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Non-outsourcing companies driving demand for office spaces — Colliers report

TRADITIONAL and non-outsourcing firms is fueling demand for office spaces anew, according to Colliers International Philippines.

“We see the sustained macroeconomic growth boosting the office space demand of the non-outsourcing occupants, particularly construction, insurance, and flexible workspace operators over the next three years,” Colliers said in a statement.

The real estate consultancy services firm said that non-outsourcing locators, which include engineering and construction firms, multinational corporations, government agencies, and flexible workspace operators have been expanding their presence in the country over the past 24 months. This is in addition to the continued expansion of business process outsourcing (BPO) companies, knowledge process outsourcing (KPO) companies, and the offshore gaming firms from China.

“Developers should closely observe this non-outsourcing segment given the growing leasing opportunities. In Q1 (first quarter) 2019, the segment covered 35% of transactions or 116,800 square meters (sq.m.) (1.3 million square feet),” Colliers said.

While outsourcing companies prefer office spaces accredited with the Philippine Economic Zone Authority (PEZA), Colliers noted the non-sourcing firms are indifferent to the availability of PEZA-proclaimed spaces, with their expansion dependent on the country’s economic growth.

For engineering and construction firms that are taking part in public infrastructure projects, Colliers recorded that these firms took up 14,000 sq.m. in the first quarter of 2019 in Makati, Quezon City, and Fort Bonifacio.

“The government intends to double its infrastructure spending to about 6% of annual GDP or P1 trillion ($19 billion) per year from 2019 to 2022,” Colliers said, further noting that this is likely to support the expansion activities of the construction and engineering firms, which would push them to occupy more office spaces in Metro Manila.

Also, insurance companies and flexible workspace operators have been taking up office spaces in Makati, Fort Bonifacio and Ortigas Center.

“Even local flexible workspace operators have been aggressive in scouting for available space in new Grade A buildings across Metro Manila,” the firm noted.

RESIDENTIAL DEMAND
Meanwhile, Colliers said that demand for residential units, especially for house and lots in provinces, will be driven by sustained remittances from overseas Filipino workers (OFW) in the next three years.

Citing data from the Bangko Sentral ng Pilipinas, OFW remittances have reached P281 billion in the first two months of 2019, up by 2.3% from the same period last year.

“The sustained growth in remittances along with decelerating inflation and the central bank’s decision to cut interest rates by 25 basis points, should result in a cheaper cost of borrowing money,” Colliers said.

The property consultant recommended that developers consider areas like Pampanga, Cavite, Laguna, Batangas, Bacolod, Iloilo, and Davao for residential expansion.

As for industrial space and warehouses, demand will be driven by the growth of the manufacturing sector over the next three years. The sector grew by an annual 6.8% over the past three years.

“The development of the first Sino-Philippine industrial park by Ayala Land north of Metro Manila shows growing interest from industrial locators and developers to expand outside of the Cavite-Laguna-Batangas corridor, the country’s primary industrial hub,” the firm noted.

“Filinvest Land Inc. also announced that it is likely to start the construction of its industrial park in New Clark City in Tarlac (about 120 km from Manila) in 2019. This should further raise industrial investments north of Manila,” it added. — Vincent Mariel P. Galang

DMCI Mining more than doubles nickel ore shipments

DMCI Mining Corp. recorded a 118% increase in nickel ore shipments in the first quarter of 2019.

In a disclosure on Monday, DMCI Holdings said its mining unit more than doubled its nickel ore shipments to 338,000 wet metric tons (WMT) in the January to March period, from 156,000 WMT shipped a year ago.

“We had a good first quarter but we do not see this holding up for the rest of the year due to a number of factors, such as weak market prices, peso appreciation versus the US dollar and our dwindling nickel reserves in Berong’s active mine sites,” Cesar F. Simbulan, Jr., president of DMCI Mining, said in a statement.

DMCI Mining said the shipments came from Berong Nickel Corp. (BNC), which has a nickel mining site in Barangay Berong, Palawan. Another unit Zambales Diversified Metals Corp. (ZDMC) is still suspended by the Department of Environment and Natural Resources (DENR).

