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Farm output nearly flat in Q1

By Vincent Mariel P. Galang
Reporter

A NEARLY FLAT farm output marked the first quarter, slowing from a small increment a year ago, the Philippine Statistics Authority (PSA) said on Thursday a day ahead of its gross domestic product (GDP) report for the same period, noting that increases in livestock, poultry and fisheries output narrowly offset a drop in crops that accounted for half of total value of production.

The PSA said that value of production last quarter of the farm sector — which contributes about a tenth to GDP and a fourth of jobs in the country — edged up just 0.67% annually compared to a downward-revised year-ago 1.08% increment and 1.8% in 2018’s final three months, as well as a 2.5-3.5% program under the 2017-2022 Philippine Development Plan.

Value of production of the crops subsector — the biggest contributor to total production with a 52.71% share — decreased by 1.01%, compared to a 1.1% year-ago increment.

Palay, which made the biggest contribution to total farm output value at 18.06%, dropped 4.46% in value and volume (compared to 4.61% growth a year ago) to P4.417 million metric tons (MMT) against an April 15 expectation of a 1.3% drop to 4.56 MMT.

“This was attributed to the adverse effects of the dry spell reported in Cagayan Valley, CALABARZON (Cavite-Laguna-Batangas-Rizal-Quezon), MIMAROPA (Occidental and Oriental Mindoro-Marinduque-Romblon-Palawan), Western Visayas, Central Visayas, Zamboanga Peninsula, Northern Mindanao and SOCCSKSARGEN (South Cotabato-Cotabato-Sultan Kudarat-Sarangani-General Santos City),” the PSA said.

“Bicol Region reported damage to palay production due to flooding brought by Typhoon Usman during the latter part of December 2018,” it added, citing as well reductions in area harvested and yield in Davao Region due to January floods brought by a low pressure area.

Corn, which accounted for 8.74% of total value of production, dropped 2.07% (compared to the past year’s 4.66% increase) to 2.425 MMT against an April 15 estimate of a 1.2% increase to 2.51 MMT.

“The decline was expected because of the drought which is why we are really pushing for the implementation of small and sustainable irrigation projects,” Agriculture Secretary Emmanuel F. Piñol said in a mobile phone message when sought for comment.

For Roehlano M. Briones, senior research fellow at the Philippine Institute for Development Studies, “[i]t’s pretty straight forward. I think the decline in crops is because of the impact of the El Niño.”

In a separate telephone interview, Rolando T. Dy, executive director at the University of Asia and the Pacific’s (UA&P) Center for Food and Agri-Business, said: “Drought impacted crops as expected.”

The National Disaster Risk Reduction and Management Council, which says a dry spell is characterized by three consecutive months of below-normal (21-60% reduction from average) rainfall, estimated on April 25 El Niño’s damage to rice, corn, fisheries and high-value crops at P7.96 billion, consisting of P4.04 billion (191,761 MT) in palay damage and P3.89 billion (254,766 MT) in corn damage.

Mr. Piñol had said in an April 25 social media post that “[d]espite the impact of El Niño on rice and corn production, their respective production targets can still be met as reported losses are only 0.96% (197,700 MT) of the 20 million MT target for rice and only 2.94% (254,766 MT) of the 8.64 million MT target for corn.”

All other farm subsectors gained, though slower than year-ago increments.

Livestock output, which accounted for 17.11% of total production value, grew by a slower 1.25% in terms of value (from two percent a year ago) as hog output, which accounted for 14.86% of the total, increased by 1.56% (compared to 2.39% a year ago) to 567,410 MT.

Poultry output, which contributed 16.74%, increased in value terms by 5.41% (from 5.24% a year ago) as chicken production, which accounted for 12.21%, rose 4.34% (from 4.93% previously) to 495,060 MT.

Fisheries production, which accounted for 13.45% of total farm output value, edged up by 0.97%, turning around from a 4.58% year-ago contraction, as a 3.18% drop (from -5.43% the past year) to 89,860 MT for tilapia, which contributed 1.98%, and a 4.73% contraction (from -7.38% previously) to 62,890 MT for milkfish which contributed 1.78%, were offset by a 36.16% surge (turning around from a 14.48% year-ago drop) to 53,260 MT in production of roundscad, with 0.99% of total value of production.

