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SEC warns public against investing in Organico

THE SECURITIES and Exchange Commission (SEC) has advised the public against investing in Organico Agribusiness Ventures Corp. due to its illegal investment activities.
In an advisory posted on its website, the commission described Organico as a company with interests in organic farming, poultry and piggery, as well as telemarketing, and construction.
The SEC found Organico to be soliciting investments of at least 10 shares priced at P1,800 each from the public. In return, an investor is promised P450 per share every 15 days, for a total of P2,700 in three months.
The funds are allegedly used to support Organico’s businesses in organic farming and the piggery, among others.
The company was also found to offer a 90-day investment scheme where investors are promised a profit of P7,000 after three months, alongside their initial investment of P3,600. The money is supposedly used to raise a piglet.
“The public is hereby informed that Organico Agribusiness Ventures Corporation is not registered with the Commission as a corporation nor as a partnership under the Corporation Code of the Philippines and is not authorized to offer, solicit, sell or distribute any investment/securities,” the SEC said.
The country’s corporate regulator noted that soliciting investments require the company to secure a secondary license, as per Sections 8 and 12 of the Securities Regulation Code. These sections pertain to the registration of securities with the SEC.
Those found to be salesmen, brokers, dealers, or agents of Organico may also be prosecuted and held criminally liable by the commission. They face fines of up to P5 million, up to 21 years imprisonment, or both.
The SEC will also be submitting the names of people involved will Organico to the Bureau of Internal Revenue for the appropriate assessment of penalties and/or taxes. — Arra B. Francia

Treasuries signal bearish era

FOR global markets, it’s back to life, back to reality.
As the Treasury selloff kicks off in earnest, Citigroup Inc. says investors should prepare for a possible “normalization’’ of risk premiums across credit and emerging markets as the era of monetary distortion unravels.
A bearish breakout in the world’s largest bond market remains an underestimated risk, strategists Mark Schofield and Ben Nabarro wrote in a Monday note. They caution a “structural re-pricing of asset markets” — the like of which hasn’t been seen since the financial crisis — could be brewing.
“Recent dialogue suggests that investors are much more attuned to the scenario in which rising yields and a strong dollar choke off the recovery, bringing yields back down, than they are to a scenario in which we see rates back to pre-crisis levels,” the pair wrote.
Their bearish comments follow a retreat across global debt markets last week that drove the yield on 10-year US notes firmly above its 3.05% resistance level. Investor sentiment remains sanguine, according to the strategists, with bulls arguing Treasury headwinds have been exacerbated by transitory forces like oil and stretched positioning. And the healthy business cycle is seen offsetting a more-restrictive monetary climate, keeping risk premiums low.
The retreat in US debt has been driven by real yields rather than market-derived headline inflation expectations, suggesting an uptick in oil prices isn’t the main culprit behind the selloff, according to Citi.
The US economy’s upward march in concert with a term premium — the extra compensation to hold longer-maturity Treasuries over short-term securities —would justify the 10-year benchmark at 4% to 4.5%, according to Citi.
The strategists don’t necessarily see bond yields heading to such giddy heights. And even if they did, by slamming the brakes on two key drivers of global growth — emerging markets and US expansion — it could create a “self-stabilizing” mechanism that cushions the impact on risk premia by spurring a rally in US bonds.
It all adds up to a complicated picture for investors, but for Schofield and Nabarro that’s not enough to justify why the various Treasury breakout scenarios are priced so “asymmetrically.” That is, why traders judge that Treasury yields are more likely to tumble than continue their upward march. — Bloomberg

