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TW Steel, Simeon Panda collaborate on The Crunch Time Collection

INSPIRED BY the philosophy of “Seizing the moment,” Dutch watch maker TW Steel and influential British fitness instructor Simeon Panda teamed up for the limited-edition The Crunch Time Collection.

A seven-watch collection, The Crunch Time timepieces are built around the shared belief of TW Steel and Mr. Panda of living the carpe diem life — seeing your goal, reaching out and taking it right here, right now.

TW Steel said the collaboration with Mr. Panda was a fitting one and saw the two parties truly working together to come up with a collection that embodies the “Crunch Time” mentality that they are pushing for and watches that they could be proud of and confident with.

“[Crunch Time] is not so much what the person does but about the mindset. When I met Simeon I knew that even if he was not doing fitness he would still be successful doing other things because his mind is about reaching his full potential. He is always about doing his best and going for it. It is the same with TW Steel. We are never satisfied. We always look for the next thing to prove ourselves. And we connected immediately,” said Jordy Cobelens, CEO of TW Steel, at the media launch of the collection on May 23 at Kerry Sports at the Shangri-la at the Fort in Bonifacio Global City.

“The design process was really a partnership. Simeon had a lot of say in it and was very involved so that when he wears the watches he can feel that this is him in a watch,” added Mr. Cobelens.

It was a setup that suited Mr. Panda well, saying it was a privilege to be asked to collaborate with TW Steel.

“It was a privilege to be a partner with TW Steel for this collection. It’s a nod to what I am doing and I’m very thankful for that. And the collection is amazing,” said the noted fitness instructor and owner of the Just Fit and SP Aesthetics Sportswear, at the launch.

THE WATCHES
The collection, which is composed of the TW985, TW986, TS9, TS10, TS11, TS12 and TS13 models, boasts of the juggernaut 6S20 Chrono Movement from Miyota.

TW Steel’s The Crunch Time Collection timepieces are already available.

The cases are 48mm and crafted from rugged 316L, high-grade steel.

Every watch features a screwed crown, an ultra-durable sapphire coated crystal, and is waterproof up to a depth of 10ATM.

The seven unique designs are inspired by Mr. Panda’s personal fitness brand Just Lift, in clean and mean combinations of dark grey, black, and white.

Apart from the TS13, every model features a characteristic Panda or reverse Panda dial.

The straps come in black silicon with a selection of details such as the Just Lift logo.

The watches are limited to 1,000 pieces each and retail for P20,000, P27,000, and P30,000.

They are available at TW Steel Boutiques at Alabang Town Center, Century Mall, SM Clark, SM Makati, SM Megamall, and SM Seaside Cebu as well as Chronos Boutiques at Shangri-La Plaza and SM North Edsa.

For more information on The Crunch Time Collection, check out www.twsteel.com / @TWSteel. — Michael Angelo S. Murillo

Dennis Uy still open to PXP Energy tie-up

BUSINESSMAN Dennis A. Uy is open to revisiting plans with PXP Energy Corp. for a potential oil exploration venture once government relations with China improve.

“We both agreed to not pursue it because of the uncertainty of the government to government. But we agreed to revisit it once there’s an opportunity,” Mr. Uy told reporters last week after the stockholders’ meeting of another company he leads.

PXP Energy and Mr. Uy’s Dennison Holdings Corp. entered into a subscription agreement in October 2018 where the former will issue 340 million common shares priced at P11.85 each to the latter for a total of P4.029 billion.

In exchange, Dennison Holdings was to give PXP Energy or any of its affiliate companies preferential rights to acquire up to 49% in Phoenix Petroleum Philippines Corp.’s share in its joint venture with China National Offshore Oil Corp. (CNOOC) for the development of a liquefied natural gas project.

Both parties, however, announced the termination of the deal last March, highlighting that the decision was mutual. Dennison Holdings withdrew its P40-million downpayment for the deal following its suspension.

Mr. Uy noted that PXP Energy Chairman Manuel V. Pangilinan has committed to invite the company once government relations progress.

Prior to the termination of the deal, Phoenix Petroleum and CNOOC Gas and Power Group Co. Ltd. signed a memorandum of understanding with state-owned Philippine National Oil Co. for their equity investment in Tanglawan Philippine LNG, Inc.

The Tanglawan project is set to break ground within the year in time for its completion in 2023. It is seen to have an annual capacity of 2.2 metric tons of the regasification and receiving terminal.

On the other hand, Mr. Uy said there are plans to pursue the follow-on offering for his holding firm Udenna Corp. within a year’s time.

“We’re working on it. Baka in a year’s time, depende sa regulator (Maybe in a year’s time, depending on the regulator),” Mr. Uy said.

Udenna is in the process of conducting a share swap with listed firm ISM Communications Corp., which will involve the issuance of 24.058 million ISM shares to shareholders of Udenna in exchange for two billion Udenna shares.

ISM’s public float will fall to about 10% after the share swap. The company earlier said the target would be to increase public ownership to 15-20% during the secondary offering.

At the same time, ISM has proposed to increase its authorized capital stock to P75 billion from P2.8 billion to support Udenna’s entry. ISM’s name will then be changed to Udenna Holdings Corp.

The transaction is still pending approval from the Securities and Exchange Commission.

Udenna’s business interests include fuel and oil, telecommunications, logistics, hospitality, education, and convenience stores. — Arra B. Francia

Farm insurance coverage at record 2.27 million in 2018

THE insurance rate among farmers and fisherfolk has increased to 33.52% in 2018, hitting a record 2.27 million, the Philippine Crop Insurance Corp. (PCIC) said.

