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Philippines’ factory activity improves in March

FACTORY ACTIVITY in the Philippines improved last month despite higher input costs and selling prices due to the tax reform law that took effect on Jan. 1, according to an IHS Markit survey conducted for Nikkei.

The Philippines’ Nikkei Manufacturing Purchasing Managers’ Index (PMI) grew to 51.5 in March from 50.8 in February on output, new order, and export growth.

The first quarter average however was the lowest since the survey started in 2016.

The Philippines placed third among select Association of Southeast Asian Nations member-states, an improvement from placing fifth in February, but was overtaken by Myanmar and Vietnam’s 53.7 and 51.6, respectively.

“Growth in the Philippines manufacturing sector accelerated into the end of the first quarter. Faster rises in output and new business boosted the headline PMI, while a slower fall in employment was seen,” the report read.

“The stronger upturn saw business expectations improve, with optimism at an eight-month high. This encouraged firms to scale up purchasing activity and build-up inventories,” it added.

The report also noted that the new excise taxes “continued to push up inflationary pressures during March,” that led input costs and selling prices to climb “the highest in the survey history.” — Elijah Joseph C. Tubayan

March inflation could have topped 4%

By Melissa Luz T. Lopez
Senior Reporter
HEADLINE INFLATION likely quickened further in March to breach four percent amid rising fuel and power costs, analysts said in a BusinessWorld poll, noting that tax reform and a weaker peso have stoked price pressures.
A poll among nine economists last week yielded a median forecast of 4.2% under the 2012 base year, which is a fresh peak for monthly inflation. This compares to the 3.9% rate logged in February and the adjusted 3.1% for March 2017.
If realized, this would settle above the 2-4% target range set by the Bangko Sentral ng Pilipinas (BSP), but will fall within the 3.8-4.6% forecast given late last week.
Under the old 2006 base, inflation likely clocked 4.75%.
The central bank has cited a higher power generation charge and retail pump prices due to the depreciation of the peso as upside pressures, partly offset by lower costs of cooking gas.
The Philippine Statistics Authority will release official inflation data on Thursday.
Inflation last pierced the four-percent mark — using the 2012 base — at 4.2% in July and August 2014.
Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines, said faster increases in the costs of petroleum, food and non-alcoholic drinks likely led to the overall surge in prices. “The costs of these goods accelerated, fuelled by the hike in excise taxes under the TRAIN law and the depreciation of the peso, which made foreign goods and services more expensive in local currency terms,” Mr. Dumalagan said via e-mail, referring to the impact of the Tax Reform for Acceleration and Inclusion Act that took effect Jan. 1.
TRAIN, enacted as Republic Act No. 10963, imposed an additional P2.50 excise tax per liter of diesel and P3 per liter for kerosene, which came at a time of three-year highs for world crude prices. The new law also introduced additional taxes on cars, coal, sugar-sweetened drinks and a host of other items that likely drove up prices of other widely used goods and services.
Other analysts said higher prices of rice, fish, meat and vegetables drove up food costs last month.
At the same time, the peso weakened to a fresh 11-year-low last month as it continued to trade above P52 versus the dollar.
Nomura economist Euben Paracuelles expects inflation to have settled at 4.2% in March, and will likely keep moving faster: “I still think inflation remains on an upward trajectory driven by the combination of a pickup in fuel & electricity prices, the impact of ‘TRAIN’ tax reforms continuing to feed through, and still-strong demand conditions.”
The BSP said they see inflation peaking within July-September, before averaging at 3.9% for the full year.
With inflation further picking up pace, more analysts are now considering that a rate hike may happen sooner than later, with some betting the change in rates as early as next month.
“Though the current monetary policy settings are deemed to be appropriate, thus far, I think there’s a growing chance of a modest monetary tightening within the year, especially if inflation will continue to accelerate and depreciation pressures on the peso will be persistent,” said Angelo B. Taningco, economist at Security Bank Corp.
Rajiv Biswas, chief economist for Asia Pacific at IHS Markit, said the case for a rate hike “will become more compelling” by May should inflation remain elevated and economic growth robust.
BSP Governor Nestor A. Espenilla, Jr. has acknowledged that inflation will be “accelerated” within 2018, but noted that price pressures “will come down soon enough.” The central bank sees inflation settling back within target and averaging three percent.
Inflation

