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Filipino-headlined fights usher in packed year for ONE

ASIA’S largest martial arts organization ONE Championship is poised for a packed 2019 after announcing it would be hosting 45 events this year, beginning with two which will be headlined by Filipino world champions.
First to fire off is “ONE: Eternal Glory” in Jakarta, Indonesia, on Jan. 19, where Filipino ONE world strawweight champion Joshua “The Passion” Pacio will try to defend his title for the first time against Japanese challenger Yosuke Saruta.
Eternal Glory is 15-fight card that will also see Filipinos Edward Kelly and Robin Catalan in action taking separate opponents.
Mr. Kelly, a teammate of Mr. Pacio in Team Lakay, will battle Singapore’s Christian Lee in a featherweight clash while strawweight Catalan faces off with Indonesian Stefer Rahardian.
After a week, another Team Lakay teammate of Mr. Pacio, Geje “Gravity” Eustaquio, will make his own title defense for the first time, taking on former ONE flyweight world champion Adriano Moraes of Brazil for the third time in what practically is a rubber match in the event dubbed “ONE: Hero’s Ascent” here in Manila on Jan. 25.
In their first two encounters, Messrs. Eustaquio and Moraes split things with the latter taking the first in 2014 and the Filipino exacting payback in June last year to seize the flyweight gold.
Also part of Hero’s Ascent are Honorio “The Rock” Banario and Danny “The King” Kingad.
Mr. Banario takes on American Lowen Tynanes in a world grand prix lightweight quarterfinal while Mr. Kingad squares off with Japanese Tatsumitsu Wada in a flyweight battle.
Eternal Glory and Hero’s Ascent are among ONE’s 24 flagship events for 2019, which include forays into new territories such as Japan, South Korea and Vietnam.
In addition, Rich Franklin’s ONE Warriors Series will double its number of 2018 live shows with six in 2019.
The groundbreaking documentary series kicked off with three thrilling cards held in Singapore, and saw ONE Vice-President Franklin unearthing Asia’s finest burgeoning talent.
This includes the likes of Thai sensation Stamp Fairtex, who captured the ONE Kickboxing Atomweight World Championship en route to being named ONE’s 2018 Breakthrough Athlete of the Year.
Furthermore, ONE will host 12 ONE Hero Series events in 2019, with further details on the new format to be announced at a later date.
On top of the elite combat sports that are set to light up Asia this year, ONE Esports will also get under way. There will be three of the colossal gaming events on offer, held alongside the martial arts shows in weekend spectacles. — Michael Angelo S. Murillo

