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Business confidence steadies in Q2

OPTIMISM among firms in the country steadied in the second quarter from the preceding three months — though it dropped from a year ago — in the face of expectations of higher prices of goods and as businesses continued to adjust to a new tax regime, a recent central bank survey showed.
Results of the latest Business Expectations Survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed that 39.3% of companies remained upbeat last quarter, 0.2 points less than the preceding three months though 3.7 points lower than the overall confidence index recorded in the comparable period in 2017.
The reading is the lowest since the 37.9% logged in July-September of last year and marks a decline for the second straight quarter.

Redentor Paolo M. Alegre, Jr., head of the BSP Department of Economic Statistics, said businesses cited sustained demand for their products and services as the reason for their steady outlook, but “ongoing market adjustments” to the Tax Reform for Acceleration and Inclusion (TRAIN) law that took effect as 2018 began remain a pressing concern for companies.
“There was a slight dent on optimism caused by expectations of higher consumer prices — partly due to oil price hikes — and peso depreciation,” Mr. Alegre said in a press briefing yesterday.
Seasonal factors such as a spike in demand in the dry months, enrolment and harvest periods; expansion of businesses and new product lines; sound macroeconomic conditions; and ongoing rollout of state infrastructure projects kept business outlook buoyant.
“I think the only difference between then and now is the implementation of the TRAIN law and the corresponding implications, particularly on prices,” BSP Deputy Governor Diwa C. Guinigundo explained in the same briefing.
“The other positive way of looking at it is, if that is the only reason, in fact that should be positive to business.”
The survey covered 1,466 firms between April 2 to May 22 — drawn from the combined list of the Securities and Exchange Commission’s Top 7,000 Corporations in 2010 and BusinessWorld’s 2016 Top 1,000 Corporations in the Philippines — and compares the number of respondents optimistic about their prospects versus those who were pessimistic. A positive reading means optimists outnumbered pessimists.
Firms based in Metro Manila grew less upbeat during the quarter (37.3% from 41.1% in the first quarter and 43.8% a year ago) as they cited higher utility and fuel costs, as well as stiffer competition. This more than offset the stronger optimism among companies based in the provinces (43% from 36.7% in the first quarter and 41.7% a year ago) on the back of summer, enrolment and fiesta season providing generally “favorable” business conditions.
By type of business, exporters grew more bullish as they expected better prices for their products and increased orders. Importers as well as domestic-oriented firms were also more optimistic as they expected a boost from economic growth and robust consumer demand.
Optimism surged among construction firms as they bagged new projects from the government and private sector, while wholesale and retail traders also expected a lift from “brisker” economic activity.
Meanwhile, firms in the services sector saw optimism dip due to a weaker peso and higher commodity costs.
Companies also said they will proceed with expansion plans, but fewer establishments said they will hire more workers compared to the preceding quarter.
Firms also expect the peso to remain weak, interest rates to keep rising and inflation to pick up further. Financial conditions are also expected to tighten, although credit channels will remain accessible.
Business sentiment turned less buoyant for the third quarter, the central bank said, with the “next quarter” index down to 40.4% from 47.8% previously. The seasonal dip in optimism comes as firms expect interruption of business activities during the rainy season, lower consumer demand as households pour funds into school fees and see even higher commodity prices. — Melissa Luz T. Lopez