Central bank unfazed by pace of price pickup

THERE IS STILL NO NEED to raise policy rates in the Philippines despite rising inflation pressures, a senior central bank official said, noting that calls for a rate hike bare a “myopic” view of the economy.
In a four-page commentary, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo sought to allay concerns that the central bank is running monetary policy too loose as it has kept interest rates within the 2.5-3.5% range since mid-2016, despite rising global yields and with inflation on the rise.
A number of analysts have been flagging the need for the BSP to raise rates since last year, saying this move is needed to keep local yields competitive. Among the reasons cited are elevated inflation — with expectations that the pace will quicken in the coming months — as well as the gradual rate increases in the United States.
“While these concerns are relatively valid, the BSP believes that these developments — along with other ignored but equally important facts — continue to validate the current monetary policy stance,” Mr. Guinigundo said over the weekend.
“While there are pressures to raise interest rates, our careful assessment of the data and facts does not point to immediate rate hikes.”
The BSP kept policy interest rates steady on Thursday last week despite the US Federal Reserve’s tightening bias and inflation pressures intensifying at home especially due to higher taxes as a result of tax reform that took effect in January.
Mr. Guinigundo said the central bank is keeping an eye on liquidity and other financial conditions, even as there is no urgent need to tweak benchmark borrowing rates for now.
Inflation averaged 3.7% for the first two months of 2018, with the BSP seeing a steady ascent towards a peak in July-September. The full-year pace is expected at 3.9% under the 2012 base year, still within the 2-4% target range which the central bank had set using the old 2006-based consumer price index.
“While some market indications point to rising inflation expectations, nothing at this point suggests that the market expects persistent significant surge in consumer prices through 2019 that would warrant a change in the monetary policy stance,” the central bank official added.
He also stood firm that the BSP charts its own course in terms of monetary policy, and does not have to match the Fed’s tightening moves.
The Fed raised rates by another 25 basis points last month, but this was followed by a status quo decision from the local central bank.
“In practice, these trade-offs imply that monetary policy has real and significant economic costs,” Mr. Guinigundo said.
“On one hand, when a central bank raises interest rates prematurely, it runs the risk of the economy slowing down. On the other hand, when the central bank raises interest rates too late, it could… fuel inflationary pressures leading to overheating.”
However, he pointed out that the BSP does not discount the need for higher interest rates should domestic conditions change and “targets may be compromised.” — Melissa Luz T. Lopez

Corporate regulator eases financial reporting rules for small businesses

THE SECURITIES and Exchange Commission (SEC) has eased financial reporting requirements for small businesses as part of a continuing government effort to facilitate entrepreneurship.
“The Commission, in its meeting held on 22 March 2018, approved the adoption of the Philippine Financial Reporting Standards (PFRS) for Small Entities as part of SEC’s rules and regulations on financial reporting,” according to SEC Memorandum Circular No. 5, series of 2018, dated March 26, that was published in a newspaper on Thursday last week and posted on the regulator’s website.
Adoption of the PFRS for Small Entities, in turn, prompted revision of Section 2 of Securities Regulation Code (SRC) Rule 68, or the general guide to financial statement preparation.
Prior to the release of the new guidelines, the SEC had required small and medium enterprises (SMEs) to observe uniform financial reporting standards that simplified the principles in the full PFRS for recognizing assets, liabilities, income and expenses.
“The changes in effect made easier and (simpler) the reporting of small enterprises,” SEC Chairperson Teresita J. Herbosa said in a mobile phone message when sought for explanation, citing SEC General Accountant Emmanuel Y. Artiza.
“The Financial Reporting Standards Council came out with said framework as one of ease-of-doing-business initiative as recommended by the Association of (Certified Public Accountants) in Public Practice.”
The new framework this time distinguished medium-sized entities as those with total assets of more than P100 million to P350 million or total liabilities of more than P100 million to P250 million.
The PFRS for Small Entities will now apply to businesses with total assets or liabilities of P3 million to P100 million, that are required to file financial statements under Part 2 of SRC Rule 68, are not in the process of filing their financial statements for the purpose of issuing any class of instruments to the public and are not holders of secondary licenses.
The new rules will not apply to small businesses which have operations or investments that are based or conducted in another country. These should instead use the full PFRS or PFRS for SMEs.
The circular also exempted from mandatory adoption of the PFRS for Small Entities those small businesses that are subsidiaries of a parent company reporting under the full PFRS or PFRs for SMEs, are subsidiaries of a foreign parent moving towards International Financial Reporting Standards (IFRS) or IFRS for SMEs, and joint ventures of associates that form part of a group reporting under the full PFRS or PFRS for SMEs, among others.
Should a small business breach the prescribed threshold in terms of total assets or total liabilities and thus fall under a different classification, its annual financial statement should be prepared based on the higher framework, the circular read.
The SEC may consider other cases as valid exceptions from the mandatory adoption of PFRS for Small Entities.
“If a small entity that uses the PFRS for Small Entities in a current year breaches the floor or ceiling of the size criteria at the end of that current year, and the event that caused the change is considered ‘significant and continuing,’ the entity shall transition to the applicable financial reporting framework in the next accounting period,” according to the circular.
If such event is not considered “significant and continuing,” the entity can continue to use the same financial reporting framework it currently uses, according to the circular.
Management will determine what is “significant and continuing” based on the relevant qualitative and quantitative factors; but in general, a fourth or more of the consolidated total assets is considered significant.
The SEC requires entities meeting the prescribed criteria to apply the PFRS for Small Entities for the annual period beginning on or after Jan. 1, 2019, although the regulator will allow early application of the new reporting rules. — Krista Angela M. Montealegre

