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Gov’t eases procedure for securing tax clearance

By Elijah Joseph C. Tubayan
Reporter
ALL APPLICATIONS for tax clearance required of prospective bidders for government contracts can soon be filed in regional offices of the Bureau of Internal Revenue (BIR).
Revenue Regulation 18-2018, signed by Finance Secretary Carlos G. Dominguez III on Jul. 27 and published in a newspaper on Monday, said that tax clearance applications required by Republic Act No. (RA) 9184, or the Government Procurement Reform Act, and Executive Order No. 398 — which requires “timely and complete payment of taxes as a precondition for entering into and as a continuing obligation in contracts with the government” — “shall be manually filed with the Collection Division of the Revenue Regional Office” where taxpayers concerned are registered, or with the “concerned office under the Large Taxpayers Service.”
Previously, the tax clearance applications were lodged with the Office of the Accounts Receivable and Monitoring Division at the BIR’s National Office in Quezon City.
The new revenue regulation will take effect on Aug. 21, 15 calendar days from publication yesterday.
The regulation also noted that manual filing will be done “until such time that an on-line application for this purpose has been made available for use of prospective bidders.”
“This is in line with the bureau’s objective of extending utmost and unequivocal service to its stakeholders pursuant to its commitment to the mechanisms of ‘Ease of Doing Business’ in this country to enable the taxpayers cope with the ever-changing dynamics and demands of the business community for the benefit of the bureau and the taxpayers,” the regulations read.
The new regulations also said that “For those which were previously issued tax clearance for bidding purposes, the requested tax clearance shall only be issued if they are found to be regular eFPS (Electronic Filing and Payment System) users from the time of enrollment up to the time of filing of application.”
The regulations added that “regular usage of eFPS shall not apply to new applicants,” adding that “[t]he submission of the new applicant’s latest income tax and business tax returns not filed and paid through the Bureau’s eFPS shall suffice.”
Sought for comment, Lina P. Figueroa, Tax Advisory and Compliance principal at P&A Grant Thornton, said in a mobile phone message: “Devolving the application and approval to the region will be beneficial especially to contractors in the provinces.”
“I hope the regions are less clogged.”
Eleanor L. Roque, vice-president of the Tax Management Association of the Philippines, said in a separate text message: “Changing the issuing agency to the regional level will ease up the processing time as, presumably, the regional office will be able to issue the clearance faster.”
She also cited benefits for first-time tax clearance applicants.
“In the past, first time applicants were required to show that they are already eFPS filers, which is not always the case,” Mr. Roque said.
“Since this requirement has been relaxed, first time applicants will be able to secure the clearance faster.”
She added that the new requirements will give smaller contractors a chance to participate in government contracts.
Other requirements for a tax clearance include: not having unpaid annual registration fees, not having open valid “stop-filer” cases, not identified as a taxpayer who “cannot be located”, not having pending criminal information filed in any court arising from tax-related cases and not having delinquent accounts.
Tax clearances provide official validation of full, timely payment of taxes to the BIR.
RA 9184’s implementing rules and regulations enumerate other requirements for prospective bidders as a registration certificate; mayor’s or business permit, or its equivalent document; Philippine Contractors Accreditation Board license and registration; and audited financial statements.