Osako double helps Japan fight back to beat Turkmenistan

AL AIN — Japan’s Yuya Osako scored twice as the four-times champions fought back from going a goal behind to earn a 3-2 win over unfancied Turkmenistan in their Asian Cup opener on Wednesday.
Hajime Moriyasu’s side, one of the favorites for the title, labored throughout the opening 45 minutes and fell behind to a vicious long-range strike from Arslanmyrat Amanov that flew past goalkeeper Shuichi Gonda.
The Japanese rallied in the second half, however, with Osako netting two in quick succession before Ritsu Doan added a third, although a penalty from Ahmet Atayew in the 79th minute kept Turkmenistan’s hopes alive until the final whistle.
Uzbekistan joined the Japanese at the top of the early Group F standings with a late 2-1 win over Oman, while Qatar scored twice in the second half to secure a 2-0 win over Lebanon in Group E.
Japan is unbeaten since Moriyasu took over from Akira Nishino in July but that record looked under threat when Amanov smashed his shot home from 25 meters as the Samurai Blue toiled in the Abu Dhabi sun.
Yet Genki Haraguchi inspired a second-half fightback, with Osako leveling the scores 11 minutes after the break when he turned to slot the ball beyond Mamed Orazmuhamedov.
Three minutes later, Werder Bremen forward Osako struck from close range after good work from Haraguchi and Yuto Nagatomo.
Doan added the third 19 minutes from fulltime only for Atayew’s penalty eight minutes later to give Turkmenistan hope of snatching a draw.
“At the break I went over the first half and told my players about our transition play, the battle around the ball and the need to read the game better than we had been doing,” said Moriyasu.
“We made it difficult for ourselves after conceding the goal.”
Uzbekistan’s Odil Ahmedov, who was named the country’s Player of the Year earlier in the week, claimed their opener against Oman with a fierce free kick after 34 minutes, but Muhsen Al Ghassani leveled with 18 minutes remaining.
Eldor Shomurodov came off the bench to grab the winner five minutes from fulltime when he beat goalkeeper Faiyz Al Rashidi at his near post, although Egor Kremits’ straight red card two minutes into stoppage time took some of the gloss off the win for Hector Cuper’s team.
Qatar’s win over Lebanon, courtesy of goals from Bassam Al Rawi and Almoez Ali, moved Felix Sanchez’s side level with Saudi Arabia on three points in the Group E standings.
Al Rawi put his side ahead five minutes after the hour mark with a curling free kick while Ali put the result beyond doubt when he stabbed home from close range after goalkeeper Mehdi Khalil parried Abdelaziz Hatem’s initial shot.
SOUTH KOREA’S LEE A DOUBT FOR KYRGYZSTAN; KI OUT
South Korea attacking midfielder Lee Jae-sung is a doubt for Friday’s Asian Cup Group C match against Kyrgyzstan due to a toe injury, according to the Korea Football Association (KFA).
The 26-year-old, who played 86 minutes of the Korean’s 1-0 win over the Philippines on Monday, did not take part in Wednesday’s training session.
“Lee’s right big toe was bent during South Korea’s opening match against the Philippines on Monday, and he is feeling pain,” a KFA official told the Yonhap News Agency.
“The swelling in his toe is getting better, but for quick recovery, Lee didn’t take part in today’s training. He’s currently staying at a hotel for rehabilitation.”
Portuguese coach Paulo Bento will also be without Ki Sung-yueng after the Newcastle United defensive midfielder injured his hamstring in Monday’s game.
Ki, 29, has been ruled out for a week and will also miss second-placed Korea’s final group game against leaders China on Jan. 16 when Son Heung-min is scheduled to make his tournament debut. — Reuters

Fish named US Davis Cup captain

NEW YORK — Mardy Fish was named US Davis Cup captain on Wednesday as the men’s team competition enters a new era.
Fish, winner of six ATP singles titles and a silver medal at the 2004 Athens Olympics, takes over from Jim Courier who held the post for eight years before stepping down in September.
“It is something that is a dream job for me, something I won’t take for granted,” said Fish during a conference call. “To be the next Davis Cup captain is incredibly humbling.
“I can’t express how excited I am… that the players have supported the decision,” added the 37-year-old.
“Everyone is really excited about the idea of the reform and the new format, sort of a World Cup of Tennis.
“It is going to be interesting from all parties to see how it goes.” Fish will take charge in a dramatically different Davis Cup format from the one in which he played in 11 ties from 2002-12.
Instead of the three-day ties that used to take place a few times during the year, it has been overhauled into an 18-team event that this year will be played from Nov. 18-24 in Madrid.
The new format will also bring a change in duties for the US Davis Cup captain, who will work closely with the United States Tennis Association (USTA) player development program. — Reuters

Overmatched

Considering how the Sixers lost yesterday, it’s fair to argue that the Wizards have their number — at the Capital One Arena, that is, where, for some reason or another, they’ve failed to taste victory in five years. It didn’t matter that the hosts were missing John Wall, out for the rest of the season due to a left heel injury, or that they just came off a rousing triumph against the very same opponents at the Wells Fargo Center. Apparently, there’s something in the Washington air that makes them forget they’re supposed to be crowding the top of the East and not the bottom.
On paper, the Sixers didn’t do badly. In fact, their Big Three managed to post significant numbers. Joel Embiid was a force down low, putting up 35 points on 17 shots along with 14 rebounds. Ben Simmons got to within two assists of a triple-double. Jimmy Butler, fresh off a talk with head coach Brett Brown on the expansion of his role in the offense, finished with 23 markers off a team-high 18 field-goal attempts. And still they got blown off the court; the 6-5 advantage they held not three minutes into the match proved to be their last one all game. By the time the first half ended, they were staring at a 15-point deficit that somehow got even worse after the third quarter.
Interestingly, the Sixers headed into the set-to having prevailed in their last four contests. They appeared ready to string together a run that would improve their Top-Four standing in the conference. The pacesetting Raptors were just three games ahead, and they seemed motivated, finally, to back up their preseason standing as a league powerhouse. Instead, they looked listless, overmatched even, against the Wizards yesterday, with pencil pushers not even needing to delve into advanced metrics to see their deficiencies. The Eye Test was all fans on site and in the comfort of homes needed to conclude that they remain a work in progress.
Certainly, the Sixers have the potential to challenge for the hardware. Embiid, Simmons, and Butler are too good not to amass win shares. On the other hand, they haven’t yet shown with consistency that they’re more than just a team of outstanding players and actually players on an outstanding team. And unless and until they do, they’ll be spending a lot of time wondering about the What Ifs and not enough of it relishing the Wows.
 
Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

KUYSEN: Building the future

Kuysen began its legacy of luxury in 1989 as a small industrial hardware store in Caloocan. Cultivating brands and products through 30 years of dedication to quality, style, innovation, continuous learning: the hardware store has evolved to become a household name in luxury furnishings.
Humility and ambition

Kuysen Caloocan Showroom

Kuysen Enterprises has certainly grown from its humble yet ambitious beginnings in Caloocan. It started making a name for itself with Tyrolit, the Austria-based Swarovski-owned pioneer in abrasives. By turning it into a domestic industry leader, Mr. Kuysen Go proved there was a market for premium products in the Philippines.
Through the years, Mr. Kuysen Go would travel to Europe to learn from prestigious construction exhibitions the brands blazing trails in the industry. With his entrepreneurial
acumen, he brought these brands home and considered them partners, curating them into
household names for residential and commercial projects.
Premier manufacturers of mixers, showers, and sanitary wares, Hansgrohe and Duravit
from Germany were among the first prestigious names Kuysen would import and
distribute. They would eventually become Kuysen’s flagship brands, attesting to Mr. Go’s
belief the Philippines had a market that was ripe, ready, and raring for products renowned
for their indisputable quality, design and innovation.
Riding the wave
In 1999, Jensen Go joined the family business as the company’s President and General Manager, adhering to the same principles set forth by his father.
President and General Manager, Jensen Go

The upswing in the Philippine economy would encourage Kuysen to expand its repertoire even further.  Kuysen welcomed brands of international acclaim—Kaldewei, Victoria+Albert, Teka, Aquatherm, Geberit, Geesa, Schell and many more to the company’s ever growing portfolio of partners. What mattered foremost was these brands were unparalleled in their design, and their commitment to quality unquestionable.
In 1999, Kuysen Bath Gallery, the 500-square meter showcase of Europe’s finest bathroom brandwas opened in Glorietta 4, Makati. It was a peek into the future. With functional displays and aspirational tableaus, Kuysen came to be at the forefront of the industry’s furnishing sector.
Bigger, bolder, braver
By 2007, Kuysen had moved into its new corporate headquarters—an eight-storeymulti-function office and showroom. With such a huge space, Kuysen could only widen the scope of their offerings even further. Hereon Kuysenstarted to venture into the tile industry with European brands Cerim from Italy and Ibero from Spain.  Complementary products like Kessel and BWT for water filtration systems were added.
Kuysen E-Rodriguez

When the Kuysen-Hansgrohe flagship showroom opened in 2013 in Eton Residences Makati, no less than Mr. Philippe Grohe himself, Axor Brand Head of Hansgrohe, declared it as prestigious as their own during his speech. The new showroom was a great marker of Kuysen’s 25th year – It is much a showroom as it is a venue to hold professional events and meetings.
Kuysen Eton Residences

Kuysen Eton Residences

Kuysen’s latestventure would be into the world of lighting and furniture. To set the standard for class, Kuysennow proudlyrepresents world-class brands such as Baxter, Zanotta, Living Divani, Paola Lenti, Porro, Vibia, Muuto, and Montana.
Kuysen Karousel

Building the future
Committed to its mantra of inspiring creativity and delivering solutions, Kuysen continues to partner with no less than luxury brands of international acclaim, setting the standard for class in and out of the Philippine household.
This 2019, these brands will be hosted in the Kuysen Design +Experience Center, a five-storey, two-basement interactive showroom in Bel-Air, Makati—the first of its kind in the Philippines. This new investment reaffirms the company’s dedication to the Filipino homeowner as well as its unwavering belief in the Philippines’ booming construction industry.
Kuysen Design +Experience Center, Bel-Air, Makati

With three decades of expansion and diversification under its belt, Kuysen has gone through innumerable changes. Kuysen may carry the finest home furnishings the world has to offer, with materials and expertise drawn from the far ends of Europe, but the intimacy with which Kuysen relates to its clientele remains the same.
Kuysen remains as humble, as grateful, as committed to servicing its clients as when the little shop in Caloocan began.