“Roundscad production recovered from the previous year’s slump,” the report read.

“In NCR (National Capital Region, or Metro Manila), more unloadings of roundscad were reported due to the… lifting of ban on catching roundscad in the fishing ground of Palawan and additional fishing boats from other regions” like Central Visayas, Zamboanga Peninsula and the Bangsamoro Autonomous Region in Muslim Mindanao.

This year’s first three months saw farmers get generally lower prices at the farmgate for their harvest, down 3.76% compared to a 7.64% increase a year ago. Poultry saw the biggest price drop of 8.6% from a 3.12% increase a year ago, crops came next with a 5.46% fall compared to a 6.8% year-ago rise, while livestock recorded a 1.49% contraction compared to a 13.23% increase the past year.

In its report, the PSA attributed the overall fall in crop farmgate price partly to “speculation” on lower rice prices as the government liberalized importation of the staple and replaced previous quantitative restrictions with a tariff scheme.

“‘Yung downside lang sa next semester: how will the farmer respond to the softening of palay prices,” UA&P’s Mr. Dy said.

“With the softening of palay price, ‘yun bang [will the] farmer magtatanim [plant]?”

Fishermen, however, got generally better deals, with farmgate prices rising by 6.68%, though smaller than the year-ago 9.76%.

Treasurer signals euro bond sale within the month

THE COUNTRY’s planned benchmark-sized euro-denominated notes will likely be offered “very very soon,” the head of the Bureau of the Treasury told reporters in Malacañan Palace on Wednesday, saying the government is still watching market developments for the right time to sell the debt papers.

“We are just watching closely market developments and very soon we may be able to launch the euro bond issue,” National Treasurer Rosalia V. De Leon said in the press conference, adding later with a smile when pressed for a definite timetable that the sale will be conducted “very very soon.”

Asked if the euro bonds will be sold next month, Ms. De Leon replied: “Masyadong matagal ‘yan (That’s too long a wait).”

The government plans to issue “benchmark-sized” euro-denominated bonds — meaning at least $500 million (€446.94 million) in volume — in order to diversify funding sources.

The Philippines hired banks late last month to arrange deal road shows in Zurich, London, Paris, Frankfurt and Milan from April 26 to draw investor interest.

“Based on the road show that we conducted, they are very receptive. They have been looking forward for the RoP (Republic of the Philippines) to come back to the market…” Ms. De Leon said.

On Monday, she said the Treasury is looking at issuing the notes with maturity in the “intermediate part of the curve.”

“During discussions with investors, that’s also their preference, so between seven to 10 years,” she said following the weekly Treasury bills auction in Manila City.

Fitch Ratings and S&P Global Ratings assigned a “BBB” rating while Moody’s Investors Service assigned “Baa2” to the planned debt notes two weeks ago, all a notch above minimum investment grade.

On April 30, S&P raised the country’s long-term sovereign credit rating to “BBB+” from “BBB,” bringing it a step closer to bagging a single “A” grade.

Deputy Treasurer Erwin D. Sta. Ana said late last month that the government has been “planning to go back to the euro market for the longest time,” explaining that “[t]his is part of the DoF (Department of Finance) and Treasury’s strategy to diversify its financial instruments and… investors base.”

The last time the government borrowed euros was in 2010, raising €75 million in three- and five-year multi-currency retail Treasury bonds that also raised $400 million.

It also raised €500 million in 10-year debt in 2006 in a multi-currency global bond offer along with $1.5 billion.

The state plans to borrow P1.189 trillion this year — 75% of which will be sourced domestically while the remainder will be from foreign creditors — to fund a budget deficit programmed at P624.4 trillion, equivalent to 3.2% of gross domestic product, and support increased government spending programmed at P3.774 trillion.

The state is also set to raise 6 billion yuan ($893.3 million) from a second sale of “panda” bonds. For the planned yuan-denominated debt, Ms. De Leon said the government is also waiting for the right market conditions before selling. “We have also received the approval of the regulators. Same, we are looking closely,” she told reporters on Wednesday.

The government is also looking at offering “samurai” bonds amounting to $1-1.5 billion in yen equivalent some time next semester, as well as another round of offshore dollar bonds.