Finance continues tracking revenues foregone due to perks

THE DEPARTMENT of Finance (DoF) argued on Monday that redundant tax incentives have continued to take more from the economy than provide benefits, with 645 enterprises enjoying such perks even after 15 years in business.
This, the department said in a press release, showed that investment perks given to a number of the big companies “have become redundant and unnecessary” since “many of them are inherently profitable.
Moreover, “[r]evenue losses are expected to increase to P196.02 billion or by 9.77% in 2017,” the DoF said in a statement on Monday.
The Finance department said that revenues forgone due to redundant tax perks amounted to P178.56 billion in 2016. In 2015, such potential revenues added up to P301 billion.
The DoF noted that its estimates do not yet include revenue leakages that may arise as a result of abuse of transfer pricing.
Citing data provided under the Tax Incentives Management and Transparency Act (TIMTA), the DoF said that the government gave away P86 billion worth of income tax incentives to firms in 2015 that paid out a total of P83 billion combined in dividends.
“So our question is, why are we supporting certain firms if they are inherently profitable and they pay even more dividends than the incentives they receive? And these are dividends, which is just a fraction of profit because part of profit is the one you retain as earnings,” Finance Undersecretary Karl Kendrick T. Chua was quoted in the statement as saying.
The DoF said that only 43% of the firms registered with investment-promotion agencies are “worthy” to receive fiscal incentives, with the balance considered to be “unnecessary or redundant.”
In a public hearing of the House of Representatives Ways and Means committee on the second tax reform package last week, Mr. Chua presented the Finance department’s cost-benefit analysis of giving away tax perks, finding that the economy on the average gets only 60 centavos per peso of tax incentives granted.
It also noted that perks whoso costs outweighed benefits were granted mostly to non-manufacturing and service-sector firms.
The House committee will meet today to present the consolidated bill of the Corporate Income Tax and Incentives Reform Act, after a technical working group convened on Sunday.
The committee on Wednesday last week had already approved the bill in principle.
In its current form, House Bill No. 7458 seeks to lower the corporate income tax annually starting 2019 from 30% to 20% to make it competitive in Asia. The DoF’s version meanwhile proposed to cut it only up to 25%, where a one percentage point cut will be warranted per P26 billion collected from reducing fiscal incentives.
The DoF said that the Philippines collects at a lower efficiency even with a higher tax rate, compared to rivals in the region.
The bill also seeks to replace the existing five percent gross income earned tax incentive in lieu of all other national and local taxes with a 15% tax on net income, while capping this perk at five years, to be granted only to sectors identified in the Strategic Investment Priorities Plan. — Elijah Joseph C. Tubayan

BSP considering the possibility of issuing digital currencies

By Melissa Luz T. Lopez
Senior Reporter
THE BANGKO SENTRAL ng Pilipinas (BSP) is looking into the possibility of issuing digital currencies at a time of increasing use, although industry experts cautioned that doing so could disrupt monetary policy operations.
BSP Governor Nestor A. Espenilla, Jr. mentioned in a recent speech that monetary authorities have been studying the emergence of central bank-issued digital currencies (CBDCs) in other countries and its potential impact on the local financial system. However, they are not yet keen on pursuing this track for the Philippines.
In particular, Mr. Espenilla said they are checking CBDCs in terms of “what it means for the supply of credit and the impact on the financial system,” noting that they are giving “thorough consideration” on the matter.
Also called digital fiat currency, CBDCs would address questions of legitimacy as these would be guaranteed by the central bank and is acknowledged as real money, although used online.
Countries like Ecuador, Senegal, Venezuela and the Marshall Islands have moved towards issuing cryptocurrencies as a legal form of payment.
Two industry experts echoed the need for a comprehensive study on using virtual currencies as legal tender in the Philippines, in the context of managing liquidity and interest rates.
Cecilia Mueller-Chen, head of the Switzerland-based Crypto Valley Association, said monetary authorities need to spell out clear regulations for the use of blockchain technology as well as digital currencies as a first step.
“I think different central banks have different velocities or speed in which they have assessed whether they can issue some type of e-currency that will supplement any type of legally-binding tender,” Ms. Mueller-Chen said in an interview during her recent visit to Manila.
“It’s actually quite a complex issue because there are issues about how you conduct monetary policy… When you issue e-currency that could possibly be traded or use in some kind of payments system, we need to track it as well,” she explained.
“The question is do you supplant M1 money supply in terms of cash? How do you control the interest rates off of an e-currency, would you tie it to actual cash? How do you verify it?”
Justo A. Ortiz, president of the Blockchain Association of the Philippines, noted that the Philippines could benefit from wider use of cryptocurrencies but flagged its potential impact on market yields.
“It’s definitely feasible, but our central bank needs to believe… Our economic circumstance might be different — these… decisions need a lot of research because it needs to be sort of positive or additive to their (BSP) mandate,” Mr. Ortiz said.
“The Bank of Canada thought it would improve (the conduct of monetary policy) because it would reduce cash. Our central bank also has that goal that they want to digitize, move transactions electronically,” he added.
“Like everything… it has to be very thoroughly examined and has to be thoroughly researched supporting it.”
The BSP has moved to regulate virtual currency exchanges, or businesses that convert peso values into e-currency before being traded online via a blockchain platform.
At the same time, the Securities and Exchange Commission has released draft guidelines for initial coin offerings, which will cover firms that issue tokens or digital currencies to raise capital.
Industry players have called for “legal and regulatory clarity” in order to allow blockchain-based companies and transactions to flourish, at a time the BSP is promoting the shift to digital payments.