In a statement, the company said the number of insured rose from 1.7 million in 2017, and more than twice the 1.09 million in 2016.

“The assets covered included for the most part rice, corn and high-value crop farms totaling 1.845 million hectares in 2018, which is 39.04% greater than the 1.327 million insured in 2017,” PCIC said in the statement.

“In terms of indemnity payments, the PCIC paid out P3.397 billion in 2018, 75.37% more than the P1.937 billion paid in 2017. Most insured farmers and fisherfolk numbering 442,035 received the payments in 20 days or less according to PCIC’s improved and ISO-certified systems,” it said.

PCIC was given a top rating in the corporate governance scorecard issued by the Governance Commission for GOCCs (GCG).

It scored 100.5 in corporate governance. GCG uses this evaluation to assess government firms’ observance of best practices and international standards of corporate governance.

The PCIC is the only GOCC that provides agricultural insurance. It insures rice and corn, as well as high-value crops, livestock, fisheries, non-crop agricultural assets, and credit and life insurance.

The Department of Finance (DoF) said it plans to convert the PCIC into a reinsurer in order not to compete with private insurance providers.

House Bill 6923, An Act Strengthening the PCIC written by Representative Arthur C. Yao, which authorizes the PCIC to engage in index-based insurance and reinsurance, was approved on third and final reading in April.

The DoF is awaiting the counterpart bill to be filed by Senator Cynthia A. Villar, who heads the chamber’s Committee on Food and Agriculture.

An option to privatize the PCIC is also on the table, but this will depend on legislation. — Vincent Mariel P. Galang

For a touch of Grace Kelly, here are pearls from Monaco

HAS IT really been that long since Grace Kelly was said to have uttered, “I favor pearls on screen and in my private life”? The famous American actress wed Prince Rainier III of the small principality of Monaco, becoming Princess Consort, lending her image to the small nation. During her husband’s reign, reforms to the constitution changed the country’s economic gambling base to its current role as a tax haven for the rich. This then gave the country a reputation of expensive living. In any case, the princess died in 1982, leaving behind a legacy of quiet elegance.

The name of Monaco is important to jewelry brand Misaki Monaco’s image, as it is this legacy that they wish to tap.

“It’s glamor, it’s luxury — it’s a nice love story,” said Stephane Alech, President of Misaki Monaco, alluding to the publicity-rich marriage of the prince and the Hollywood star. “We’re really proud to come from Monaco.”

Misaki itself was born of a love story between its founders, a French photographer and a Japanese illustrator. The brand was founded in 1987, but was acquired by the Alech couple about five years ago. The brand may ring a bell: it frequently sells on airlines and airports, specializing in cultured pearls and “handmade” (read: faux) pearls.

Mr. Alech points to the brands accessibility as in-flight purchases due to their duty-free status. However, he says that they have begun expanding to domestic locations: “We want to extend the market and touch more customers.” The brand has a store in the country at Shangri-La Plaza. It also has stores in over 40 countries and is stocked in more than 30 airlines.

The pearls are cultured, meaning it’s through a process of nature ushered along by man, or else completely handmade by a worker. It might be easy to sniff at the idea, but then remember that the well-worshipped Gabrielle “Coco” Chanel started a fad for wearing veritable mounds of fake pearls. She defended her choice, reportedly saying, “It’s disgusting to walk around with millions of dollars around the neck because one happens to be rich. I only like fake jewelry… because it’s provocative.”

In any case, the pearls are cultured with a special process that lends to them a brighter sheen than the real thing (a nucleus made of quartz, the first step of the process, might be the key).

Lots of pearls are farmed and sold in the Philippines, but Mr. Alech also says about the product that their edge rests on design: “We kept the emblematic and timeless spirit of the pearl,” he said, but, “We really tried to put more modernity and more design.”

He also points to the brand’s anchoring in its headquarters of Monaco (the pieces are designed in Monaco, but made in Japan): “It’s a guarantee of quality and security.” — Joseph L. Garcia

Fab fun with the Forester

Words and photos by Manny N. de los Reyes

WHEN YOU want to go trekking through mud and sand and driving over rocks and even across a river, you’d normally bring a dedicated 4×4 like a tricked out old Land Cruiser, Defender, or Wrangler — not a shiny, luxurious crossover.

But we did just that — all of that — with a brand spanking new Subaru Forester.

Why?

Because it can do it. All of it.

Like most crossovers, the Forester shares its platform with its sedan sibling — in the Forester’s case, the Impreza.

But that’s as far as the Forester’s similarities with most other crossovers go. And that’s because the Forester is made by a company that has practically been synonymous with all-wheel drive.

And which is also why Subaru was daring enough to take their popular SUV and have more than 20 members of the Philippine motoring media take a crack behind the wheel, not just on the high-speed expressways of NLEX and TPLEX, not just on a spirited blast on the northern provinces’ national roads, but also for some playtime on rough dirt roads and a couple of river crossings.

You don’t do this with your everyday crossover.

While most compact and subcompact SUVs and crossovers are front-wheel drive and send their torque only to the rear wheels when needed, Subarus send power to all four wheels — all the time. Subaru’s Symmetrical All-Wheel Drive gives the cars that extra traction at all speeds and in all road conditions — giving its driver and passengers that extra capability and margin of safety.

