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Hirna says no plans to enter Metro Manila

By Denise A. Valdez
HIRNA Mobility Solutions, Inc. started offering transportation options last month when it was accredited by the Land Transportation Franchising and Regulatory Board (LTFRB) as a transport network company (TNC).
But unlike most TNCs, it offers a solely taxi-based solution, because it believes fixing the public transport system is the real answer to solving traffic congestion.
“Hirna was formed primarily to help elevate taxi services in key cities outside Manila. As having a more efficient public transport system is the real solution to traffic congestion and reducing carbon footprint,” Hirna President Francisco Mauricio told BusinessWorld in an e-mail interview.
The taxi-hailing application has been operational since April. In Davao City, it has about 4,000 taxi units and more than 5,000 drivers. Unlike the dominant player Grab Philippines, Hirna has no booking fees and surge pricing, and gets revenues from the subscription fees of its taxi operators.
Mr. Mauricio said it has not decided whether or not the company will follow a transport network vehicle service (TNVS) model in the future, meaning non-taxi vehicles will be part of its fleet.
Most TNCs in the Philippines follow this model, as pioneered by Uber Philippines and Grab Philippines when the two used to dominate the market.
Hirna’s president, however, said the company will review its business model in two to three months, and may soon charge a minimal booking fee to generate revenues.
But for now, Mr. Mauricio said Hirna won’t enter the Metro Manila market soon. “Our mission is to help elevate taxi services in key cities outside Metro Manila,” he said.
“Instead of being disruptors, we consider ourselves as collaborators. We connect drivers with passengers, unite operators with each other and collaborate with government stakeholders, specifically LGUs (local government units), LTFRB and DoTr (Department of Transportation),” he added.
Hirna is hoping that with its business model, it will change the perception of commuters towards taxis to start seeing it as a “safe, reliable, convenient and affordable mode of transport.”

DA to review rules for importing carabeef

THE Department of Agriculture (DA) will be reviewing its importation guidelines for Indian buffalo meat or carabeef after the agency received reports of meat being retailed in wet markets.
Agriculture Secretary Emmanuel F. Piñol said that he assigned Undersecretary for Policy and Planning Segfredo R. Serrano to lead the review of carabeef imports.
“The meat should only go to food processors, and not be sold in the wet market,” he added.
Prior to 1996, private traders and companies were allowed to import carabeef, mostly from India, until the DA intervened after the livestock industry complained.
Later, imports were restricted to accredited meat processors.
Mr. Piñol said carabeef was found in a Marikina wet market three weeks ago, adding that the investigation is still ongoing.
“[The meat] is only for processing into corned beef. The public can eat it only if it’s been processed so they shouldn’t buy what they find in the market,” he added.
Data from the Bureau of Animal Industry showed that the Philippines imported 28.16 million kilograms of buffalo meat from India as of Oct. 31, 2017. — Anna Gabriela A. Mogato

Davao’s Sun Made rice evaluating capacity, demand for ASEAN exports

DAVAO CITY — The Mindanao Agri Network Corp. (MANCOR), distributor of rice brand Sun Made, is preparing to expand via exports to the Association of Southeast Asian Nations (ASEAN).
Carlo C. Lorenzana, MANCOR vice-president, said the company has filed an application for an export/import license and is working on its supply and demand projections.
“Once we finish that, we are hoping also to explore the ASEAN market… We want to give it a shot so that we will be able to expand outside and it also means a bigger social enterprise,” Mr. Lorenzana said in an interview.
Sun Made is currently distributed in the main cities nationwide through major supermarket chains and specialty stores.
MANCOR, through its MANCOR Assisted Farm (MAF) program, sources the rice from Davao City farmers, currently numbering 50, who are also trained in organic farming.
The MAF program hopes to expand its network of growers alongside product and market development.
“This is a social enterprise as we buy the rice from Davao farmers, and then we hire their daughters, wives, and relatives to pack so that is additional income for the household. Social enterprise is making money while helping to make it sustainable,” Mr. Lorenzana said.
The planned foray in the ASEAN market, he said, is boosted by “very good” sales volume on the domestic market.
The Sun Made brand was launched in 2010 and was initially available only in Davao City supermarkets. — Maya M. Padillo