ABS-CBN tempts viewers with free trials of new TVPlus channels

ABS-CBN TVPlus has announced the introduction of five new channels into its line-up including an all-new Asianovela channel which will feature Asian TV series.
“We believe that every Filipino should be given the opportunity to enjoy quality content at home, Our five new exclusive channels… ring true to our core mission to deliver more quality and exciting choices to [our viewers],” Chinky de Castro-Alcedo, head of ABS-CBN digital terrestrial television, said in a press release.
The five channels are: Movie Central, an all-English movie channel featuring international films; Jeepney TV, which airs classic and currently airing ABS-CBN shows; MYX, a music channel; Asianovela Channel, featuring Filipino-dubbed and uncut Asian TV series; and O Shopping, a home TV shopping network.
Of the five channels, only O Shopping will remain permanently free of charge while the four others will be on free trial until Dec. 31.
“We still haven’t hammered down the payment scheme for these channels after Dec. 31 but viewers with TVPlus can enjoy it while it’s on free trial,” Alvin Ebrada, TVPlus product manager, told BusinessWorld shortly after the launch on July 30 in ABS-CBN, Quezon City.
This isn’t the first time the company given free trials of channels before they are offered on a pay-per-view scheme: KBO (Kapamilya Box Office) was offered to new TVPlus customers in 2016 when they could access the channel for four weekends (Saturday and Sunday) and watch four films — three local titles and one foreign title — as well as catch-up with the network’s prime time series Dolce Amore.
After the free trial, access to KBO was priced at P30/day.
The five new channels were rolled out in Metro Manila, Rizal, Cavite, Laguna, and Metro Cebu and TVPlus customers need to re-scan their devices to gain access to the new channels.
TVPlus was first introduced in 2015 promising “clear picture and crisp sound without any monthly and installation fee,” as it only required a one-time payment of P1,499. As of July, ABS-CBN reported that there are 5.5 million TVPlus boxes in circulation with a goal of increasing this to 6.2 million by end-2018.
Despite the introduction of premium (though currently free) channels, Mr. Ebrada said they don’t believe they are competing with another ABS-CBN product, SkyCable, as both products serve different markets with TVPlus serving the CD market segment while SkyCable is caters to a higher segment of the market.
“They have different offering because the two cater to different markets. What we’re giving our customers is the power to choose a service that would fit their needs. The viewers get to choose what they want to watch,” he said. — Zsarlene B. Chua