In January, the Philippines sold $1.5 billion in 10-year offshore dollar bonds, priced 110 basis points (bps) above benchmark US treasuries and tighter than an initial 130 bps guidance. — Karl Angelo N. Vidal

SM Investments nets P10.7B in 3 months

SM Investments Corp. (SMIC) delivered a 26% profit increase in the first quarter of 2019, boosted the double-digit topline growth of its property, banking, and retail units.

In a statement issued Wednesday, the holding firm of the Sy family said net income hit P10.7 billion, an improvement from the P8.5 billion it posted in the same period a year ago. Consolidated revenues also went up 15% to P109 billion.

“We continued to deliver double-digit growth to both our top and bottom line in the first quarter. Performance was strong across our businesses, particularly for our banks,” SM President Frederic C. DyBuncio was quoted as saying in a statement.

The listed conglomerate’s banking unit contributed 42% of its consolidated net income for the quarter, followed by the property and retail businesses at 40% and 18%, respectively.

BDO Unibank, Inc. saw its net income soar 66% to P9.8 billion during the period, after gross revenues also jumped 37% to P53.69 billion. The company attributed the positive performance to the continued expansion of its core banking operations, the recovery of trading gains to normal levels, and strong results from bank fees and life insurance premiums.

Meanwhile, China Banking Corp. also posted a 24% uptick in consolidated net income to P1.9 billion, thanks to strong growth of its core businesses during the quarter.

For the property segment, SM Prime Holdings, Inc. realized a 16% increase in net income to P8.8 billion during the January to March period, on the back of a 14% increase in revenues to P26.5 billion.

The shopping mall business registered revenues of P15 billion, eight percent higher year on year, accounting for 56% of SM Prime’s topline for the period. This was supported by a seven percent same-mall sales growth.

The residential unit also grew its revenues by 23% to P9.2 billion, following higher construction accomplishments of projects launched from 2015 to 2017, as well as the recognition of recently launched projects.

On the other hand, SM Retail, Inc. said net income went up five percent to P2.7 billion, as revenues also rose 13% to P79 billion.

The retail business includes the food unit through SM Markets, WalterMart, and Alfamart, as well as a non-food unit through The SM Store and specialty stores. Revenues from specialty retail stores alone stood at P19.6 billion, 13% higher year on year.

SM Retail ended the quarter with 2,385 stores, composed of 63 The SM Stores, 1,388 specialty retail stores, 57 SM Supermarkets, 53 SM Hypermarkets, 194 Savemore, 52 Waltermart, and 578 Alfamart stores.

Shares in SMIC closed at P966 each at the stock exchange on Wednesday, higher by 1.79% or P17 from the previous session. — Arra B. Francia

Solaire operator’s income slides in 1st quarter

EARNINGS of Bloomberry Resorts Corp. slumped by 40% in the first quarter of the year, pulled down by lower forex gains alongside higher interest expenses.

In a statement issued Wednesday, the operator of Solaire Resort & Casino said consolidated net income stood at P2.2 billion from January to March, lower than the P3.69 billion it posted in the same period a year ago.

The listed firm noted that foreign exchange gains were “meaningfully lower” for the period, while interest expenses jumped due to the full drawdown of a P73.5-billion syndicated loan it raised in April 2018.

“The proceeds of the syndicated loan were used to retire previous debt facilities and finance the acquisition of land from PAGCOR (Philippine Amusement and Gaming Corp.) where Solaire and its Phase 2 expansion area is located within Entertainment City,” the Razon-led company said in a statement.

Bloomberry acquired the 16-hectare property in Parañaque for P37.33 billion in April last year, giving it room to further expand Solaire.

The lower profit came amid a five percent increase in consolidated net revenues to P10.77 billion in the January to March period.

Consolidated gross gaming revenues (GGR) — which includes the operations of Jeju Sun Hotel & Casino in South Korea — also ended flat at P13.87 billion.

For Solaire alone, GGR was down by one percent at P13.62 billion after VIP volumes dropped by six percent to P185.9 billion. VIP revenues accordingly fell by 16% to P5.98 billion as hold rate also slipped 3.22% from 3.61% in the first quarter of 2018.

In contrast, mass table revenues were up by 23% to P3.997 billion, after hold rate improved to 35.1% from 33.2% in the same period a year ago. This followed a 17% increase in mass table drops to P11.38 billion.

