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2019 Ramadhan Trade Fair opens applications for exhibitors

LAST YEAR’S Ramadan Fair had 75 booths featuring food and non-food products from the region. — ARMM FILE PHOTO

THE DEPARTMENT of Trade and Industry in the Bangsamoro Autonomous Region in Muslim Mindanao (DTI-BARMM) announced yesterday that entrepreneurs may now submit their applications to be among the exhibitors during the 1st BARMM Ramadhan Trade Fair 2019. This year’s Ramadhan, the Islamic month of fasting, is tentatively set to start on May 6 (Saudi Arabia time). DTI-BARMM officer-in-charge Rosslaini Alonto-Sinarimbo said all applications “will be subject to screening and evaluation” by the Technical Working Group of the BARMM Ramadhan Trade Fair. Deadline for submission is April 25 at the BARMM Compound in Cotabato City. Applicants are required to bring their Business Name Registration, IDs, and Sanitary Health Care Certificate.

Flood control project for Davao del Norte now under study

HEAVY RAINS in late January 2019 caused flooding in most parts of Davao del Norte, including the capital Tagum City. — TAGUM CIO

DAVAO CITY — A flood control project that will protect Davao del Norte is now under a feasibility study, based on documents from the Department of Public Works and Highways (DPWH).

The project is part of the six-river Infrastructure and Innovation Facility loan from the Asian Development Bank, which was finalized in Oct. 2017 and has a loan period between 2018-2021.

The $100-million loan has a $64.06 million counterpart from the Philippine government.

“One of the things we were looking at initially before was to put up a big dam in the upstream, initially to become the reservoir and with a hydropower plant component,” Davao del Norte Gov. Anthony G. del Rosario told BusinessWorld on the sidelines of a recent press conference.

He noted that eight of the 11 local government units in the province, including the capital Tagum City, are affected by flooding.

The original plan was abandoned after the DPWH determined that the proposed dam location would be above a fault line.

“One of the (alternative) possibilities… is the creation of water collecting basins upstream. That is a proposal that has a merit,” Mr. Del Rosario said, explaining that this would create lakes that will become sources of potable water as well as for irrigation.

The province has two huge bodies of water, the Saug River and the Libuganon River, which flow from the highlands in Compostela Valley and Agusan del Sur.

These two rivers, during heavy rains, become one huge body of water that inundates the province.

The DPWH plan is to develop flood risk management master plans and feasibility studies for the Libuganon River, one of the 18 major river basins in the country.

“The main output of the Flood Risk Management Plan (FRM) Master Plan will be a priority list of proposed (structural and non-structural) to be measured, to be implemented in short-, mid-, and long-term,” according to the DPWH project document.

Heavy rains in late January this year caused flooding in all parts of the agricultural province within the mainland, sparing only the Island Garden City of Samal, according to a report of the Regional Risk Reduction and Management Council.

The regional office of the Department of Agriculture reported that damage to crops was about P195.25 million. — Carmelito Q. Francisco

Nation at a Glance — (04/23/19)

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

Nation at a Glance — (04/23/19)

BVR on Tour: Polidario-Magdato pair leads Dumaguete Open cast

UNIVERSITY of Negros Occidental-Recoletos alums Alexa Polidario and Erjane Magdato returns to the site of their successful championship run last year as the Beach Volleyball Republic On Tour: Dumaguete Open unwraps on Friday at the Rizal Boulevard sand court in Dumaguete City.

Polidario and Magdato emerged victorious over Samaa Miyagawa of Japan and Tin Lai of Hong Kong in the Negros Oriental capital last November, the most well-attended leg in the history of the four-year old beach volleyball circuit.

A firm believer that sports is a great equalizer and unifier, Dumaguete Mayor Felipe Antonio Remollo hopes that the hosting of the BVR leg will solidify the city’s status as the sports tourism capital in the central Philippines.

Winners of two BVR legs last year, Polidario and Magdato will face tough opposition in the two-day, double-gender event.

Perlas’ Bea Tan and Dij Rodriguez are hoping to make it three in a row after their undefeated runs in the Puerto Galera and Santa Fe, Bantayan Island legs last month, while the international pair of Yuen Ting Chi and Lok Shun are also eyeing to make an impact in the 12-team field.

The NU-Boysen’s sister tandem of Roma Joy Doromal and Roma Mae Doromal, Air Force 1’s May Ann Pantino and Jozza Cabalsa, Smash Bacolod’s Bianca Lizares and Jennnifer Cosas and the University of Santo Tomas duos of Babylove Barbon and Gen Eslapor, and MJ Ebro and Derie Virtusio are the other women’s pairs to watch.

Completing the cast are University of St. La Salle’s Nohlin Jundana and Ceejay Recayo, Air Force 2’s Mikaela Andres and Angel Antipuesto, Sipalay City’s Jesalen Moises and Gelamie Villanueva, and Rizal Technological University’s Reyann Cañete and Sayrel Bermeo.

