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ICTSI to operate Motukea terminal by middle of May

INTERNATIONAL Container Terminal Services, Inc. (ICTSI) on Tuesday said it expects to start operations of its Motukea International Terminal (MIT) in Port Moresby, Papua New Guinea by mid-May.
This after the ICTSI South Pacific signed an agreement with the Noho-Magae organization, which represents the Baruni and Tatana communities, that would allow the latter to become shareholders of the MIT.
MIT Chief Executive Officer Edward Muttiah said the Noho-Magae will represent the interests of the Baruni and Tata communities on the company’s board.
Last year, community representatives and MIT signed a memorandum of agreement to create a collaborative framework for the successful operation of terminal.
“This is a momentous occasion for our communities. ICTSI has shown good intent throughout our negotiations and we are proud to be partners of MIT. We are confident that global port operator ICTSI will bring industry proven best practices to Papua New Guinea, and our communities — as partners — will benefit from the opportunities stemming from the implementation of international standards,” said Motukoitabu assembly chairman Opao Udia, who is also chairman of the Tatana-Araira Development Association.
MIT said it will handle all international container and general, non-bulk cargo vessels through the international wharf at Motukea. It also committed to work closely with the community leaders to implement projects.
Christian R. Gonzalez, ICTSI senior vice-president and head of Asia Pacific, said ICTSI is “privileged and excited to have been granted the opportunity to collaborate with our host community to jointly realize the potential of the Port of Motukea as a logistics hub. This mutually beneficial goal would not be possible without the support of our host communities.”
The Razon-led company reported its net income attributable to equity holders stood at $182.14 million in 2017, one percent higher than the $180 million it booked in 2016.
This year, ICTSI has committed to spend $380 million for capital expenditures. The allocation will be used for capacity expansion in terminal operations in Manila, Mexico, and Iraq, as well as for the completion of a new barge terminal project in Cavite.

New York’s Met Opera to stage opera for toddlers

NEW YORK — The Metropolitan Opera of New York is wooing a younger audience — make that very, very young.
It is putting on an opera for toddlers to see how they react to the music and singing.
The 40-minute show, called BambinO, will run from April 30 to May 5, offering 10 free concerts. It premiered last year in Manchester, England.
The work was composed by Lliam Paterson, a young Scottish composer, and will be performed by an ensemble of four young artists.
The show is strictly for people from six to 18 months of age, plus their caregivers.
The story is about a bird and an unrelated chick that hatches from a golden egg, and how the bird teaches the chick to get out on its own and fly.
“In the Met’s never-ending quest to develop audiences of the future, we’ve decided to start at the very beginning,” Met general manager Peter Gelb said in a statement Thursday.
“This should be a formative experience for the infants of NYC.”
For this gig, the Met has teamed up with researchers from Columbia University who will examine how the toddlers respond to the opera. — AFP

BPI Family sees strong loan growth despite higher prices due to TRAIN

By Karl Angelo N. Vidal
The thrift lending arm of listed Bank of the Philippine Islands (BPI) is bullish on its loan growth despite the effects of the tax reform law.
In a round-table discussion on Tuesday, Joaquin Mari B. Abola, retail lending group head at BPI Family Savings Bank, Inc., said the lender is look at “high double-digit” loan growth this year.
Mr. Abola added that fast turnaround time, as well as competitive rates, will drive the growth of their loan portfolio.
“Fast turnaround time is always a big driver. Rates [are] another consideration,” he said, noting that obtaining the loan faster is more important for customers.
“We’re quite surprised because some of our competitors actually charge higher rates but their turnaround time is fast so they were able to get away with it. When you look at it, a one-to-two percentage point difference in rates, that will not impact a lot on the monthly amortization. The more relevant point for the buyer is getting to their dream fast.”
On the other hand, BPI Family Savings Bank said the tax reform law will have a positive impact for the lender despite the higher prices of oil and some cars.
“I think it’s going to be very positive,” Mr. Abola said. “We’re very encouraged because what is really happening is that there’s much more money in the pockets of the average employees.”
The Tax Reform for Acceleration and Inclusion Law (TRAIN), enacted as Republic Act No. 10963, provided tax cuts and exemptions on personal income and imposed an additional excise tax on petroleum, 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, which has caused the prices of other widely used goods and services to increase in past months.
Nicholas Antonio T. Mapa, economist at BPI, said consumers can still afford to buy cars since the higher take-home pay compensates for the price increase.
“The additional purchasing power freed up by the TRAIN law should give potential car buyers the ability to purchase vehicles despite the increase in prices, fuel and overall inflation,” Mr. Mapa was quoted as saying in a statement.
Meanwhile, BPI Family Savings Bank’s retail lending group head also noted that they are looking at offering loans for luxury motorcycles.
“We want to go into big bikes. We still have to study that, but that’s a very small market.”