Inflation could have topped 5% in May

By Melissa Luz T. Lopez
Senior Reporter
INFLATION likely picked up further last month as oil and rice prices kept rising, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
Prices of basic goods and services may have surged by 4.6-5.4% in May, which would meant a steady ascent for the fifth straight month.
The estimate range meant that inflation will be higher than April’s 4.5% — already the highest rate seen in at least five years — and from the 2.9% clocked in May last year using 2012 prices.
This also meant that year-to-date inflation will remain above the 2-4% 2018 target range of the central bank.
The Philippine Statistics Authority is scheduled to release latest inflation data on Tuesday.
“Higher domestic petroleum prices amid geopolitical tensions in the Middle East as well as the sustained increase in rice prices present upward price pressures for the month,” the BSP Department of Economic Research said in a statement on Thursday.
Rice prices have been rising since April due to low stocks in National Food Authority warehouses.
Fuel companies also announced three waves of increases for retail pump prices in May, reflecting movements in global crude and a weaker peso-dollar exchange rate.
Oil prices surged to three-year highs earlier last month amid fears tensions between the United States and Iran could affect global supply. As a result, pump prices have risen by P6.70 per liter for gasoline, P7.30/liter for diesel and P6.85/liter for kerosene as of May 22, according to the Department of Energy.
Several lawmakers want to halt implementation of Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act that took effect on Jan. 1, in order to temper inflation as the law raised the excise tax on gasoline by P7/liter and on diesel by P2.50/liter since Jan. 1. The new tax law carries a provision that will suspend the fuel excise tax, but only if Dubai crude oil — which is used as benchmark for local prices — averages $80 per barrel or higher before another round of tax increases kick in. The Finance department has attributed the spike in petroleum prices to rising global oil prices and the peso’s depreciation, rather than higher excise taxes.
On the flip side, the BSP said lower electricity tariffs coupled with declines in the cost of fruits and fish would “partly offset” price spikes for other commodities. Food costs have declined as supply of these crops normalized in April, the central bank added.
Power distributor Manila Electric Co. said utility rates dropped by P0.5436 per kilowatt-hour in May due to a lower generation charge.
“Going forward, the BSP will remain watchful of evolving price trends and ensure that the monetary policy stance remains appropriate to maintain price stability that is conducive to a balanced and sustainable economic growth,” the central bank said.
Inflation has averaged 4.1% as of end-April.
The central bank has conceded to missing its inflation target for 2018 as latest estimates showed that the full-year pace will average 4.6%.
BSP Deputy Governor Diwa C. Guinigundo previously said that inflation will pick up further and peak “towards the end of 2018.”
At the same time, he noted that the 25-basis-point interest rate hike announced by the central bank on May 10 — the first in nearly four years — appears to be enough to ease future price increases and bring the inflation rate back to target range by next year.

Firms brave turbulent market to raise funds

By Krista A. M. Montealegre
National Correspondent
A FLURRY of fund raising lies ahead this month, even as jarring volatility presents a challenging environment for companies seeking to raise funds on the stock market.
The bourse has a robust pipeline of initial public offerings (IPO), follow-on share sales and stock rights issue at a time the benchmark Philippine Stock Exchange index (PSEi) is hovering at its lowest level in over a year.
“The issuers have not made major adjustments to their fund-raising timelines, and that speaks volumes in terms of their confidence to go to market and mitigate the risks,” PSE Chief Operating Officer Roel A. Refran said in a mobile phone message on Thursday.
All the approved equity fundraising activities are scheduled to be launched this month, based on the latest term sheets uploaded on the PSE website.
Fruit canner Del Monte Philippines, Inc. is set to conduct the country’s first IPO this year after securing the green light from the PSE on Wednesday to proceed with the P17.55-billion offer. Del Monte’s offer on June 8-18 is a go “as of now,” BDO Capital & Investment Corp. President Eduardo V. Francisco said via text.
Integrated real estate and construction firm D.M. Wenceslao & Associates, Inc.’s P15.5-billion maiden share sale will immediately follow Del Monte’s IPO.
Likewise, property developer DoubleDragon Properties Corp. plans to undertake a follow-on share sale amounting to a maximum of P6 billion, while Rizal Commercial Banking Corp. is also raising up to P15 billion from the issuance of shares to existing stockholders.
Nickel miner Global Ferronickel Holdings, Inc. is also pushing through with its long-delayed P1-billion follow-on offer in the second quarter once the regulator finishes the review of its documentary filings. “We will push through with the follow-on offering. The consensus is still that nickel demand is bullish both for the short term and medium term,” Global Ferronickel President Dante R. Bravo explained.
With the PSEi in correction mode after losing 12% from its January record and the peso continuing to show signs of weakness, issuers are pressured to drive demand for the upcoming share sales.
“It may dampen demand given other bargains out there. As such, pricing may have to adjust accordingly in order to generate sufficient demand,” RCBC Capital Corp. President Jose Luis F. Gomez said in a text message.
Believing “the negative sentiment will demand lower valuations for the upcoming IPOs,” Michael Gerard D. Enriquez, chief investment officer at Sun Life of Canada Philippines, Inc., said: “I would think most retail investors are already invested in the market prior to the correction.”
Philippine equities are held hostage by wild price swings in international markets amid concerns over rising interest rates, a brewing trade war between United States and China and political tensions in Europe.
Italy’s five- and 10-year debt sale on Wednesday was oversubscribed following a selloff in the nation’s bonds earlier in the week amid a deepening political crisis, an indication that it is business as usual for investors despite headwinds, according to an analyst.
“Market volatilities in Europe and Wall Street were more (of) a panic reaction than reality-based,” First Metro Investment Corp. Head of Research Cristina S. Ulang said via text.
“There is no doomsday scenario on the horizon.”