There are two international pairs in the 12-team men’s division in Chueng Chek Hong and Li Chun Kit, and Wong Ka Yun and Tse Kin Wang, as well as the host Dumaguete, which is represented by Buen Sayson and Reynald Catipay.

Air Force’s Jessie Lopez and Ranran Abdilla, who also ruled Puerto Galera and Santa Fe, Bantayan Island last month, are also vying for their third crown as in many legs this year.

Also slugging it out for the men’s championship are Visayas’ Jade Becaldo and Mike Abria. Colegio de San Agustin-Bacolod’s Marvin Haresco and Mike Anton Beronio, NU-Boysen’s James Buytrago and Pol Salvador, UST’s Efraem Dimaculangan and Rancel Varga, USLS-Bacolod’s Herold Parcia and Deanne Neil Depedro, Bacolod’s Christian Marcelino and Simon Aguillon, Gandang Laban’s Rawsa Inaudito and Nichol Jundana, Perpetual Help’s Jayjay Solamillo and John Patrick Ramos.

After Dumaguete, the BVR on Tour will hold its fifth leg in Lingayen, Pangasinan on April 30-May 1.

Ceres tries to extend dominance in AFC Cup Group G

THE lone unbeaten team in its grouping in the ongoing AFC Cup, top local team Ceres-Negros FC looks to maintain its fine form when it goes for its fourth win in as many games in an away match today in Indonesia.

To take on Persija Jakarta at the Gelora Bung Karno Stadium in Jakarta at 4:30 p.m. (Manila time), Ceres (3-0-0) guns to stay unblemished in Group G and further propel its cause of advancing to the next round of the tournament.

As per tournament format, the top teams in each of the groupings earn an automatic spot in the Zonal semifinals of the tournament.

Ceres is coming off a 1-0 win over Persija Jakarta (1-1-1) on April 3 at its home turf of Panaad Park and Football Stadium in Bacolod City where Bienvenido Maranon (9’) scored early for the team and after which it held tight to book the huge win that kept the “Busmen” ahead of the chasing pack.

It was a victory that team stalwart Stephan Schrock hailed as a “massive” win considering that they still are not in the form where they want to be.

“It was a massive, massive win for us, especially considering that we only play every three weeks as our league hasn’t started yet,” Mr. Schrock was quoted as saying by the official AFC Cup Website after their victory.

“To stay undefeated at the top of the group is very, very good. What we need to improve is our match fitness but that’s hard because the league hasn’t started yet,” added the Philippine Azkals player, referring to the rebranded local league — Philippine Premier League — which was rescheduled to start later this week from the original kickoff of March 30.

In today’s match, Ceres, which has nine points, goes for back-to-back wins over Persija Jakarta to secure another full three points and keep a safe distance from second-running Becamex Binh Duong (2-1-1) of Vietnam which has seven points.

Mr. Schrock said they will do that by way of continuous hard work.

“We work hard because nothing beats hard work. We try to improve things from the previous games and from 1-25, not just the 18 in the squad for game day, all the players are working hard and there for each other,” he said.

Home side Persija Jakarta, for its part, attempts to swing back to the winning track and add to its four points to keep in step with the top two teams in the grouping.

In Group G, only Shan United FC (0-0-4) of Myanmar has been eliminated from the running. — Michael Angelo S. Murillo

Braves crush Indians as Donaldson homers twice

JOSH DONALDSON homered in his first two at-bats and Max Fried tossed 6 1/3 strong innings as the visiting Atlanta Braves breezed to an 11-5 rout of the Cleveland Indians on Sunday night.

Donaldson drove in four runs while Freddie Freeman had a pair of RBI singles to highlight his three-hit performance.

Ozzie Albies had a two-run single and joined Freeman in scoring twice for the Braves, who saw each member of the starting lineup record at least one of the team’s 16 hits.

Donaldson provided the fireworks by depositing a 1-1 slider from starter Shane Bieber (2-1) over the wall in center field for a solo homer in the first inning. The 2015 American League Most Valuable Player wasn’t done, launching a 1-2 fastball from Bieber deep into the bleachers in left field for a three-run shot in the second inning.

Donaldson’s multi-homer performance was his first since Sept. 26, 2017, when he went deep twice off Boston Red Sox ace Chris Sale while playing with the Toronto Blue Jays.