The 2019 Forester has been reengineered to include a host of enhanced features, resulting in a balance of easy, confident handling and a spacious, comfortable interior — attributes we all appreciated on our extensive on- and off-road experiences over two days.

Safety, technology, and performance continue to be top priorities with the inclusion of a strong suite of active safety features that comprise Subaru’s core technologies: Subaru Global Platform, Symmetrical All-Wheel Drive, Boxer Engine, and the new — and very effective — EyeSight Driver Assist technology.

The Forester is powered by a 2.0-liter normally aspirated (no Turbo version in the current model) direct-injection boxer engine. Gear shifts are now done via new seven-speed (in manual mode) continuously variable transmission (CVT).

The new Forester rests on the Subaru Global Platform, which delivers a safer, smoother driving experience by having less shake and body roll while reducing road noise. True enough, it was a pleasure sitting in the back seat of the Forester and relishing the smooth and silent ride and the generous increased legroom — much like being in an executive sedan (but with much better outward visibility).

The Forester comes with X-MODE function, which enhances driving performance on challenging terrain through optimized integrated control of the engine, all-wheel drive, brakes and other functions. Drivers can activate X-MODE via a new dial switch to transition from Normal to Dirt to Snow and Mud. This feature made it almost a no-brainer when we traversed the rock and pebble-strewn sandy riverbed. The generous 220mm ground clearance made short work of the river. We just had to look out for the small boulders — made easy by the excellent visibility. Even with riding comfort-oriented all-terrain tires, the Symmetrical AWD gripped the sandy bed like a crab grabbing its prey with its claws. Even with two carmates having no experience driving on soft sand, let alone through a river, our Forester went straight through the two knee-deep rivers we crossed without breaking a sweat.

The cool, new feature on the 2019 Forester is EyeSight, an advanced driver assist technology that includes Automatic Pre-collision Braking, Pre-Collision Throttle Management, Adaptive Cruise Control, Lead Vehicle Start Alert, Lane Departure and Lane Sway Warning. EyeSight proved its worth, when on one occasion, the vehicle in front of us braked hard suddenly, the system braked even before our driver could react. Fabulous!

In addition, features such as Auto Vehicle Hold and Subaru Rear Vehicle Detection (SRVD) are also available on the new model. Auto Vehicle Hold works to reduce driver fatigue by keeping the vehicle still when the driver’s foot is removed from the brake pedal while the vehicle is stopped. SRVD uses radar sensors installed on the rear of the vehicle to detect objects and vehicles behind and alerts the driver with its three main functions: Blind Spot Detection, Lane Change Assist and Rear Cross-Traffic Alert.

The new Forester also introduces redefined interior features such as divided seatback pockets, USB charging ports and air-conditioning vents behind center console, bringing a more luxurious riding experience for the passengers. Aside from the added rear legroom, the latest Forester also boasts increased cargo room with a wider rear tailgate opening. There is also an available power rear tailgate.

The new Forester uses extensive high-strength steel that delivers durability and rigidity. The ruggedness of the SUV is further underscored with the raised body, claddings and underguard, coupled with well-defined fenders with prominent protrusions. The updated design pays homage to the model’s earlier predecessor — hence the resemblance — with subtle updates on the grille, headlights and tail lights. It’s almost as if Subaru does not want us to forget its legendary go-anywhere heritage.

All things considered, ninety-nine percent of all crossovers can do what the Forester does. But this Subaru is the one percent that can do more. Much more.

Onboarding the un(der)banked

With the emergence of the Internet in the 1990s and the improvement in broadband in the early 2000s, online banking has started becoming the norm.

Fast forward a decade later, the adoption of smartphones has further accelerated the use of doing financial transactions online. This decade saw the development of financial technology (fintech) companies and other online-based platforms as they offer alternatives to doing business over the counter.

Authorities such as the Bangko Sentral ng Pilipinas (BSP) are aware of this as they incorporate the trend of digitalization in their financial inclusion efforts, recognizing that there are more people that have mobile phones than they are with bank accounts.

The BSP’s latest Financial Inclusion Survey published in July 2018 found that as of 2017, 52.8 million or around 77.4% of Filipinos do not have formal bank accounts, with 60% having insufficient money to maintain one.

“Over the past three years, the BSP issued key regulations that form the foundational elements of digital financial inclusion: democratized access to a transactional account; ubiquitous cash-in and cash-out points; and an account-to-any account electronic fund transfer schemes,” BSP Deputy Governor Chuchi G. Fonacier said in an e-mail to BusinessWorld.

According to the BSP’s “Financial Inclusion in the Philippines” (FIP) publication (Issue No. 8, series of 2018), digital financial inclusion — which is the “digital access to and use of formal financial services by the underserved population” — has five key components: the presence of new providers and new combination of providers; digital technology; the use of third-party agents that will offer financial services on a provider’s behalf; new products and services; and the presence of financially unserved and underserved customers.

“An account is a first step into digital financial inclusion [as it is] a gateway to access the whole range of welfare-enhancing financial products and services,” Ms. Fonacier said.

“To promote ownership of account, we need to address two key things: (1) make it easy and affordable for anyone to open an account; and (2) make an account useful not only as a store of value but also as a practical tool for various financial transactions, particularly payments and remittances which are most relevant to the low-income segment,” she added.

Ms. Fonacier cited some of the BSP’s initiatives in fostering digital inclusion, among them Circular No. 992, which provides “no-frill, low-cost, and easy to open” basic deposit accounts that enable the unbanked population to make payments via an electronic device; Circular No. 940 that enables banks to tap third-party cash agents; and Circular No. 987 that allows banks to set up “branch-lite” offices geared towards extending full banking services to the underbanked and underserved areas.