Boom in Asia cryptocurrency arbitrage fizzles amid profits

SHANGHAI/SINGAPORE — When China closed its local cryptocurrency exchanges late last year, an underground ecosystem of bitcoin “mules” and peer-to-peer platforms sprung up to allow bitcoin trading to thrive, away from regulators’ watchful eyes.
Li, a Canada-based Chinese banker in his 20s, is one of these underground traders. He buys cryptocurrencies in other markets and sells them at a premium to investors in China, who cannot otherwise get them.
At the height of the frenzied demand for bitcoins in January, when prices of the digital currency were hovering close to $20,000 after a 20-fold jump during 2017, Li and other traders were able to sell bitcoins in China for 30 to 40% more than they cost elsewhere.
But in a matter of months, the premium for bitcoins in China has fallen to around 7% or less as a flood of bitcoin mules, who physically carry cash across borders for the trades, has swamped the arbitrage business. Cryptocurrency funds and individual computer-assisted traders have also piled into the market.
The boom has eaten away the spreads and shown how fast the galloping cryptocurrency markets can change course.
“The market’s kind of taken a downturn; there is less general appetite in this space,” said John DeCleene, an assistant fund manager running the fintech and cryptocurrency investments at Overseas Chinese Investment Management.
“It is too many players entering this market, but also less of the hype we saw in December-January, when people were paying a 30% premium because they expected 10 times gains overnight.”
DeCleene launched a $5 million Singapore-based global fund in November to invest in cryptocurrencies, blockchain-related equities and some exploratory arbitrage trading. He said it has generated a 58% return so far.
BITCOIN MULES
Bitcoin arbitrage thrived last year as the cryptocurrency grew more volatile and some governments stepped in with rules to curtail trading.
The simplest geographical arbitrage involved buying bitcoin in unregulated markets such as Thailand, or ones that have legalised bitcoin trading such as Japan, and selling them in banned markets such as South Korea, China or India.
A second form occurred between exchanges, when nimble-footed traders bought cryptocurrencies cheaply on lesser-known exchanges and sold them for a profit on more liquid and widely used platforms.
There were huge price differences to exploit.
In early January, when the price of bitcoin was $17,600 on Bitstamp, the Luxembourg-based digital currency exchange, it was being quoted at 25 million won ($23,630) in South Korea, implying a 34% “kimchi premium”.
As China’s ban expanded from an initial prohibition on issuing new cryptocurrency to a shutdown of exchanges, premiums rose and traders quickly found new ways of doing business.
At first, it was limited to closed groups on the popular messaging platform WeChat and meetings at bars, where potential bitcoin buyers could meet sellers.
Then peer-to-peer platforms such as CoinCola, websites belonging to former Chinese exchanges Huobi and OKCoin, and even the retail platform Taobao became hubs for “over-the-counter” (OTC) cryptocurrency trading, conducted outside of formal exchanges and far more difficult for regulators to police.
“The big Chinese traders are all using CoinCola or going direct to each other through other OTC platforms,” like WeChat or AliPay, said Christian Grewell, a professor of business and interactive media arts at NYU in Shanghai who has lectured extensively on cryptocurrencies and blockchain technology.
AliPay is China’s leading online payment platform.
Another option, bank transfers between buyers and sellers, is “almost untraceable”, Grewell added, as it is difficult to prove that a transfer is related to a cryptocurrency transaction.
A trader in her 20s in Shanghai said she buys bitcoins in the United States to sell over the counter in China. On each trip to the US, she illegally carries $30,000 to $40,000 in cash, she added.
“Selling and buying bitcoins on those OTC websites is the same as shopping on Taobao,” said the trader.
BIG COMPETITION
Hedge funds that can execute arbitrage trades quickly and at a fraction of the cost are squeezing individual traders, said Ramani Ramachandran, the chief executive of digital exchange Zenprivex.
Peter Kim of KIT Trading, part of Vulpes Investment Management, manages a $10 million cryptocurrency arbitrage operation.
“In the beginning, when there is 30% arbitrage, obviously you can travel to Thailand, buy bitcoins, send them to China, Japan, Korea and sell them. That’s easy,” said Kim, who was formerly an options arbitrage trader.
“But that opportunity is not going to last very long. And even though it is not as blatantly there, there are still many ways to profit from it, especially for someone like me who is used to making 3 basis points on a trade,” he added.
The arbitrage funds operate much like retail traders, buying and selling cryptocurrencies simultaneously on two different platforms, but on a much larger scale. That allows them to profit from smaller spreads.
Some retail traders, including Li, have turned to lesser-known cryptocurrencies such as Tether, which bills itself as being pegged to the US dollar.
Tether is popular with Chinese seeking to move their cash discreetly overseas, as it is not volatile. That demand means it trades at a 2.5% to 3.5% premium in China, although the number was as high as 10% in January.
Li said his arbitrage activity nets him about $18,000 a month on a trading volume of about half a million dollars.
Although that is a tidy sum, it is far less than what frantic traders made late last year.
“The easy arbitrage is going to be much less prevalent now than it used to be,” Kim said. — Reuters