Lego builds miniature Windsor castle to celebrate the upcoming royal wedding


LONDON — Attraction park Legoland has unveiled a miniature model of this month’s royal wedding of Prince Harry and Meghan Markle at Windsor castle, built by a team of 11 model-makers who used almost 60,000 pieces of Lego bricks.
The replica includes a 60-brick Markle in her wedding dress and veil, with Harry by her side.
The couple are riding in a brick-built carriage being drawn by horses along Windsor Great Park’s Long Walk towards the castle, surrounded by 500 spectators, recreating the real life procession that is planned for the big day on May 19.
The scene is completed by miniature models of Queen Elizabeth and the Duke of Edinburgh along with best man Prince William, his wife Kate and their children Prince George and Princess Charlotte, and Meghan Markle’s parents. — Reuters

Voyager no longer pursuing partnership with Chinese tech giant

PLDT, Inc. said its unit Voyager Innovations, Inc. is no longer pursuing a strategic partnership with Chinese tech giant Tencent Holdings, Ltd., after talks did not materialize.
PLDT Chairman and CEO Manuel V. Pangilinan said the company did not receive any feedback from Tencent, who was being eyed as a strategic partner for Voyager.
Tencent is the tech giant behind messaging app WeChat and also has businesses in video streaming and mobile gaming.
“No news. We have not received any word from, one way or the other from Tencent…. We’re assuming at least for the moment that we will not have a strategic partner and we will proceed with our own plans with Voyager,” Mr. Pangilinan told reporters on May 10.
The PLDT official last year said the company was looking for a partner to “push the various thrusts of Voyager,” given that the company is a cash business and “capital-hungry.”
Mr. Pangilinan, however, remains confident and sees encouraging signs that Voyager can grow its base without a strategic partner given the increasing number of accounts and transactions.
Voyager targets to have 30 million users by 2020.
PLDT Chief Operating Officer Paola Azzola said last December that there are eight million users of PayMaya Philippines, Inc. and Smart Money. Other units under Voyager include FINTQ, Lendr, and freenet.
Last year, Chinese firm Ant Financial Services Group, an affiliate of Alibaba Group, entered into a strategic partnership with Globe Telecom, Inc.’s Mynt (Globe Fintech Innovations, Inc.) to accelerate digital payments.
Globe and Ant Financial have partnered to enable merchants in the Philippines to accept payment from both local users (using GCash) and Chinese visitors (using Alipay) via a connection to GCash QR Code solution.
Tencent has partnered last year with Asia United Bank for WeChat Pay in the Philippines to allow mobile payments from Chinese tourists.
PLDT recorded a net income of P6.9 billion for the first quarter, excluding international business and Voyager. This was 39% higher than the P5 billion during the same period in 2017. Consolidated core income grew by 13% to P6.0 billion during the first three months of 2018 from P5.33 last year.
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

BPI still studying use of blockchain technology

BANK OF THE Philippine Islands (BPI) is not yet keen on using blockchain technology as the lender is still studying the applicability to banking processes.
Cezar P. Consing, BPI president and chief executive officer, said the concept of a distributed ledger “is quite interesting.”
“Blockchain is a distributed ledger, so that by itself is quite interesting. That, we continue to study. But something we would use right now? No, not yet,” he said following the listing of its new common shares early this month.
“Is it applicable to a bank like us right now? Maybe not yet but we continue to study it very closely,” he said. “We’d like to see how this thing develops.”
Blockchain is a distributed data ledger which involves a large network of entities where data is stored in “blocks.”
The storage units are continuously updated and being secured using cryptography, making data management and data-driven processes decentralized.
Mr. Consing noted the Ayala-led lender is looking at the ubiquity, security as well as the energy requirement needed to run a blockchain.
“We just don’t know enough about it yet. Remember, blockchain technology uses a lot of energy. It can be expensive in a country where energy is valuable,” he said.
“Think of where we are as a country and where we want to devote our energy resource… We should probably [look at it] before dabbling into blockchain technology.”
Last month, UnionBank of the Philippines said it is embracing blockchain to connect rural banks and increase the efficiency of its internal processes.
UnionBank President and CEO Edwin R. Bautista said many of its banking processes are “right for conversion into the blockchain technology.”
He added that it will first adopt the “disruptive” technology by putting general circulars and operating manuals into the blockchain, enabling a more efficient distribution of the materials to its employees.
Meanwhile, Mr. Consing said BPI views itself as a consumer of financial technology (fintech) rather than an innovator.
“Our philosophy towards fintech is we want to be able to use what’s available and equitable for us. We’re looking at applications that makes sense and we could use,” he said, adding that it might take too long if the bank tries to develop the technology by itself.
“I don’t think you could expect us to be a big technology innovator. That’s not us. You can expect us to be able to use innovative technology in a way that helps. And to use it quickly if it’s available,” Mr. Consing added.
BPI, the third-largest bank in the country in asset terms, booked a net income of P6.25 billion last quarter, flat from the profit posted in the same period last year, on the back of lower trading gains.
Shares in BPI ended at P98 each on Friday, up P2.20 or 2.3% from its previous close. — Karl Angelo N. Vidal