The 33-year-old Donaldson’s power display on Sunday night nearly eclipsed his totals accumulated in a 16-game stretch with the Indians last season. He had three homers and seven RBIs in that span. — Reuters

Endgame magic

63rd USA Chess Championship
Saint Louis Chess Club, USA
March 18-April 2, 2019

Final Standings (all GMs)

1. Hikaru Nakamura 2746, 8.0/11

2-3. Leinier Dominguez Perez 2739, Fabiano Caruana 2828, 7.5/11

4-5. Wesley So 2762, Samuel Sevian 2642, 6.0/11

6. Samuel Shankland 2731, 5.5/11

7-8. Awonder Liang 2590, Jeffery Xiong 2663, 5.0/11

9-11. Aleksandr Lenderman 2637, Varuzhan Akobian 2625, Timur Gareyev 2557, 4.0/11

12. Ray Robson 2667, 3.5/11

Average Rating: 2682 Category 18

Time Control: 90 minutes for the first 40 moves, then 30 minutes play-to-finish with 30 seconds added to your clock after every move starting move 1

Wesley scored two wins, a loss and eight draws in the just-concluded USA Chess Championship and finished in fourth place. He played a quite magical game in round 2 vs. the former Uzbek Grandmaster (GM) Timur Gareyev, who now plays for the United States. He holds the world record in simultaneous blindfold chess play, taking on 48 opponents in Las Vegas last Dec. 4, 2016.

So, Wesley (2762) — Gareyev, Timur (2557) [E15]
US-ch Open 2019 Saint Louis (2.4), 21.03.2019

1.d4 Nf6 2.c4 e6 3.g3

There is some shadow-boxing going on here. Wesley wants to go into a Catalan.

3…Bb4+

Gareyev prefers the Bogo-Indian.

4.Bd2 a5 5.Bg2 0–0 6.Nf3 b6

This move in combination with …Ba6 and …Ra7 is an invention of the Ukrainian tactical genius Oleg Romanishin.

7.0–0 Ba6 8.Ne5

The position Romanishin was aiming for comes about after 8.b3 d5 9.Qc2 Ra7 10.Rd1 Qe7 11.Ne5 c5 Black has completely equalized, at least. Rashkovsky, N-Romanishin, O Odessa 1973 0–1 36.

8…Ra7 9.Bxb4 axb4 10.Qa4

Trying to improve on 10.a3 d6 11.axb4 (11.Nf3 Bxc4 Black manages to snatch a pawn) 11…dxe5 12.dxe5 Ng4 13.b5 Nxe5 14.b3 Qe7 15.Qd4 f6 16.bxa6 Rd8 17.Qe3 Rxa6 18.Nc3 Rxa1 19.Rxa1 Nbc6 game is completely equal. Hjartarson, J (2530)-Jussupow, A (2590) Reykjavik 1985 0–1 (40).

10…c5 11.a3!

See? Now if Black plays 11…d6 12.Nf3 the c4–pawn is not en prize.

11…bxa3 12.Nxa3 Rc7 13.dxc5 bxc5 14.Rfd1

The top players sit down before the start of big tournaments and plan out their event. For example they figure out who it is they will try to beat and who they should conserve their energy against by agreeing to a draw early. Obviously Gareyev is on Wesley’s “hit list” and the position on the board is exactly what White was aiming for — a small but stable advantage (in this case pressure down the d-file) which he will grind on until Black makes a mistake.

14…d5 15.e4 d4 16.b4 Nfd7 17.Nxd7 Qxd7 18.Qxd7 Nxd7 19.bxc5 Nxc5 20.e5 Nb3 21.Rab1 Na5! 22.Bf1 Bxc4 23.Rdc1 d3!

Of course not 23…Rfc8? which loses a piece to 24.Rb4. Black cannot withdraw the bishop because of 24…Bd5 25.Rxc7 and the threat of a back rank mate prevents recapture.

24.Bxd3 Bxd3 25.Rxc7 Bxb1 26.Nxb1 Nb3 27.Nc3 Nd4 28.Kg2

Gareyev has defended well and kept his opponent’s forces at bay. Wesley only has two pluses left — a rook on the 7th rank and more space due to his pawn on e5.

28…f6

Black of course wants to exchange pawns. Some have said that this is a mistake but I don’t think so. The e6 pawn becomes isolated but it is defended easily enough.

29.exf6 Rxf6 30.Rd7 Nf5 31.Ne4 Rf8 32.Nc5 Re8 33.g4 Nh4+ 34.Kg3 Ng6 35.f4 Nf8 36.Rc7 h6 37.h4 Ra8 38.h5 Ra3+ 39.Kf2 Rh3 40.Re7 Rc3 41.Ne4

White could have won a pawn with 41.Nxe6 Nxe6 42.Rxe6 but then, with his pawn already on h5, this position is a clear draw.

41…Rd3 42.g5 Rd7 43.Re8 Kf7 44.Ra8 Ke7 45.Ke3 Rd1 46.g6 Rd5 <D>

POSITION AFTER 46…RD5

Nothing wrong with 46…Rd7 but Gareyev has no inkling of what is to follow. We should thank him for that, though, as otherwise Wesley’s tremendous concept will just be relegated to the notes.

47.Nf6!!