Matti’s Inferno

By Menchu Aquino Sarmiento
Movie Review
BuyBust
Directed by Eric Matti
THE FILIPINO film auteur Eric Matti’s BuyBust was two years in the making and the extraordinary care and effort that went into crafting this action-packed (an understatement) extravaganza are evident. Overall, it’s a pleasant surprise to find the many frenetic fight scenes so competently choreographed, although somewhat haphazardly staged. There are incoherently sincere homagic echoes of classic cinematic blood fests like Kill Bill and the Mad Max movies. Through the stylized grime and luridly lit detritus, BuyBust occasionally shines with sparks of wit and fun. Nonetheless, the depictions of crazed slum dwellers as rabidly violent and lethally zombie-like, raise disturbing questions, foremost of which is: does this characterization of the poor intend to justify killing them off in such inordinate numbers in real life?
A prominent Duterte supporter from Davao has reasoned that decimating impoverished substance abusers was necessary because of the singular effect narcotics has upon them. He claimed that the cumulative result of all the deprivations and injustices that the very poor suffer as a necessary part of their daily existence, causes them to go berserk whenever they get high. Middling or upper class folks might safely indulge, and still be chill, but give the very poor even a taste of THC or fine whisky, and they will lose it, in a heinous synergy of their personal circumstances and bad chemistry. The poor just can’t handle drugs, and are transformed into multitudinous, verminous Dr. Jekyll’s and Mr. Hyde’s. Extermination is the only solution.
BuyBust mostly takes place in the surreally handmade slum Gracia ni Maria (artfully constructed over 8,000 square meters of blighted real estate), with as many mystifying levels as a Max Escher etching. Aside from the usual hovels and drug dens, Gracia ni Maria even has its own disco, human trafficking pens, a mini-mosque and a makeshift graveyard. The latter should come in handy given the body count at the film’s end.
The film opens with the torture of the pusher Teban (Alex Calleja), by SPO Rudy Dela Cruz (Lao Rodriguez) while his dead-eyed commanding officer Capt. Alvarez (Nonie Buencamino) impassively looks on. Their worthy goal is to get Teban to rat on his supplier “Biggie” Chen (Arjo Atayde). Chen’s moniker is aspirational at best. He operates out of the dinky and fetid Gracia ni Maria — a far cry from the first tier gated communities and swanky high rises worthy of the more financially successful drug lords. “Biggie” is strictly small-time, but he can dream of someday living up to his name.
Meanwhile, the adorable Nina Manigan (Anne Curtis) plays shoot-em-up with her PDEA cohorts, among them, the even more adorable Brandon Vera, the Fil-Am mixed martial arts athlete, as Rico Yatco. In the ostensibly covert operation to get Biggie Chen, these special police forces enter Gracia ni Maria where the rules of Filipino social reality no longer apply. For one thing, here, almost everyone carries, either paltik (home-made gun), long knives, or plain do-it-yourself hardware. A corpse’s schoolgirl sister makes do with a claw hammer. Still, the company of narcos inevitably attract attention, conspicuously and incongruously costumed as they are in spiffy bulletproof flak vests and brandishing army regulation heavy artillery. The feckless witnesses who happen to spot them, are dragged along, Farmer in the Dell fashion. It’s a ridiculous solution straight out of the Grimm’s fairy tale where the trickster holding the golden goose gets the curious to touch it, and tows them in his wake, a veritable chain of fools.
The heroine Manigan is not immune to these Kafkaesque Keystone Cops shenanigans. After all those earlier scenes establishing her as a crack shot and undergoing rigorous combat training with her crew, she uses her formidable fully loaded armalite as a bludgeon against two unarmed assailants. Of course, if she actually took aim and shot the bad guys with live bullets, then she wouldn’t have the chance to show off her fine fighting form by using her shapely legs to strangle them in a wrestling scissors hold. And what red-blooded Filipino male does not salivate at the prospect of having Anne Curtis’s thighs wrapped around his neck?
The superhuman Manigan even defies gravity. With just one dainty, perfectly manicured hand, she casually shoves a kariton (cart) loaded with explosives uphill, scattering a horde of murderous, malnourished squatters. When Biggie Chen applies brass knuckles to her lovely face, her lips burst into a luscious though bloody pout, yet not a single bone breaks. Despite such accomplishments, the poor dear’s self-esteem is so low that she glumly calls herself a jinx — malas. She may be an extraordinarily gifted rookie, but this is the second buy-bust operation she’s been on, where everyone dies except for her. Others would call her lucky, but the poor girl doesn’t see it that way. Survival might be the start of a new franchise for the erstwhile romcom princess.
There are bleak touches of hollow humor, such as the doomed company’s inability to call for back-up because there is no cellphone signal in Gracia ni Maria. “Signal jammers,” someone helpfully explains, absolving the telcos from blame. Then, minutes later, we get to watch Biggie Chen’s lead muscle, the scrawny but invincible Chongki (Levi Ignacio) prove yet again what a homicidal maniac he is, by undertaking the sadistic and prolonged gangland style execution of an elderly man who annoyed him because he couldn’t stop his cellphone from ringing. Seems the signal jammers work very selectively as a plot device.
The murdered man was a guest at the wake of Judiel, the daughter of Solomon (Ricky Pascua). This is the last straw for these chief-test mourners. They are instantly transformed into a crazed mob of urban poor, Bacchae in dusters, sando (sleeveless undershirts), and tsinelas (slippers) who indiscriminately attack even the supposedly good guys. The raucous randomness and excessiveness of the violence cross over into camp, but for a generation raised on video games it is all par for the course.
More than a socio-political commentary, one is left with the unsettling feeling that the supposedly good guys (with the exception of Manigan and Yatco) are either criminally corrupt or hopelessly inept. Manigan’s team leader Bernie Lacson (Victor Neri) literally runs the operation like a mom and pop outfit, with his wife (Sheenly Gener) fussing by his side. “What’s your plan?” she pointedly asks him after three quarters of their team are killed. Apparently, he didn’t have one. Despite their hundreds of hours of combat and reconnaissance training, Manila’s finest are unable to get their bearings in a slum. They are there to serve and protect us, and in the end, good intentions are all they have.