Exports drop, imports slow down in November

By Christine Joyce S. Castaneda
Trade activity softened in November as exports declined while imports slowed.
Preliminary results from the Philippine Statistics Authority (PSA) showed merchandise exports declining 0.3% to $5.569 billion in November, a reversal from the growth performances of 5.5% in October and 14.2% in November 2017. The November reading snapped five straight months of export growth in 2018.
Meanwhile, import payments rose 6.8% year on year to $9.469 billion in November, easing from the double-digit growth of 21.4% in October and 20.1% in November 2017.
This brought the country’s trade deficit to $3.901 billion, an increase from $3.280 billion a year ago.
To date, exports contracted by 0.9% to $62.767 billion against the two-percent target of the Development Budget Coordination Committee (DBCC) for full-year 2018.
On the other hand, imports grew 15.8% to $100.455 billion versus the DBCC’s nine percent projection for the year.
Cumulatively, the country’s trade balance posted a $37.687 billion deficit, much bigger than the $23.408 billion shortfall during 2017’s comparable eleven months.
The United States is the Philippines’ top export market in November with a 16% share at $893.20 million followed by Japan’s 14.7% ($819.07 million) and Hong Kong’s 13.1% ($729.01 million).
Meanwhile, China was the country’s top source of imports with an 18.7% share ($1.766 billion) followed by Korea’s 10.9% ($1.03 billion) and Japan’s 9.5% ($903.28 million).

WB sees Philippines weathering risks

By Elijah Joseph C. Tubayan
Reporter
THE WORLD BANK expects the Philippines to sustain above-average economic growth in the next two years despite a global slowdown triggered largely by the trade spat between the world’s two biggest economies.
In the Global Economic Prospects published on Wednesday, titled: “Darkening Skies,” Washington-based multilateral lender expects the Philippines to have grown 6.4% in 2018 from 6.7% in 2017, and expects it to hit 6.5% this year — keeping its estimates from December.
It also kept its 6.6% forecast for 2020 made in an October regional report and gave a new estimate of 6.6% for 2021.
Compared to the June 2018 edition of the Global Economic Prospects — which is issued twice a year — the World Bank’s forecasts were lower by 0.3 and 0.2 percentage points, respectively, for 2018 and 2019.
The forecasts fall below the 7-8% target the government has set annually until 2022.
The World Bank’s latest estimates for the Philippines show that the country will weather the world GDP growth slowdown from 3% in 2018 to 2.9% this year and 2.8% in 2020 and 2021, as well as the East Asia and Pacific average of 6.3% in 2018, six percent in both 2019 and 2020, and 5.8% in 2021.
The regional outlook was kept from the October 2018 East Asia and Pacific Economic Update but the latest 2019 estimate is 0.1 percentage point lower than the projection in the June 2018 Global Economic Prospects report.
The Philippines will be among the fastest-growing countries in East Asia and the Pacific, roughly matching or outpacing China (6.5% in 2018, 6.2% in 2019 and 2020, and six percent in 2021) though slower than Vietnam (6.8% in 2018, 6.6% in 2019, and 6.5% in 2020 and 2021). In comparison, India in South Asia is estimated to have clocked 7.3% in 2018 and is expected to post 7.5% GDP growth annually from this year to 2021.
The report said that economic activity in the Philippines “has slowed as surging inflation, capacity constraints, and currency pressures have prompted authorities to hike policy rates,” which totaled 175 basis points from May to November.
It also noted that the 2018 growth outlook for commodity importers in the East Asia and Pacific, excluding China, “has been downgraded because of a moderation in private consumption amid rising inflation in the Philippines.”
Sought for further explanation, World Bank Senior Economist Rong Qian said that the Philippines’ robust economic base has shielded itself from external shocks, but still cited external and local risks.
“Philippines is fairly resilient to external shocks given its strong macroeconomic fundamentals such as having a flexible exchange rate regime, large foreign reserve, low external debt and large inflow of remittances,” she said in an e-mailed response to queries.
“Medium growth drivers include robust private consumption and public investment boost,” she added.
“Risks include uncertainties derived from US-China trade tensions that create uncertainty on the global growth outlook, persistent high inflation, although it seems to be declining already, and slower than expected public investment growth.”
The World Bank’s forecast compares with the Asian Development Bank’s 6.4% and 6.7% estimates for 2018 and 2019, respectively, the International Monetary Fund’s (IMF) 6.5% and 6.7%, and 6.7% of the Organization for Economic Cooperation and Development for both years.
Budget Secretary Benjamin E. Diokno noted that the World Bank’s estimates are “consistent” with the government’s targets, saying: “6.6% is still a very decent growth rate”
“In fact that’s one of the fastest growth rates in this part of the world, especially since the World Bank and the IMF are forecasting a global slowdown because of the trade war with China. It’s still early in the game for a downward adjustment. So were optimistic that we will still hit our seven percent,” said Mr. Diokno in an interview on Wednesday, adding that the impact on the Philippines of the raging US-China trade war will be “minimal” to “none, if at all” since “the Philippines is really not export-oriented country”.
Socioeconomic Planning Secretary Ernesto M. Pernia meanwhile said that latest policy moves should help boost economic growth.
“Our target is still to hit 7-8% economic growth this year and thereafter” Mr. Pernia said in a mobile phone message.
“We hope to counter global headwinds with strong domestic demand: BBB (Build, Build, Build) program, consumption (including election spending), domestic investment and FDIs (foreign direct investments) — the latter two helped by the EoDB (Ease of Doing Business) law and the reduced 11th FINL (Foreign Investment Negative List).”