Trade row fears to keep markets on edge for weeks

BRUSSELS — A full-scale global trade war has not broken out yet — but that hasn’t stopped the market from fretting about one or analysts from warning about the potential cost.
Whether such concerns remain a driving force for asset prices in the coming days depends largely on decisions, tweets and formal announcements from Washington and Beijing, but it seems certain that the uncertainty has at least another month to run.
South Korea has cut a deal with the United States, agreeing to reduce its steel exports to avoid tariffs.
The European Union, Canada, Mexico, Brazil, Australia and Argentina face a May 1 deadline to reach equivalent deals.
US President Donald Trump has tied the suspension of tariffs for Canada and Mexico to a renegotiation of the North America Free Trade Area. Officials have said the next round of talks was due to start on April 8, but that date is not certain and there are mixed messages on the chances of a quick breakthrough.
China has meanwhile warned that it could target a broad range of US businesses if Trump slapped tariffs on $50 billion-$60 billion of largely high tech Chinese goods, although the latter may not happen until early June.
Economists at ING split such a conflict into four stages from a lone Trump attack to a tit-for-tat battle to US escalation, such as including European Union cars, and finally an all-out trade war.
The last, ING estimates, would harm all economies, with the United States facing the heaviest hit, of some two percent of gross domestic product (GDP) over two years, with US exporters facing high tariffs at all borders while the rest of the world keeps its prevailing arrangements in place.
Only in the first scenario, in which Mr. Trump imposes tariffs and no one retaliates, would the United States make any noticeable economic gain — of some 0.3% of GDP.
ING’s head of international trade analysis Raoul Leering said that the conflict was currently somewhere between the first scenario and the second ‘tit-for-tat’ stage.
“If other countries give in and give Trump something in return, then we’re looking at scenario one,” he said.
“It’s a conflict in which Trump could turn out to be the winner.”
Harm Bandholz, chief US economist at UniCredit, believes that the trade conflict is likely to be the main driver of market sentiment for weeks to come, although for the time being it is “barely more than tough talk”, with strong announcements then watered down, such as with the metal tariff exemptions.
“If it stays like this it’s not really altering anything in the macro outlook. The risk is, once you’ve started, you’re on a slippery slope and you don’t know if you can stop. That’s the risk markets are worried about,” he said.
“People are worried about accidents happening. Clearly, if you are more aggressive, the chances of mistakes or something bad happening will increase.”
All that said, and even with many in Europe off for Easter vacation, some major economic data is due in the coming week.
The Bank of Japan’s quarterly tankan survey, out on Tuesday, is expected to show business sentiment deteriorating slightly in the three months to March with the outlook for the coming quarter also fading, reflecting concerns over the strong yen eroding business profits.
In Europe, the first estimate of euro zone inflation will be released on Wednesday and is forecast to have risen to 1.4% in March from 1.1% in February, with some economists pointing to a potential 1.5%.
An earlier Easter this year, pushing up prices of package holidays and accommodation in March, cold weather that drives fruit and vegetable prices higher and a steeper year-on-year increase in energy costs will all contribute.
Even if inflation remains short of the European Central Bank’s target of almost two percent, its policy makers are now debating whether to end lavish bond buys later this year. The purchase program currently runs until the end of September.
US monthly non-farm payrolls round off the week on Friday. The economy is seen adding far fewer jobs than the 313,000 of February, but the average Reuters forecast for March of 203,000 is still strong and the unemployment rate is set to fall to 4.0%, a level not seen since 2000.
“We see further declines of the rate below the level the Fed thinks is the natural rate of unemployment. Over time, you would expect it would exert upward pressure on wages, which admittedly we have not really seen,” Commerzbank’s Bernd Weidensteiner.
“It should happen during the course of this year. Otherwise, we really need to rethink our picture of the workings of the US labor market.” — Reuters