Sy-led SM Prime grows profit by 16% in 1st half

THE property firm of country’s richest man Henry Sy reported a 16% profit growth for the first six months of 2018, driven by the provincial expansion of its malls alongside higher demand for residential properties.
SM Prime Holdings, Inc. said in a statement on Monday that its net income reached P16.62 billion for the January to June period, on the back of a 15% uptick in consolidated revenues to P49.77 billion.
“SM Prime’s expansion projects in various progressive provincial areas in the Philippines, as well as bolstered presence in Metro Manila, allowed the Company to maintain double-digit growth in all of our businesses,” SM Prime President Jeffrey C. Lim was quoted as saying in a statement.
The listed property developer’s shopping mall business accounted for the bulk of total revenues at 58%. Mall revenues jumped by 12% to P28.71 billion.
Rental revenues rose by 13% to P24.49 billion, driven by same-mall sales that went up by eight percent and contribution from newly-opened and expanded malls. Cinema and event ticket sales grew 10% to P2.59 billion, boosted by blockbuster films such as “Avengers: Infinity War,” “Jurassic World: Fallen Kingdom,” and “Deadpool 2.”
SM Prime had 77 malls as of end-June, with 70 in the country and seven in China. Malls opened during the period include SM Center Imus in Cavite, SM City Urdaneta Central in Pangasinan, and SM City Telabastagan in Pampanga.
For the second half, SM Prime will be opening SM Legazpi in Albay and SM Center Ormoc in Leyte.
The residential segment through SM Development Corp. (SMDC) generated P17.05 billion in revenues, 23% higher year-on-year. The double-digit increase was driven by sales from high-rise housing projects in Metro Manila launched from 2015 to 2017.
SMDC’s reservation sales during the first half jumped by a fourth to P34.45 billion, amid a seven percent increase in number of units sold to 9,319 units. The company observed strong sales of units at its Shore 3 in Pasay City, Bloom Residences in Parañaque City, Fame Residences in Mandaluyong City, and Red Residences in Makati City.
SM Prime’s hotel, convention centers, and commercial properties group collectively generated a 10% increase in revenues to P4.11 billion.
The commercial properties group ended the period with nine office buildings covering a gross floor area of 481,000 square meters. It plans to add 130,000 sq.m. of office spaces at the Mall of Asia complex in Pasay City through the launch of the ThreeE-Com Center in the second half of the year.
For hotels, the company maintained its portfolio of 1,500 rooms across six hotels, four convention centers, and three trade halls. SM Prime will expand Park Inn-Clark in Pampanga in the second half of the year.
“We intend to deliver more integrated developments in the coming years anchored by lifestyle malls, luxurious yet affordable residences and other complementary amenities across the country. We believe that synergy among our businesses is key to sustaining our revenue and income growths, while also improving the lives of the communities we serve,” Mr. Lim said.
Shares in SM Prime gained 0.79% or 30 centavos to P37.70 each at the stock exchange on Monday. — Arra B. Francia

