cunanan shared.

On weekdays, Mr. Cunanan’s RedDoorz-branded rooms have at least 80% occupancy rate. On weekends, on the other hand, these rooms are always fully booked, and sometimes overbooked.

“If you check it every day, it is almost fully booked. Then, it’s a good business,” Mr. Cunanan said. “I have a good partnership with them; it’s a right decision.”

As part of RedDoorz’s online booking platform, partners were able to increase their property visibility not only in the country but all over the world. This has paved the way for RedDoorz partners to accommodate guests in a broader market.

Mr. Rodriguez and Mr. Cunanan observed that they have guests from different countries now, unlike before when they only cater to local clients. This seems to be an advantage, according to Mr. Cunanan, since foreigners tend to stay for weeks because of the affordable and competitive rate that RedDoorz offers.

A RELATIONSHIP BEYOND BUSINESS

Before RedDoorz came in, Mr. Cunanan said that they operated traditionally, relying on walk-in guests alone. Its partnership with RedDoorz has addressed such dilemma and opened doors for property owners like him to be more accommodating to the new age millennial market.

Moreover, Mr. Rodriguez shared that RedDoorz is very hands on in terms of addressing the concerns of its partners. “They are attentive to attend to what your problem is. It’s easy to deal with them because the staff and people are very nice,” Mr. Rodriguez said.

RedDoorz not only ensures a long-term positive relationship with its partners but also with their staff through its several engagement initiatives.

“Here at RedDoorz, we promise not only growth for the partner property owners themselves but for their staff as well. By providing them with further training to help them provide excellent service to our guests, we are also enabling them to achieve more in their career,” Rishabh Singhi, RedDoorz chief operating officer, said.

RedDoorz also facilitates English courses to increase staff’s morale, boost their performance, and sharpen their communication skills. To create a sense of belonging and community, it also gives free lunch on Fridays and organizes several contests, among others.

As an affirmation to RedDoorz’s unparalleled partnership, Mr. Rodriguez and Mr. Cunanan were encouraged to expand their RedDoorz room portfolio.

In addition to 26 rooms, Mr. Rodriguez targets to lease another four rooms under his contract with RedDoorz. “We’re happy [with the partnership with RedDoorz], that’s why we’re expanding a little bit,” he said.

In the case of Mr. Cunanan, the overbooking they have experienced on weekends from time to time has pushed him to increase his RedDoorz rooms to 40 by the end of the year.

“There is a demand. If I don’t see the figures, I won’t,” Mr. Cunanan explained. “Kaya malakas ang loobko because I know RedDoorz is there.”

Reforms eyed to boost FDI inflows

By Janina C. Lim
Reporter

FOREIGN direct investments (FDI) inflows to the Philippines dropped in 2018 even as most Southeast Asian countries saw gains that pushed the region’s overall haul for the year to an all-time high.

While admitting that challenges to the Philippines’ investment environment persist, Trade Secretary Ramon M. Lopez said the government is pushing reforms to make the country more attractive to foreign investors.

The United Nations Conference on Trade and Development’s (UNCTAD) 2019 World Investment Report on special economic zones showed FDI flows to Southeast Asia last year went up 3% annually to a record $149 billion, hiking the subregion’s share in global inflows to 11% in 2018 from 10% in 2017.

“The growth in FDI was mostly driven by an increase in investment in Singapore, Indonesia, Vietnam and Thailand. Manufacturing and services, particularly finance, retail and wholesale trade, including the digital economy, continued to underpin rising inflows to this subregion. Strong intra-ASEAN (Association of Southeast Asian Nations) investments and robust investment from other Asian economies also contributed to the trend,” the report said.

“However, inflows to some countries (Malaysia and the Philippines) declined,” it added.

FDI inflows to the Philippines slid by 25.75% to $6.46 billion from $8.70 billion in 2017, the UNCTAD report showed.

Mr. Lopez admitted “there are still challenges [to investments] we have to continuously work on.”

The Trade chief cited the need to revise the Public Service Act and the Retail Trade law and the Foreign Investment Negative List (FINL) to open up to more foreign investors, further improvement in infrastructure; digital connectivity; power and logistics; ease of doing business reforms down to the local government units; special eco zones with access to more skilled resources; better infrastructure links; data connectivity; relevant technologies; and environmental and sustainability systems.

“We are now working on modernization of incentives to make it performance-based and timebound,” Mr. Lopez said in a mobile message yesterday.

“We need to attract more quality investments, bringing in higher value operations, more R&D and innovation-oriented industries, in industries with comparative advantages, provide greater facilitation in government permits and services,” Mr. Lopez added.

UNLOCKED POTENTIAL
American Chamber of Commerce of the Philippines, Inc. Senior Adviser John D. Forbes meanwhile said the fact that FDI flows to the country continue linger around the $10-billion threshold already marks an improvement.

Data from the Bangko Sentral ng Pilipinas showed that FDIs settled at $9.802 billion last year, sliding 4.4% from 2017’s $10.256 billion.

However, the Philippines’ continued failure to remove barriers in some areas, coupled with uncertainties that hounded the local investment environment last year, prevented the economy from capturing potentially bigger gains, he said.