Budget chief expects infrastructure spending to have closed in on target

THE COUNTRY’s Budget chief expects infrastructure spending last year to have closed in on the government’s program.
Budget Secretary Benjamin E. Diokno said that the share of infrastructure spending to gross domestic product (GDP) likely settled at 6.2% last year, based on funds obligated in the 11 months to November, against an official 6.3% full-year program for 2018.
“Infrastructure spending surged to 6.3% of GDP in 2017 and is projected to hit 6.2% of GDP in 2018, almost tripling the average two percent of GDP spent from 1986 to 2016. This is in line with the Duterte administration’s target of increasing infrastructure spending to more than 7% of GDP by 2022,” Mr. Diokno said in a press briefing on Wednesday in Mandaluyong City.
The infrastructure spending-to-GDP ratio — based on obligated funds and not actual payments — is targeted to hit 7.3% by 2022, when President Rodrigo R. Duterte ends his six-year term, from this year’s 6.3% target.
The government is shifting to a cash-based spending scheme starting with the proposed 2019 national budget that accounts for only actual payments to contractors in a fiscal year plus a six-month extension. Under this scheme, infrastructure spending-to-GDP is programmed at 4.7% this year, rising to seven percent by 2022.
“As long as the Senate and the House act on the budget, then we’ll probably hit it. The 2018 budget was extended [since Congress has yet to ratify the proposed P3.757-trillion 2019 national budget]. There were some appropriations released but have yet to be obligated, so that will help,” Mr. Diokno said.
“And depending also on the speed on how we contract our foreign loans, so I’m optimistic that we’ll hit the target for this year.”
Expecting the 2019 budget to be operational before the end of this quarter, Mr. Diokno said that the government is preparing a catch-up plan to mitigate the impact of the delays in implementing new projects as well as the 45-day halt of public works before the May 13 mid-term legislative and local elections. The catch-up plan includes hiring of more workers in the construction of infrastructure projects and longer working hours.
“The best time to build is during the first six moths of the year, but depending on the weather pattern. But with climate change hindi mo na alam kung ano ang tagulan… (we no longer know when to expect rains) so if we miss that, we can still make up kung walang (if there are no) major typhoons. Some major projects are not susceptible to the weather,” Mr. Diokno said.
“This fast-tracked spending performance addresses the country’s under-investment in infrastructure, which has severely dragged the Philippines’ economic performance in the past.”
The reenacted budget came as leaders of the House of Representatives late last year flagged alleged project insertions in the budget that favor select districts and a certain contractor. Earlier, House appropriations officials had also opposed the Executive’s proposed shift this year to a cash-based budget — which takes into consideration state offices’ limited spending capacities — from one that had appropriated funds for payments over two years. The shift resulted in a proposed budget of P3.757 trillion against 2018’s P3.767 trillion.
2019 GDP GROWTH ‘AT LEAST 7%’
In the same press briefing, Mr. Diokno also said that he expects economic growth to hit “at least seven percent” this year amid waning inflation.
Inflation’s spike for much of last year had been blamed for crimped GDP growth, since elevated overall price increases of widely used goods weighed on household consumption.
“We are confident this time we will hit 7-8% growth rate. At least seven percent,” Mr. Diokno said.
“And inflation will be much much lower this year. Our target is 2-4%, but as you know because of the base effects, we’ll probably end up closer to two percent than to four percent.”
This comes as the government late last year downgraded its economic growth forecast for 2018 to 6.5-6.9% due to inflation from 7-8% initially. GDP growth in the first three quarters of 2018 averaged 6.3%.
Government expenditures totaled some P3.095 trillion in the 11 months to November, up 24% year-on-year and equivalent to 92.5% of the P3.346-trillion 2018 downgraded disbursement target.
Latest data on infrastructure spending and other capital outlays show such spending settled at P665.1 billion as of October, growing 50.3% from 2017’s comparable 10 months.
Mr. Diokno said that latest available data have been “increasing the likelihood of zero underspending for 2018.” — Elijah Joseph C. Tubayan