“These regulatory initiatives facilitate both accessibility and utility of a financial account — which can significantly boost account penetration. As we move forward, the BSP will intensify coordination with various stakeholders to further promote compelling use cases for transaction accounts and digital payments. These include electronic bills and government payments platforms, and a wide base of merchant accepting QR-code enabled payments,” Ms. Fonacier said.

Ms. Fonacier likewise cited the passage of Republic Act No. 11127 or the National Payments Systems Act wherein it gave the BSP oversight power over payment systems. For regulatory purposes, payment system operators such as banks and electronic money issuers are required by law to register with the BSP.

The central bank official also mentioned the BSP’s support of the government’s Philippine Identification System (PhilSys) ID, which is seen to “boost account ownership and further enable innovations in digital finance.”

Under the national ID system, each resident will be assigned a 12-digit PhilSys Number that can serve as their digital identity across multiple platforms. This reform is expected to help improve access to credit especially for the unbanked as many are currently not able to open accounts due to lack of valid IDs.

The government is hoping to start registrations soon for the national ID, targeting to sign up at least seven million Filipinos this year. By 2023, authorities are expected to complete the registration of Filipinos and resident aliens to accelerate authentication procedures in delivering access to government and financial services.

‘FOOT IN THE DOOR’
According to the BSP’s FIP publication, digital financial inclusion is “closely associated” with being “cash-lite,” a state where electronic fund transfers and payments dominate cash transfers.

However, Ms. Fonacier said that even though having an enabling regulatory environment is critical and necessary in digital financial inclusion, it is not sufficient.

“Concerted and deliberate effort from the various government agencies and the private sector is needed to implement programs to develop compelling use cases for digital payments and transaction accounts. This is the focus of our digitization advocacy,” she said.

The private sector has taken note of the BSP’s initiatives.

“The BSP… has been very receptive of fintech developments, so much so that they have even led the charge in automating our clearing houses through InstaPay and PESONet (Philippine Electronic Fund Transfers System and Operations Network). We are positive that with developments such as this, we will be able to migrate most of financial transactions in the country to digital in the next several years,” said Orlando B. Vea, founder and chief executive officer (CEO) of Voyager Innovations, Inc. as well as president and CEO of PayMaya Philippines, in an e-mail.

Mr. Vea, who is also chairman of the Philippine eMoney Association, was referring to the two automated clearing houses already in operation. A third one (“PhPay”) that looks to process for government services and even the state’s fund releases to individuals is slated to be out within the year.

“PayMaya, as an e-wallet, has become the foot in the door for many unbanked and underserved Filipinos to be part of the financial mainstream. For local governments… our PayMaya Super ID has become their way to disburse cash benefits to their citizens and at the same time served as an identification card of their citizens. This move helped them make government services more efficient for LGUs (local government units) and convenient and transparent for citizens,” Mr. Vea said.

PayMaya, formerly known as Smart eMoney, is an online application that serves as a virtual prepaid card for online markets, bills payments, and money remittance.

Justin Leow, head of Business Operations at Coins.ph, noted an “accelerating adoption” in using the platform as they roll out more products and services.

“Coins.ph has found success in leveraging the widespread adoption of smartphones to enable millions to have access to financial services in a cheaper and more convenient manner that wasn’t possible before. Similarly, we have also been able to leverage blockchain technologies to lower the costs of remittances, and data to deliver more personalized services,” Mr. Leow said.

“Coins.ph and the BSP have shared a collaborative relationship over the last number of years as we work to promote financial inclusion in the Philippines. While we can’t speak directly for the BSP, our missions in this regard have been quite aligned and we have had productive discussions on how platforms like ours are working to improve financial access in the country,” he added.

WHAT ABOUT THE BANKS?
With their established presence in the financial system, banks are also looking to cash in on the digitalization game.

“Digitalization enables banks to efficiently and effectively reach out to and financially include the unbanked through products and initiatives such as mobile banking, cash cards, eKYC (“Know Your Customer” processes using digital channels),” Security Bank Corp. said in an e-mail.

“Security Bank’s main target market is the ‘mass affluent’ segment. Most of the banked only have one financial product so our approach to this segment in terms of digital financial inclusion is to address their pain points when it comes to availing bank products and services. For example, through the eKYC project, we were able to ease the process of opening a bank account. Customers can open a bank account anytime and anywhere just by using a smartphone,” according to Security Bank’s e-mail response that is attributed to its Vice President and Head of e-Commerce Mark Joseph A. Bantigue.

Security Bank also mentioned the introduction of its mobile-based Salary Advance (SALAD) loan facility. Launched in 2017, the lending scheme allowed employees of accredited companies to avail of short-term loans with affordable installments.

“SALAD has continued to allow us to close payroll arrangements with the top BPOs in the country and offer affordable financing solutions than the informal lenders,” said Security Bank Senior Vice-President and Head of Consumer Business and Operations Abigail Marie D. Casanova.

For Union Bank of the Philippines, Inc. (UnionBank) Executive Vice-President and Chief Mass Market and Financial Inclusion Executive Manuel G. Santiago, Jr., the bank has been a “solid and consistent proponent of digital financial inclusion,” citing its digital banking platform EON where customers can open accounts online instantly without any need for a maintaining balance or paying for fees and penalties.