A complete surprise. The immediate point is that 47…gxf6?? 48.g7! wins on the spot. But what about the other moves? After the shock subsided Gareyev continued …

47…Kxf6

The correct reply. 47…Rd8 48.Ng8+ Ke8 49.Rxd8+ Kxd8 50.Nxh6! just wins a pawn.

48.Rxf8+ Ke7 49.Rf7+ Kd6?

This is where Gareyev errs. He should have played 49…Ke8 50.Rxg7 Rxh5 which holds the draw. However, it is a natural reaction to keep your king active and take it out of the back rank.

50.Rxg7 Rxh5 51.Rd7+!

This is it. The g-pawn cannot be prevented from queening.

51…Kxd7 52.g7 Rh3+ 53.Kf2 Rh4 54.Kg3 Rh1 55.Kg2 Rh4 56.g8Q Rxf4 57.Qg7+ Kd6 58.Qxh6

KQ vs KRP is a win of course for the side with the queen, but it is by no means easy.

58…Rf5 59.Qg7 Kd5 60.Kg3 Kd6

The King has to retreat. 60…e5? 61.Qd7+ Ke4 62.Qh7 winning the rook.

61.Kg4 Kd5 62.Qc7! Kd4

If Black puts the king on e4 then 62…Ke4 63.Qd6 Re5 now a bit of triangulation to lose a move 64.Kg3! Rg5+ 65.Kh4 Re5 66.Kg4 we have the same position as earlier but now it is Black to move, and he has to lose a pawn.

63.Qd6+ Rd5 64.Qxe6

Now it is KQ vs. KR. Black should keep his rook close to his king to avoid losing it to a fork while White should force the enemy king to the edge of the board and go for the “Philidor position,” one of three such positions in the endgame with that name. One is the drawing technique for the inferior side in a KRP vs. KR endgame, another is how to win with KRB vs. KR, and this is the third.

Even with this knowledge the win is by no means trivial. I remember during the 2001 FIDE World-Championship KO matches Peter Svidler got KQ vs. Gelfand’s KR but could not mate within the 50–move allowance. The reader may scoff and say that his inability is due to Svidler’s lack of time but I should point out that in December 1978 the computer programme BELLE engaged GM Walter Browne to try to beat it with KQ vs. the software’s KR. The game was played at a tournament time limit but Browne also overstepped the 50–move limit and had to concede the draw. This reinforces my point — Q vs. R is far from simple to play.

64…Re5 65.Qc6 Rc5 66.Qb6 Kd5 67.Kf5 Kd4+ 68.Ke6 Kc4 69.Kd6 Rd5+ 70.Kc6 Re5 71.Qa6+ Kd4 72.Qa2!

Black’s king

72…Rf5 73.Qb2+ Ke4 74.Kd6 Rg5 75.Qc2+ Kf4 76.Ke6

Basically the same position as in move 72 but with the black king and rook shifted several squares to the right. This is really instructive.

76…Re5+ 77.Kf6 Re3 78.Qf5+ Kg3 79.Kg5 Kg2 80.Kh4 Kg1 81.Qf4 Re2 82.Kh3 Ra2

Alternatives:

82…Rg2 83.Qc1+ Kf2 84.Qd2+ wins the rook;

[82…Re8 83.Kg3 Rg8+ 84.Kf3 Rg2 85.Qh4 is the Philidor position with Black to move, see explanation later]

83.Qg4+ Kf1 84.Qc4+ Re2 85.Kg3 Ke1 86.Qc1# 1–0

Let us get back to the so-called Position:

THE PHILIDOR POSITION

If the diagram does not reproduce well here are the piece placements:

White: Kc6, Qa5

Black: Kb8, Rb7

With Black to play he loses his rook to a fork (you will see later) and so with White to play the idea is to use triangulation and lose a move. Here is how it is done:

1.Qe5+ Ka7

1…Kc8 2.Qe8#;

1…Ka8 2.Qa1+ Kb8 is the same position as in the illustration (2…Ra7 3.Qh8#)

2.Qa1+ Kb8 3.Qa5!

Now we are back to the Philidor position but this time with Black to play. The rook will fall:

3…Rb1

The other possibilities:

3…Rb3 4.Qd8+ Ka7 5.Qd4+ Kb8 6.Qf4+ Ka8 7.Qa4+;

3…Rf7 4.Qe5+ Ka7 5.Qe3+ Kb8 6.Qe8+;

3…Rh7 4.Qe5+ Ka7 (or a8) 5.Qa1+ Kb8 6.Qb1+]

4.Qd8+ Ka7 5.Qd4+ Kb8 6.Qh8+ Ka7 7.Qh7+

A little bit of endgame theory here and there.