DFNN eyes hybrid e-bingo, sports betting business

By Arra B. Francia,
Reporter
DFNN, Inc. is planning to introduce more products this year, as it aims to boost its revenue contribution to the Philippine Amusement and Gaming Corp. (PAGCOR).
“We’re looking at a hybrid of e-bingo sites and more breadth in terms of the product itself, and more sports betting,” DFNN Chief Executive Officer Calvin Lim told BusinessWorld on the sidelines of the ASEAN Gaming Summit in Conrad Hotel in Pasay City last week.
Asked how many electronic bingo (e-bingo) sites the company targets to put up, Mr. Lim declined to give details.
“We are still working on it. We want to see the pure entertainment value is reached to as many locations as possible,” the newly elected official said.
Mr. Lim said the addition of more products will help increase its contribution to PAGCOR’s revenues, as well as bring more entertainment into the online gaming industry.
During a panel discussion, DFNN Executive Vice-President for Business Development Christopher M. Tio said the company and other e-gaming firms “play vital roles in helping provide needed revenue for the development of the country.”
Mr. Tio noted that PAGCOR is the third largest contributor to the Philippine government’s revenues, after the Bureaus of Internal Revenue and Customs.
He also sees strong potential in sports betting, noting the figures for the Philippine industry are “quite staggering.”
“But if you look at the share of the regulated, legalized sports betting, it’s very very small. So potential is there,” Mr. Tio said, noting that the company has a sports betting license.
“That will allow us to come up with a very competitive product against illegal sports betting,” he added.
For this year, Mr. Lim said sees huge opportunities for expansion in the country.
“(Being profitable) is actually very important. We have the duty to shareholders of the public to ensure that the investment is solid,” Mr. Lim said.
DFNN currently engages in online gaming services, with its subsidiary Pacific Gaming Investments Pty. Ltd. working on game developments for the firm, HatchAsia, Inc. for management and technology expertise, and iWave, Inc. for system integration software and technology development.
The listed firm saw its attributable profit soar to P114.85 million in the first nine months of 2017, against P1.86 million in the same period in 2016. Revenues for the period likewise jumped 400% to P855.8 million during the period.