US eyes end of Hollywood’s film distribution system

US ANTITRUST officials are considering terminating a 70-year-old Hollywood settlement that governs how films are distributed around the country, potentially upending negotiations among movie studios and major theater chains over blockbuster releases.
The Justice Department said Thursday that the agreements, known as the Paramount Pictures consent decrees, may no longer be effective given that they have been around since the late 1940s. The settlements stem from a 1948 Supreme Court case that dismantled the old Hollywood system in which film studios also owned the theaters where their pictures were shown.
“The Paramount decrees have been on the books with no sunset provisions since 1949,” Makan Delrahim, the head of the department antitrust division, said in a statement. “It is high time that these and other legacy judgments are examined to determine whether they still serve to protect competition.”
The move is part of a broader effort by the Justice Department to review more than 1,000 legacy antitrust settlements to determine whether they have become outdated. The government has said that the vast majority no longer protect competition in the various markets where they apply.
Delrahim had signaled his displeasure about the Paramount settlement at a public forum in April, saying it probably prevented smaller films from getting wider distribution.
Among the key provisions of the consent decrees is a prohibition on selling films in packages, a practice that allowed the studios to force less desirable films on theaters by linking them to more popular releases. The restrictions also prohibit the setting of minimum prices on movie tickets and granting exclusive film licenses for specific geographic areas.
The Paramount decrees were created in a world before television or home entertainment, when theaters were a more significant part of America’s entertainment landscape. The 1948 Supreme Court decision effectively crushed the Hollywood movie system as it operated at the time, when major studios controlled production and distribution from start to the end. They had exclusive contracts with actors and directors and owned theaters which showed only their movies.
Today, Viacom Inc. owns Paramount, which has struggled to compete for moviegoers’ attention in recent years against studios like Walt Disney Co. The box office is dominated by expensive movies based on franchise properties like comic books. Studios are making fewer movies, with each one a bigger bet.
The box office has also become more concentrated with Disney grabbing a market share of 35% so far this year. The concentration would increase if Disney completes its planned $71.3 billion acquisition of 21st Century Fox Inc.’s entertainment assets. Paramount’s market share in the year to date is just under 6%, according to Box Office Mojo.
Major studios have moved away from releasing smaller independent films in theaters, unless they believe they have the chance to win an Oscar, which requires a small release in theaters to qualify. Instead these films have been bought by the new crop of digital distributors, such as Netflix Inc. and Amazon.com Inc.
Studios and theaters split ticket revenue, and in the case of big movies, some studios, such as Disney, can secure as much as 60% of ticket sales. The theater industry has come under pressure in the past year from new subscription services like MoviePass, which have offered unlimited theater access for less than $10 a month. The average US ticket price is just over $9. That has forced big chain like AMC Entertainment Holdings Inc., to offer discounts to moviegoers.
The consent decrees were years in the making, starting with a Federal Trade Commission investigation in 1921 to end what it saw as monopolization of theaters. The FTC sued the forerunner to Paramount Pictures, the Famous Players-Lasky Corp., along with nine other studios. The fight was delayed by the Great Depression, when the movie business was struggling.
Independent film producers like Charlie Chaplin, Mary Pickford, and Orson Welles fought alongside the government to free up the market further and renew the case, which ultimately led to the 1948 ruling. — Bloomberg

PSE index seen to close at 8,600 level by end-2018

LOCAL equities have been affected by the movement of funds away from emerging markets. — SANTIAGO ARNAIZ

By Arra B. Francia, Reporter
COL Financial Group, Inc. expects the Philippine Stock Exchange index (PSEi) to close at the 8,600 level by the end of the year, revising downward its earlier projection following higher than expected inflation figures and the continued outflow of foreign funds from the local market.
The local brokerage firm identified a number of risks that the bourse encountered during the first half of the year, including faster inflation, delays in the implementation of rate hikes by the Bangko Sentral ng Pilipinas (BSP), and the movement of funds away from emerging markets.
This prompted COL Financial to lower its end-2018 projections by 7.5%, from the 9,300 level it predicted last February.
“The problem was the market in January was at 9,000 and everybody was so optimistic. So there was no room for any error… but we had more negatives coming in, so emerging markets became out of favor,” COL Financial Chief Equity Strategist April Lynn C. Lee-Tan said in a media briefing in Ortigas Center on Monday.
The market has also seen net foreign outflows for 25 straight weeks prior to a reversal the week before, as the US dollar strengthened due to rate hikes implemented by the US Federal Reserve.
The new 8,600 projection will translate to a price/earnings ratio of 19.8x.
Amid this downward revision, COL Financial expects the market to go no lower than its 6,986 close on June 25.
“We believe that 6,900 was in fact the low of this correction. We’re confident that this is already the bottom… 6,900 is already an adequate magnitude of the correction,” Ms. Tan said.
Ms. Tan also noted the Philippines’ economic growth remains to be favorable, which could lend support to the main index’s rise.
COL Financial is banking on various catalysts for the market’s recovery, including higher than estimated earnings growth for local firms; inflation to peak; the US Fed to stop raising rates; and firms in the US and China to continue reporting strong corporate earnings despite the trade war.
“The market wants to see the BSP raising rates… The market already anticipates that inflation will be high. It wants the BSP to taking steps to control inflation… In terms of what investors would like to see, they want them to raise rates,” Ms. Tan said.
Ms. Tan added that they expect two more rate hikes at 25 basis points each, or one rate hike at 50 basis points, for the rest of the year.
The company is keeping a bullish outlook on the property, telco, and gaming sectors for the rest of the year. Its stock picks include Ayala Land, Inc., Megaworld Property Corp., Bloomberry Resorts Corp., D&L Industries, Inc., Metropolitan Bank & Trust Company, and Security Bank Corp.