Splash wins trademark case in Indonesia

SPLASH Corp. will be introducing its Maxi-Peel exfoliant brand in Indonesia this month, after winning more than a decade-long trademark battle in the country.
In a statement issued Tuesday, Splash Corp. said it expects to receive the trademark certificate for Maxi-Peel Micro-Exfoliant Fluid in the next few weeks.
The company had applied for the trademark registration of Maxi-Peel in the country back in 2004, but the application was rejected in 2010. Splash Corp. re-applied for the brand’s registration in 2011, which was granted only last Dec. 17.
“We are happy that Maxi-Peel has finally been registered in Indonesia. Maxi-Peel has considerable word-of-mouth following in Indonesia, but registration issues prevented us from directly selling the product in this market,” Splash cofounder and Chief Executive Officer Rolando B. Hortaleza said in a statement.
The listed firm will now be selling the Maxi-Peel Micro-Exfoliant Fluid in Indonesia, with other variants to follow upon the approval of their respective product registrations.
“With this trademark issue out of the way, we can now be aggressive in expanding our presence in Indonesia, the largest country in ASEAN, through our subsidiary PT Splash Cahaya,” Mr. Hortaleza said.
Maxi-Peel is touted as the dominant player in the Philippines’ exfoliant market. The company noted that the newest addition to its portfolio, Maxi-Peel Zero which was launched in 2017, is now its leading product.
Maxi-Peel products are manufactured in the company’s facility in Valenzuela City, which it described as one of the lowest cost producers of soaps and lotions in the country. The finished products will then be exported to Indonesia.
Incorporated in 1991, Splash develops, manufactures, bottles, packs, and markets cosmetics and other beauty products and pharmaceutical products in the country. Its products are available in North America, the Middle East, Southeast Asia, and Africa. — Arra B. Francia

Picasso self-portrait expected to fetch $70M

HONG KONG — A rare Picasso believed to be a self-portrait created when he was under threat of deportation to a Nazi concentration camp is expected to fetch $70 million at auction, Christie’s said Friday as the work went on view in Hong Kong.
The oil painting Le Marin depicts a sad-looking man dressed in a blue and white striped sailor’s shirt sitting on a chair.
“You have… a slightly dark sense around the picture. It’s nervous, it’s on edge and slightly gloomy,” said Conor Jordan, deputy chairman of impressionist and modern art at Christie’s.
The 52 by 31-inch vertical painting shows the man resting his head against his right hand, while his legs are crossed with his left hand on his knee.
“That’s a traditional symbol of melancholy,” Jordan added.
Created in 1943, during the Nazi occupation of France, the painting reflects the distress and anxiety of the Spanish painter who was under threat of being sent to a concentration camp in Germany.
Le Marin’s last appearance was 21 years ago at an auction of works from the collection of New York art collectors Victor and Sally Ganz.
The painting, which was on view in Hong Kong until April 3, will go under the hammer in New York on May 15 as part of a sale of Impressionist and Modern Art by Christie’s.
Le Marin is set to fetch “one of the five highest prices” for a Picasso piece at auction, according to Christie’s.
Last November, a series of 100 Picasso etchings which dealt with his erotic obsessions and marital strife, as well as political turmoil in the 1930s, sold for €1.9 million ($2.2 million) in Paris to an unnamed American collector.
Picasso’s The Women of Algiers (Version 0) set a world record as the most expensive piece of art sold at auction when it fetched $179.4 million at Christie’s in New York in 2015. — AFP

How PSEi member stocks performed — April 3, 2018

Here’s a quick glance at how PSEi stocks fared on Tuesday, April 3, 2018.