Bulls on a roll as foreign funds trickle back to PHL

PHILIPPINE bulls are on a roll, and who can blame them?
The nation’s equities index has started the year beating many global peers, and foreign fund managers are putting back money in a market that was among Asia’s worst in 2018.
Traders at Rizal Commercial Banking Corp. (RCBC) and AB Capital & Investment Corp. are riding the rally by deploying their cash, rather than cutting their stock holdings as they did last year whenever equities went into high gear.
The Philippine Stock Exchange index (PSEi) has rallied by 6.08% for the year so far since end-2018’s 7,466.02 finish, including a 2.8% gain Wednesday.
It closed at an eight-month high, breaking a key resistance level and moving closer to the 8,000 that traders say it could surpass this quarter.
“It’s a good strategy to ride the prevailing positive mood, even if only for the short term,” said Gerard Martin F. Abad, who manages $380 million as chief investment officer at AB Capital.
“We will see a continuation of the improvement in inflation, and it helps that the US Fed has become dovish. That eases pressure on the central bank to raise rates,” he added.
The optimism stems from encouraging inflation data — it slowed for a second month from a nine-year high, reaching its slowest pace since May — and prospects that the Federal Reserve will ease interest-rate increases.
That’s brought down the US dollar from a high, prompting foreign investors to come back to the Philippines: They’ve already pumped in $49 million in equity funds this year, including the longest streak of daily inflows in five months, after $1.08 billion of withdrawals in 2018.
“Sentiments are very bullish,” said RCBC trader Steven Kent Ko, who helps manage about $1.72 billion.
“We are taking profit in some of the leaders, but rotate the money into stocks that will outperform as the climb to the 8,100-8,200 level is quite possible from here.”
Nomura analysts Chetan Seth and Jayant Parasramka upgraded Philippine equities to overweight from neutral in a note published Wednesday, citing a peak in the nation’s inflation.
Stock valuations can be justified by strong earnings growth prospects, they said.
Mr. Ko is looking for market laggards, with a preference for banks and consumer-related shares on expectations margins will improve and earnings will grow.
Mr. Abad, who in addition to those sectors also likes property, is withdrawing from mid-cap stocks and putting the money into the market’s biggest companies, which he expects will propel the nation’s benchmark index higher.
Yet he recommends to “cut exposure” should PSEi break the 8,200-8,300 level, which he sees as likely. With the prevailing bullish sentiment, and should fourth-quarter gross domestic product data show a pick up in growth, the gauge could even hit 8,400, he said.
“It won’t hurt to be conservative and top slice if the market rallies too fast, too soon,” Mr. Abad said.
“It’s better to wait for first-quarter earnings for confirmation of whether this rally is standing on fundamental legs.”
Slowing inflation could boost spending and margins that could trigger a corporate earnings surprise and drive the Philippine stock index to 8,900 this year, according to Jose Domingo III Manalad “Jody” Santiago, Manila-based strategist at UBS AG.
He forecasts market earnings growth to speed up to 12.3% this year compared with about 8.5% in 2018, when rising inflation squeezed margins and hurt consumer demand.
Optimism for earnings growth is renewing interest from overseas investors and helping support valuations, Mr. Ko said.
That’s even though — at 16 times projected profit for the next year — they remain among the highest in Asia.
“It’s too early to say if the foreign-fund inflow is a reversal of last year’s withdrawals, but definitely there is some interest in emerging markets and the Philippines,” Mr. Ko said. — Bloomberg