Cruise beats Pooh as Mission Impossible again tops box office

HOLLYWOOD — Tom Cruise continued to test the limits of the possible this weekend as Mission Impossible — Fallout clung for a second week to the top spot in North American theaters, beating new Disney film Christopher Robin, industry tracker Exhibitor Relations reported.
Paramount’s Mission, the sixth stunt-filled edition in the popular franchise, took in an estimated $35 million for the three-day weekend. Critics and audiences have warmed to the film, in which Cruise again does his own vertigo-inducing, cliff-hanging, exploding-car stunts.
Disney’s live-animated Christopher Robin placed second, at $25 million. Inspired by A.A. Milne’s classic Winnie-the-Pooh books, it tells the story of a now grown-up and stressed-out Christopher reuniting with his old stuffed friend and relearning the joys of childlike imagination. The film stars Ewan McGregor and Hayley Atwell, along with the voices of Brad Garrett and Jim Cummings.
In third was another new release, Lionsgate’s The Spy Who Dumped Me, at $12.4 million. The action comedy stars Mila Kunis and Kate McKinnon as friends being chased frantically through Europe after a former boyfriend turns out to be a CIA agent with a pack of killers hot on his trail.
The star power of Mamma Mia! Here We Go Again — with its toe-tapping ABBA soundtrack and gorgeous Greek scenery — helped keep the Universal film afloat in fourth place, taking in $9.1 million for a worldwide total to date of $231 million. Its cast includes Meryl Streep, Amanda Seyfried, Colin Firth, Cher and Pierce Brosnan.
In fifth was Sony’s The Equalizer 2, with superstar Denzel Washington playing the part of a quiet former black-ops agent who is drawn back into action to avenge a friend’s death. Its take was $8.8 million in its third week out.
Also of note: Disney has announced that Black Panther has taken in more than $700 million in North America since its release in February, joining only Star Wars: The Force Awakens and Avatar in that exclusive category.
Rounding out this weekend’s top 10 were: Hotel Transylvania 3: Summer Vacation ($8.2 million); Ant-Man and the Wasp ($6.2 million); The Darkest Minds ($5.8 million); Incredibles 2 ($5 million); and, Teen Titans Go! To the Movies ($4.9 million). — AFP

Ayala Land earnings jump 18% in 2nd quarter

By Arra B. Francia, Reporter
AYALA LAND, Inc. (ALI) expanded its attributable profit by 18% in the second quarter of 2018, as the company reported growth across its residential, office, mall, and other businesses during the period.
ALI Chief Finance Officer Augusto Cesar D. Bengzon said in a briefing in Makati yesterday that net income attributable to equity holders of the parent climbed to P7.21 billion in the April to June period, from P5.9 billion in the second quarter of 2017. Revenues meanwhile went up by more than a third to P43.4 billion, versus the P32.9 billion it posted in the same period a year ago.
This pushed the company’s attributable profit 18% higher to P13.5 billion in the first half of 2018, while revenues gained 25% to P80.4 billion.
“The economy continues to be very supportive of the property sector. There has been growth across the board in all product lines. For the balance of the year, given what we’re seeing in the economy, we’re optimistic we will be able to sustain growth we’ve achieved in the first half of the year,” ALI President and Chief Executive Officer Bernard Vincent O. Dy said during the same briefing.
For the first six months of 2018, revenues from the sale of residential lots and units, office spaces, and commercial and industrial lots surged 27% to P55.7 billion, while commercial and industrial lot sales increased by 16% to P3.9 billion.
Reservation sales for the six-month period improved by 17% to P72 billion, indicating a monthly take-up of P12 billion. It launched five residential projects during the period, namely The Residences at Azuela Cove in Davao, Cerilo Phase 4 and 5 in Laguna, Callisto Tower 2 in Circuit Makati, Ametta Place Phase 3 in Pasig, and Avida Towers Abreeza Tower in Davao.
The listed property developer also recognized P4 billion in sales from its investment in Malaysia through MCT Bhd, where it is currently completing an integrated development in Southern Klang Valley as well as a residential project in Cyberjaya.
For malls, ALI ended the first half with 1.81 million square meters in gross leasable area, with an average occupancy of 89%. The company’s malls command an average lease rate of P1,060 per sq.m. per month.
The office segment meanwhile had 1.02 million sq.m. in GLA by the end of the first half, 93% of which have been leased out. Lease rates are priced at P742 per sq.m. every month on average.
Sales of residential projects, offices, commercial and industrial lots accounted for 68% of the company’s net income for the period, while mall leasing, office leasing, hotels and resorts, and property management provided for the remaining 32%.
Mr. Bengzon noted ALI has not come close to the 50-50 contribution target from residential development and leasing businesses, due to the strength of the latter. The ALI official was referring to the company’s 2020 vision, which targets to generate P20 billion in revenues from both residential development and leasing segments by 2020.
“What’s important is we’re growing both developments. We don’t want to artificially contain the business… we continue to grow based on the best opportunities that we see,” Mr. Dy explained.
The company has spent P48.4 billion in capital expenditures for the first half of 2018, out of its P110.8-billion allocation for the year. Of this, 45% was spent to complete residential projects, 25% for commercial leasing projects, 15% for equity investments, including for its Malaysian unit MCT Bhd and Prime Orion Philippines, Inc., 10% for land acquisitions and five percent for estate development.
Shares in ALI rose 3.58% or P1.45 to close at P41.95 each at the stock exchange on Monday.