The company noted average nickel grade fell to 1.59% in the first quarter, from 1.70% during the same period last year, as BNC’s shipments included middle-grade ore (1.50%). It said that nickel prices also continue to drop, bringing the average selling price 25% lower to $29.

DMCI Mining said that it expects a “tough” year ahead as its inventory will soon run out given the current situation of its Zambales plant.

BNC has an estimated nickel reserve of around 710,000 tons in its active mining sites. In December 2018, it was the only company that passed DENR’s two-year review.

“We hope that with BNC’s track record as a responsible miner, it will be allowed to operate in other areas so we can continue providing livelihood and employment opportunities in our host communities,” he said.

Shares in DMCI Holdings inched up 0.38% to P10.62 each on Monday. — V.M.P.Galang

DreamPlay marks 4th year with kiddie dance off

THE 4th anniversary celebration of City of Dreams Manila’s DreamPlay, the only DreamWorks-inspired interactive play space in the world, is in full swing with the staging of the annual King Julien Dance Off competition.

Now on its fourth year, the competition is opening its doors to dance groups composed of children ages seven to 14 years old. Following a preliminary screening, the top eight groups will vie for the King Julien Dance Off Champion title on the Grand Final stage on June 29, 2 p.m., at City of Dreams Manila’s Grand Ballroom.

The preliminary round will be held on June 15, wherein contestants are required to perform a dance routine to any English song that should not exceed four minutes. Eight finalists will be chosen to compete at the Grand Finals, showcasing their creative routines with any English song or a mash up of songs from DreamWorks Animation movies, such as Trolls, How To Train Your Dragon, Kung Fu Panda, Shrek, Puss in Boots, and Madagascar.

The grand champion will receive P120,000 cash and a DreamPlay trophy. The first runner up will get P30,000 cash and a DreamPlay Plaque; while the second runner up will be given P20,000 cash and a DreamPlay Plaque. Each of the finalists will be given P5,000 and a certificate.

Interested parties may visit DreamPlay or send an e-mail request to dreamplay@cod-manila.com for a copy of the entry form. The deadline for accomplished entries, which must include a group photo, is June 14, 10 p.m.

Since it was launched in 2016, DreamPlay’s King Julien Dance Off has served as a platform in discovering talented children from around the country, and as a springboard for them to perform in local and international stages.

Past grand winners include: Junior FMD Extreme (2016 Grand Champion), an all-boys group of former street children; Higher Level Kids (2017 Grand Champion), an all-boys group from Cavite; and GFAM (2018 Grand Champion), which went on to win in other dance competitions including First Place in the World Supremacy Battle Ground (Young Guns Division) in 2018, and a back-to-back championship title in the Inter School Dance Sports Competition (National Capital Region 2017 to 2018).

DreamPlay by DreamWorks at City of Dreams Manila is open from 10 a.m. to 9 p.m. Mondays to Thursdays, and from 9 a.m. to 10 p.m. on Friday to Sunday, and on holidays

Loc&Stor 24/7 opens SLEx branch

SELF-STORAGE facility Loc&Stor opened its fourth facility along the South Luzon Expressway (SLEx), catering to residents and business owners in Alabang, Parañaque, Magallanes, Las Piñas, Cavite, Laguna, Batangas, and nearby areas.

Loc&Stor 24/7 offers world-class storage service that are accessible 24 hours a day, 7 days a week, all year round. Seven sizes of storage units are available to meet the different needs of customers. The smallest unit can accommodate up to eight balikbayan boxes, while the jumbo-size unit can fit up to 180 balikbayan boxes.

Since Loc&Stor 24/7 SLEx is a one-level facility, there are no weight limits are imposed on all units.

“Only you and your authorized representatives can access your stored possessions, using unique PIN codes that arms and disarms your unit’s alarm. And because all access to your unit is electronically logged, the system will notify you through e-mail if your unit has been opened,” the company said.

Loc&Stor 24/7 SLEx is located in “a guarded, gated, and flood-free compound manned round-the-clock by personnel from a leading professional agency.” It is also equipped with high-definition CCTV cameras with night vision, smoke detectors and fire alarms, and sprinkler systems.

Aside from SLEx, Loc&Stor 24/7 has facilities in Pasig City and in Makati City (J.P. Rizal and Urban Avenue).

