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DMCI expects ‘modest growth’ in 2018 despite mine closures

DMCI Mining Corp. on Friday said that it is expecting “modest growth,” even as it awaits the resolution of its appeals to the Office of the President to reopen its nickel mines in Zambales.

In a disclosure to the stock market, DMCI Holdings, Inc.’s mining arm said it is aiming to ship 1 million wet metric tons (WMT) of nickel ore but also said this is dependt on the nickel market and regulatory conditions.

DMCI Mining president Cesar F. Simbulan, Jr. said that despite the closure of its two mines — Berong Nickel Corp. (BNC) in June 2016 and Zambales Diversified Metals Corp. (ZDMC) in February 2017 — they still have enough inventory to make shipments.

“Our nickel ore inventory is good for a few more shipments. If nickel prices remain at current levels, we expect a double-digit improvement in our bottom line,” he added.

“But beyond 2018, there will be nothing more for us to sell, unless the government lifts the mining suspensions of BNC and ZDMC. Our fate rests on the decision of the government.”

The Department of Environment and Natural Resources allowed the mines to ship their stockpiles “to limit the possible accumulation of silt in nearby bodies of water.”

DMCI Mining will also conduct cost-cutting measures this year.

Last year, DMCI mining only managed to ship out 525,000 WMT of nickel ore, 51% less than the 1 million WMT it shopped in 2016 — at a selling price of $29, which was 6% less than 2016’s $31.

The mining firm ended last year with P105 million in net income compared to a net loss of P11 million in 2016.

DMCI Holdings, on the other hand, reported that its profits climbed 16% to P12.7 billion.

DMCI Holding’s shares on Friday closed P0.320 or 2.41% lower at P12.98 from Thursday’s selling price of P12.30 per stock. — A.A. Mogato

Peso slumps on Trump’s move vs China

THE PESO slumped against the dollar on Friday as President Donald J. Trump imposed sanctions on China for trade violations.

The local currency closed the week at P52.39 against the greenback, 19 centavos weaker than its P52.20-per-dollar finish on Thursday.

The peso traded weaker the whole day, opening the session at its best showing of P52.25. Its intraday low was its closing rate for the day.

Dollars traded decreased slightly to $701.2 million from the $717.4 million traded on Thursday.

“The downward pressure may have come from…the probable impact of Trump’s move penalize China for various alleged trade violations,” Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines said in a text message.

On Thursday, Mr. Trump slapped new tariffs on Chinese goods worth about $50 billion following a seven-month investigation into alleged intellectual property theft.

After this, the US is also looking at imposing investment restrictions as well as retaliatory actions at the World Trade Organization.

In response, China, through the Web site of its commerce ministry, announced it may launch reciprocal imposition of tariffs on 128 American products including wine, dried fruits and nuts and steel pipes.

The US slapped tariffs following the imposition of 25% duty on imported steel and 10% duty on imported aluminum, also directed at Beijing.

“We saw a risk-off sentiment and that affected the Asian currencies where there’s an impending move by the US to impose tariffs to China,” a trader said in a phone interview.

“We don’t know if this will escalate into a trade war. Let’s wait and see.”

Meanwhile, traders added that the decision of the Bangko Sentral ng Pilipinas (BSP) to keep its interest rates steady on Thursday also put downward pressure on the local currency.

“The peso depreciated strongly following the BSP’s decision [on Thursday] to keep its monetary policy rates steady despite apparent inflationary pressures due to the enactment of the first package of the [tax reform] law and increase on local oil prices,” another trader said.

The BSP’s Monetary Board kept policy settings unchanged at its second review this year. Rates stand at 3.5% for the overnight lending rate, 3% for the overnight reverse repurchase rate and 2.5% for the overnight deposit rate.

The monetary authority said that “the baseline forecasts continue to to show inflation remaining within the inflation target in 2018 and moderating further in 2019” despite the elevated outturns of the inflation lately.

Based on the 2006 baseline, inflation accelerated to 4.5% in February from the 4% the previous month.

BSP Governor Nestor A. Espenilla, Jr. has said that elevated inflation in the past few months is only transitory. — Karl Angelo N. Vidal

10 Aegis Juris fratmen surrender to NBI

THE 10 Aegis Juris members linked to the hazing death of University of Santo Tomas (UST) law student Horacio “Atio” Castillo III on Friday voluntarily surrendered to the National Bureau of Investigation (NBI).