“When we talk about financial inclusion, we mean access to financial services and access to credit. Our digital bank addresses both concerns. We are also creating synergy with the rural banks that we have purchased by providing the EON platform to these banks,” Mr. Santiago said.

He said that EON has partnered with PeraHub to bring financial services to rural areas.

Meanwhile, CitySavings Bank, Inc., UnionBank’s thift banking arm and known for its teachers’ loans, is expanding its offerings to include overseas workers and pensioners.

“With its acquisition and merger with [Philippine Resources Savings Banking Corp.], CitySavings has further diversified its business and has entered the motorcycle loan market,” he said.

For Bank of the Philippine Islands (BPI) President and CEO Cezar P. Consing, BPI’s programs of financial inclusion in the countryside is being addressed through building out their BPI and BPI Family Bank branches at “between 10-20 branches a year” as well as building out branches of BPI Direct BanKo, their microfinance arm that provides financing to self-employed micro-entrepreneurs.

“We are building out 100 BanKo branches a year. By the end of this year, we expect to have 300 BanKo branches,” he said.

Mr. Consing explained that with BanKo being fitted with full digital capabilities, it will serve as a “good example of two marriages” — that of between branch and digital and between digitalization and financial inclusion.

For Mr. Consing, BPI’s goals of being a leader in digital banking and being one of the most “financially inclusive” are tied.

“Digitalization will reduce our cost to serve. A digital transaction is much cheaper to execute than a transaction done over the counter. So digitalization will allow us to serve a much greater proportion of the population, including people who may not have the means to leave a lot of money in their deposit accounts,” Mr. Consing said.

“Digitalization will make financial inclusion truly sustainable,” he added. — Marissa Mae M. Ramos

T-bill, bond rates likely to drop

RATES OF THE government debt on offer this week will likely decline further amid healthy demand after the central bank trimmed the reserve requirement ratio (RRR) for both commercial and thrift banks.

The Bureau of the Treasury (BTr) is offering P15 billion worth of Treasury bills (T-bill) today, broken down into P4 billion and P5 billion for the three- and six-month instruments, respectively, and P6 billion in one-year papers.

The BTr will also offer on Tuesday reissued 10-year Treasury bonds (T-bond) amounting to P20 billion with a remaining life of nine years and seven months.

Two traders said the rates of the T-bills will move lower by five to 10 basis points (bp) across all tenors from the previous auction.

Last week, the Treasury borrowed P15 billion as planned at its T-bills auction. Total bids reached P50.3 billion, more than thrice the amount it wanted to raise. Yields on the 90-, 182- and 364-day papers slipped to 5.258%, 5.7% and 5.869%, respectively.

Based on the PHP Bloomberg Valuation Service Reference Rates, the three-month, six-month and one-year papers were quoted at 5.359%, 5.694% and 5.895% on Friday.

“Strong demand may persist across the offering as dealers and investors alike are expected to position ahead of the first tranche of the RRR cut effective May 31,” Robinsons Bank Corp. trader Kevin S. Palma said in a Viber message.

The Bangko Sentral ng Pilipinas will slash reserve requirements of lenders by a percentage point effective May 31 to 17% for universal and commercial banks, 7% for thrift banks, and 4% for rural and cooperative banks.

A percentage point cut in big banks’ RRR will likely unleash P90-100 billion into the financial system, while another P22 billion is seen to be released due to a 100-basis-point cut in the reserve ratios of smaller lenders.

“We expect that by next week, the market will price in the expectation of additional funds,” a bond trader said in a phone interview.

For the 10-year bonds, the trader said its rate will likely range between 5.65-5.7%, which if realized will be lower than the average rate fetched when the papers were last offered in April.

The government borrowed P15 billion as planned via reissued 10-year bonds on April 11, receiving bids totalling P46.468 billion. The 10-year debt notes, which carry a coupon rate of 6.875%, fetched an average yield of 5.954% at that auction.

At the secondary market on Friday, the 10-year papers were quoted at 5.709%.

“Average yield is expected to land within 5.675% to 5.725%,” Robinsons Bank’s Mr. Palma said.

“Market could track lower US Treasury yields which dipped to levels not seen since December 2017 after FOMC (Federal Open Market Committee) minutes reflected that the Fed (US Federal Reserve) is not so keen to be moving its rates in either direction amid the intensifying trade dispute between US and China,” he added.

The other bond trader noted that the market will flock to safer securities such as bonds as the trade spat between the world’s two largest economies intensifies. — Karl Angelo N. Vidal

SMPC remits P3.57 billion in royalties to government

SEMIRARA Mining and Power Corp. (SMPC) remitted lower royalties to the Department of Energy (DoE) in 2018 at P3.57 billion, as it recorded a drop in coal sales volume for the year.

In a statement over the weekend, the integrated energy company said the royalties — or the government’s share in its mining revenues — was 17% lower than the P4.3 billion it remitted in 2017. This came after an 11% decline in coal sales volume to 11.6 million metric tons (MMT) from 13.1 MMT.

About P1.43 billion of the royalties will be distributed to SMPC’s host communities: Barangay Semirara will get about P500 million, the municipality of Caluya will receive P642 million, while the province of Antique will get P285 million.

This brings SMPC’s remittances to the national government to more than P21 billion since it was acquired by Consunji-led DMCI Holdings, Inc. in 1997. The remittance is in line with Republic Act No. 7160, which mandates that local government units are entitled to a 40% share of royalty proceeds from petroleum, coal, geothermal, hydrothermal, and wind resources.