How Far Is The Philippines From Achieving Inclusive Growth?

Palace says overall rice supply adequate despite low NFA stocks

MALACAÑANG on Tuesday said reports that the National Food Authority (NFA) has run out of low-cost rice stocks is no cause for concern, noting that the overall rice supply, including those held by commercial traders, remains adequate.
“We all know that NFA stocks are low, but the overall rice supply is more than sufficient with plenty to spare. No need to panic,” Senior Deputy Executive Secretary Menardo I. Guevarra said in a statement.
Speaking to reporters by phone at the Palace, an Assistant Secretary from the Office of the Cabinet Secretary, Jonas George S. Soriano, said the low NFA inventories were behind the NFA Council special meeting with President Rodrigo R. Duterte on March 19, but added that NFA rice, which is sold at subsidized prices or released to stabilize prices in calamity areas, makes up a small part of rice in circulation.
“We have a lot of rice in the Philippines. NFA is only a small portion, 4-5% of the (total). Still, NFA rice is supposed to be used as a buffer stock during calamities so its inventories should not fall,” Mr. Soriano said.
In a statement, Senator Paolo Benigno “Bam” A. Aquino said he expects “surge in the price of rice.”
He also called for the resignation of top NFA officials “for their incompetence that led to the total depletion of its rice reserve… forcing Filipino families to settle for costly rice in the market.”
Mr. Guevarra said that “an unusual rise in price despite more than adequate supplies could only be the result of manipulation.”
“The government will monitor rice traders very closely,” he said.
The next move, according to Mr. Soriano, is for the NFA management to start the procurement and importation of 250,000 metric tons of rice as discussed in the previous meeting of the NFA Council.
“The President said, even we have the assurance that there’s rice supply in the Philippines, better to have more than fall short,” Mr. Soriano said.
Senator Mary Grace Natividad S. Poe-Llamanzares added that she is “calling for the resignation of NFA Administrator Jason (Laureano Y.) Aquino.”
“If there is indeed a zero percent buffer of rice, this is an indication of the inefficiency of his leadership,” she said in a statement.
Ms. Poe added that “NFA Administrator Aquino should be replaced by somebody who has the capability and track record to efficiently run the agency. This is the first time that we experienced this and we cannot afford to repeat this scenario.”
In his statement on March 22, NFA Council Chairperson Leoncio B. Evasco reported that the NFA Council is seeking a special audit of NFA’s procurement and distribution operations.
The audit, according to Mr. Evasco, “shall be administered by the Commission on Audit so as to assess the current NFA operations to determine points for improvement and streamline bottlenecks in the agency’s procurement and distribution processes with the end goal to make NFA cost-effective and operationally efficient.”
He said that the NFA Council “is keen to ensure continued supply of affordable rice for the Filipino people while working hand in hand with other departments.” — Arjay L. Balinbin

LTFRB links fare hikes to modern PUV take-up

By Patrizia Paola C. Marcelo
Reporter
THE Land Transportation Franchising and Regulatory Board (LTFRB) said it prefers to wait for the jeepney modernization program to gain traction before approving fare increases.
Chairman Martin B. Delgra III said that the board will be “more receptive” to fare hike applications if more public utility vehicle (PUV) operators modernize their fleets, because they can then point to service upgrades that are visible to commuters.
“It would benefit all if they embark on the (modernization program), because it would lower their costs… The board would be more receptive if they ask for a fare hike if there is added value to the services, such as predictable times, dependable fleets… I’d like to think the public would be more receptive if they see those changes in the rides. (A fare increase) won’t be too heavy for them to bear if there is a significant change in public transportation,” Mr. Delgra told reporters.
Jeepney modernization in Metro Manila is expected to start in May with 60 modern units set for rollout, after a pilot program in December involving 45 modernized units in Tacloban City.
Board member Aileen Lourdes A Lizada said that the Metro Manila rollout will be led by transport group Pasang Masda in Metro Manila.
“By May, there will be 60 PUJs under Pasang Masda,” Ms. Lizada said in a message.
Mr. Delgra said the LTFRB is currently dealing with various fare hike applications.
“There are pending petitions for fare hikes from provincial and city bus operators, TNVS [transport network vehicle services], jeepneys,” Mr. Delgra said at the Public Transport Modernization Expo mounted by the Department of Transportation (DoTr).
He added that the public would understand higher fares for air-conditioned vehicles, which will likely involve a different fare matrix from jeepneys.
Mr. Delgra, however, added that there are no definite estimates yet for the future fare increases.
DoTr Undersecretary for Road Transportation and Infrastructure Thomas M. Orbos said that while modern PUVs may be more expensive than the current ones, the modern PUVs offer greater capacity, helping operators recoup their investment faster.
The DoTr is set to complete a route rationalization plan, which will identify new routes and consolidate and link existing jeepney routes, as part of the modernization program.
Mr. Delgra said one new route serves the Cultural Center of the Philippines (CCP) and the Mall of Asia (MOA), which was pilot-tested during the expo using modern PUV prototypes.
The modernization program has been opposed by certain transport groups, including PISTON (Pinagkaisang Samahan ng mga Tsuper at Operator Nationwide) which has called strikes, claiming that the program will kill off small operators.
A number of other groups, however, are on board with the program.
The Development Bank of the Philippines (DBP) is set to provide P1.5 billion worth of financing for the initial phase of the program.
Various prototypes were on display during the expo, including low-floor Public Utility Buses (PUBs), PUVs, and e-tricycles. Features of modern PUVs and PUBs include air-conditioning, Wi-Fi connections, and side entrances.