Fraternity members Min Wei Chan, Jose Miguel Salamat, John Robin G. Ramos, Marcelino Bagtang, Jr., Arvin A. Balag, Ralph Trangia, Axel Munro Hipe, Oliver Onofre, Joshua Joriel Macabali, and Hans Matthew Rodrigo met up with agents at around 11AM in a local shopping mall, NBI Deputy Director Ferdinand M. Lavin told reporters.

The ten gave themselves up after the Manila Regional Trial Court Branch 40 issued arrest warrants against them on Thursday, March 22 after it found probably cause in the non-bailable offenses of Section 4(a) of Republic Act No. 8049, or the Anti Hazing Law.

According to the NBI, a parent of one of the accused contacted the agency to coordinate the surrender because unidentified law enforcers were spotted outside their residences following the issuance of the arrest warrants.

“We are thankful to the parents for asking these gentlemen to better coordinate with (us),”

Deputy Director Vicente A. De Guzman said.

Mr. Lavin pointed out the ten are still undergoing booking procedures which may last until Monday, March 26.

“They will be treated fairly… there’s nothing special about this incident,” Mr. Lavin assured reporters.

“These young gentlemen just wanted to be safe” and they were presented to the public because “we want people to know that they have clean faces,” Mr. Lavin said.

He added that if the members wanted to evade capture they could have done so.

The members will be detained temporarily at the NBI Detention Center until the court issues a commitment order, according to Mr. Lavin. — Dane Angelo M. Enerio

Filinvest breaks ground on San Pedro project

LISTED company Filinvest Land, Inc. recently broke ground on its a mid-income residential project called Southwind, the newest addition to it’s South Peak community development in San Pedro, Laguna.

“We are proud to offer Southwind to our buyers. This project exemplifies comfort and tranquility. You get to breathe fresh air, live in a clean environment and enjoy the majestic view of the lake, making it an ideal place to raise a family,” said Rey Ascaño, Filinvest Senior Vice-President for Southwest and North Luzon Cluster.

The floor area of the project’s units range from 125 square meters to 167 square meters. It offers two three-bedroom Asian-inspired model houses to choose from.

The Southwind project also offers amenities such as a pavilion, adult and kiddie pool, and playground which is planned to be extended with a basketball court, tennis court, barbecue park, swimming pool, and a main clubhouse.

The Gotianun led-firm earlier expressed plans to develop almost 11 hectares of the 69-hectare South Peak development to build 365 residential units and lots. — Janina C. Lim

DENR to draft management plans for other tourist spots

THE DEPARTMENT of Environment and Natural Resources (DENR) will come up with management plans for other tourist sites in the country to avoid the possible closure of these areas due to environmental violations.

In a statement released on Friday, Environment and Natural Resources Secretary Roy A. Cimatu said he has ordered DENR’s regional offices to draft up their own list of tourist sites for the plans.

“I have instructed the regional directors to make an inventory of emerging tourist destinations in their areas and to craft management plans for them. We want to make sure that the problem in Boracay will not be repeated,” he added.

“We will make sure that there is proper sewerage treatment facilities in the tourist sites, the easement zones are followed and that there will be no encroaching in forestlands.”

The DENR, together with the departments of the Interior and Local Government and Tourism, sent a letter to President Rodrigo R. Duterte unanimously recommending a one-year closure for Boracay starting April 26.

This is despite local tourism stakeholders of the island clamoring to be given another 60 days to rehabilitate their own establishments and for the government to close only the violators.

The one-year closure will give the government a leeway to rehabilitate the island which has been polluted due to improper water and solid waste management.

While Boracay is closed, Mr. Cimatu said other tourist destinations can be developed instead so visitors can be directed to other areas.

“The revenue that tourists bring to a municipality is very significant especially if it is situated in a third class municipality,” he added.

“If they focus only on development of the tourist destination and the projected revenues and fail to comply with environmental laws, then we will have another problem in the future.

Aside from the crackdown in Boracay, the DENR is also monitoring other tourist destinations such as Bohol, Cebu, and Palawan. — A.G.A. Mogato

Bank of Makati net profit surges

BANK of Makati, Inc. (BMI) doubled its net profit in 2017 on the back of its motorcycle loan business.

In a statement obtained by BusinessWorld, the savings bank said it booked a P1.4 billion net income in 2017, 117.5% higher than the P645 million it logged the previous year.

The spike in its profit was mainly attributable to the lender’s net interest income, which rose to P4.68 billion by 13.3% from the P4.13 billion logged in 2016.