Philippine companies should invest more in security, says Blackpanda CEO

By Krista A. M. Montealegre,
National Correspondent
IF THE GUNMAN in the deadly attack at the Resorts World Manila had walked into another establishment that fateful night last June, a security expert fears that guards in most places in Metro Manila would have responded the same way as those in the integrated resort.
The Philippines, even with its moderate-risk status, do not need special weapons and tactics team manning every establishment, but security goes beyond deploying guards with wooden sticks.
“A lot of Filipino companies aren’t used to the idea of paying for quality security. They always get the cheapest thing. Well, you pay for what you get and (you deal) with the consequences,” Gene Yu, the chief executive officer and cofounder of Blackpanda Ltd., said in an interview.
Blackpanda was tapped by Resorts World Manila to help establish new security protocols after gambling addict Jessie J. Carlos carried out an arson attack that left 37 dead.
“Imagining clients out there with their security cluster, they are basketball teams but nobody knows what their position is. They never practice. Nobody knows what the plays are. Who’s the coach? Who’s the captain? No one really knows. It’s just that we have basketball players and they’re sitting there and suddenly something happens and they immediately have to stand up and play in the game for real. Imagine that chaos,” Mr. Yu said.
A comprehensive security plan boils down to mastering the basics and ensuring a process is in place where the security personnel know what they are supposed to do in times of crisis, he said.
Blackpanda is more than just a private security company. It is an elite global special risks insurance and consultancy group based in Hong Kong and with offices across Tokyo, London and Southeast Asia.
Blackpanda knows that understanding the local culture and operating environment as well as engaging local partners are the keys to successful risk management. This approach has enabled the company to provide the reality on what’s on the ground, helping insurers better assess the risk of an investment.
Mr. Yu shared Blackpanda’s experience in performing a special risk audit and devising a long-term risk mitigation plan for a large-scale copper and gold mining venture in Mindanao. In the process, it uncovered local partner deception, local government collusion and active measures to delay the mine.
This allowed the client to gain a $25-million war and terror coverage from Lloyd’s of London, a British provider of specialist insurance services to businesses.
“We’re the guys that come in and increase the security profile to the point where we feel comfortable that even when there is an attack, the security and special risk management structure is strong enough that we can quickly mitigate the damage and the investment will survive,” Mr. Yu said.
A former US Army Special Forces officer, Mr. Yu spent eight years in the military with tours of duty in Iran, the Philippines and Japan. He was instrumental in the negotiation and release of a Taiwanese from Abu Sayyaf militants in the Philippines.
After leaving the military, Mr. Yu worked as an equity swaps trader at Credit Suisse in Hong Kong and with Palantir Technologies in its Asia-region business development department based in Singapore.
Seeing the country’s economic resurgence, Blackpanda came to the Philippines as its first proof of concept that the model of marrying security and insurance can work.
“Blackpanda has evolved towards insurance because to me, insurance is the productized version of security. It is an actual product that people can more tangibly understand and spend on because they get something back when something happens,” he said.
Mr. Yu has been in and out of the Philippines since 2004, but he feels like nothing has changed in terms of how Filipinos perceive the importance of security. While certain local events have raised the country’s consciousness about its value, security remains a “nuisance” for most businesses.
“It is actually very surprising when you look at it because there is actually a real-world threat here and you think people are taking it seriously. It’s almost like a collective if we close our eyes it’s not a concern. That’s a little bit of the cultural attitude towards security,” Mr. Yu said.
“Also because it is always there and it’s been so long that the Philippines has been on this stage of what I call moderate risk,” he said, citing the long-standing rebellion of the New People’s Army, considered one of the main threats in the Philippines.
The attack of the Islamic State-inspired Maute group on Marawi may have ended, but this could just be the tip of the iceberg amid reports that fighters from Syria and Iraq are flocking to Mindanao.
“Marawi, to me, is not over. I have to say that sorry. I’m really worried about that,” Mr. Yu said.
More businesses are becoming increasingly aware of the need to invest heavily in security to protect their investment, adding fuel to the country’s economic renaissance.
“It is a perfect place for us to come as a proof of concept because there’s interest to invest in the Philippines but they are really scared. My job is to make them less scared, try to remove the friction of the special risk they are facing in coming to the Philippines by providing them both consulting services as well as insure them so they are financially covered,” Mr. Yu said.

Thyssenkrupp AG pegs growth hopes on PHL infrastructure program

INDUSTRIAL engineering firm Thyssenkrupp AG targets to book around $50 million to $100 million in revenues from its Philippine operations this year, banking on the government’s infrastructure program to boost the demand for the company’s services.
The German firm recently said it looks to serve local firms expanding cement plants and power capacity to support the “Build, Build, Build” program under President Rodrigo R. Duterte’s administration. The company’s target revenues for the year would be a three-fold increase from around $30 million it generated in 2017.
“The gross potential of the Philippines is a striking positive for us… There’s cement and chemical plants, and we deliver other products here as well. We have decided that we will give a visible signal to our customers,” Thyssenkrupp Chief Executive Office Heinrich Hiesinger said in a media roundtable in Taguig City on March 27.
Thyssenkrupp is a global firm that employs around 159,000 employees across 2,000 sites in 79 countries. It operates in five segments, namely components technology, elevator technology, industrial solutions, materials services, and steel.
Since 2011, Mr. Hiesinger said Thyssenkrupp has been increasing the share of industrial goods and services to its operations in Asia, while reducing the share of the steel business.
“We decided that (steel) does not allow us to harvest the growth potential in Asia and other booming countries. And therefore we have decided that we will significantly shrink our share of steel production and significantly push for our industrial goods and service business,” Mr. Hiesinger said.
Strengthening its industrial goods and services segment will also allow it to participate in the country’s infrastructure program, particularly with the expected increase in demand for cement. Citing figures from the Board of Investments, Thyssenkrupp said that demand for cement will double to 40 million metric tons by 2020.
“We will really start where we have our strengths. One of the booming areas right now is cement, driven by ‘Build, Build, Build’ (program). This is our heritage, we are one of the global players in cement,” Mr. Hiesinger said.
The company is also looking at striking deals for power plants.
“This is the next area where we will go forward, whether it’s for large power plants, this is a strength of ours and clearly we go on in service, and we would offer our customers the opportunity that we would take over the entire operation and maintenance and lift up the output of those equipment,” Mr. Hiesinger said.
The Thyssenkrupp executive said the company prefers to go into partnerships with local firms for cement plants and decentralized power plants. Here, Thyssenkrupp will provide the engineering and material handling aspect of a project, while the local partner will take care of construction.
“For us, it’s helpful because they know all the details of the country. And it’s also getting the acceptance for the project,” Mr. Hiesinger said. — Arra B. Francia