Malipayon nga pag-abot sa Iloilo

Text and photos by Zsarlene B. Chua, Reporter
The recent opening of Courtyard by Marriott in Iloilo all but signaled the transition of the bustling provincial city of Iloilo into a metropolitan city rivaling Cebu and Davao.
The 326-room hotel is the first international hotel in the city and because of its proximity to the 3,700-seat Iloilo Convention Center, it’s natural to assume that the Courtyard is positioned as a business hotel but Bruce Winton, cluster general manager of Marriott International in the Philippines, said that they are also expecting tourists to flock to the city to see its considerable sights: from the centuries-old churches to museums and galleries, and the beautiful waters of Panay Island. (Guimaras island, known for having the sweetest mangoes in the country — and arguably the world — is a mere 15-minute boat ride away from the city’s Jordan Wharf.)
And because it’s not a terribly big city — only 70.3 square kilometers — tourists spots and destinations can be reached in about 15 to 20 minutes, which makes it perfect for those visiting for the weekend.
So for those who are tired of the heavy traffic in Metro Manila (and Metro Cebu, for that matter), experience the “Most Loyal and Noble City” of Iloilo and see some of its sites we’ve listed below.
(Trivia: The title “Most Loyal and Noble City” was granted via a royal decree by Queen Regent Maria Cristina of Spain after Iloilo City maintained its loyalty to the Spanish crown during the Philippine Revolution.)

Molo Church
A Neo-Gothic church built in 1831, Molo Church (St. Anne Parish Church) also bears the nickname “The Women’s Church” because of the 16 images of female saints located on pedestals on either side of the church leading to the altar, including St. Apollonia, St. Clara, St. Genoveva and St. Teresa, to name a few.
Built in the honor of its patron saint, St. Anne, the mother of the Blessed Virgin Mary, the church features two belfries containing 30 bells of different sizes.

Iloilo 4
ILOILO CITY TOURISM AND DEVELOPMENT OFFICE

Molo Mansion
Located directly across of the Molo Church on Locsin St. is the Molo Mansion, or the Yusay-Consing Mansion, a 1920s-era mansion which was originally the residence of Doña Petra Lacson and Estanislao Yusay, a Manila judge in the court of first instance, before it became home to Timoteo Consing, Sr., who served as Iloilo governor from 1935 to 1937.
Built in 1926, the Spanish colonial mansion, with its sweeping arches and whitewashed facade, fell into disrepair and was initially tagged for demolition before it was renovated by architect Augusto “Toti” Villalon and turned into what is arguably the most beautiful SM outlet in the country by SM Land Inc. in 2016.
The mansion’s first floor was converted into SM’s cultural retail store, Kultura, which features products made from indigenous materials including modern Filipiniana attire and accessories.
In the back is a small coffee shop and in its expansive garden are a number of food stalls focusing on local goodies.
Iloilo 5
ILOILO CITY TOURISM AND DEVELOPMENT OFFICE

Jaro Cathedral
If Molo Church is the church of female saints, then it would only be appropriate to call Jaro Cathedral the church of male saints.
The cathedral (formerly called the Church of St. Elizabeth of Hungary and now the National Shrine of Our Lady of the Candles), built in 1874, was designed in the Romanesque Revival style and features two rows of statues of male saints broken only by the presence of the Lady of the Candles.
Another interesting feature of the cathedral is its belfry which was built in front of the church rather than its side as it was said not only to have been used to house the church bells, but also serve as a watchtower against intruders.
Iloilo Museum of Contemporary Art
Beyond its churches and heritage houses, Iloilo City is also home to a considerable number of museums, one of its newest being the Iloilo Museum of Contemporary Art (ILOMOCA).
Iloilo 1
ILOILO CITY TOURISM AND DEVELOPMENT OFFICE