Gov’t makes full award of T-bills with offer thrice oversubscribed

THE GOVERNMENT raised P15 billion as planned at its auction of Treasury bills (T-bill) yesterday, with rates sliding across all tenors as investors parked their additional funds following the first cut in banks’ reserve requirement ratios (RRR) last week.

The Bureau of the Treasury (BTr) made a full award of T-bills at its auction on Monday as tenders from investors reached P49.6 billion, more than thrice the amount it wanted to raise.

Broken down, the Treasury accepted P4 billion as planned for the 92-day papers out of P9.22 billion in offers by banks and other financial institutions. The average rate declined by 15.8 basis points (bp) to 4.992% — its lowest level since October — from the 5.15% quoted in the previous auction.

The government also made a full award of the 183-day debt notes it placed on the auction block, borrowing P5 billion as planned versus total offers amounting to P15.545 billion. The average yield slipped 19 bps to 5.4% from last week’s 5.59%.

The BTr likewise fully awarded the 365-day T-bills, accepting P6 billion out of bids totalling P24.82 billion. Its average yield also slid 18.5 bps to 5.498% from the 5.683% tallied in the previous auction.

Meanwhile, at the secondary market on Monday, yields on the three-month, six-month and one-year papers closed at 5.257%, 5.528%, and 5.655%, respectively.

Following the auction, Deputy Treasurer Erwin D. Sta. Ana said the T-bills auction yesterday was a “success.”

“We came in at a much lower rate than what the market predicted through our initial pre-auction survey. It’s definitely a successful auction,” he told reporters.

“Last Friday was the initial tranche of the RRR cut. There’s obviously liquidity that flows into the system. The main investment outlet would be government securities. Hence, we see demand here,” Mr. Sta. Ana added.

The Bangko Sentral ng Pilipinas (BSP) slashed the reserve ratios of lenders by a percentage point last May 31 to 17% for universal and commercial banks, 7% for thrift banks, and 4% for rural and cooperative banks.

The Treasury added that remarks from BSP Governor Benjamin E. Diokno last week alluding to more room for policy easing also drove debt yields lower. In an interview with Bloomberg TV in Tokyo, Mr. Diokno said the central bank has “more room for monetary easing” and vowed more cuts, with the timing depending on upcoming economic developments.

Sought for comment, a bond trader said the result of the T-bills auction was lower than market expectations due to strong appetite in the short end of the curve.

“Aside from the RRR cut, market players also tracked the movement of the US Treasuries,” the trader said in a phone interview.

The Treasury plans to borrow P315 billion from the domestic market this quarter, broken down into P195 billion in T-bills and P120 billion in Treasury bonds.

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 the country’s gross domestic product. — Karl Angelo N. Vidal

Philippine Airlines, PALEA sign collective bargaining agreement

PHILIPPINE Airlines (PAL) and its labor group PAL Employees Association (PALEA) inked a five-year collective bargaining agreement (CBA) that provides for “enhanced employment terms” for the latter’s members.

“The timely conclusion of the CBA negotiations reflected a spirit of mutual collaboration and trust-building between management and labor that focused on finding ways to enhance the welfare of PAL ground rank and file employees in an era of great economic challenges,” the flag carrier said in a statement.

The agreement was signed by PAL Chief Administrative Officer Vivienne K. Tan and PALEA President Edgardo Oredina. PALEA is an organization of about 750 members or around 11% of the company’s 6,829 employees.

“I believe that an open and constructive dialogue with PALEA and other unions must always be done in a spirit of good faith which is key to establishing a strong foundation of partnership,” Ms. Tan was quoted as saying.

For his part, Mr. Oredina said: “We thank PAL Management for its pro-active approach in the negotiations which led to the resolution of key items on the negotiating table. Rest assured, we offer our hand of cooperation and collaboration. Together, we will work as a united PAL family, committed to ensuring industrial peace for the greater good.”

The listed operator of PAL, PAL Holdings, Inc., posted slimmer losses in the first quarter at P838.17 million, driven by the lower flying expenses it recorded due to a reduction in jet fuel prices worldwide. — Denise A. Valdez

Elton slams Russian cuts to Rocketman gay scenes

LOS ANGELES — Elton John on Friday criticized Russia’s reported censorship of gay sex scenes in the new movie musical based on his life, Rocketman, calling the decision “cruelly unaccepting of the love between two people.”