Ayala acquires Phinma Energy


By Victor V. Saulon, Sub-editor
AC ENERGY, Inc. is taking control of Phinma Energy Corp. through a “mutually strategic agreement” that gives the Ayala-led company a 51.48% stake in the listed energy firm for P3.42 billion.
In a joint statement on Wednesday, the two groups said the Ayala’s energy platform will acquire the combined stake of Phinma Corp. and its parent Philippine Investment Management, (Phinma) Inc. in Phinma Energy subject to regulatory approvals.
Jaime Augusto Zobel de Ayala, chairman and chief executive of Ayala Corp., described the Phinma group as “one of our early partners when Ayala was new to the power sector.”
“This partnership has prospered over the last eight years and we welcome the opportunity to now integrate Phinma Energy into AC Energy’s platform as we grow our presence in the power generation sector,” he said.
Ramon R. del Rosario, Jr., Phinma president and chief executive, said the two groups “have always enjoyed a strong partnership, making this agreement a welcome culmination of our joint initiatives in the energy sector, as we believe AC Energy is best-positioned to grow the business and take it to the next level.”
Mr. del Rosario said Phinma will now focus on its education and construction materials business.
The agreement, which was approved by both groups on Tuesday, involves the sale by listed holding firm Phinma Corp. of its 1,283,422,198 shares or 26.25% in Phinma Energy for P1.75 billion based on the unit’s implied 100% equity value of P6.65 billion. The shares will be sold through the stock exchange.
Phinma Corp. and its parent will then cause Phinma Energy to approve the issuance of 2,632,000,000 in new shares, to which AC Energy will subscribe.
Parent firm Phinma will also sell its 25.23% interest in the energy subsidiary.
“The estimated proceeds from the sale in the amount of P1.7 billion will be used to focus investments in other sectors such as education and construction materials as opportunities arise,” Phinma Corp. said.
The groups said the valuation date was as of Dec. 31, 2018 and is subject to adjustments.
The transaction will result in a loss on sale of P368 million subject to adjustments but will allow Phinma Corp. to avoid significant losses from the energy business in the future, it said.
The deal’s closing is subject to the satisfaction of certain conditions, such as regulatory approvals, including the approval of the Philippine Competition Commission, and compliance with applicable tender offer requirements.
AC Energy and Phinma Energy first teamed up in 2011 when they developed, built and started operating the 244-megawatt (MW) net capacity coal power plant in Calaca, Batangas under South Luzon Thermal Energy Corp.
Eric T. Francia, AC Energy president and chief executive, said the transaction was an “important step” for the company in hitting its 5-gigawatt (GW) renewable energy installation target by 2025.
He said the Phinma Energy platform “has significant operating and developmental renewable energy assets, and its large diesel capacity will complement the scaling-up of our renewable projects.”
Sought for comment, Luis A. Limlingan, business development head at Regina Capital Development Corp., said the deal is indeed an important step for AC Energy to achieve its target energy capacity.
On AC Energy’s possible entry into the stock market, he said: “That may be one angle to look at as a possible backdoor listing but does not seem likely yet.”
On Wednesday, shares in Phinma Corp. rose 1.21% to close at P8.99 each, while those of Phinma Energy gained 8.46% to end the trading day at P1.41 each.
AC Energy owns around 1.7 GW of generation capacity in operation and under construction based on its equity interest in power generation businesses. It generated 2,800 GW-hours of energy last year, of which 48% was from renewable sources, the company said.
Phinma Energy has an attributable generation capacity of 472 MW. It is the third-largest stand-alone retail electricity supplier serving 378 MW of customer demand.
It holds interests in the following entities: Phinma Power Generation Corp. (100%); Phinma Renewable Energy Corp. (100%); CIP II Power Corp. (100%); One Subic Power Generation Corp. (100%); One Subic Oil Distribution Corp. (100%); Phinma Solar Corp. (60%); Phinma Petroleum and Geothermal, Inc. (50.74%); Palawan Exploration and Production Corp. (30.65%); South Luzon Thermal Energy Corp. (45%); and Maibarara Geothermal, Inc. (25%).