Electronic gaming machine (EGM) coin-ins stood at P54.66 billion, four percent higher year on year. Revenues from the segment rose by nine percent to P3.64 billion.

Meanwhile, Jeju Sun’s gaming revenues jumped 395% to P254 million, as it offered competitive casino programs.

Consolidated non-gaming revenues for the quarter reached P1.92 billion, 25% higher year on year, as strong performance in Solaire offset the decline in Jeju Sun.

Solaire posted non-gaming revenues of P1.91 billion, higher by 27% due to the opening of more boutiques at its retail strip called The Shoppes. This is despite lower hotel occupancy rates of 87.8%, from 93.6% last year, due to the closure and planned conversion of the Grand Ballroom into a new gaming space. — Arra B. Francia

8990 profit jumps 13% in 2018

MASS HOUSING developer 8990 Holdings, Inc. posted a 13% profit increase in 2018, driven by higher real estate sales from several projects across the country.

In a regulatory filing, the listed firm said net profit reached P4.67 billion last year from the P4.14 billion posted in 2017. Revenues also rose 15% to P11.75 billion.

8990 noted that revenues exceeded its target of P11.5 billion in 2018. Real estate sales accounted for bulk of the firm’s revenues at P11.68 billion, a 15% improvement from the previous year’s P10.17 billion. The company attributed the positive performance to higher sales from 11 projects that are currently under construction.

“It comes to no surprise that momentum in our real estate business has remained strong throughout the year. Our company is built on solid ground and the excellent results in 2018 reflects the strong interest for our products even at a time when inflation has been moving up,” 8990 said.

Hotel operations also started generating revenues at P55.5 million. The company earlier said that it will spend P5 billion over the next five years for the development of projects under hotel brands Adama, Kura, and Argo.

8990 spent P8 billion in capital expenditures in 2018. This year, it allocated P12 billion to support its goal of recording P13.5 billion in revenues.

The company is banking on sales from Urban Deca Homes Manila in Tondo to drive its revenues for the year. The 13-tower residential complex will offer more than 13,000 units worth about P20 billion. — Arra B. Francia

GT Capital targets single-digit bottom-line growth this year

By Arra B. Francia, Senior Reporter

GT Capital Holdings, Inc. aims to grow its bottom line by mid-single digits in 2019, banking on the recovery of its auto unit and the continued growth of its banking and property businesses.

“We are trying to shoot for single-digit growth,” GT Capital President Carmelo Maria Luza Bautista told reporters after the company’s annual shareholders’ meeting in Makati on Wednesday.

If realized, this would mark a turnaround from the six percent profit decline the conglomerate saw in 2018. It booked a net income of P13.4 billion as consolidated revenues fell 10% to P215.8 billion.

GT Capital was weighed down by Toyota Motor Philippines (TMP)’s performance last year due to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which increased the excise tax on automobiles.

Retail vehicle sales dropped 17% to 153,004 units, resulting to a 14% decline in consolidated revenues to P159.2 billion. Net income accordingly slumped 39% to P8 billion in 2018.

“Hopefully, makikita mo pa rin ’yung (you can see) early signs of recovery. In fact it was reported already in the papers this morning that volume sales are starting to see a turnaround. So hopefully magtuloy-tuloy na ’yun (this will continue),” Mr. Bautista said.

Aside from introducing new models for TMP, the company is also supporting its auto business by venturing into used car auctions. Its unit, GT Mobility Ventures, Inc. has recently partnered with auction house operator Japan Bike Auction Co., Ltd. to form JBA Philippines.

The auction house business is scheduled to start operations by the third quarter of the year. Mr. Bautista expects the unit to start contributing to revenues by 2020.

The company also expects it banking unit, Metropolitan Bank and Trust Company, to continue its strong growth, especially on loan financing.

The property business, through Federal Land, Inc. and Property Company of Friends (Pro-Friends), is also seen to continue its growth momentum. Mr. Bautista earlier said they are aiming to grow property’s contribution to net income to about 15-20% in the next five years, against its 2018 contribution of 10.5%.

“The property momentum is strong, so we are hoping there will be a difference in the property side,” Mr. Bautista said.