“It has more potential, but the potential is not being unlocked. Mining has not been issued any new license since 2012…while agribusiness is still a difficult area for foreign investment. Also, in the last year, we had TRAIN (Tax Reform for Acceleration and Inclusion) 2 and also security of tenure, so those measures created uncertainty on what the rules would be going forward,” Mr. Forbes said in a phone interview on Wednesday.

“Companies that are here are still expanding but at a slower rate…and there are the companies that did not choose to come here,” Mr. Forbes added.

The UNCTAD report further noted that Chinese investments in ASEAN members continued to increase in 2018 “partly due to several large M&A deals in the services sectors in Singapore, Indonesia and the Philippines.”

Meanwhile, FDI outflows from Southeast Asia were steady at $70 billion last year, accounting for 7% of global outward flows in 2018.

Nevertheless, the outlook for the subregion remains “promising, as countries in the subregion continue to introduce measures to improve the investment environment,” according to the UNCTAD report which cited, among other developments, the Philippines’ move to ease some investment restrictions through an updated FINL that took effect in November last year.

Strong economic fundamentals, low-cost and resource-rich environments, the digital economy, and commitments to develop and upgrade information and communication technology, transport and power facilities will remain attractive to investors.

“A doubling of announced greenfield investment projects in the subregion to $139 billion in 2018 corroborates this promising outlook,” the report added.

Ranking seventh in the 10 biggest greenfield projects intended for least-developed countries announced last year is Aboitiz Equity Ventures, Inc.’s $1.15-million fossil fuel electric power project in Myanmar, the report showed. The project was the lone initiative from an ASEAN firm in the list.

Global FDI flows in 2018 fell by 13% to $1.3 trillion, marking the third straight year that FDIs moved downward.

The UNCTAD report attributed this mainly to large-scale repatriations of accumulated foreign earnings by United States multinational enterprises in the first two quarters of 2018, following tax reforms introduced in that country at the end of 2017.

Foreign funds to continue fleeing PHL stock market

By Arra B. Francia
Senior Reporter

BPI SECURITIES, Inc. sees up to $600 million worth of foreign funds exiting the local stock market this year as more investors place their funds in China, following its greater weighting on the MSCI index.

BPI Securities President and Chief Executive Officer Hermenegildo Z. Narvaez explained that about $1.9 trillion worth of funds track the MSCI Emerging Market index, influencing their decisions on where to park their funds.

“The MSCI emerging market index, which a lot of fund managers track, has decided to increase the weighting of China, and as a result smaller emerging markets like the Philippines will be impacted,” Mr. Narvaez told BusinessWorld in a recent interview.

“So expect a lot of outflows. Our expectation is we’re looking at about anywhere between $400-600 million of outflows on the back of this,” he added.

The MSCI during its May 2019 semi-annual index review decided to increase the weight of China stocks in three steps until November. China’s position in the MSCI Emerging Market index could then increase to 42% of its market cap, including Hong Kong-listed shares.

“We account for about 1.1% of that Emerging Market index…Even though we’re only 1% of the Emerging Market index, it’s still a significant figure — $400-600 million accounts for more than a month’s worth of trading in the index,” Mr. Narvaez said.

BPI Securities’ top executive added that regional peers such as Indonesia and Thailand will also be affected by the rebalancing.

Sought for comment, Philippine Stock Exchange, Inc. President and Chief Executive Officer Ramon S. Monzon noted that the MSCI review is a regular event expected by the market.

“(W)hile its results may spark buying or selling, this action happens within a specific time frame. After that, foreign investors factor in developments that may impact their investment strategy. Foreigners are still net buyers of our market as of today,” Mr. Monzon said in an e-mail last week.

To date, the PSEi has a net foreign yield of P28.24 billion, according to online stock market platform Investagrams.

He added that the Philippine market is still attractive to foreign investors given upbeat prospects on the country’s economy.

“Sentiment on the Philippines continues to be positive particularly with recent developments including the upgraded credit rating by S&P, the affirmed credit rating by Fitch Ratings and the improvement of the country’s competitive ranking based on the International Institute for Management Development’s report.”

Taking into account the MSCI rebalancing, BPI Securities is projecting the PSEi to finish at the 8,650 level by the end of 2019. This is 2.8% lower than its earlier forecast of 8,900 disclosed last year.

The market could further be affected by negative sentiment on the US-China trade war, as two of the world’s largest economies continue to impose tariff increases without much progress on a much awaited trade deal.

Mr. Narvaez said that while the Philippines will not be heavily affected by the trade war, general sentiment will affect investor’s appetite.

“The problem is the stock market is not just a function of fundamentals but sentiment, and how asset prices behave and the risk appetite of investors. Because of this trade war, there’s a general aversion to risk,” Mr. Narvaez explained.

There will then be a tendency for investors to start investing in what is perceived as safer assets.

“In the near term, probably more money is going to be taken away. Some movements in safer assets such as the yen, the dollar, short term US Treasuries, and even gold for example.”

Asked what sectors seem more attractive for investors, Mr. Narvaez listed down banking stocks, which he noted will benefit from the recent reserve requirement ratio cut. He also added property and some consumer stocks.