 

Bobby Ang is a founding member of the National Chess Federation of the Philippines (NCFP) and its first Executive Director. A Certified Public Accountant (CPA), he taught accounting in the University of Santo Tomas (UST) for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.

bobby@cpamd.net

Leadership

Heading into the playoffs, the Celtics were regarded with wariness. After going through a rough regular season that had them stumbling to the fourth seed in a conference they were supposed to lord over, they faced no small measure of uncertainty. Six-time All-Star Kyrie Irving struggled to assert his leadership over his younger teammates. Fellow Big Three members Al Horford and Gordon Hayward battled with consistency. Even head coach Brad Stevens faced pushback for seemingly poor decision-making in the crunch. The roller-coaster ride led to the green and white openly wondering where all the fun went and why it appeared to have been replaced with listless play.

All the same, the Celtics remained optimistic of their chances. They were, after all, still extremely deep and talented. And Irving was, after all, not an unparalleled shot maker who knew, and had already proven, how to deliver under pressure. Considering their predicament, the fact that the Pacers, their first-round opponents, began the postseason mired in a swoon certainly helped their cause. For all the grittiness of the underdogs, pundits figured the absence of reigning National Basketball Association Most Improved Player Victor Oladipo to be too big of a handicap to overcome.

As things turned out, all the pre-series prognoses couldn’t have been more on the mark. Notwithstanding the noise, the Celtics did just fine. They made short work of the Pacers, coming up with a playoff sweep for just the second time in 33 years. And the reason was simple: They had Irving and the Pacers didn’t have Oladipo, enabling them to dominate the second half of games. All told, they put up 17 more points in the third quarter and 22 more in the fourth. As losing mentor Nate McMillan noted, “a lot of people downplayed [them] … but we knew they would get it right come playoff time.”

Indeed, the Celtics stamped their class, and they’ve earned some rest — not to mention a much-needed morale boost — prior to meeting with the Bucks. The league leaders will be much harder to overcome than the Pacers, but Irving isn’t fazed. “Honestly, I’m not really paying attention to who is the top team in the conference during the regular season,” he argued. “Those wins are racked up already. Those are pretty set. I think at this point it’s about who can beat a team in a seven-game series. It’s just a reset button. We know what to expect.”

Whether the Celtics are now in the proper state to meet outsized expectations remains to be seen. This much is clear, though: Irving’s ready to do what he can, and needs to, in order for them to advance. In this regard, it’s telling that he scored the most number of points just once, but dished out the most number of assists in each of the four games, against the Pacers. As Stevens pointed out, “he just kept getting rid of [the ball] to the next guy, and the next guy had to make the right read and play … I think we’re a hard team to double if we’re really moving it like that.” Simply put, he’s exercising leadership by example, and those around him are taking notice.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

The world’s largest Gifts & Premium Fair set on April 27 to 30 in Hong Kong

A record of 4,380 exhibitors from 30 countries and regions will be gathering at the 34th Hong Kong Gifts and Premium Fair, to be held at the Hong Kong Convention and Exhibition Centre on April 27 to 30.

Organized by the Hong Kong Trade Development Council (HKTDC) and co-organized by the Hong Kong Exporters’ Association (HKEA), the fair is expected to be the largest marketplace for gifts sector in the world. Among various product zones, Hall of Fine Designs will return with renowned brands while World of Beauty, Fitness & Well-being will make its debut to expand their product offerings.

The fair will play host to over 140 participating brands, including B.Duck from Hong Kong, Hong Kong’s Team Green, which specialises in 3D eco-puzzle, Japan’s Kokuyo, with their signature washi-paper notebook, Germany’s classic notebook brand Leuchtturm as well as Italy’s creative stationery brand Pininfarina.

The World of Beauty, Fitness & Well-being zone will be making its debut this year, showcasing a multitude of cosmetics, skincare, fitness and SPA products from Mainland China, Hong Kong, Korea, India and New Zealand. The Aromatherapy Company from New Zealand will introduce homemade fragrance, candles and lotions made by natural ingredients, while bespoke fragrances are also on offer.

Continuing its reputation as a springboard for start-ups, the Gifts Fair will feature innovative and unique gifts ideas from over 30 start-ups coming from Hong Kong, Mainland China, Taiwan, and the Netherlands. Among these will be Muherz, a start-up from Taiwan, which will present the world’s smallest portable laser engraver Cubiio.

Additionally, participants can join the “Startup . Smart Launch” sessions during the fair period to introduce their products and business ideas to industry players.

Aside from the Start-up zone, other product zones in the fair include World of Gift Ideas, World of Camping & Outdoor Goods, Fashion Accessories, Figurines & Decorations, Toys & Baby Products, Advertising Gifts & Premium, Tech Gifts, and Party & Festive Items.

Group pavilions representing Mainland China, Taiwan, Korea, Thailand, India and the United Kingdom will be established to present gifts ideas across the globe. The HKEA will showcase Hong Kong’s most promising enterprises at three major zones: Isle of Originality, Brand Oasis and Smart Design HK. The association will also present winning designs of Hong Kong Smart Design Awards in the pavilion.