Halal accreditation delayed over failure to harmonize standards

THE Department of Trade and Industry (DTI) said that the accreditation of halal-certifying bodies has been delayed due to a failure to harmonize standards.
Bureau of Philippine Standards Director James E. Empeño told BusinessWorld that since the certifying bodies are not accredited, the halal products are not recognized once exported.
“Right now, everyone’s pressured because there are big markets that we have to address, particularly in the United Arab Emirates, because there’s big potential coming from [other Southeast Asian] countries,” he added.
Mr. Empeño said that instead of sourcing from the Philippines, buyers could turn to other Southeast Asian countries with large Muslim populations like Indonesia.
The Philippines exports dried fruits to the Middle East.
According to Republic Act No. 10817 or the Philippine Halal Export Development and Promotion Act of 2016, the Philippine Accreditation Bureau is mandated to accredit the halal-certifying bodies to maintain the national standard for the products.
Mr. Empeño said that there are currently five halal-certifying bodies that remain unaccredited with the passage of the new law last year.
“There’s actually a timeline, which should have been accomplished by last year, that all the products from the Philippines should have been halal-certified but we’re still fixing it,” Mr. Empeño said.
“Right now, we’re still in the process because the system is still not established. The system made up of the stakeholders — that’s the Muslim community, the academe, industry, and producers of the products for halal certification. That’s what we’re doing right now,” he added.
Earlier this year, Assistant Secretary for the Export Marketing Bureau Abdulgani G. Macatoman said that the DTI targets as much as 10 accrediting bodies this year and up to $1.4 billion in halal exports. — Anna Gabriela A. Mogato

Keeping Philippine cotton alive


THE WEAVING of indigenous textiles with cotton fiber is an integral part of the country’s culture but it has been in trouble for some time. Thus the Philippine Textile Council (HABI), continues its commitment to revive the industry as traditional weavers have turned to the use of synthetic thread due to cotton scarcity over the past few decades.
Cotton production has declined since the early 1990s “when the country had 38,000 hectares planted in the crop,” states an article by the Cornell Alliance for Science, citing the Philippine Fiber Industry Development Authority (PhilFIDA). In November 2017, the agency spearheaded the planting of the Bt cotton variety, a genetically engineered crop that resists bollworm, in the provinces of Ilocos Norte, Pangasinan, Tarlac, Nueva Ecija, and areas in Mindanao in an effort to revive the local cotton industry. Its adoption promises lower production costs and consistent supply.
To promote awareness and the preservation of the use of cotton in local products, HABI is collaborating with SM’s Kultura for the first time through the Likhang Habi Market Fair on April 13 to 15 at the SM Megamall Fashion Hall D. The fair will showcase more than 50 locally handcrafted products from a variety of Kultura and HABI brands.
“Traditional weaves are depleting and HABI is fighting to keep this tradition current and supported. HABI vendors are mostly members believing in the preservation of our traditional textiles and indigenous culture,” HABI coordinator Kelly Mortensen told BusinessWorld in an e-mail.
“Kultura carries many brands that HABI supports and some of these brands/designers are HABI members. Yearly, vendors also receive supplies from HABI-supported weaving communities,” Ms. Mortensen added.
Along with the participating brands, cotton growing kits will be sold for the benefit of weaving communities all over the country. A kit contains one packet of Philippine cotton seeds, Durabloom organic fertilizer, a bag of potting mix, and a coconut husk pot — convenient for growing cotton at home.
Lectures on how to cultivate and grow cotton, and a pangalay performance — a traditional dance characterized by hand movements done by the Tausug people — are also in the lineup of activities.
“More than presenting our unique and varied indigenous fabrics, we also aim to educate the public about how important it is to support our traditional textile industry,” HABI president Adelaida Lim was quoted as saying in a the press release.
“The Likhang HABI market experience allows weavers and designers to innovate and to level up to modern trends. Through this, we hope that the Philippine indigenous fabrics industry will get the revival it deserves,” Ms. Lim said.
For more information, visit www.habitextilecouncil.ph or follow www.facebook.com/HabiThePhilTextileCouncil and Instagram @habifair #supportthehabilifestyle. — Michelle Anne P. Soliman