GT Capital will be spending P51.7 billion in capital expenditures this year, bulk of which will be used at the parent level for its new ventures.

Federal Land cornered P12 billion of the spending, for land banking purposes and the construction of office buildings, while Pro-Friends will receive P2.3 billion to fund its expansion. Metrobank will get P2 billion for IT system upgrades and expansion, while insurance provider AXA Philippines will have about P200 million for computer and IT upgrade.

Shares in GT Capital slipped 4.89% or P44 to close at P855 each at the stock exchange on Wednesday.

Search for PLDT president, CEO continues

PLDT, Inc. Chairman Manuel V. Pangilinan said the search for a new president and chief executive officer (CEO) may take longer.

Mr. Pangilinan, who has been sitting as president and CEO of PLDT since the start of 2016, told reporters Tuesday that he is ready to relinquish the two posts as soon as he finds a worthy replacement.

“Siguro [Probably] delayed a bit, realistically. You have to give some time to Al to put both his legs under the table,” he said when asked about PLDT’s timeline for finding a new president and CEO, referring to newly appointed Chief Revenue Officer Alfredo S. Panlilio.

Last week, PLDT told the stock exchange Mr. Panlilio was returning to the company to replace Ernesto “Eric” A. Alberto as chief revenue officer by July 1.

Mr. Alberto assumed the position in 2016 and led the company’s turnaround in the consumer wireless business and sustained double-digit growth in the home and enterprise units.

But Mr. Pangilinan noted his departure is not expected to impact the company’s operations significantly, as the unit heads were kept in position.

“We know Eric Alberto has really strong unit heads. Ren (Oscar Enrico A. Reyes, Jr.) for the individual and the Home, Jovy (I. Hernandez) for the Enterprise and Alex (Alejandro O. Caeg) for sales and channels. Of course we’ll miss Eric, but I think Al — who is an alumnus of PLDT, knows the organization and is digital and understands what we’re doing. I think (he) will ably fill up the position, and I think will probably bring a calming influence on the organization,” he said.

Mr. Panlilio admitted the appointment was a surprise, saying it happened “very quickly.”

“There was of course something that happened in PLDT and the change that had to (happen), a major decision that (Mr. Pangilinan) had to make so that we can continue to go after the objectives set by (him) for PLDT,” Mr. Panlilio said.

Asked what were Mr. Pangilinan’s marching orders for him, Mr. Panlilio said: “To continue to grow the business. I think that’s the main thing.”

He said he personally wants to look into the service delivery of PLDT and see how it could be improved to be more “customer centric.”

Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

First Gen wants to get more partners for LNG terminal project

By Victor V. Saulon, Sub-Editor

FIRST GEN Corp. is looking to bring in more partners for its liquefied natural gas (LNG) terminal project as it schedules to break ground by month’s end and targets to make a final investment decision by early 2020 in time for a 2024 completion date.

“We aim to finalize the financing for the project and execute the relevant key project agreements, including LNG supply and firm up our strategic partners for the project,” Francis Giles B. Puno, First Gen president and chief operating officer, told stockholders during their annual meeting on Wednesday.

“In fact, we are going to have our formal groundbreaking at the end of the month,” he added.

Mr. Puno said the existing partnership with Tokyo Gas Co., Ltd., which was forged in December last year, will proceed with the project ahead of a final investment decision (FID).

“We anticipate that we’ll bring in more partners, but in the meantime between ourselves and Tokyo Gas, we want to proceed already. So the formal FID will entail a bigger, hopefully a complete group of owners,” he told reporters, adding that a new investor could be a Filipino entity.

He said the LNG terminal could be completed in four years, and that the existing partners do not intend to underwrite the $1-billion project cost.

“In our case, probably right now we have 80%, Tokyo Gas has 20%. We don’t intend to own the whole 80%, so it can go down to 50%, 51%, so that’s the flexibility,” he said.

Jonathan C. Russel, First Gen executive vice-president and chief commercial officer, said a number of nationalities had expressed “a great deal of interest” in the project. He said the partnership talks include those with potential fuel suppliers.

“I can’t give you any names, but we are in advanced discussions with a number of entities, so it’s possible that in the near future, we’ll announce additional partners that are coming in,” he said. “Within the next few months, we may have additional announcements.”