Located within the Iloilo Business Park, ILOMOCA — which opened in late March — is said to be the first contemporary art museum in the region, with a 3,000-square meter floor area inside the three-story Casa de Emperador building.
There are five exhibitions ongoing including the Ilonggo Country exhibit in Gallery 1 on the second floor which features works by “established and emerging Filipino artists who trace their roots to Iloilo or Western Visayas,” according to the museum brochure. These include National Artist Jerry Elizalde Navarro, Manny Garibay, Mark Justiani and Brenda Fajardo, among others.
Meanwhile, the adjacent Gallery 2 features works by major foreign artists such as Joan Miro and Salvador Dali.
Gallery 3 features works by National Artists including Benedicto “BenCab” Cabrera, Abdulmari Asia Imao, and Arturo Luz, and a sculpture by Ramon Orlina.
The third floor houses the Adoracion Valencia Gallery which contains artworks chosen by the museum’s patron, Edwin Valencia. This space contains works by Ronald Ventura, Rodel Tapaya, and Mideo Cruz, among others.
Located at the first floor is Hulot, a space which pays tribute to Ilonggo hero Martin Delgado and other works with patriotic themes.
The entrance fee is P100, with student tickets priced at P50.
Iloilo 6
ILOILO CITY TOURISM AND DEVELOPMENT OFFICE

National Museum Western Visayas
Housed in a structure built in 1911 to serve as the city’s prison — and it continued as such until 2006 when the prisoners were transferred to another facility in another town — the National Museum Western Visayas is the 5th regional extension of the country’s National Museum.
Located along Bonifacio Dr., the National Museum spent P80 million to convert the former prison into a museum containing hundreds of archaeological artifacts, fossils, and textiles, among other cultural relics.
The museum will also house the Oton Death Mask, a pre-Hispanic gold mask found in a grave site in Oton town, which is currently kept in the vault of the National Museum in Manila.
Entrance to the museum is free.

PHL counted among economies that will benefit from tax reform

THE PHILIPPINES is one of few developing Asia-Pacific economies better-placed to benefit from tax reforms due to more effective debt management and state spending, according to a May 30 report of Moody’s Investors Service that was e-mailed to reporters on Thursday.
“Tax reforms are most likely to expand revenue bases in fast-growing economies with strengthening expenditure and debt management,” read the report, citing the Philippines, India, Indonesia, and Thailand in this regard.
“A sovereign’s growth and debt dynamics are important variables to assess implications for fiscal strength,” the report said further.
“The Philippines stands out as having both a comparably fast high real GDP (gross domestic product) growth rate and as being the only sovereign that has seen a material decline in its debt burden.”
Moody’s said broadening of the tax base will be “most effective” when tax reforms are “accompanied by fiscal deficit reduction, including measures that effectively manage expenditure growth.”
“Low or declining debt burdens and strong underlying GDP growth amplifies fiscal strengthening. As such, credit profiles of fast-growing economies that are undertaking fiscal consolidation and which have relatively strong or strengthening institutions — such as the Philippines, India and Indonesia — are likely to garner the most support from ongoing tax reforms in the medium term.”
The government has begun to overhaul the Philippines’ tax system in order to make it more equitable, while yielding more revenues. It started in January by reducing personal income tax rates while increasing or adding taxes on several items and removing many exemptions to the value added tax, among other steps. That first package, under Republic Act No. 10963, will be followed by lower corporate tax rates and removal of redundant fiscal incentives, as well as up to three more packages.
The four months to April have seen state revenues up a fifth annually to P927.4 billion, overall state spending grow 29% to P1.033 trillion and infrastructure and other capital outlays surge 47.5% to P222.7 billion. — Elijah Joseph C. Tubayan

Del Monte PHL’s IPO gets PSE go-ahead

DEL MONTE Philippines, Inc. is set to be the first initial public offering in the Philippine stock market this year. — SANTIAGO ARNAIZ