“Our partnership with DoE allows us contribute meaningfully to the economy of our host communities. Aside from royalties, we also generate employment in Semirara Island and nearby areas,” SMPC President and Chief Operating Officer Maria Cristina C. Gotianun said in a statement.

The company directly employs more than 3,300 people in its mine site, making it the biggest employer in Semirara Island and Caluya.

SMPC reported a 49% drop in earnings to P2.33 billion in the first quarter of 2019, weighed down by an 18% decline in coal prices to P2,272 per ton during the period from P2,786 per ton last year.

Despite its slower performance, SMPC remains to be the largest contributor to DMCI Holdings’ net income at P1.42 billion, 49% lower year on year.

Overall, DMCI Holdings saw its net income slump by 26% to P2.87 billion in the first quarter, from the P3.86 billion it posted in the same period a year ago. Revenues also slipped by 3.2% to P19.65 billion. — Arra B. Francia

Agriculture dep’t lifts ban on hog products from Japan

THE Department of Agriculture (DA) has lifted the temporary ban on imports of farmed and wild pigs and other hog products from Japan.

In Memorandum Order No. 11, series of 2019, Secretary Emmanuel F. Piñol said the Bureau of Animal Industry (BAI) has found that the risk of contamination from classical swine fever of pig and pig products from Japan is negligible.

Products such as domestic and wild pigs including pork, pig skin, and semen from Japan can be shipped again to the Philippines.

“All import transactions of the above products shall be in accordance with existing rules and regulations of the Department of Agriculture, Bureau of Animal Industry and National Meat Inspection Service (DA-BAI-NMIS),” he said.

Mr. Piñol earlier ordered a ban on pork imports from Japan in February after reports of African Swine Fever (ASF) in that country. There were four separate cases in Japan in January, and seven cases were confirmed between October and January involving pork inspected at domestic airports.

ASF is a non-treatable and contagious, and can kill swine in as little as two days.

Other territories affected by the virus are China, Hong Kong, Cambodia, Vietnam, Hungary, Belgium, Latvia, Poland, Romania, Russia, Ukraine, Bulgaria, the Czech Republic, Moldova, South Africa and Zambia. — Vincent Mariel P. Galang

Tips on starting a jewelry collection

Adornata’s Veronica earrings, a multiwear mismatched set made of round and pear cut rhodolite, marquise cut amethyst, cushion cut citrine and white topaz, set in 10 karat solid yellow gold.

JEWELRY can melt even the hearts of the coldest cynics. The shine and sheen of precious stones, according to a study by Belgian researchers, turn on the brain and tap into the primeval search for water, explaining our attraction to shimmering surfaces.*

That’s your primeval brain talking, but then, in a world as messy as ours, maybe when we gaze into the depths of a jewel, what we’re looking for is the security and perfection that we can’t find in this world. BusinessWorld trooped to a trunk show by young jewelry brand Adornata earlier this month, which was similarly flocked by young actresses and older socialites.

Chynna Gonzalez, Adornata’s founder, brought out for this season a line of classic diamonds (tennis bracelets and the like), in contrast to her previous collection of flamboyant pieces taking inspiration from the Venetian Festa del Redentore, a festival that celebrates the city’s freedom from the Black Plague through fireworks. The simplicity of the new line brought on a discussion of the right jewelry purchases for a young woman.

First off, when it comes to jewelry, there’s no such thing as age. “I personally don’t believe in age-appropriate jewelry — from someone who wear a two-carat diamond everyday,” said Ms. Gonzalez, pointing to an heirloom ring from her grandmother. The two-carat center stone was flanked by baguettes that formed the illusion of wings. Certainly a piece ahead of its time then, but today a grand piece. For those who don’t favor the antique settings on antique jewelry, she may reset and redesign the stones, but warns that about 12% of the gold’s weight is lost in the process.

“Even though my pieces look young, the clients for those are mixed too — the young and the young at heart.”

Ms. Gonzalez’s brand, Adornata, is anchored on earrings in precious stone and precious metals that can be taken apart and built again in different configurations: say, a dangler from her collection can be taken apart and worn as a stud, or a stud with a halo. “You feel like you’re getting more value for your money. It’s functional luxury.”

For starter collectors, she immediately says, “Always invest in gold, gold, gold.”

“You can easily track the weight, the value, and it has not gone down in like, 10 years.”

Diamond studs seem like a charming addition to a small collection, but she warns, “The resale value is kind of low. If there’s no certification, they kind of debate on the value of the diamond.”

For those who aren’t serious about the investment game, and just really want to build a jewelry collection for the sheer beauty of it, Ms. Gonzalez has a tip: “Go to a jeweler that you trust, and bring a picture, whatever. Tell them your budget.”

Ms. Gonzalez says that jewelers like her can execute more expensive designs with the use of lower-priced stones — Ms. Gonzales refrains from calling them semiprecious stones. “They’re really all precious stones, there are just tiers.” — J.L. Garcia

*https://www.dailymail.co.uk/sciencetech/article-2543625/My-precious-Scientists-discover-attracted-shiny-objects-say-key-inbuilt-desire-water.html

Honda Brio: A first drive

Words and photos by Ulysses Ang

PAUSE for a minute and imagine everything that a small car is. Ugly, terrible to drive, cramped — these are just some of the words used to describe what’s commonly considered as the lowest tier in motoring: the subcompact or A-segment car. Now, open your eyes and see the 2019 Honda Brio. It’s the most affordable car in Honda’s stable, yet it manages to adhere to everything the Japanese car maker stands for.