Meanwhile, seminars and forums will be held, covering a full spectrum of topics including the latest retail trends in the United States and Mainland China markets, brand-building strategies and business opportunities in the emerging market.

Guests will be able to keep track of the various events at the fair through the latest version of the HKTDC Marketplace app, which introduced the Exhibitor e-Badge that offers seamless access to the fairground. The initiative, together with the Buyer e-Badge and the e-Business Card function, will enable exhibitors and buyers to link up digitally simply by scanning each other’s QR code, strengthening connectivity between exhibitors and buyers.

Last year, the fair attracted over 48,000 buyers from 139 countries and regions. The Hong Kong International Printing & Packaging Fair will take place concurrently at the AsiaWorld-Expo, offering expanded sourcing opportunities for gift and premium buyers. A complimentary shuttle bus service will run between the HKCEC and the AsiaWorld-Expo at regular intervals during the course of the two fairs.

On a promising track

Mark Louis F. Ferrolino, Special Features Writer

In the starting years of mutual fund concept in the Philippines, the industry had a rough start due to lack of government regulation, deteriorating political and economic condition, and an undeveloped equity market, among others. Today, about six decades after, a lot has changed. It cannot be denied that the industry shows greater stability and is poised for stronger growth, given the improving fiscal and economic environment of the country.

According to the Philippine Investment Funds Association (PIFA), the country’s association of mutual fund companies, there are a total of 66 mutual funds in the country as of March 12, 2019.

The increasing number of mutual funds in recent years can be attributed to several factors. One of these is the development of necessary controls and regulations.

Last year, the Securities and Exchange Commission (SEC), the country’s corporate regulator, issued implementing rules and regulations (IRR) of the Republic Act No. 2629, also known as the Investment Company Act (ICA).

The IRR amended the ICA Rule 35-1, initially published in 1998, with the aim to develop the Philippine capital market that will help prepare investment companies qualify and compete in international cross-border transactions by aligning the rules with global standards and practices.

BPI Investment Management Inc. (BIMI), a wholly owned subsidiary of the Bank of the Philippine Islands, told BusinessWorld in an e-mail that the said regulatory development enables investment companies to provide more investment opportunities as well as align with global standards and best practices.

As stated in IRR of the ICA, “No person shall act as an investment company unless it is registered as such in accordance with the Corporation Code of the Philippines, the Act (the ICA, Republic Act No. 2629), the SRC (Securities Regulation Code, Republic Act No. 8799) and their implementing rules and regulations (IRR).”

It added that a mutual fund company that already registered its common shares for offer or sale may also be allowed to register units of participation. However, it noted that the computation of the net asset values for the share shall be computed separately from the assets generated from the issuance of the units.

The rules also require investment companies to appoint a fund manager with an investment company adviser license. The fund manager, as well as its directors, chief executive officer, key executive officers or managers, and substantial shareholders, shall be fit and proper to serve based on their honesty, fairness, integrity, diligence, competency, capability, and financial soundness.

Amidst the improving government regulations, there are still some challenges being faced by mutual fund entities today. One of which, according to BIMI, is the competition with similar products, such as Unit Investment Trust Fund (UITF) and Variable Universal Life Insurance (VUL).

Technically, mutual fund, UITF and VUL are all types of pooled funds; investors can gain or lose depending on how the fund and the market perform. As defined by PIFA, mutual fund is an investment company that pools the funds of many individual and institutional investors to form a massive asset base. UITF, on the other hand, is a ready-made investment that allows the pooling of funds from different investors with similar investment goals, while VUL is a cash-value life insurance that offers both death benefit and investment features.

To address the said competition, BIMI said that the industry has been working closely with different regulatory bodies to develop or update existing regulations with the goal of promoting an equal playing field.

Another difficulty that mutual fund entities currently face is the perception of the general public towards investing in mutual fund. BIMI said that investors still considered opening an account or topping up as a burden — they perceived mutual fund as expensive and inconvenient.

“In the past, investors would have to physically have to go to the investment company or a branch (most are located in urban areas) to open and subscribe into a mutual fund. However, significant efforts have been [made] to make investing in mutual fund convenient and accessible through the use of online or digital channels. Several investment companies have also lowered their minimum investment amount to encourage more people to invest,” BIMI said.

In today’s era, BIMI still sees that Filipinos are lacking proper knowledge about investing. This makes it tougher for mutual fund companies to expand their AUM and client base.

Based on the 2017 Financial Inclusion Survey of the Bangko Sentral ng Pilipinas (BSP), only 22.5% of Filipino adults have some form of investment — the most common types are contributions to Social Security System (SSS) and Pag-IBIG. The report noted that only 3% of adults invest in stocks, bonds, UITFs, mutual funds, and other managed investment schemes.

Among those without investment, the most common reason is lack of money due to unemployment, followed by the perception of high cost, lack of awareness, and perceived lack of need.