By Arra B. Francia, Reporter
THE Philippine Stock Exchange has given the greenlight for the P17.5-billion initial public offering (IPO) of Del Monte Philippines, Inc. (DMPI) on Thursday.
In a term sheet posted yesterday, the PSE said it has approved DMPI’s issuance of up to 587.44 million common shares priced at up to P29.88 each.
The company is set to have a public float of 21% and a market capitalization of up to P83.58 billion after the fund raising activity.
DMPI will set the price for the issue on June 6, with the offer period to run from June 8 to 18. The company looks to lists its shares on the main index of the PSE by June 25.
This will place DMPI ahead of D.M. Wenceslao & Associates, Inc., which will be offering its shares from June 18 to 22, with target listing slated for June 29.
Analysts noted that investors’ appetite for the issuance will depend on its pricing, given that it has been a while since a new issue was offered in the market.
“It’s good and stable company. I think it’s quite long since last IPO. So I think investors are looking for market opportunities, and if priced right, it could be a few times oversubscribed. However we will value it when the data and briefing comes,” IB Gimenez Securities Research Head Joylin F. Telagen said via text.
First Grade Finance, Inc. President and Managing Director Astro C. Del Castillo noted the same, saying the price will determine the issue’s performance despite the volatility in the market.
“As long as the price is right, more attractive, despite the slump in prices. Yun ang risk, if the price is at a discount to valuation, people will flock to the issue,” Mr. Del Castillo said via phone.
Meanwhile, Eagle Equities, Inc. Research Head Christopher John Mangun said the stock’s performance may depend on its issue manager.
DMPI engaged BDO Capital and Investment Corp. as issue manager, sole global coordinator, and sole book runner.
“The IPO has been delayed several times. I think they have enough exposure to get all the shares sold. Plus BDO is the underwriter. And they have one of the best structures in place to sell all these shares,” Mr. Mangun said in a separate message.
Net proceeds raised from the issuance will be used by DMPI’s parent company, Del Monte Pacific Ltd. (DMPL), to partially prepay or repay certain loan facility or facilities of around P6.8 billion. Around P3.544 billion will be used to repay certain payables, while it will also allocate up to P6 billion to refinance or reacquire certain financial obligations of the DMPL group to reduce its leverage positions.
DMPI is an indirect subsidiary of DMPL through Del Monte Pacific Resources Ltd.’s Central American Resources, Inc.

Robinsons Land plans to develop dormitory, shared office spaces

ROBINSONS Land Corp. (RLC) is planning to develop a dormitory and shared office spaces in the future, seeking to cater to those who cannot afford to buy their own properties.
The Gokongwei-led property developer said it will be building a Go Dorm in Metro Manila in the coming years, targeted toward individuals who are employed in the metro.
“It’s being consistent with our goals is to provide housing for everyone. I guess we have to also accommodate those who cannot buy units but can only afford to rent,” RLC President and Chief Operating Officer Frederick D. Go told reporters after the company’s annual shareholders’ meeting in Ortigas late Wednesday.
The company is also planning to offer shared office spaces, with Mr. Go calling it a “disruptor” in the office leasing sector.
“For office space, the disruptor is shared offices. We are studying and going into that market. There are many shared offices, but not from property developers,” Mr. Go said.
For shared offices, RLC will target businesses who “cannot afford to rent an entire office floor,” such as small to medium enterprises.
The net leasable area (NLA) of RLC’s office segment stood at 405,000 square meters (sq.m.) at the end of 2017. It targets to grow the area by 28% to 518,000 sq.m. this year with the opening of office towers in Exxa, Zeta, and Cyberspace Gamma in Ortigas Center.
The office segment will further grow by 18% to 613,000 sq.m. in terms of NLA by 2019, following the addition of Giga Tower, Cybergate Galleria Cebu, Cybergate Magnolia, and Delta Tower Two.
This year, RLC will start construction on two industrial warehouse facilities in Calamba, Laguna. The first of the two industrial hubs will cover around 33,000 sq.m. of leasable space.
“We can rent it to anybody who needs to take up space… It’s a logistics warehouse, so it can be anything the client wants,” Mr. Go said.
The Laguna facilities will be added to RLC’s first industrial facility in Muntinlupa spanning 32,000 sq.m. of leasable space. The company started turning over the facility in March, and will start contributing to its revenues by June.
For its residential segment, RLC looks to launch two more projects before year-end, including a building within the Robinsons Pioneer complex in Mandaluyong City, and another in Ortigas Center. The company has so far launched three residential towers this year, namely Magnolia Tower D, Radiance Manila Bay South, and Acacia Aurora Escalades.
Mr. Go said the company’s residential business is doing “extremely well,” projecting reservation sales to grow by more than 100% in the second quarter of 2018.
Meanwhile, RLC’s mall segment is set to end the year with 1.508 million sq.m. in gross leasable area, following the addition of Robinsons Place in Ormoc, Pavia, Tuguegarao, and Valencia. By 2019, the opening of Robinsons Place in San Pedro and extension of Robinsons Magnolia and Robinsons Place Antipolo will bring RLC’s GLA to 1.61 million sq.m.
RLC has committed to spend P22.5 billion in capital expenditures this year to support its expansion plans. It already spent P6.817 billion in the first quarter of 2018.
The company’s net income went up 12% to P1.55 billion in the first three months of the year, as revenues climbed 17% to P6.36 billion during the period.
Shares in RLC jumped 9.98% or P2 to close at P22.05 each at the stock exchange on Thursday. — Arra B. Francia