John and the makers of Rocketman, which depicts the warts-and-all rise to fame of the gay British musician, issued a statement after Russian media reported that scenes involving gay sex and drug taking had been cut from a screening in Russia.

“We reject in the strongest possible terms the decision to pander to local laws and censor Rocketman for the Russian market,” John and the filmmakers said.

“That the local distributor has edited out certain scenes, denying the audience the opportunity to see the film as it was intended, is a sad reflection of the divided world we still live in and how it can still be so cruelly unaccepting of the love between two people,” their statement added.

The English-language Moscow Times on Friday quoted a Russian film critic who had seen the film at its May 16 world premiere in Cannes as saying that several scenes, totaling about five minutes, had disappeared from the Russian version.

They include a male sex scene featuring actor Taron Egerton, who plays John, and a photograph during the closing credits in which the “Goodbye Yellow Brick Road” singer is pictured with his real-life husband David Furnish, who was a producer on the film, film critic Yegor Moskvitin was quoted as saying.

The movie, which has won warm reviews, began its worldwide rollout last week.

John, 72, a prominent gay rights campaigner, has previously spoken out against a 2013 law banning the dissemination of “gay propaganda” among young Russians.

In 2015, Russian President Vladimir Putin said he would be willing to meet with John. Although the singer played a concert in Moscow in May 2016, no meeting with Putin took place. — Reuters

DMCI Homes turns over units at Parañaque condo

DMCI Homes has started turnover of units at the first building of Calathea Place, a residential condominium project in Parañaque City.

The turnover process for the eight-storey building, Zebrina, was done in April, six months ahead of its October 2019 committed schedule.

Construction of the three other buildings eight-storey Leonia, and 12-storey high Lavender and Marantina is on-going, and on track for completion next year.

Built along Dr. A. Santos Avenue (formerly Sucat Road), Calathea Place is a 1.54-hectare development designed to be “a place where one can relish serenity while enjoying the comforts of modern city living.”

Amenities include a swimming pool, gazebo, roof deck, an entertainment room, fitness gym, play area, and a game area.

Calathea Place is one of the developments of DMCI Homes, the country’s first Quadruple A real estate companies.

UnionBank lists bonds

UNIONBANK of the Philippines raised P5.8 billion via three-year bonds.

UNIONBANK of the Philippines, Inc. listed P5.8 billion in three-year fixed-rate bonds, which will support its expansion and lengthen its debt maturity profile.

The Aboitiz-led lender issued P5.8 billion in peso-denominated bonds at the ceremonial listing on Monday at the Philippine Dealing & Exchange Corp. (PDEx) in Makati City.

The three-year debt papers carry a coupon of six percent per annum to be paid quarterly until May 2022.

The bank opted to upsize the issuance from the P3 billion it initially wanted to raise after receiving strong demand from institutional and retail clients.

“The main purpose of this really is to lengthen the maturity profile of the liabilities so that we can reduce the gap between the tenor of the loans and the deposits,” UnionBank President and Chief Executive Officer Edwin R. Bautista told reporters following the bell ringing ceremony.

“So it does two things: it gives us more money to lend and at the same time the sourcing of funds, the tenor is also lengthened.”

The Hongkong and Shanghai Banking Corp. and ING Bank N.V. served as the joint lead arrangers and bookrunners of the transaction. The global banks also acted as selling agents alongside UnionBank.

The issuance brings the bank’s total issuance to P16.8 billion, after it raised P11 billion via its maiden bond offering last December with a coupon rate of 7.061% per annum.

UnionBank is programmed to raise fresh funds via fixed-rate bonds amounting to P30 billion.

The lender’s listing brings the total volume of new listings at the PDEx this year to P154.49 billion. Overall, the total amount of outstanding securities listed at the bourse stood at P1.166 trillion, floated by 49 companies.

UnionBank Treasurer and Senior Executive Vice President Jose Emmanuel U. Hilado, in his speech yesterday, hinted at the bank’s return to the offshore bond market, saying the bond’s working team is “simultaneously working on another deal on the dollar side.”