Bicol urged to raise rice seed output

THE Philippine Rice Research Institute (PhilRice) said farmers in Bicol region need to produce higher-quality seed to increase access to planting material suitable to the growing conditions.
PhilRice Genetics Resources Division Head Jonathan M. Niones during the Lakbay Palay Dry Season tour in Ligao City, Albay, said that increased production of quality seed is needed to ensure that farmers have access to inputs.
“Low-quality seed leads to unsynchronized germination and growth of crop, which will later become a problem in crop management,” he added.
Bicol, which is prone to floods, drought and typhoons, was rated first among the regions in terms of resiliency to climate with the area’s seed reaching an 85% germination rate.
Mr. Niones said that quality seed can increase rice yields by 5% to 10% due to higher gemination rates.
In 2010, PhilRice established a Bicol office to spur research and development as well as diversified rice-based production in the region.
In 2014, the institute reported that the region’s seven varieties out of 14 survived the testing — three of which are hybrid rice seeds.
PhilRice said for Bicol it recommended NSIC Rc 302, NSIC Rc 308 and new varieties NSIC Rc 352 and NSIC 354. — Anna Gabriela A. Mogato

Yields on government debt climb following central bank rate hike

By Carmina Angelica V. Olano
YIELDS on government securities (GS) traded in the secondary market rose slightly last week on demand following the highly anticipated decision of the Bangko Sentral ng Pilipinas (BSP) to hike rates.
On average, GS yields inched up by 2.39 basis points (bps) week on week on Friday as bond prices of medium- to long-tenored notes dipped from a week ago levels, data from the Philippine Dealing & Exchange Corp. showed.
“Yields ended ‘flatter,’ where movement is slightly higher on the short-end while lower at the belly to long-end of the curve. The BSP’s decision to hike rates on Thursday last week [drove] yields lower on hawkish statements of Governor Nestor A. Espenilla, Jr. that the central bank is ready to act if inflation rises further. This is bullish on bonds because it means inflation expectation is being managed,” a bond trader said by phone.
For his part, Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines (LANDBANK) said: “Upward pressures prevailed overall, giving yields a slight positive bias,” as yields generally moved sideways on “mixed signals.”
Internal factors such as the accelerated economic growth in the first quarter, [has given] confidence to the BSP to finally hike policy rates to address broadening inflation. [These] generally pushed yields higher,” he said.
Meanwhile, external factors such as the further pick up in the April US inflation, “suggesting more US rate hikes ahead,” as well as its “softer-than-expected” labor report “had mixed impact on yields,” he added.
For First Metro Asset Management, Inc. (FAMI) the yields on GS ended flat last week as the market has already factored BSP’s rate hike ahead of its announcement.
“There’s no big movement that happened in the GS trading last Friday,” but noting a rally on the 3-5 year tenor “given that the market is still anticipating another rate hike,” it said.
Last Thursday, the BSP raised key policy rates by 25 bps — its first tightening move in nearly four years — at a time of five-year highs for inflation and robust economic growth. Overnight lending rate now stands at 3.75%, overnight reverse repurchase rate at 3.25%, and overnight deposit rate at 2.75%.
In the US, the Bureau of Labor Statistics showed new jobs created reached 164,000 in April, lower than the 192,000 expected payrolls growth in a Reuters poll. In a different Reuters report, US consumer prices rebounded to 0.2% in April after slipping 0.1% in March.
At the secondary market, the 10-year Treasury bonds (T-bonds) ended with the highest yields and the only note that rose at the longer-end of the curve. It climbed 39.09 bps to 6.5286% to week-on-week.
At the belly of the curve, the 2-year and 3-year securities went up by 1.23 bps and 8.49 bps to 4.3069% and 4.6653%, respectively.
This week, analysts said yields will continue to move sideways.
“Yields might generally move sideways [this] week amid bets of mixed drivers abroad and likely lukewarm US data on retail sales and housing. Expectations of more rate hikes from the US Federal Reserve and the BSP this year could push yields higher,” said LANDBANK’S Mr. Dumalagan.
For FAMI, “We can say that we’re going to see a flat yield curve until the next rate hike to be implemented by the BSP,” expecting another rate hike for at the third quarter this year.