Ginebra aims to double net income this year

GINEBRASANMIGUEL.COM

GINEBRA San Miguel, Inc. (GSMI) targets to generate P1.2 billion in earnings this year, around double the net income it realized in 2017 amid an expected recovery in the sales of gin.
“I think we’ll be hitting P1.2 billion for net income,” GSMI President Ramon S. Ang told reporters after the company’s annual shareholders’ meeting in Mandaluyong on Thursday.
The listed beverage manufacturer booked P602 million in net income last year, also 66% higher than the P361 million it posted in 2016.
GSMI is also looking to double its sales volumes for the year. In 2017, the company sold a total of 27.7 million cases worth of beverage products, 10% higher year on year.
“Naka-recover na, nagkaroon ng problema sa volume noon (We have recovered, there was a problem in volume before)… Gin is rebounding, even globally. Maybe we’re riding on that popularity as well,” Mr. Ang said.
GSMI General Manager Emmanuel B. Macalalag said the company plans to expand their capacity to support this year’s profit growth target, but noted the timeline for the expansion is still being assessed.
“We have plans for expansion, just putting in the right time. There’s capacity for now. We’re looking at various sites,” Mr. Macalalag told reporters, adding that plant utilization is currently at 50%.
The planned expansion will be done to address logistical issues, according to Mr. Macalalag.
Mr. Ang said the company will be coming up with a plan on the retrieval of used bottles of GSMI products. Bottle retrieval is currently being done by one of its subsidiaries.
FOLLOW-ON OFFERING
On the other hand, Mr. Ang expressed confidence the company will be able to fully sell the shares from its planned $3-billion follow-on offering (FOO) from the consolidation of conglomerate San Miguel Corp. (SMC)’s food and beverage, beer, and liquor businesses, despite volatility in the local market.
“When we go down for listing, we are confident that we can list the shares,” said Mr. Ang, who also sits as the president and chief operating officer of SMC.
“If your stocks are good, company is good, you should not worry about the market condition. Beer, Ginebra, food, it’s also the same. It’s a very good company,” he added.
The FOO is set to be conducted by San Miguel Food and Beverage, Inc. (SMFBI), the company that will emerge after the consolidation of San Miguel Pure Foods Company, GSMI, and San Miguel Brewery, Inc.
This will allow the company to comply with the 10% minimum public ownership set by the Securities and Exchange Commission, as SMFBI will have a float of only around 4%.
“We want to comply with the minimum public float which is at the moment 10%. We may go as high as 30%, depending on the market condition or our requirement if we want to raise more money then we will sell more shares,” Mr. Ang said.
Mr. Ang said the company may conduct the FOO toward the end of this year or early 2019, noting that the delay in the issuance was due to regulatory approvals.
Shares in GSMI gained 12 centavos or 0.62% to close at P19.48 each at the stock exchange on Thursday. — Arra B. Francia