Despite several challenges in the industry, BIMI remains optimistic about the future of the local mutual fund industry.

“With the different regulatory developments and the current digital revolution, there’s a lot of opportunity for the mutual funds to grow its AUM and client base,” BIMI said, noting that a lot of financial institutions are now enhancing their digital capabilities to reach a wider client base and improve cost efficiency.

‘Underspending’ shaves deficit in Q1

THE STATE’s fiscal deficit shrank last quarter amid “underspending” with delayed enactment of the 2019 national budget, according to preliminary Bureau of the Treasury (BTr) data which the Finance department released on Thursday.

Citing a BTr report submitted to him on April 17, Finance Secretary Carlos G. Dominguez cited in a Viber message to reporters “P.1.01 bln [billion] daily underspending for primary expenditures (non-interest payments) for Jan[uary]-March, based on BTr estimates.”

First-quarter fiscal deficit shrank 41% year-on-year to P90.245 billion, missing the program by 52%. In March alone, the fiscal deficit shrank by 47% annually to P58.409 billion, falling 51% short of program.

Whittling the deficit were smaller state disbursements as the government operated on a reenacted 2018 national budget that left new programs and projects unfunded. President Rodrigo R. Duterte finally signed the national budget into law on April 15, nearly four months late, as approval of the spending plan was stalled by a tiff between leaders of the House of Representatives and the Budget department, and then between the House and the Senate which accused each other of irregular fund realignments. He vetoed about P95.3 billion in appropriations that he said were not in accordance with his administration’s priorities, slashing this year’s national budget to P3.662 trillion.

Consequently, state disbursements missed the program by 11% at P777.99 billion in the first quarter, although they edged up a percent from a year ago. In March alone, state spending fell by eight percent from a year ago and fell 16% short of program at P287.327 billion.

State revenue collections sustained double-digit growth rates last quarter, increasing by 11% year-on-year though narrowly missing the program by 0.03% at P687.745 billion. Collections of the Bureau of Internal Revenue and of the Bureau of Customs went up by 11% and nine percent respectively, while non-tax revenues “rose by 18% with higher dividends from remittances from BSP (Bangko Sentral ng Pilipinas) and PDIC (Philippine Deposit Insurance Corp.) totalling P8.6 billion.”

March alone saw state revenue collectors rake in 13% more from a year ago and top the program by three percent at P228.918 billion.

Michael L. Ricafort, economist of the Rizal Commercial Banking Corp., said in a mobile phone message: “The latest budget deficit data may somewhat reflect the delays in the 2019 national budget, despite the sustained growth in government spending especially on infrastructure as well as increased government spending related to the upcoming mid-term elections in May 2019.”

“With the 2019 national budget enacted into law last week, government spending may pick up again in the coming months, thereby leading to faster economic growth.” — Reicelene J. N. Ignacio

Groups line up for land reclamation

By Arra B. Francia
Senior Reporter

PROPERTY DEVELOPERS and local government units (LGUs) alike are rushing to get a slice of the robust demand for real estate projects in the so-called Bay Area, with the Philippine Reclamation Authority (PRA) awash with almost two dozen applications to reclaim more land along the Manila Bay coastline.

Land reclamation is the process of recovering land from bodies of water like the sea, lake or riverbeds with the aim of putting the new land to productive use.

As of March 11, the PRA had 22 reclamation projects along Manila Bay’s coastline on its table, six of which have secured approval and one already in implementation stage (see map).

These projects are typically partnerships between a private developer and an LGU.

“They (companies) have proposals with the LGUs, so on their part, undoubtedly that is a business endeavor. On the part of the LGU, that is probably part of their economic trust,” PRA General Manager and Chief Executive Officer Janilo E. Rubiato told BusinessWorld in a Feb. 28 interview.

Since its establishment in 1977 under the late strongman Ferdinand E. Marcos, the PRA has accomplished one reclamation project in Metro Manila: the Bay City Reclamation Project, which was formerly called Boulevard 2000.

The Bay City Reclamation Project, composed mostly of business parks, encompasses the cities of Pasay and Parañaque.

One of the major landowners in the project is the SM Group, which property analysts say has contributed to the major boom in demand for projects in the Bay area.

“What SM did was to develop a practical mass of land in the area, and it has succeeded in doing that. They started with a church, then we had a mall. People started going to the Mall of Asia, and then people saw the start of office and condominium projects,” Colliers International Philippines Research Manager Joey Roi Bondoc said in a phone interview.

The Metrobank Group of Companies also had its stake in the Bay City Reclamation Project, where it has since put up a dealership for auto unit Toyota Motors Philippines, residential condominiums, as well as a mix of retail and commercial establishments.

OPPORTUNITY
Since then, demand for more property developments in the Bay Area has escalated.

For instance, D.M. Wenceslao & Associates, Inc. (DMWAI) — the developer of mixed-use estate Aseana City in the Bay Area — said that undeveloped land in its property now commands rates of P400,000-500,000 per square meter (/sq.m.).