Mober sees strong demand for same-day delivery service

By Patrizia Paola C. Marcelo
Reporter
FILIPINO start-up company Mober Technology Pte. is aiming to increase the number of delivery bookings to 1,000 per day in Metro Manila, as it sees growth in the furniture and appliance market as a driver of demand for its same-day delivery service.
Mober Founder and CEO Dennis Ng said the company is seeing its bookings grow by 20-25% a month, with an average of 250 delivery bookings a day in Metro Manila.
In an interview, Mr. Ng said the company is differentiating itself from competitors by specializing in big-item delivery.
“Depending on our marketing, on our information dissemination, we can reach about 1,000 bookings per day,” he said.
Mober is also ramping up its fleet expansion to cope with the increased demand.
“We’re trying to increase our fleet, at least up to 500 for the next quarter, from 250,” he added.
Mr. Ng said Mober is bullish as it sees strong demand for same-day delivery of appliances and furniture, given the higher disposable income of Filipinos who furnish their residences with appliances and furniture.
“The appliances now are cheaper compared before. It’s made affordable,” he said.
Mober also introduced a cargo-sharing strategy, where customers can choose between three time periods in a day when he or she wants to have the product delivered. Mober vans will be on standby and will leave at the selected time regardless of the number of delivery points.
Mr. Ng said this maximizes the use of trucks and at the same times provides more revenue to the drivers.
“We feel that we are able to maximize one delivery truck. At the same time we’re able to give more revenue to our van partners,” he said.
Mober announced earlier this year it received capital infusion from 2GO Group, Inc., linking it to the various business of SM Investments Corp. (SMIC). SM has an interest in 2GO after it acquired last year a 34.5% interest in 2GO parent Negros Navigation Company (Nenaco). Mober vans are now readily available at SM Appliance Center outlets.
Mr. Ng said the investment from 2GO also helped in improving their software.
Mober is set to expand to Cebu City this month, and to Davao City by year-end.
With the expansion, Mr. Ng said they hope to have a next round of funding.

Dreyfus loosens grip on robusta coffee stocks as contract changes

LONDON — Louis Dreyfus Co. (LDC) has offloaded the bulk of its certified robusta coffee stocks ahead of a rule change that will make it more expensive to carry the coffee forward, industry sources told Reuters.
Some 59,270 tons of robusta coffee has changed hands in the delivery period that began at the start of this month, Intercontinental Exchange data showed on Friday.
This is equivalent to about 76% of certified stocks currently held in European warehouses.
Industry sources said the bulk of this was tendered on behalf of LDC, signaling that the trade house is unwinding its majority hold on certified stocks.
LDC declined to comment.
Ownership of certified robusta stocks is often seen as a strategic move because it can give trade houses a bigger sway over the structure of the futures market.
Four industry sources said that the key driver behind LDC’s move was a looming change to exchange rules, which will add extra costs to robusta contracts from July, the next delivery period.
“Commercially, it didn’t make sense to hold it,” one source familiar with the matter told Reuters. “It didn’t get to the point where you were even close to breaking even.”
The rule change is the latest in a series of reforms to the robusta contract in recent years after complaints that the exchange was failing to stop abuses such as steep rent charges and long warehouse loading delays.
Under the new rules, sellers of certified robusta stocks will have to absorb a load-out cost of about $35 a ton, effectively making contracts from July onward “free on truck.”
Previously, the buyer had to cover these load-out charges if they wanted to transfer the coffee out of the warehouse.
“With the rule change, somebody is going to have to pay when they re-tender the coffee in July,” one of the sources said. “There’s going to be a cost associated with that.” — Reuters