PAL seeks higher fuel surcharge

By Denise A. Valdez
PHILIPPINE Airlines (PAL) is now seeking a higher fuel surcharge, after the cost of jet fuel continued to rise since it filed its initial application with the Civil Aeronautics Board (CAB) in December.
In a press conference on Thursday, PAL President and COO Jaime J. Bautista said the flag carrier’s first petition had sought to impose a fuel surcharge of between P51 to P207. He noted the figures have to be updated considering the price of fuel has gone up by $13 from January to April.”
Mr. Bautista said the carrier consumes 11 million barrels of fuel very year. “That would mean $143-million additional cost to Philippine Airlines. This is one of the reasons why we are urging government to allow us to collect the fuel surcharge,” he said.
He noted that company’s fuel costs increased by 36% in 2017, which cost PAL $200.1 million. “This is one of the reasons why we did not perform well in 2017; because we were not able to pass on to our passengers the total increase in fuel charges,” he said.
PAL Holdings, Inc., the listed operator of PAL, reported a P7.3-billion net loss in 2017, due to higher fuel prices and ballooning aircraft and passenger expenses.
For the first quarter, PAL Holdings saw a net loss of P1.1 billion, mainly due to higher jet fuel prices. Fuel and oil expenses accounted for the biggest share of PAL’s first quarter expenses at P11.746 billion, up by P2.1 billion from the same period last year.
Mr. Bautista said the weakening of the Philippine peso is also taking its toll on the company, as every P1 depreciation against the US dollar leads to a $3-million loss every year.
In the event that CAB does not give the go-signal for the fuel surcharge, PAL is preparing contingency measures, one of which is the acquisition of “more efficient” aircraft. Mr. Bautista said the airline has bought Airbus 350 and Airbus 321 NEO planes which are more fuel-efficient.
Earlier this week, Cebu Pacific President and CEO Lance Y. Gokongwei said the budget carrier also applied for a fuel surcharge of between P70 to P250 for domestic flights, adding the rising fuel prices is costing the company a P700-million increase in expenses every month.

Megaworld eyes P6.5-B sales from Bonifacio project

MEGAWORLD Corp. is targeting young professionals and executives for its third residential tower inside its McKinley West township in Fort Bonifacio, Taguig City, looking to generate P6.5 billion in sales from the project.
The Andrew L. Tan-led property developer on Thursday launched Park McKinley West, a 25-storey residential tower that offers units with one to five bedrooms.
“From seasoned achievers to young professionals and executives, and rising entrepreneurs, Park McKinley West becomes a testimony of everyone’s accomplishment in life. We are tapping on this new generation of accomplished individuals to live in this rising business district,” Megaworld Senior Vice-President for Sales and Marketing Noli D. Hernandez said in a statement.
Each unit is sized anywhere from 48.5 square meters, 110 sq.m., 212 sq.m., 229 sq.m., and 336 sq.m., depending on the number of rooms.
Amenities include a lap pool and children’s pool, fitness center, function rooms, a pool deck with pool lounge chairs, outdoor sitting areas, water features, children’s playground, game room, and a Sky Deck on the 15th floor. It also added wellness amenities such as a Yoga Room and Outdoor Yoga Deck.
Megaworld aims to complete the project by 2022.
Park McKinley West follows the development of Megaworld’s first two residential buildings in McKinley West, namely St. Moritz Private Estate and The Albany.
Launched in 2015, St. Moritz Private Estate is a two-tower, nine-storey development in McKinley West. Megaworld said earlier this year that it will start turning over the project’s units this year.
Meanwhile, The Albany is a low-rise residential tower that offers 64 units, each with a private balcony. The project is expected to generate P3 billion in sales.
McKinley West is the company’s P45-billion township covering 34.5 hectares. The mixed-use estate sits directly beside Forbes Park and Manila Polo Club.
Megaworld delivered an 11.3% increase in attributable profit for the first three months of 2018 to P3.2 billion, supported by a 10% climb in revenues to P13.1 billion. The company attributed the growth to its residential and office businesses.
Shares in Megaworld gained 6.81% or 31 centavos to P4.86 each at the Philippine Stock Exchange on Thursday. — Arra B. Francia