“We can accommodate more than one partner. It’s just a question of trying to choose partners that add the most value and also will be easy for us to work as a group, good chemistry and a strong combination,” Mr. Russel said.

In the meantime, First Gen is setting aside up to $250 million for this year’s capital expenditure, most of which will be used by subsidiary Energy Development Corp. (EDC).

“For consolidated [capex], it’s about $220 to $230 [million], bulk of that will be with EDC, it’s about $150 [million], then the rest would be with gas,” Emmanuel P. Singson, First Gen Corp. senior vice-president and chief financial officer, said.

However, EDC President and Chief Operating Officer Richard B. Tantoco said the consolidated amount could reach $250 million to include additional budget for a geothermal-related project.

“Some of it will be for projects, and then some of it will be for things that we’ll do in the power plant like cooling tower upgrades,” he said. “So it’s investments that will optimize the assets’ flexibility.”

Last year, the group’s consolidated capex was $100 million, Mr. Singson said.

On Wednesday, shares in First Gen slipped by 5.88% to close at P20 each.

Introducing Itogon coffee to the world

MICHAEL Harris Conlin, the 2019 Philippine National Barista Champion, has done his country proud. Mr. Conlin was able to place in the semifinals of the World Barista Championship (WBC) in Boston, USA, and finished 15th out of 50 candidates from all over the world. More than his show of technical ability, he was also able to showcase Filipino coffee, showing in a cup the hard work of farmers in Itogon, Benguet.

His attachment to Itogon comes from an advocacy. Last year, a typhoon ravaged Benguet, and as part of his work for his company’s foundation, the Foundation for Sustainable Coffee Excellence, they donated water and food to farmers in the region, not knowing that they grew coffee there.

“Itogon’s elevation is not as high as other places,” he recalled during an interview with BusinessWorld on May 3 in the Institute for Coffee Excellence. The educational facility is part of Mr. Conlin’s company, Henry & Sons, which roasts coffee for retail and for industry purposes. Another component of Henry & Sons is The Giving Café, their retail outlet.

“What’s nice about Itogon is most of the coffee that grows there are wildlings… that means these coffees have already adapted to the terroir.”

In the coffee business since 2001, he has seen all aspects of the coffee industry, from the growing of the beans to the final products made under the expert eye of a barista. “This journey has inspired me to create a space to nurture the baristas and our Filipino coffee farmers,” he was quoted as saying in a press release. That space is the Institute of Coffee Excellence which works with both farmers and baristas. “The transformation of a community begins with education,” he was quoted as saying. “In the case of our coffee community, I believe we would have to start by empowering our farmers and baristas with the knowledge, values, and passion to work towards a beautiful coffee future.”

For his competition entry to the WBC last April, Mr. Conlins presented locally sourced honey and strawberries from Benguet, lactic acid from coconut meat infused with sampaguita aroma, and cold brew coffee from Itogon. The concoction, he said, tasted like rootbeer; one of his favorites. “For me, I wanted to turn ordinary items into something extraordinary, I think that’s what really made an impact on the judges,” he told BusinessWorld.

“I feel pretty good,” he said about placing 15th. “I was happy with it. I had fun. I think that’s the most important thing — I was able to deliver our message and our dream on the world stage, I’m a fan. That’s the thing.” He recalled crying on stage, and someone interviewing him tried to console him, but he told that person that his tears were of joy.

As for how the win spells changes in the coffee community in the Philippines, he notes: “People are more mindful and nationalistic… they’re going to museums again.”

Mr. Conlins gave this interview while wearing a Barong Tagalog bought off the rack, and wearing a lapel pin depicting the Philippine flag.

“They’re loving local products again. I really feel that in the next five to 10 years, the world will have their eyes on us.” — JLG

Apple said to prep upgrades for iPhone apps, Watch, health data

APPLE INC. is planning to unleash a slew of new apps, features and development tools at its annual software conference next month. To improve its devices and strengthen its connection to customers, the consumer technology giant will continue to walk a fine line between wooing outside app makers while also competing against them.