Traffic is the problem says CCP’s new chairperson Margie Moran

TRAFFIC, and not the misconception that art is elitist, is the reason why many find the Cultural Center of the Philippines (CCP) to be, literally and figuratively, hard to reach, said the CCP’s new chairperson, Margarita “Margie” Moran Floreindo.
The former president of CCP resident company Ballet Philippines (BP), speaking to the press after her oath taking on May 17, said that the notion that art is snobbish is only a misconception.
“It’s just a perception. For the past years, the CCP has been active in bringing the people here. We’ve been doing that for 10 years in Ballet Philippines, and I am sure the other resident companies are doing the same. It’s just a hallowed perception,” she said.
From 2016 to 2017, the CCP audience grew from 655,000 visitors to 678,000, and the target is to reach one million attendees by 2020.
“The problem here is the traffic. It makes it [a problem] for people from Quezon City, for instance, to come here. I find it so satisfying when we invite public school students to come and watch our shows and they dress up in their best, they look forward to it, and it changes their way of thinking when they are able to witness and experience a show. It’s the same with the young visual artists who come and visit the exhibits — it enriches them,” said Ms. Floreindo.
She was appointed as a member of the CCP’s Board of Trustees by President Rodrigo R. Duterte in January this year, and in April she was elected to head the board.
“I am not just a chairperson, but a chairperson plus something,” said Ms. Floreindo, who succeeded Emily Abrera.
Thanks to her being a household name — many people still remember that she won the Miss Universe pageant in 1973 — she said she’ll use her clout to talk, approach, and influence people to embrace more culture and art activities in the country. After all, it is the mandate for the CCP trustees: to make art and culture accessible to everyone.
“I will just build on what Emily Abrera has done, and she will still be in the Board, anyway. We also have new infusion of young members of the board, which makes it more exciting,” said Ms. Floreindo.
The current member of the board are Arsenio Lizaso, Stanley Borero Seludo, Nestor Jardin, Michelle Nikki Junia, Zenaida Tantoco, Mary Rose Magsaysay-Crisostomo, Anthony de la Cerna, Jaime Laya, and Emily Abrera.
She added that there will be no difference in leadership style. “There will not be any change in vision, we will follow the path that has been set by our predecessors,” she said.
For the coming years, the CCP is preparing for many celebrations like the 50th anniversary of CCP and Ballet Philippines (Kathleen Liechteinstein, an advocate of culture and arts, has taken over Ms. Floreindo’s former post as BP president).
Cinemalaya and Pasinaya — two of the CCP’s best attended events — will also mark 15th anniversaries next year.
Moreover, the CCP will be unveiling new buildings in the next few years — the Black Box Theater in 2019, with the New Artists Center and New Performing Arts Theater to follow.
“It will be a season of edgy and experimental productions that will suit the young audiences,” Ms. Floreindo said of her vision to bring attract more people to visit the CCP.
Many may have known Ms. Floreindo as a former beauty queen, but she has always had an artistic side, taking dance lessons in her youth then joining musicals that were shown at the CCP. She also co-produced the award winning film Bagong Buwan.
As BP president, Ms. Floreindo spearheaded fund-raising campaigns like Art Auctions and Ballet Barbie for BP, which have made the company sustainable.
During her presidency, BP was also able to establish branches of its dance school in SM Aura, the Greenhills Theater Mall in San Juan, and Victoria Sports in Quezon City. — Nickky Faustine P. de Guzman

UK retailer M&S says to shut more than 100 stores

LONDON — British food-to-clothing retailer Marks and Spencer will shut more than 100 “underperforming” UK stores in an ongoing restructuring, it said Tuesday.
The high-street chain has expanded its closure plans as it aims to shift at least a third of sales online, the group announced in a statement.
The London-listed giant did not specify the number of job losses — but thousands of positions are believed to be at risk, according to media.
“M&S will now close over 100 stores in total by 2022, including 21 that have already closed and the 14 stores that are announced today as proposed for closure or set to close,” the company said.
M&S had in November 2016 launched a five-year overhaul of its UK stores amid fierce competition from supermarkets and budget garment chain Primark — as well as online giants like Amazon. The restructuring was accelerated last year.
“We are making good progress with our plans to reshape our store estate to be more relevant to our customers and support our online growth plans,” said Sacha Berendji, M&S retail, operations and property director.
The retailer, which had a total of 1,035 stores at the end of its 2017-2018 financial year, will publish its annual results on Wednesday. — AFP