China still considering curbs on US soybean imports, association says

BEIJING — China is still considering import curbs on US soybeans in retaliation for moves by Washington to impose trade tariffs, US Soybean Export Council Asia Director Paul Burke said on Thursday, following a meeting with the Ministry of Agriculture.
In his comments, Burke rejected a report in Hong Kong’s South China Morning Post that the council’s meeting with the ministry had been part of official talks aimed at shielding American soybeans.
“The agriculture ministry wanted to discuss our view of the soybean industry regarding tariffs and the supply and demand situation,” Burke said. “We are cautiously optimistic soybeans won’t be targeted, but they’re still on the table.”
A trade spat between the world’s top two economies is escalating, with US President Donald Trump preparing to slap tariffs on $50 billion in Chinese imports over the alleged forced transfer of intellectual property.
Soybeans were the top US agricultural export to China last year, worth more than $12 billion. China is the world’s biggest soybean importer and the US is its second-largest supplier.
In an editorial on Thursday, the China Daily newspaper said Beijing could target a broad range of US businesses from agriculture to aircraft. — Reuters

Gov’t securities to edge sideways

YIELDS on government securities on offer this week will likely move sideways amid lower US Treasury rates.
The Bureau of the Treasury plans to raise a total of P35 billion from the Treasury bonds (T-bonds) and Treasury bills (T-bills) this week.
Broken down, for the T-bills, the government will auction off P5 billion in three-month, P4 billion in six-month, and P6 billion worth of one-year papers today.
Meanwhile, the Treasury will also raise P20 billion via reissued T-bonds tomorrow with a remaining life of two years and nine months.
A bond trader said the yields of the securities to be placed on the auction block this week will move slightly higher.
“For the bond auction, [we’re expecting] possibly higher yields from the previous auction. We’re looking at 4.4-4.6%. While for the bills, we’re seeing sideways movement of around five basis points,” the trader said in a phone interview.
In January, the government made a partial award of fresh three-year T-bonds, which fetched a coupon rate of 4.25%. It only awarded P14.891 billion out of the planned P20 billion borrowing.
Meanwhile, the Treasury also made a partial award of the T-bills it planned to raise last week, as the 91-, 182- and 364-day papers fetched average yields of 2.995%, 3.206% and 3.434%, respectively.
Meanwhile, at the secondary market, the three-month, six-month and one-year papers fetched 3.0723%, 3.2063% and 3.075% last week, while the three-year bond was quoted at 4.6098%.
The trader added that the papers to be offered this week will likely fetch slightly higher yields on the back of lower US Treasuries lately.
“We continue to track US Treasuries, and right now we’re seeing lower US Treasuries,” the bond trader said, adding that they are still waiting for fresh catalysts.
On Thursday, the yield on the benchmark 10-year US Treasury note fell below 2.75%, its lowest in seven weeks, while yields of the 30-year US T-bonds was lower at 2.972%.
On the other hand, a poll from Reuters showed that the yield curve will likely further flatten as the American government focuses most of its new issuance on shorter maturities, driving long-tenor yields to stay low.
The government is set to borrow P325 billion from the domestic market in the second quarter of the year through auctions of securities.
This is higher than the P240 billion it offered in the first quarter and the P180 billion placed on the auction block in the same quarter last year.
The government plans to borrow P888.23 billion this year from local and foreign sources to fund its budget deficit, which is capped at 3% of the country’s gross domestic product. — K.A.N. Vidal

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