The Worldwide Developers Conference, or WWDC, starts June 3. The company will reveal updates to the operating systems that run the iPhone, iPad, Mac, Apple Watch, and Apple TV. Highlights include upgrades to core iPhone apps such as Maps, Reminders and Messages; new apps for the Apple Watch that make it more independent from the iPhone, and enhancements to the health tracking capabilities of Apple devices, according to people familiar with the plans.

Since launching the iPhone in 2007, Apple has pursued an aggressive approach to refreshing its mobile operating systems each year. The fast pace is taxing on Apple engineers, but the results have been impressive. The company’s products are often unique and more capable than those of rivals because Apple’s home-grown software works so well with the hardware. The new updates also give users access to the latest services like Apple Music and the upcoming TV+ video-streaming subscription, which give Apple a recurring revenue stream.

It’s a delicate balance. Part of the allure of iPhones and iPads also comes from all the different apps made by independent developers. The company provides new tools for these partners, but it is increasingly building its own versions of popular apps, too. That helps differentiate its devices from rivals but sometimes upsets third-party developers. Spotify Technology SA and other app makers have complained to European antitrust regulators that Apple’s own software and services give it an unfair advantage on the App Store. US presidential candidate Elizabeth Warren has proposed splitting the App Store from the rest of the company, although few other policy makers have supported the idea.

“Developers, from first-time engineers to larger companies, can rest assured that everyone is playing by the same set of rules,” Apple said in a recent statement rebutting Spotify’s complaint. “That’s how it should be. We want more app businesses to thrive — including the ones that compete with some aspect of our business, because they drive us to be better.”

New features coming to the Apple Watch illustrate the balance that the company must strike. Apple plans to add the App Store directly to the Watch so users can download apps on the go. This could open up huge new opportunities for outside developers, boosting app installations. But Apple has its own new Watch apps in the works, too. There will be new health applications, a Calculator and a Books app for listening to audio books from your wrist, the people familiar with the plans said.

So far, Apple has managed to make the strategy work. The App Store drove $46.6 billion in spending last year, almost double the amount spent on Google’s Android equivalent, according to Sensor Tower estimates. That’s wooed more than 20 million developers who have created over 2 million apps for Apple’s platform. At the same time, there are 1.4 billion active Apple devices in use, and 92 percent of iPhones and iPads run the latest operating system, or the version before that. The App Store and other digital services are on course to generate more than $50 billion in annual revenue soon.

Here are the software features Apple is planning to announce at WWDC 2019, according to people familiar with the plans. They asked not to be identified discussing unreleased product details. Apple’s plans are fluid and could change between now and the event, people familiar with Apple’s development process said. The company could also choose to push back some features until next year, like was done last year, they added. An Apple spokesman declined to comment.

The biggest change coming to the Mac this year is the ability for iPad apps to run on laptops and desktops, as Bloomberg News previously reported.

For the first time, Apple will allow developers who write iPad apps to re-work their apps so the software can also run on the Mac. This will be useful for developers who are looking to simplify their development process, but it will also brighten the macOS app ecosystem with several new applications. Developers will still need to submit separate versions of the app to Apple’s iOS and Mac App Stores, but the new software development kit will mean they don’t have to write the underlying code twice.

Beyond this year’s conference, Apple is planning to expand the feature so iPhone apps can run on the Mac by next year. The year after that, the company aims to merge iPhone, iPad, and Mac applications into single downloads that can run on any Apple device. Eventually, it could also merge the App Stores.

While the developer conference is software-focused, the company often sprinkles new hardware announcements in at the event. For this year, Apple has been considering debuting a revamped Mac Pro desktop computer. It’s also readying a new external monitor, code named J290, with high-dynamic-range support so colors look much better. — Bloomberg

Demand for term deposits rises

BSP
DEMAND for the central bank’s term deposits climbed on Wednesday.

BANKS’ APPETITE for term deposits increased this week to push yields lower as the central bank placed a higher volume on the auction block ahead of its monetary policy review.

The Bangko Sentral ng Pilipinas (BSP) on Wednesday received P38.540 billion in tenders under its term deposit facility (TDF), more than filling the P30 billion up for auction and recovering from the previous week’s demand worth P29.644 billion.

Tenors for the week were back to the usual seven and 14 days following last week’s offering of only six-day and 13-day papers due to a holiday. As with last week’s auction, it also didn’t offer the month-long tenor yesterday.