Everything starts with the styling. Compared to the startled look of the first-generation Brio, this new one looks every inch more refined. Lengthened by close to 200mm, the stance is less awkward now. It keeps the front doors from the first-generation model, necessitating the continuation of that sharp side crease, though everything else is new. There are still some angles where it looks tall and skinny, but for the most part, it looks great. The Mobilio headlights do well to visually widen the front, despite the identical width with its predecessor, while the formal steel hatch at the back removes the sourness that most complained about before.

Despite carrying on with the first-generation Brio’s platform, the wheelbase’s been stretched by 60mm. While that sounds like a miniscule number, it plays dividends in making the interior much more habitable. Jumping directly to the back, knees no longer scrape against the front seats anymore. The redesigned hatch also gives birth to more headroom, and with it, adjustable headrests. There’s a claimed capacity of three in the back, but in all honesty, fitting two regular-sized motoring journos is the most possible. Even more impressive is the larger cargo hold. Grown by 83 liters, it now allows large pieces of luggage to fit without having to reduce the passenger count to two (there’s no split-folding function here).

Improved as the Brio is from the back, it’s from the front where it truly shines. Borrowing the Mobilio’s angular dashboard, it’s straightforward to use. Compared to other subcompacts out there, the seating position is lower and sportier, aided by a well-positioned meaty three-spoke steering wheel and easy-to-read gauges. Like the first-generation Brio, the front seats have fixed headrests (except for the RS), but are comfy even for long drives. The Brio scores big for its sturdy construction, amount of storage spaces, and easy-to-use digital type air-conditioner, too.

Perhaps Honda’s gamble is their decision to swap the previous generation’s 1.3-liter engine for a 1.2-liter one. The downsized motor gives up 10hp and 17Nm of torque in a car that weighs just one kilogram lighter than before (22kgs more with the RS). On the surface, it seems Honda’s levying a performance penalty to make it more affordable, but thankfully, that’s not the case.

Getting the most out of the engine still requires wringing the accelerator, but it’s confident enough to hit the highways. It can feel taxed with three people and luggage onboard, but the engine isn’t at all vocal thanks to impressive NVH; plus, it’s smooth and refined even at high rpm. Swapping the traditional automatic for an Earth Dreams CVT should have dulled the responses, but it’s actually quite the opposite. It picks up speed pretty quickly, at least until the needle reaches 120 km/h. Fuel economy is also good, registering 14.5 km/L in a mixed city/highway route (about 10 km/L in the city).

With a carryover platform that’s, in turn, based off the first-generation Jazz, the Brio keeps its crown as the best handling A-segment car. The steering has this immediacy that the chassis could match. This tandem makes the Brio a great dance partner; the only car in this price range confident enough to tackle winding roads and sweeping corners. What’s even better is the ride hasn’t been affected at all; it’s actually softer than the previous generation while also being impervious to road cuts or potholes.

The name “Brio” means verve in Italian and with that, Honda managed to choose a very apt name. Just as the first-generation Brio presented itself as a fun-to-drive small car, this second-generation model successfully continues that trend. Honda’s penchant for making a well-engineered car continues here, and with that, enthusiast will reap the benefits by having a choice with qualities that exceed its class.

Full foreign bank entry, (almost) five years in

UP UNTIL May 1994, no foreign bank was permitted to enter the country apart from four foreign lenders that were already operating at that time. In February 1995, the Bangko Sentral ng Pilipinas (BSP), under Republic Act (RA) No. 7721, approved the application of 10 out of 22 foreign banks that had expressed interest. Under RA 7721, only when one of the 10 banks pulls out could another offshore lender enter the Philippine financial system.

RA 10641, which was signed by then-President Benigno S. C. Aquino III in July 2014, removed that limit, allowing foreign banks to invest in subsidiaries, buy into existing local banks or set up branches, so long as domestic banks — or those majority-owned by Filipinos — own at least 60% of the resources or assets of the Philippine banking system.

Since then, the BSP has approved 12 foreign bank applications. The latest to set up operations is Industrial and Commercial Bank of China Ltd., the first Chinese bank to do so in recent years after the Bank of China’s entry in 2002.

As of March 2019, there are 29 offshore lenders operating in the Philippines, with 24 of them operating as foreign bank branches while the remaining five are foreign bank subsidiaries.

BusinessWorld’s banking report covers 26 of those foreign lenders, of which they hold a combined five percent of the Philippine banking industry’s total loan portfolio and 7.3% of its total assets as of the first quarter of this year.

This means that the economy can still accommodate more foreign banks if it wants to with the foreign banks’ aggregate share remaining well below the 40% asset ceiling.

“The BSP welcomes foreign players to promote healthy competition in the banking sector and at the same time attract additional foreign direct investments, international expertise in customer service and financial technology innovation,” said BSP Deputy Governor Chuchi G. Fonacier in an e-mail to BusinessWorld.

Ms. Fonacier said that the Philippine economy’s “strong macroeconomic fundamentals” as well as the steady growth of its banking system remain to be the “sweet spots” that make the Philippines an attractive destination for investments and foreign bank entry.

Affirming this, Ms. Fonacier said, were two things: the upgrades of the Philippines’ banking industry country risk assessment (BICRA) score in February 2019 that is “anchored on the strengthened supervisory powers and monetary functions of the BSP” and the country’s long-term sovereign credit rating earlier this month.