Wells Fargo to boost auto loans

WELLS FARGO & Co. Chief Executive Officer Tim Sloan said the firm is ready to increase lending for car sales after pulling back last year, and it’s now looking with consternation at the commercial real estate market.
In auto lending, “we’ve pulled back enough and now we’re going to be growing that business again,” Sloan said Monday in an interview with Erik Schatzker on Bloomberg Television. Yet, “there are some markets that we’re a little bit concerned about.”
Some transactions in commercial real estate seem “frothy,” he said, without giving examples. The San Francisco-based firm still likes that business, he noted.
Wells Fargo decided to rein in car financing in mid-2017 and tighten underwriting standards. The decision came as a drop in vehicle resale prices made it harder for lenders to blunt losses by repossessing cars when borrowers default.
The firm previously signaled it could resume growth in that business some time later this year. In February, Wells Fargo said it aimed to complete consolidation of its regional car-loan centers by April, and that lending would then increase within two quarters.
Sales of investment properties in Manhattan, the nation’s largest commercial real estate market, got off to a faster start in 2018 than last year as buyers became more aggressive. There’s also been a surge in prices for a less sexy type of property — warehouses — as e-commerce companies race to build distribution centers across the US to compete with industry leader Amazon.com Inc.
In an investor presentation this month, Wells Fargo Treasurer Neal Blinde said long periods of economic growth and good credit conditions give borrowers more options, putting pressure on banks to compete for financing deals. While some lenders take those risks, Wells Fargo prefers to maintain discipline in that part of the cycle, Blinde said.
Ten-year Treasury yields could rise in coming months after surpassing 3% recently, Sloan said. “Could I imagine us seeing a 10-year at 3 1/2% or 4 sometime in the next six to 12 months? Absolutely,” he said. A swift uptick in rates can damp the economy.
In the wide-ranging interview, Sloan also discussed the bank’s campaign to rebuild customer trust after a series of scandals. The company’s culture is “fundamentally fine,” he said, and its efforts now mostly focus on improving processes and internal systems. This month, Wells Fargo launched an ad campaign called “Re-Established,” reassuring the public that it’s addressing problems and making things right. — Bloomberg

To love it you must know it: the educational role of the Nat’l Museum of Natural History


TO FALL in love with something, one must first know it.
This is how historian Fr. Rene Javellana, SJ, a member of the National Museum Board of Trustees, explained the importance of the newly opened National Museum of Natural History, the third museum of Manila’s National Museum Complex, at a press briefing at its opening over the weekend.
“The first engagement in protecting biodiversity is [that you] fall in love with the land. Kung hindi mo minahal ang isang bagay, hindi mo aalagaan (If you do not love something, you will not take care of it),” he said. “For you to fall in love, you have to know [about it].”
The goal of inculcating an interest in — and perhaps love of — is made possible through new museum’s role as an educational institution which showcases elements of the country’s biodiversity through interactive exhibits for students and guests, as well as holding training sessions for teachers.
“It’s important for us to have a natural history museum because without it, many people would not even know [about] what we have. It’s not even about what makes the Philippines special, but even just what we have. They (guests) will learn that it is special, that it is ours, and, hopefully, they will fall in love with it, and with our country,” National Museum director Jeremy R. Barns told BusinessWorld during the museum’s opening on May 18, which was International Museum Day.
“Not everyone can go into the forest or dive underwater to see the beauty of nature firsthand, so we have to come up with something that will serve as a substitute for that and encourage people to learn and [to] know about the world around us, and, of course, about ourselves within that world,” he said.
Awareness of the country’s biodiversity would lead to more responsible behavior regarding our environment, more sustainable development, and, as a result, greater quality of life for all Filipinos, he noted.
The National Museum will be working closely with public schools and provide teachers with pre-excursion visits and training, “We [will] do teacher tours and training. By targeting teachers, we’re targeting so many people — all the students they will teach. Our teachers lack confidence. We need to give them a boost because they’re so important in our society,” Mr. Barns said.
MUSEUM TOUR
An elevator inside the “Tree of Life” at the building’s atrium ascends directly to the museum’s fifth floor where the narrative of the galleries begin. Guests can immerse themselves in information and displays related to mountains and volcanoes (fifth floor), forests and bodies of water (fourth and third floor), and finish with the living things and elements on land (second floor).
One must note that not all the exhibits are on view at the moment.
Galleries at the first three floors are now accessible. Gallery 9 showcases mangroves, beaches, and intertidal zones, including a display of preserved leaves and other specimen in a set of drawers. Gallery 10 on the marine realm features animal dioramas, preserved corals, and an indoor submarine showing videos on marine life.
Gallery 11 focuses on climate change. Among its features are an activity space for children and a film viewing area where guests learn about the Philippines’ UNESCO world heritage sites and the 300 endangered species found in the country.
Gallery 12 is designated for temporary exhibits — currently on view is The Pioneering Naturalists in the Philippines. The exhibits will be changed every three months.
The skeleton of Lolong — the largest saltwater crocodile in captivity — hangs from the ceiling of the Ayala Hall; while at the ground floor are displays of petrified wood and rocks which guests are allowed to touch.
UPCOMING ATTRACTIONS
In the months to come, visitors can expect to see more exhibits as the museum comes closer to completion.
The skeleton of a sperm whale will be suspended from the ceiling at the main entrance hall; Lolong’s taxidermied body will be displayed at Gallery 1 at the 5th floor, which focuses on an introduction to Philippine biodiversity; and the rest of the galleries — on geology, minerals and energy, life through time, the types of forests, and freshwater wetlands — at the 4th and 5th floors are targeted to open in June.
The National Museum of Natural History is located at T.M. Kalaw St., Rizal Park, Manila. It is open from Tuesday to Sunday, 10 a.m. to 5 p.m. Admission is free. — Michelle Anne P. Soliman