LTFRB says 4 firms seek licenses for ride-share

ANOTHER ride-sharing company is seeking to apply for accreditation with the Land Transportation Franchising Regulatory Board (LTFRB).
Board Member Aileen Lourdes A. Lizada said that the LTFRB will meet on Thursday with a new service named Pira, a transport network company (TNC) seeking accreditation.
Three other TNCs, Lag Go, Owto, and Hype, have applied for accreditation with the LTFRB and are in the process of completing their applications.
“This Thursday, we will be talking to another TNC which wants to enter, the name is Tira,” Ms. Lizada told reporters on the sidelines of the Public Transport Modernization Expo.
“We’ll see. If everybody will be able to comply, we’ll see four possible new players as TNCs.”
Ms. Lizada added the target is to have the new TNCs operating by the second quarter, in order to increase competition in the ride-sharing market.
“We will work hard so that by second quarter, they will be there. We also do not want Grab to be (alone in the market) for a long period; we need to have other choices for the riding public,” Ms. Lizada said.
Singapore-based Grab has agreed to take over Uber Technologies, Inc.’s Southeast Asian operations in exchange for Uber taking a stake in Grab. The deal is subject to review by the Philippine Competition Commission (PCC).
If granted franchises, the vehicles of the accredited TNCs will be part of the common supply base of 65,000 transport network vehicle service (TNVS). — Patrizia Paola C. Marcelo

US firms hope digitalization will maximize FTA

By Janina C. Lim
Reporter
US businesses hope to maximize a possible Free Trade Agreement (FTA) between Washington and Manila by pushing for seamless digital channels for trade, a member of the US-ASEAN Business Council said.
“What we would be looking for mainly is a free and open digital world economy,” Michael W. Michalak, Senior Vice-President and Regional Managing Director of the Council, told BusinessWorld in an interview, when asked about its members’ wish list in an FTA.
“We heard from just about every Cabinet official how every department is looking to become more digital, to use the Internet better. Nobody is satisfied with your current Internet,” Mr. Michalak said, recalling his dialogue with the country’s top economic managers during the group’s Philippine Business Mission in early March.
He added that the group remains hopeful for a third player to enter the telecommunications industry to improve on Internet services on offer.
The emergence of another competitor is expected to provide heightened competition to incumbents PLDT, Inc. and Globe Telecom, Inc.
The Department of Information and Communications Technology expects to select a third player by June or July.
Mr. Michalak said an “open, interoperable, competitive” atmosphere for the digital industry will allow the country to maintain its “good relationship” with US businesses.
However, he does not expect an FTA to come soon amid other pressing trade concerns.
“The Office of the US Trade Representative (USTR) doesn’t have the bandwidth to handle all the questions they need to handle,” Mr. Michalak said, citing the US and China’s escalating trade tensions, among other matters.
“They don’t have the time to spend on new FTAs. We’ve got to give them some time,” he added.
He said the Philippines should continue developing its trade policies without waiting for the US FTA.
According to the USTR, goods and services traded with the Philippines totaled an estimated $27 billion in 2016; exports at $10.8 billion; and imports at $16.2 billion.
The US goods and services trade deficit with the Philippines was $5.4 billion in 2016.
The Philippines is currently the 31st-largest trading partner of the US for merchandise goods.

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