Shakey’s to deliver 20 new stores

SHAKEY’S Pizza Asia Ventures, Inc. has introduced a new look for the pizza chain in an effort to attract millennial consumers. — SHAKEY’S FACEBOOK PAGE

By Arra B. Francia, Reporter
SHAKEY’S Pizza Asia Ventures, Inc. (SPAVI) plans to open 20 new stores this year, pushing its expansion outside Metro Manila as it sees more opportunities for growth in the provinces.
In a statement issued Wednesday, the casual dining restaurant operator said this will bring its total store network to 248 by 2019.
The listed firm is banking on higher consumer spending to support its expansion.
“We continue to see consumer spending fueling the Philippine economy, which is still one of Southeast Asia’s fastest-growing markets,” SPAVI President and Chief Executive Officer Vicente L. Gregorio said in a statement.
The target for store expansion this year matches the net openings the company had in 2018, 80% of which are located outside the National Capital Region.
“We are focused on expanding outside Metro Manila where we see great potential in terms of demand for the premium yet affordable dining experience we provide. We also tapped more local partners this year to run our provincial operations and to ensure that we have on-the-ground accountability even in farther-flung areas,” Mr. Gregorio said.
The company also noted that 75% of the newly-opened stores were franchised. Franchising a Shakey’s store entails an investment of about P18-24 million, depending on the size and location. SPAVI earlier said that the total investment can be recovered in three to five years’ time, with the franchise contract running for a minimum of 10 years.
In 2017, SPAVI said it looks to have a network of 300 stores within three years, further ramping it up to 500 within five years.
Aside from expanding its store network, SPAVI also redesigned interiors for the newer branches and launched new products to attract more millennials into their outlets.
“The brand has been able to stay relevant; it has gone through a lot of adaptations in response to the changing times, and our ability to touch lives has formed the foundation of our fiercely loyal base of guests,” Mr. Gregorio said.
SPAVI also owns the perpetual rights to franchise the Shakey’s brand in the Middle East, Asia excluding Japan and Malaysia, China, Australia, and Oceania. The company has at least 18 outlets in the pipeline in these locations over the next few years.
The company’s net income attributable to the parent went up six percent to P534.64 million in the first nine months of 2018, compared to P503.61 million in the same period a year ago. This followed a 10% uptick in gross revenues to P5.49 billion in the same period a year ago.
Shares in SPAVI jumped 1.95% or 24 centavos to close at P12.54 each at the stock exchange on Wednesday.

PLDT, GMA team up for digital television


PLDT, Inc. and wireless unit Smart Communications, Inc. are working with GMA Network, Inc.’s New Media, Inc. (NMI) to assist the television network in its digital transformation.
In a statement, the listed telecommunications giant said it signed on Wednesday a technology, content, and distribution agreement with GMA that relates to the latter’s plans for digital television.
PLDT-Smart Chairman, President and Chief Executive Officer Manuel V. Pangilinan said the partnership with GMA Network helps its goal of transforming “from being a legacy telco into the premier and most trusted digital enabler in the country.”
“[T]his partnership will enable us to power GMA’s digital pivot and help deliver to our millions of fixed and wireless subscribers GMA 7’s unique and compelling content, as well as exciting new digital experiences to more Filipino families,” he said in the statement.
GMA Network Chairman and Chief Executive Officer Felipe L. Gozon said the agreement is a step towards the media company’s goal of “welcoming disruption and embracing digital with open arms.”
“By riding the wave of disruption with PLDT and Smart as partners, we will not only upgrade the quality of content we are producing but we are also setting the stage for a new age of digital television,” he was quoted as saying.
For years, PLDT and GMA Network have been engaged in on-and-off negotiations for the telco to acquire a controlling stake in the media company. In 2017, both Messrs. Pangilinan and Gozon said they were open to revive the talks, but no progress was made.
PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. currently holds all television and print media interests of Mr. Pangilinan. This includes TV5 Network, Inc., Cignal TV, Inc., the Philippine Star Group, and BusinessWorld.
Hastings Holdings, a unit of MediaQuest, has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

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