Asked for more details, Mr. Bautista said the dollar-denominated debt note issuance is “highly possible” within the year.

“It depends on how fast can we deploy the funds… As we make more money, our ability to increase our asset book also grows. We should leverage on that,” he said.

In November 2017, UnionBank raised $500 million from the offshore issuance of fixed-rate senior notes under its medium-term note program programmed at $1 billion. Proceeds of the fund-raising activity will be used to refinance existing liabilities, expand funding base and for other general corporate purposes.

UnionBank posted a P2.16-billion net income in the first three months, down 26% from P2.93 billion recorded in the same quarter in 2018.

The bank’s shares closed at P60 apiece on Monday, gaining 20 centavos or 0.33%. — K.A.N. Vidal

Velarde’s Now Telecom plans to offer 5G services

NOW TELECOM Co., Inc. said Monday it is planning to offer fifth-generation (5G) services in the country, in order to keep up with telecommunications giants PLDT, Inc. and Globe Telecom, Inc.

The subsidiary of Velarde-led Now Corp. said in a statement its board had recently approved the adoption of 5G technology for enterprises and homes, which will render speeds of up to 20 gigabits per second (Gbps).

“The Decentralized Gigabit Era is upon us now. 5G will allow high wireless bandwidth in low latency scenarios, allowing for further complex technologies to exist. 5G is necessary for the Internet of Things to thrive. With cloud computing, you can now decentralize the business of telecommunications,” Now Telecom President Rodolfo P. Pantoja was quoted as saying.

The company noted the recent appointment of Mr. Pantoja is part of its strategy to improve its footing as a telecommunications firm in the country. Mr. Pantoja was the chief executive officer of Indonesia’s PT Smartfren Telecom Tbk, which is known for its fourth-generation (4G) long-term evolution (LTE) advanced network.

PLDT and its wireless unit Smart Communications, Inc. have fired up its first two 5G cell sites in late 2018, while Globe is scheduled to launch its 5G network for the home this month.

Aside from its 5G plans, Now Telecom also said its board of directors approved an 11% share swap with its parent Now Corp., which will increase the company’s share in Now Telecom to 30%.

“This will satisfy the congressional franchise requirement for Now Telecom to have the public own at least 30% of the company,” it said, referring to its franchise that was renewed in February last year. — Denise A. Valdez

Chernobyl ends today

THE last episode of the five-part HBO Original Miniseries Chernobyl — about the events surrounding the Chernobyl Nuclear Reactor in the Ukraine which suffered a massive explosion that released radioactive material across Ukraine, Belarus and Russia, and as far as Scandinavia and western Europe — airs today at 9 a.m. on HBO GO and HBO, with a same day encore at 10 p.m.

An encore marathon of all five episodes will air on HBO Signature on June 15 at 10 a.m. Past episodes of Chernobyl are also available on HBO GO.

It stars Jared Harris, Stellan Skarsgård, and Emily Watson.

SMEC Philippines to design railway projects

SMEC Philippines Inc. has been tapped to design the Manila Clark Railway Project (MCRP) North Line and the North South Railway Project (NSRP) South Line.

In a statement, the firm said it will assist the Japan International Cooperation Agency (JICA) Design Team in the preparation of all necessary documents for the detailed design of the civil, structural, architectural, mechanical and electrical works.

“We’re proud to continue our successful partnership with Oriental Consultants Global Co. Ltd on another major commuter rail project that will support economic growth and improve everyday life for people in the Philippines,” Ric Yuzon, country manager of SMEC Philippines, was quoted in the statement as saying.

The MCRP North Line will be a 50.5-kilometer commuter rail stretching from Malolos to Clark City and around 70 km up to New Clark City. It will pass through the town of Calumpit in the province of Bulacan, the town of Apalit and cities of San Fernando and Angeles until reaching the Clark International Airport (CIA) Complex, all in the province of Pampanga.

Meanwhile, the NSRP South Line will span around 56.5 km, starting from Caloocan City to Calamba Station, plus an additional 13 km up to the proposed depot site at the University of the Philippines in Los Baños, Laguna.

Both lines will utilize the existing Philippine National Railway (PNR) right-of-way over their lengths.

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