Total loans of the lender stood at P22.36 billion, 15% higher the P19.43 billion it booked in the comparable year-ago period.

Broken down, motorcycle loans accounted for bulk of BMI’s total loans at P15.66 billion. Commercial, consumption and microfinance loans, meanwhile, stood at P5.46 billion, P1.12 billion and P122.2 million, respectively.

“Last year, the motorcycle loans drove our bottom line,” Luis M. Chua, President of BMI said in an interview, adding that the loan segment made up 90% of the lender’s compounded annual growth rate.

The bank’s net interest margin rose to 18.2% last year from 16% in 2016.

On the other hand, BMI’s total deposits were at P22 billion, 6% higher than the P20.76 billion in 2016.

Operating expenses of the bank stood at P2.43 billion last year, up 13% from the P2.15 billion recorded in 2016. Mr. Chua noted that the bank managed to double its growth while keeping its expenses low.

Overall, BMI’s assets grew by 7.6% to P30.33 billion in 2017 from P28.19 billion in 2016.

BMI’s return on assets was at 4.5% while return on equity stood at 20.8%.

Looking ahead, Mr. Chua said BMI is looking at serving more unbanked Filipinos as well as going digital this year.

The bank president said BMI is looking at opening 40 branch-lite units this year.

“Our branches right now [are] still in the key cities and we want to cater more on the rural side and those which are…underserved and even the unbanked,” Mr. Chua told reporters during the launch of its new headquarters in Makati earlier this month.

In December, the central bank approved the option for lender to set up branch-lite units, a smaller and simplified version of a brick-and-mortar bank branch which can be placed in towns and cities which are unbanked or underserved.

As of September 2017, BMI was the ninth largest savings bank in the country in assets terms, data from the central bank showed.

BMI was originally established as a rural bank in 1956. It was bought by the Ongtengco family, owner of motorcycle dealer Motortrade, in 2001 and became a savings bank in 2015.

Currently, BMI has 62 branches and 703 outlets through Motortrade. — Karl Angelo N. Vidal

Local stocks tumble on trade war fears

By Janina C. Lim, Reporter

THE Philippine stock market dropped on Friday, along with the rest of Asia, amid fears of a looming trade war between the United States and China.

The Philippine Stock Exchange index (PSEi) fell 1.89% or 153.65 points to 7,970.80 points on Friday. The broader all-shares index shed 1.35% or 66.01 points to 4,824.16 points.

“Trade war fears brought down the value of Philippine shares,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.

“All major regional indexes dropped broadly and volatility spiked as the Trump administration’s plans to announce new trade restraints against China renewed fears about a potential trade war that could dent economic growth,” he added.

President Donald J. Trump unveiled on Thursday extensive new trade restrictions that would effectively block up to $60 billion in Chinese goods from entering the United States.

On Friday, U.S. import tariffs on steel and aluminium announced by Mr. Trump earlier this month went into effect. In response, China revealed plans to impose additional duties on up to $3 billion of US imports such as fresh fruit, wine and nuts.

Jervin S. de Celis, equity trader at Timson Securities, Inc., said the escalating tensions may threaten US economic growth since China is one of its top trading partners.

“I expect the pessimism to linger in the markets and in this case we may see further downward bias for the PSEi,” Mr. de Celis added in a mobile message.

All counters finished in the red. Holding firms were hit the hardest, falling 2.04% or 165.15 points to 7,923.41 points.

The property sector slumped 2.02% or 74.71 points to 3,629.06 points; while financials dropped 1.89% or 39.46 points to 2,053.15 points.

Services shed 1.38% or 23.52 points to 1,679.98 points; while mining and oil fell 1.03% or 112.59 points to 10,827.03 points.

A total of 2.55 billion issues worth P8.65 billion changed hands, slightly higher than the 2.02 billion issues valued at P8.37 billion on Thursday.

Losers trumped advancers, 143 to 69, while 39 ended unchanged.

Foreigners continued selling their holdings, with net outflows at P1.07 billion from the P180.05 million on Thursday.

Ex-customs employee, others charged with graft

THE National Bureau of Investigation (NBI) on Friday filed graft charges before the Office of the Ombudsman against a former Bureau of Customs (BOC) official, his wife, and two associates for “allegedly amassing illegally acquired wealth.”