Morgan Stanley, Deutsche Bank derivatives legal battle heats up

A LEGAL BATTLE is heating up over scraps of a synthetic securitization structured before the global financial crisis, highlighting risks in derivatives trades that are proliferating again.
Deutsche Bank AG and Morgan Stanley are fighting over €36 million ($43 million) that wasn’t repaid to junior noteholders. The deal matured in December 2016 and was designed to provide credit protection to Deutsche Bank on a portfolio of about €2.9 billion of loans to small and medium-sized enterprises.
Morgan Stanley, which holds most of the outstanding Class F notes, is reviving an argument applied to other legacy deals that the structuring bank had a conflict of interest because it stood to benefit from credit-default swap payouts. Complex trades that allow banks to reduce the amount of capital they have to hold against losses on loans by paying investors to take the first hit have rebounded as yields on traditional fixed-income assets declined.
“As was often the case in pre-crisis deals, the arranger has an economic interest that was divergent from that of the noteholders,” said Vincenzo Bavoso, a lecturer at the University of Manchester, England, who’s written papers on securitization. “This divergence was exacerbated, or perhaps created altogether, by the CDS that the arranger had entered.”
COURT DEADLINE
Lawyers for the banks have to submit documents for the dispute by the end of the month, after agreeing to an extension in April. Depositions are due to be completed two months later and a case management meeting is scheduled for August, according to court filings in New York. The case is The Bank of New York Mellon, London Branch v. Smart Sme Clo 2006-1, LTD. et al.
Spokesmen for both banks declined to comment on the case.
Under the swap, Deutsche Bank made periodic premium payments to noteholders in exchange for compensation on loan losses.
Morgan Stanley has said Deutsche Bank breached its obligations by embarking on a “firesale” of defaulted loans in a bulk auction months before the deal matured, worsening potential recoveries for investors. The sale “was designed to accelerate losses rather than maximize recoveries,” according to court filings.
Morgan Stanley said that the trade documents called for defaulted loans to be sold individually. The average recovery in the October 2016 auction was less than 18%, compared with nearly 42% for the previous three years, the US bank said.
The German lender has argued that it’s owed the €36 million as insurance payments for the defaulted loans, according to court filings. It denies that it breached obligations under the swap and contends that its bulk sale was permissible.
“Pre-crisis deals will still knock at our door,” Bavoso said. “It is likely that investors will choose to litigate in order to recover some of the losses.” — Bloomberg

Anchor Land breaks ground for P1.5-B Cosmo Suites

ANCHOR LAND Holdings, Inc. is venturing into the “bedspace” business, starting with the development of a P1.5-billion project in the Bay Area that looks to cater employees of the business process outsourcing (BPO) sector in the area.
In a statement issued over the weekend, Anchor Land said it has broken ground for Cosmo Suites in Pasay City, the first facility offering bedspace under its portfolio.
Cosmo Suites is a 16-storey twin-tower project housing more than 800 units sized from 22-32 square meters. It will offer 3,000 beds mainly catering to young professionals from the BPO sector, as well as employees of hotels and casinos in the Bay Area.
“We have meticulously planned for each unit, taking into consideration how our clients can co-live in a room in the most efficient way… With Cosmo Suites’ high-end amenities and industrial interior design, we offer our clients a condo-like living,” Anchor Land Chief Executive Officer Steve Li said in a statement.
Cosmo Suites seeks to provide a halfway home to employees working in Pasay City during the weekdays, allowing them to avoid the infamous Metro Manila traffic during rush hours.
Amenities in Cosmo Suites will include an open lounge area, a 20-meter lap pool, fitness gym, basketball court, badminton court, and a game room.
Office developers are currently rushing to develop more projects in the Bay Area to take advantage of the growing demand for leasable spaces by Philippine Offshore Gaming Operators (POGOs).
POGOs occupied 48,000 square meters of office space for the first quarter of 2018 alone, most of which are in the Bay Area, Pasig City, and Makati City, according to real estate consulting services firm Pronove Tai International.
A separate report by Colliers International Philippines noted that the Manila Bay Area is expected to have an additional 935,800 sq.m. of office spaces from 2018 to 2021, a 39% increase from the 400,900 sq.m. seen at the end of 2017.
Anchor Land will also be opening the high-end Bay Life Venue in the Bay City soon, which will house the Anchor Land Corporate Center and a seafood restaurant. The company is further ramping up construction of tourism-related projects in Boracay and Coron, Palawan.
Incorporated in 2004, Anchor Land develops mostly luxury residential projects for the Filipino-Chinese community. Its projects are located in Manila, Pasay, Parañaque, and San Juan, including the Mayfair Tower, Mandarin Square, Solemare Parksuites, Wharton Parksuites, and Admiral Baysuites, among others.
The company’s net income grew 11% to P620.05 million in 2017, higher than the P559.76 million posted the year before on the back of a 25% increase in revenues to P6.01 billion. — Arra B. Francia

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