Donald Trump breaks silence on Roseanne race row, attacks ABC

WASHINGTON — President Donald Trump on Wednesday broke his silence about the racism row engulfing supporter Roseanne Barr, not to condemn her outburst but to attack ABC television for purported media bias.
The US network on Tuesday canceled hit sitcom Roseanne, after star Barr fired off a racist tweet against former White House advisor Valerie Jarrett, who was one of Barack Obama’s closest aides.
Jarrett revealed that Bob Iger, the head of ABC parent company Disney, telephoned her personally to tell her the network was canceling the show.
“Bob Iger of ABC called Valerie Jarrett to let her know that ‘ABC does not tolerate comments like those’ made by Roseanne Barr,” Trump tweeted Wednesday.
“Gee, he never called President Donald J. Trump to apologize for the HORRIBLE statements made and said about me on ABC. Maybe I just didn’t get the call?”
White House Press Secretary Sarah Sanders later defended the president, saying that he was hitting out against media bias.
“The president is pointing to the hypocrisy in the media,” she said.
“This is a double standard that the president is speaking about. No one is defending her comments. They’re inappropriate, but that’s what the point that he was making.”
When the scandal first broke, the White House had deflected questions with Sanders saying: “We have a lot bigger things going on in the country right now.”
Barr, 65 and a vocal Trump supporter who has used Twitter to voice far-right and conspiracy theorist views, took aim at Jarrett in a post that read: “Muslim brotherhood & planet of the apes had a baby = vj.”
She later apologized for what she called a “joke.” But ABC said it was canceling the show, condemning her “abhorrent, repugnant” tweet, which was “inconsistent with our values.”
“I’m not a racist, I never was & I never will be,” Barr tweeted Wednesday, attempting to defend herself against an onslaught of criticism.
“One stupid joke in a lifetime of fighting 4 civil rights 4 all minorities, against networks, studios, at the expense of my nervous system/family/wealth will NEVER b taken from me.”
A since-deleted tweet blaming her outburst on a dose of the sleeping pill Ambien, prompted a swift retort from pharma giant Sanofi.
“While all pharmaceutical treatments have side effects, racism is not a known side effect of any Sanofi medication,” tweeted the French pharmaceutical giant in an acerbic post that quickly went viral.
Roseanne had returned to US screens in March after a 21-year hiatus with Barr’s character recast as a Trump supporter in a rare depiction of working class life on the US small screen.
The show scored huge ratings and had been renewed for an 11th season following largely positive reviews — including from the president. — AFP

Digitization calls for ‘massive investment in retooling of workers’


SINGAPORE — Men and women in suits rushed to meeting rooms at the Capella Singapore.
The venue was vintage Singapore — a blast from the late 1800 era as the Capella hotel was built around two colonial structures, actually former military buildings that were restored.
But the agenda was everything but old: digitization.
They are actually senior executives — managers and directors from Thailand, Philippines, Malaysia, Japan and parts of Europe — about 40 of them, huddled for a lecture by the Lausanne-based International Institute for Management Development (IMD), as part of a five-day management course the business school holds twice a year in Singapore and Switzerland. The case study for that class was the story of DBS Bank’s successful digital transformation.
The Singapore-listed bank’s transformation was over half a decade in the making from 2009 and started with eliminating wastes from paper to customer time. It literally broke down barriers, dismantling traditional branches and making the bank nearly invisible by allowing customers to go around with the bank in their pockets. It meant cutting headcount to be replaced with leaner, central teams of about 15 people. The result was a bank that scales across regions with little investment, yet with high customer satisfaction scores — a lender unrecognizable from what it was about a decade ago.
DBS is a trailblazer in digital banking in this part of the world, and more are expected to follow suit.
Digitization and artificial intelligence (AI), despite their clear benefits, do have a downside: they are a threat to jobs in the region, the Asian Development Bank said.
However, judging by the attendance at IMD’s management classes, Asian executives are embracing the shift, reconciling their old-school mind-sets with those of the young millennials.
“I think the best ones [companies] will digitize quickly, especially when there’s exposure to international competition,” IMD President Jean-Francois Manzoni said in an interview.
The banking sector, as well as companies in the logistics and insurance industries, is likely to adopt fast, capitalizing on data analytics most of them have been using in the past decades.
“Asian economies tend to be younger. There are lots of reasons this [digitization] will happen faster in Asia,” Mr. Manzoni said.
For workers at risk of losing jobs to AI, it’s not all doom and gloom. Google, for instance, has been testing driverless cars, but the trucking industry is still alive.
“Drivers do not just drive,” the IMD executive pointed out. “While some jobs will be lost, jobs in other areas will be created as well.”
That’s where government help must come in.
“There’s a need for massive investment in retooling of workers,” Mr. Manzoni said.
“There are some generations with a digital disadvantage… we need to have investments,” he said, noting that learning is “not a matter of age” as there are people in their 80s who still want to learn.
“At some point, it becomes a national issue how to make people retool,” Mr. Manzoni added.
Countries that “do not help youngsters to be prepared for the world” and say that “they’re too old to retool” risk having their citizens “falling by the wayside,” fanning labor discontent.
Wealthy Singapore, with its lifelong learning investment fund, provides the template its Asian peers can emulate, he added.

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