Former BOC Risk Management Office head Atty. Larribert Hilario, former Taft, Eastern Samar Vice Mayor Maria Concepcion, their driver Dino Dotingco, and “dummy” Jerlie Adel “were charged for Violation of R.A. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees), R.A. 1379 (An Act Declaring Forfeiture in Favor of Government of unlawfully acquired property), and Falsification of Public Documents under Article 171 of the Revised Penal Code,” the agency said in a statement.

After a ten-month investigation, “the NBI was able to establish that the couple Atty. Larribert Hilario and Maria Concepcion Hilario are liable for illegally amassing assets and real properties and for now declaring assets and business interests in their SALN, which is required of public officials and employees,” the statement said.

The investigation also revealed that Mr. Dotingco operated an export and import business — where fellow respondent Mr. Adel was an employee — named Cangco Dotingco Enterprises (CDE) and its transactions amounted to P1,775,338,247.

The NBI in the press statement argued “that Dino Dotingco has no knowledge and training to qualify him to undertake import and export business and since he is living with Atty. Hilario, CDE is business transacting without proper office and staff.”

It added, “It is clear that there is misrepresentation and that the integrity of transactions of CDE is questionable.”

NBI Deputy Director Ferdinand M. Lavin said that the move was a “lifestyle check.” He added: “Walang political motivation ang investigation na ito (This is a lifestyle check… There are no political motivations in this investigation.)” — Dane Angelo M. Enerio

China’s hitting the US where it hurts — in the pork belly

China struck back at US import tariffs with its own set of reciprocal ones targeting, among other products, pork.

The world’s biggest pork producer, consumer and importer is planning a 25 percent tax on U.S. pork imports, the Ministry of Commerce said in a statement on Friday. The tariffs would be in addition to current duties.

China’s plans for reciprocal tariffs on $3 billion on products from pork to wine come in response to steel and aluminum duties ordered by U.S. President Donald Trump earlier this month. Agricultural commodities could be a feature of any ongoing tit-for-tat trade war. China is already investigating sorghum imports from the U.S. and people familiar with the matter said last month that the country was studying the impact of restrictions on U.S. soybeans, used to feed the Asian country’s pigs.

“China is showing its capacity to fight back,” said Monica Tu, an analyst at Shanghai JC Intelligence Co. The measures aren’t expected to “impact fundamentals a lot,” she said, as imports from the U.S. only account for about 14 percent of China’s purchases.

Still, China and Hong Kong combined is the second-biggest market for U.S. pork, according to the U.S. Meat Export Federation. Analysts at Vertical Group said this week that U.S. pork was an “ easy target” for China, citing a decline in its domestic pork and hog prices.

The National Pork Producers Council warned that possible Chinese tariffs on U.S. pork could have a significant negative impact on rural America. “No one wins in these tit-for-tat trade disputes, least of all the farmers and the consumers,” it said in a statement.

Market Moves

WH Group Ltd., the world’s largest pork company, dropped 4.7 percent. The company acquired U.S. pork and hog producer Smithfield Foods Inc. in 2013. Shares of Muyuan Foodstuff Co., the country’s third-biggest pig breeder, rose 0.6 percent. Guangdong Wens Foodstuffs Group Co., the largest pig breeder, advanced 3.7 percent. New Hope Liuhe Co., China’s top animal-feed producer, added 0.1 percent. Jiangxi Zhengbang Technology Co., a feed producer, increased 2 percent.

Soybean meal on Dalian Commodity Exchange climbed as much as 4.3 percent to 3,128 yuan ($494) a metric ton before closing 1.5 percent higher at 3,046 yuan. The surge reflects concerns that an expansion in tariffs could impact the supply of U.S. soybeans to China, according to Tu.

A consolidation of China’s pig industry has seen small farms shut due to environmental concerns, while large-scale operations are expanding. The country’s pork imports are forecast to decline in 2018 as an increase in domestic production reduces the need to buy meat from overseas, according to the U.S. Department of Agriculture. — Bloomberg

Bitcoin slumps after Japan warns major cryptocurrency venue

A regulatory rebuke for one of the world’s largest cryptocurrency exchanges is giving Bitcoin investors the jitters.

Japan’s Financial Services Agency issued a warning to Binance for operating cryptocurrency exchange services with Japanese residents through the internet without a license in the country, according to a statement on the agency’s website. Bitcoin fell as much as 4.5 percent after the Nikkei first reported the warning on Thursday, and was down 0.2 percent at 9:31 a.m. in Hong Kong on Friday.

Binance, founded by Zhao Changpeng, was warned because it had several staff in Japan and had been expanding without official permission, according to a person familiar with the FSA’s plans, who asked not to be named because the information is private.