“Reclamation projects are essentially real estate projects. The financial viability of the real estate potential of these projects is on a case-by-case basis. The benefit lies only if there is a high probability of the future development potential of the property,” DMWAI Chief Executive Officer Delfin Angelo C. Wenceslao said in an e-mail.

Colliers projects office supply to reach about 1.16 million sq.m. in the Bay Area in 2021, a 72% increase from a supply of 673,200 sq.m. by the end of 2018.

“If you were just to base it on supply and demand, it really shows you that this sublocation is really receiving a lot of strong demand. So the tendency for developers that have vast experiences in reclaiming land is to gravitate towards the Bay Area and we are seeing the growing opportunities there,” Mr. Bondoc explained.

This demand is primarily sustained by outsourcing firms followed by Philippine Offshore Gaming Operators (POGOs). The latter has been thriving over the past three years ever since President Rodrigo R. Duterte assumed office in 2016, whose administration paved the way for the institutionalization of the offshore gaming sector in the country.

Data from Colliers show that POGOs accounted for 30% of total office space absorption in Metro Manila in 2017 and about 20% in 2018. Despite the smaller share last year, absolute figures were at 310,000 sq.m. and 303,000 sq.m., respectively, showing the sustained demand from the sector.

The residential sector has also been riding along the robust demand for office spaces. Prices of condominium units have shot up in the previous years, with Colliers noting that the presence of Chinese employees in POGOs have prompted a 30-50% increase in rental rates for condominium units in the area.

For real estate consultancy services firm JLL Philippines, reclamation projects can provide several benefits to the Philippine economy.

“(Reclamation projects provide) revenue source for the government; better masterplanned communities which combine infrastructure with real estate; and, if successful, [a driver of] economic growth in the area,” JLL Philippines Head of Research and Consulting Janlo delos Reyes said in an e-mail.

Colliers’ Mr. Bondoc said the most immediate effect of these types of projects is the creation of jobs for Filipinos and foreigners alike.

“More office buildings, more condos being built — that means more construction workers being hired and basically if we have an economy that is growing 6-6.5% per annum, now there is an opportunity to develop more support facilities for that growth,” Mr. Bondoc said.

Mr. delos Reyes noted that Metro Manila still accounts for approximately 40% of the country’s economic output, resulting in the “agglomeration of business in the metropolis.”

The JLL Philippine executive noted that the limited amount of reasonably priced land within the region has prompted developers to resort to reclamation projects.

“Typically, investors would require huge tracts of lands for investments which is difficult to find in Metro Manila, in addition to the challenge of consolidation,” Mr. delos Reyes said.

Asked if land reclamation is a more efficient land banking strategy for developers, Mr. delos Reyes said that this depends on the market conditions of the area.

“Mature real estate markets and geography-challenged areas are best suited for reclamation projects. Meanwhile, land acquisition is a better strategy in emerging markets that still have a large number of available and undeveloped land,” he explained.

For DMWAI’s Mr. Wenceslao, reclamation becomes efficient only if there is a shortage of available land supply in a specific location “deemed essential” by businesses concerned.

Mr. Wenceslao explained: “The only reclamation worth exploring is responsible reclamation (which) can be defined by: in terms of adequately assessing the supply-and-demand justification for the project; if the proposed project is legally compliant (including environmental, etc.) and financially feasible; and finally, the project has to take into account the execution capability and track record of the relevant party/parties proposing the project.”

While the prospects of land reclamation seem promising, the Duterte administration has recently changed the rules for the approval of such projects.

The president signed last month Executive Order (EO) 74, transferring control and supervision of the PRA to the Office of the President (OP) from the Department of Environment and Natural Resources (DENR).

This also gave the PRA Governing Board the authority to approve all reclamation projects, a power previously held by the National Economic and Development Authority (NEDA), while the PRA had the right to continue to process, evaluate and recommend approval of proposed reclamation projects to the NEDA Board.

PRA’s Mr. Rubiato said that despite being transferred to the OP, the approval process for reclamation projects will probably remain the same for proponents.

“Hindi naman sabing mapapabilis in the sense na it would become reckless and negligent,” he explained.

“Kinuha lang ng presidente yung another layer of approval (It will not be streamlined in the sense that it would become reckless and negligent. The President just removed another layer of approval),” he added.

“As to the processes, we are guided by the timelines… we still have to comply with the requirements set by the DENR in so far as the issuance of the ECC (environmental compliance certificate) is concerned and walang nabago doon, ganoon pa rin iyon (and nothing changed, that requirement remains).”

The PRA has yet to release the implementing rules and regulations for EO 74, which will outline the new steps that proponents will take.

It will also be crafting a regional development plan that will serve as the master plan for all reclamation projects moving forward.

Approved Reclamation Projects along Manila Bay

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