Demand for the one-week term deposits offer hit P20.53 billion, slightly higher than the P20 billion on the auction block. This week’s bids also outpaced the P14.13 billion in tenders seen last week, although the central bank offered just P10-billion worth of the six-day deposits at the May 2 auction.

Accepted yields settled between 4.55% and 4.76% from the range of 4.63%-4.76% seen last week. This resulted in an average rate of 4.6925% for the seven-day papers, lower than the 4.7198% yield for the six-day term deposits auctioned last week.

Tenders for the two-week papers likewise increased to P18.01 billion yesterday, almost double the P10 billion on offer, from the P15.52 billion in bids seen for the 13-day term deposits last week.

Returns sought by banks for parking their funds with the BSP decreased slightly to 4.6%-4.76% on Wednesday from last week’s 4.67%-4.78%. The average yield on the 14-day tenor settled at 4.6961%, a decline from last week’s 4.7524%.

The TDF stands as the central bank’s primary tool to shore up excess funds in the financial system and to better guide market interest rates. Through the weekly auctions, the BSP wants to bring loan and interbank rates within their desired 4.25-5.25% range.

The central bank is reviewing policy settings anew today. At its March meeting, the Monetary Board voted to keep key interest rates steady, citing the need to stay cautious despite easing inflation.

The Philippine Statistics Authority reported on Tuesday that headline inflation slowed to a 16-month low of 3% in April from 3.3% in March and 4.5% a year ago — causing more analysts to predict a cut in key interest rates by the BSP sooner rather than later.

Following the release of the latest inflation data, BSP Governor Benjamin E. Diokno said on Tuesday that the BSP will keep watch of price risks as its Monetary Board conducts its third policy review for the year on Thursday.

The central bank governor earlier said that the BSP will continue to be data-driven in its decision-making amid mounting expectations of monetary policy easing.

Ayala to spend P2B for cancer hospital

AYALA Healthcare Holdings, Inc. (AC Health) plans to build a specialty hospital in Metro Manila dedicated to cancer worth about P2 billion, in a bid to support the public sector’s efforts to improve cancer care in the country.

In a statement issued Wednesday, AC Health said the standalone Cancer Hospital will be a fully integrated facility with 100 beds.

The specialized center will have diagnostic equipment including a positron emission tomography (PET) scan, chemotherapy facilities, linear accelerators for advanced radiation therapy, and operating rooms for the specialist surgeons.

A company representative said AC Health has yet to finalize the exact location for the facility as it is still talking with several property owners.

AC Health President and Chief Executive Officer Paolo Maximo F. Borromeo said the company is working with “the most respected names” in the oncology field for the hospital, which aims to provide high quality cancer care services at more affordable prices.

“I think having a specialized cancer hospital in the Philippines is long overdue, and our goal is to redefine cancer care by serving a broader segment of Filipinos, while providing quality of care that matches global standards,” Mr. Borromeo said in a statement.

Ayala Corp. President and Chief Operating Officer Fernando Zobel de Ayala said the Cancer Hospital will seek to address the prevailing gaps in screening, diagnosis, and cancer treatment in the country.

“Cancer is now the third leading cause of death in the Philippines and unfortunately, we struggle with poor outcomes. A key pillar of our advocacy is screening and early detection so that we can diagnose patients earlier, and provide them with more affordable high-quality cancer care,” said Mr. Zobel, who also sits as the chairman of AC Health.

AC Health’s plan to develop the Cancer Hospital follows the passage of the Republic Act No. 11215, otherwise known as the National Integrated Cancer Control Act, last February. The law outlines the National Integrated Cancer Control Program, which should serve as the framework for all cancer-related activities of the government.

The company also looks to complement Cancer Hospital’s operations by offering cancer screening services to identify early cases at FamilyDoc, its chain of community-based primary care clinics.

AC Health looks to end the year with more than 80 FamilyDoc clinics, after ending 2018 with more than 50 clinics. This is in line with the company’s target of having 100 FamilyDoc clinics and 1,000 Generika drugstores by 2020.

Aside from physical facilities, the company is also in the health care space through mobile health app Aide, which allows patients to book doctors, nurses, and other medical professionals to provide health care services at home. It also has investments in online pharmacy MedGrocer. — Arra B. Francia

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