The news adds to signs that governments around the world are stepping up scrutiny of cryptocurrencies amid worries that they’re facilitating everything from money laundering to tax evasion and fraud. Japan, one of the most active markets for digital assets globally, introduced a licensing system for virtual currency exchanges last year in an effort to improve oversight.

Binance told Bloomberg in January that it was working to acquire a license in Japan, but the warning could complicate those efforts. Zhao said on Thursday that the exchange is “engaged in constructive dialogue” with the FSA. While Binance was founded in Hong Kong last year, Zhao has said that his company does not currently have a legal headquarters anywhere in the world.

The FSA has been clamping down on cryptocurrency venues in the wake of a $500 million theft from Japanese exchange Coincheck Inc. in January. Last month, the regulator issued an administrative penalty against Macau-based Blockchain Laboratory Ltd. for giving seminars and providing consultation services in Japan without a license. Earlier this month, it suspended several local venues for poor security measures.

Binance has consistently ranked as the world’s largest cryptocurrency exchange by volume since late last year, according to Coinmarketcap.com. It held the top volume ranking for the past 24 hours, trading about $1.6 billion, the website shows. — Bloomberg

Top US regulator frets crypto markets could be full of manipulation

Add a top U.S. financial regulator to the list of people concerned that lightly policed cryptocurrency markets make easy targets for manipulators.

Warding off market cheaters in digital currencies is among the Securities and Exchange Commission’s major concerns as it monitors those assets, according to Brett Redfearn, head of the regulator’s Division of Trading and Markets.

“We are concerned about a lot of the issues around manipulation, whether it’s spoofing, or any other forms of market manipulation that are out there,” he said Thursday at an event in New York. “ Spoofing, front running, wash trading, pump-and-dump, insider trading — there’s a question of, how are they being watched out for?”

Few cops are currently on the beat watching for rigging, in part because regulators are still trying to work out who’s responsible for what and also because it’s not clear they can do much until the exchanges register with them. Cameron and Tyler Winklevoss, who run the Gemini exchange for Bitcoin and Ether, recently proposed that the industry start self-policing to help fill in the vacuum.

U.S. regulators are grappling with the “Wild West” of trading digital assets including Bitcoin, Ether and digital tokens. The SEC is examining a range of businesses in the nascent industry, including initial coin offerings — or digital token sales that allow buyers to take a stake in companies — as well as cryptocurrency-focused hedge funds and trading venues.

The trading behaviors Redfearn mentioned are all banned in traditional financial markets — ways of fooling the market about the right price for securities and pocketing ill-gotten gains or, in the case of insider trading, making a trading decision based on non-public information. While laws around these kinds of activities are clear when it comes to trading traditional securities, in cryptocurrencies the lines appear to be blurred.

Other priorities when it comes to digital assets include preventing fraud, money laundering and theft, Redfearn said. He compared the nascent industry to the early days of electronic equity trading in the U.S., when certain rules were still unclear and electronic platforms weren’t all linked to one another. Regulators eventually stepped in to create new rules around how trading should happen in the new landscape.

“There was a lot of evolution that had to take place,” Redfearn said. “And there’s no doubt in my mind that there’s more evolution that needs to take place in this space.” — Bloomberg

World’s best and cleanest airports are found in Asia

Asia has the world’s best airports. Still.

That’s according to the latest ranking by Skytrax, which sees Singapore’s Changi taking the top spot for the sixth year in a row. It’s followed by Seoul’s Incheon International Airport, Tokyo’s Haneda, Hong Kong International Airport, and Doha’s Hamad International Airport. Munich Airport, in sixth place, was the highest ranked among airfields in Europe.

U.S. hubs were absent from the top 10 list based on an airport customer survey that’s been conducted annually since 1999. Changi Airport — which handled a record 62.2 million passengers last year — has been expanding its capacity to meet rising demand for air travel. The airport is building its fifth terminal, a third runway, as well as a shopping-and-dining facility called the Jewel as passengers increase.

At number 14, Vancouver was the highest ranked airport in North America. Denver, down one spot to 29th, was the best placed among U.S. airports, while New York’s JFK fell six places to 69th.

Asia also dominated Skytrax’s list of the world’s cleanest airports, led by Haneda, Nagoya in Japan, and Incheon.

In a separate ranking of airport terminals, London Heathrow’s terminal 2 placed first, followed by Munich’s terminal 2 and Changi’s terminal 3. — Bloomberg

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