How PSEi member stocks performed — May 22, 2018

Here’s a quick glance at how PSEi stocks fared on Tuesday, May 22, 2018.

Which Philippine regions import/export more?

PUV upgrades to be required for fuel vouchers

THE DEPARTMENT of Transportation (DoTr) said that it is preparing to issue fuel vouchers for public utility vehicle (PUV) drivers and operators affected by higher fuel taxes, and may restrict voucher eligibility to those who have modernized their vehicle fleets.
At the House ways and means committee hearing yesterday on the second package of the tax reform program, legislators raised concerns about inflation they claim was caused by the preceding package, known as the Tax Reform for Acceleration and Inclusion (TRAIN) law. The Finance department has said that the bulk of the fuel price increase is due to higher global crude prices, currently at about $77 per barrel.
Representative Dakila Carlo E. Cua (Quirino), who chairs the committee, requested the immediate implementation of the remaining social benefits program as provided for in TRAIN.
TRAIN provides for increased social spending to compensate for the higher taxes affecting the poorest members of the public, including cash transfers and fuel vouchers.
“I would like to take this opportunity to remind our colleagues in the Executive that the start of TRAIN 2 does not mark the end of TRAIN 1. I reiterate my call for the immediate implementation of the Social Welfare Benefits Program, among other social protection measures of TRAIN 1. With several sectors appealing to halt TRAIN 1, we must first demonstrate that TRAIN 1 works so that we can decisively move forward with TRAIN 2,” he said during the hearing.
Although the government has begun distributing P2.4 billion in cash transfers, the fuel vouchers to transport operators under the Pantawid Pasada program has yet to proceed.
“We’re still preparing the guidelines,” DoTr Undersecretary Thomas M. Orbos said.
He said the department is hoping to avoid a repeat of a previous fuel voucher program where about a third of the 179,000 recipients were found to have been ineligible.
“You have to understand that the modernization program is very integral here,” he said, indicating that operators who buy upgraded vehicles are a good proxy for the list of eligible recipients. “In the past implementations of the Pantawid Pasada program, we were not able to monitor the recipients because of the inaccuracy of the data at that time,” he added.
“There were 30-40% who were supposedly not on the list but availed of the program. It is not fair to those who are legitimate operators,” he added.
According to Finance Undersecretary Karl Kendrick T. Chua, there are about P800 to P900 million worth of allocations for the program under the 2018 budget, valid only until the end of the year under budget rules.
Mr. Orbos said that the department is studying the possibility of making the vouchers conditional upon public utility vehicle (PUV) operators’ participation in the DoTr’s PUV modernization program (PUVMP)
That way, drivers and operators will be incentivized to register under the Land Transportation Franchising and Regulatory Board (LTFRB), and shift to modernized jeepneys with EURO-4 compliant engines.
“We’re looking at a much bigger picture for the PUVMP. If it is simply a one-time assistance given to PUV operators through fuel vouchers, then that would be it. But we want to have value-added support mechanisms by which we would rather incentivize those who want to modernize under the PUVMP rather than having to support those who operate obsolete and highly polluting PUV fleets,” LTFRB Chairman Martin B. Delgra III said. — Elijah Joseph C. Tubayan