S&P upgraded the Philippines’ BICRA score to group 5 from group 6, citing “improvement in the institutional framework of the country’s banking system” with enactment of RA 11211 of which key features include providing full legal support for central bank officials and employees as they carry out their mandate of inspecting and penalizing banks and other supervised financial businesses.

Meanwhile, S&P raised the Philippines’ long-term sovereign credit rating to “BBB+” from “BBB” — just a step away from a single “A” tier rating. Furthermore, the rating was also assigned a “stable” outlook, indicating the country is likely to maintain the grade in the next six months to two years as the economy is expected to remain strong over the medium term.

“Other growth opportunities include the integration of the ASEAN economies, huge demand for infrastructure projects/business developments, and financial inclusion,” Ms. Fonacier said, referring to the Association of Southeast Asian Nations.

Malaysian lender CIMB Bank is among those who had expressed interest in entering the Philippine market.

“The Philippines has definitely been a potential market for CIMB Group even before the entrance of foreign banks has been liberalized in the country,” said Vijay Manoharan, Chief Executive Officer of CIMB Bank Philippines, Inc. (CIMB Philippines).

CIMB has long been eyeing to venture into the Philippine market as it previously tried to acquire a controlling stake in San Miguel Corp.’s Bank of Commerce back in 2012.

The Malaysian-based lender formally launched its banking operations in the country last February, more than a year after it received the central bank’s approval.

Mr. Manoharan cited economic indicators that made the Philippines an attractive market which include its fast-growing economy, high Internet penetration, and a rising electronic commerce (e-commerce) ecosystem.

“The growing presence of online aggregators, delivery services and related platforms suggests a demand for online services and solutions in the market. In line with our product proposition, the top two projected payment methods in the e-commerce space are e-wallets and bank transfers by 2023,” Mr. Manoharan said.

“Companies from other industries are continuously building and developing new and innovative products that cater to providing convenience to the market, and it’s about time that the banking industry in the Philippines adapts to the digital and mobile lifestyle of the market,” he added.

The Malaysian banking giant is positioning to be the first “all-digital, mobile-first” bank in the country. Last Dec. 2018, CIMB Philippines formally launched its mobile application OCTO, to which local users can now open a deposit account without going to a physical branch.

“Our customers do not need to look for a physical bank branch to have a basic savings account and transact,” Mr. Manoharan said.

In contrast to CIMB’s recent entry, Citibank, N.A. (Citibank Philippines) has been in the Philippine banking scene for more than a century.

“In its 117-year history in the Philippines, Citi has encountered and successfully navigated several economic cycles. This highlights not only Citi’s resilience but also its long-term commitment to the Philippines,” said Citibank Philippines’ Chief Executive Officer Aftab Ahmed.

Mr. Ahmed noted that the bank’s evolution in the Philippines has been “multi-faceted.”

“In 1990, Citibank launched its first Philippine-issued credit card and pioneered wealth management for its consumer clients. In 1994, we became the settlement bank for the Philippine domestic dollar transfer system and introduced Citiphone banking,” Mr. Ahmed said.

“Our goal in the Philippines has always been to leverage our global network as well as our local, regional and global technology platforms to deliver superior financial services and solutions to our clients. Today, Citi Philippines has more than 8,000 employees and that number continues to grow,” he added.

BENEFITS
BSP’s Ms. Fonacier underscored RA 10641’s importance as it paved the way for the entry of more foreign direct investments as well as employment opportunities.

“The establishment of foreign banks’ presence in the Philippines will also increase the banking system’s ability to compete in the globalized environment to better manage the growing economy’s cross-border commerce,” Ms. Fonacier said.

“The full liberalization on the entry of foreign banks is likewise expected to contribute to the promotion of healthy competition in the banking industry, resulting in greater market penetration and more efficient delivery of financial products and services. Moreover, it is expected that there will be sharing or exchange of more quality management and governance practices as well as technology innovations and usage contributing to the overall operational efficiency of banks,” he added.

For technological innovations, this may appear to be case judging by CIMB’s and Citibank Philippines’ massive adoption of digital technology in their product offerings.

“[I]nnovation is our lifeblood,” CIMB Philippines’ Mr. Manoharan said.

“[I]t is something that we try to do constantly based on the market needs and feedback that we get from our customers. We do have services and products that we will be launching and we are very excited to tell everyone about them,” he added.

CIMB Philippines currently offers two types of savings accounts named the Fast and Fast Plus accounts, which let customers open an account through its OCTO mobile app within 10 minutes.

The savings accounts come with a Visa-powered debit card to allow withdrawals from 20,000 Bancnet, Visa and Visa Plus automatic teller machines (ATM) in the country, on top of two million Visa ATMs worldwide.

CIMB Philippines also offers an UpSave account which offers a yearly interest rate of 2.5%.

CIMB also offers personal loans wherein customers get instant initial approval and next day disbursement to any local savings account.

For Citibank’s Mr. Ahmed, bringing innovation to the marketplace is an “ongoing goal.”

“We are committed to building digital capabilities which will enable us to acquire, engage, and service clients on enhanced basis through digital channels to enhance our accessibility and to make it more convenient for our customers to access our services,” he said.

Last year saw Citibank has launched its updated Citi Mobile App, which helps its clients manage outstanding balances, track transaction details and rewards points, as well as pay bills.

“We remain exceptionally optimistic and bullish about the growth opportunities in the country and look forward to continuing to grow and invest in the Philippines. We are committed to the Philippines and its future,” said Citibank’s Mr. Ahmed. — Lourdes O. Pilar

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