‘Third player’ best guarantee for improving telecommunications service, BMI says

REDUCED interconnection rates can improve the operating environment of telecoms, but a new entrant remains the best incentive for improving service availability and quality, BMI Research said.
BMI Research, a Fitch unit, said that lower interconnection rates could lower total costs for consumers but given that data connections will quickly replace legacy connections over the long term, a new entrant will still be needed for better competition and to challenge the duopoly of PLDT, Inc and Globe Telecom, Inc.
“Although decreased interconnect rates could lower total costs for subscribers and improve the operating environment for telecoms operators, strict capital and ownership requirements will continue to delay the bidding process for the third telecoms operator. On balance, a new entrant would provide the best incentive for improving service quality and accessibility of telecoms services,” BMI said.
“While the review will improve the operating environment for a potential third telecoms player and lower costs for 2G subscribers, data connections will rapidly substitute legacy connections in the long run, suggesting that more needs to be done to improve the telecoms operating environment for better service quality and competition,” it added.
“We still believe that the Philippines is in urgent need of a new telecoms operator to present competition to the duopoly and to motivate investment in enhancing telecoms infrastructure.”
The Department of Information and Communications Technology (DICT) has directed the National Telecommunications Commission (NTC) to reduce interconnection charges for both mobile voice and short messaging services (SMS) between telecommunications companies to reduce consumer costs and benefit the incoming “third” telecommunications player.
Interconnection charges currently amount to P2.50 for voice calls and P0.15 for SMS.
DICT Acting Secretary Eliseo M. Rio, Jr. said the department does not want to wait for the passage of a law that would remove interconnection charges.
The Senate passed on second reading the “Lifetime Cellphone Number Act” or Senate Bill 1636, allowing for users to retain their phone numbers even if they change network providers. The bill also includes a provision on the removal of interconnection fees.
BMI said the proposed cuts are positive. “We have a positive view of proposed reductions in interconnection fees if followed with decreases in retail prices, which will help lower total costs of ownership (TCO) for subscribers; the regulator did so when it reduced SMS retail prices from P1.00 ($0.02) to P0.80 ($0.015) after it slashed SMS access charges to P0.35 ($0.007) in 2011. Sharp declines in interconnection costs for both PLDT and Globe followed the most recent decrease in call interconnect charges in January 2017.”
The firm, however, said that the impact will be felt to a lesser extent in the Philippines compared with the impact of similar moves in India.
“The impact of the reduction on operators is less pronounced in the Philippines, as both players should have roughly equal volumes of originating and terminating calls/SMS, but the effect is more noticeable in India, for instance, as operators such as Reliance Jio have a significantly larger amount of outgoing call traffic, and benefit largely from lower costs of connecting inter-network calls,” BMI said, referring to Reliance Jio Infocomm Ltd., the new telco on the market. Reliance has challenged incumbent Indian operators Bharti Airtel Ltd., Idea Cellular Ltd., and Vodafone.
Mr. Rio had said that the earliest period for naming the “third player” is the end of August.
Among the existing requirements for the third player are: paid-in capital of at least P10 billion; experience in providing, delivering, and operating telecommunications services in the last five years; a congressional franchise not related to either PLDT or Globe.; and no uncontested liabilities with the NTC as of Jan. 31, 2018.
BMI has said that the capital requirement is a big hurdle for potential investors.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo

DTI urges removal of foreign ownership caps, focus on job creation

THE Department of Trade and Industry (DTI) said it wants nationality restrictions to be removed from investment rules to help the government shift its priority to creating more jobs.
“We see the imperative for and agree to the proposed removal of the nationality requirements… What is important is that jobs are created here in the Philippines for the Filipino people, regardless of ownership or market to be served,” Trade Secretary Ramon M. Lopez was quoted as saying in a statement Tuesday.
The speech was delivered during a Congressional hearing on the second phase of tax reform, which hopes to rationalize investment incentives while reducing corporate tax rates.
The DTI added that it is open to input from the business sector on the second package of the tax reform program but noted that these proposals ”should comply with the fundamental principles of focused, time-bound, performance-based and transparent incentives; and the recommendations or proposals must be supported by data.”
In addition, the DTI added that it is collaborating with the Department of Finance (DoF) to come up with unified estimates of the bill’s impact, and plans to conduct further consultations with stakeholders.
So far stakeholders have proposed to harmonize the taxes and fees which Local Government Units can impose and a reasonable transition period to the new regime.
Others have also sought clarification on the application of rules governing VAT exemptions, zero rating, and refunds for locators in economic zones. — Janina C. Lim

DoE forecast for peak power demand exceeded on May 17

PEAK power demand in Luzon has exceeded the Energy department’s forecast after hitting 10,688 megawatts (MW) on May 17, National Grid Corp. of the Philippines (NGCP) said on Tuesday as the system operator moves to fast-track a crucial transmission line project in Metro Manila.
NGCP said the Department of Energy (DoE) had earlier predicted power demand to hit a high of 10,561 MW this year, making the peak consumption so far this month the second straight year that the forecast has been exceeded. Power demand last year peaked at 10,054 MW, it added.
Officials of the company said the peak power demand comes as NGCP steps up the implementation of the San Jose-Quezon 230 kilovolt (kV) transmission line upgrading project.
The project is moving forward after the Quezon City government cleared the right-of-way corridor of seven transmission tower sites in barangays Baesa and Sangandaan.
In a statement, NGCP said the San Jose-Quezon Line 3 project is critical in widening the power corridor into Metro Manila and allow supply from power plants to feed the Luzon load center.
The project will also relieve the existing transmission line, prevent overloading, and will ensure NGCP maintains the line’s N-1 contingency, or the ability of the transmission grid to withstand a major power disturbance through redundancies in the grid system.
NGCP said its good relations with the Quezon City government allowed it to “rehabilitate and upgrade our transmission lines in the city which were previously inaccessible by our transmission line team.”
“Our efforts are now focused on expediting the project’s completion, and seeing a more reliable transmission power in the country’s biggest load center,” it said.
The company said through an agreement signed by NGCP and the Quezon City government, the latter had implemented the relocation of informal settlers living underneath the San Jose-Quezon transmission line in the two barangays and cleared the tower sites of dangerous improvements.
The move helped NGCP to secure the right-of-way clearances for its tower sites within the city.
It said respecting the right-of-way corridor of transmission lines and facilities will prevent unnecessary power interruptions, ensure swifter maintenance activities, and avert potential loss of life and property.
In the south, the grid operator has secured the Energy department’s support with the declaration of the Mindanao-Visayas interconnection project (MVIP) as one of national significance, allowing it to go through the permitting process faster.
It said: “We were able to rehabilitate and upgrade our transmission lines in the city which were previously inaccessible by our transmission line team. Our efforts are now focused on expediting the project’s completion, and seeing a more reliable transmission of power in the country’s biggest load center.”
On MVIP, it said: “We are thankful for this development. NGCP emphasizes the importance of this milestone project and we are determined to make our 2020 December commitment. This will certainly help us towards that goal.”
In April, the DoE issued the implementing rules and regulations (IRR) of Executive Order 30, which created in June last year the Energy Investment Coordinating Council (EICC) to streamline the regulatory procedures affecting energy projects of national importance.
Under the IRR, the processing of permits and licenses was given a maximum period of 30 days for projects declared as energy projects of national significance (EPNS).
The IRR outlines the scope of EPNS and the general framework for the processing of the EPNS applications.
The 30-day deadline starts from the submission of the complete documentary requirements to the relevant agencies involved in the permitting process.
It also highlights the application of the principle of presumption of prior approvals. This means that a holder of the “EPNS Certificate” is presumed to have complied with the requirements and permits from other government permitting agencies. — Victor V. Saulon

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