Araneta breaks ground on Gateway Mall 2

By Romsanne Ortiguero
ARANETA CENTER Inc. (ACI) is undertaking a multibillion-peso expansion of Gateway Mall in Cubao, starting with the construction of Gateway Mall 2, which is set to “redefine the mall experience.”
In a groundbreaking and capsule laying ceremony on July 31, ACI senior management consultant Rowell Recinto said Gateway Mall 2 will keep Araneta Center’s leading edge with its “welcoming design, extensive shopping and dining offerings, and pampering public spaces.”
“While we are now able to offer a complete community — shopping, dining, offices, entertainment, and hospitality — we are still committed to continue to enhance Araneta Center to become a more vibrant community that continues to amaze and gratify,” he said.
Slated to be completed by the third quarter of 2020, the seven-floor Gateway Mall 2 will have a gross floor area of 120,000 square meters. It will feature nine state-of-the-art cinemas; a 500-seater air-conditioned chapel; an organic vegetable garden where diners can have the farm-to-table experience; a European marketplace-inspired gourmet food hall; and a spacious activity area.
The new mall is also envisioned as an urban oasis, with its contemporary architecture combining glass and steel. With greenery and water features, the interior of the mall is designed as an indoor piazza.
“It is a lifestyle hub. Lifestyle by its very definition would have to deal with positive experiences that will help us expand our market. There has been a host of changes in the shopping center industry, where food has become a major component of malls. It is really a matter of trying to cater to what are our market needs, in terms of lifestyle, in terms of experiences,” Mr. Recinto told BusinessWorld in an interview.

Gateway Mall 2 2
The Gateway Mall 2 is expected to be completed by the third quarter of 2020.

Given the market demand for more experiential aspects in shopping malls, Mr. Recinto noted that Gateway Mall 2 will have a lot more food options compared to what the Gateway Mall currently has.
Moreover, the new mall will have longer operating hours for its nightlife offerings.
A short walking distance away from main arteries such as EDSA, Aurora Boulevard, and P. Tuazon Boulevard, the new mall is expected to draw a foot traffic of over a million in a day.
NEW HOTEL
Araneta Center will also soon have an Ibis Styles Hotel. Adjacent to the Gateway Mall 2, Ibis Styles Hotel marks the entry of the first Ibis Hotel brand in the country. It will be operated by ACCOR Group, which also manages Novotel Manila Araneta Center.
According to Mr. Recinto, the new Ibis Styles Hotel will complement Novotel because it will provide additional rooms at a lower price point.
“At the Araneta Center, we care deeply about our community. GM2 (Gateway Mall 2) and all the other ongoing projects demonstrate our dedication to delivering exceptional experiences to our community and our commitment to create urban solutions that make the greatest difference – to the individual, friends, and family,” he said.

Demi Lovato thankful to be alive after overdose

SINGER/ACTRESS Demi Lovato, seen here attending the world premiere of Smurfs: The Lost Village in Hollywood on April 1, 2017, said Sunday that she was thankful to be alive and needed time to recover in her first remarks since an overdose nearly two weeks ago. — AFP

LOS ANGELES — Pop star Demi Lovato said Sunday she was thankful to be alive and needed time to recover in her first remarks since an overdose nearly two weeks ago. Writing to her more than 70 million followers on Instagram, Lovato gave few details on her July 24 hospitalization but noted that she has long been open about her struggles with addiction. “What I’ve learned is that this illness is not something that disappears or fades with time,” the 25-year-old star wrote. “It is something that I must continue to overcome and have not done yet,” she wrote. “I want to thank God for keeping me alive and well,” she said, adding that she was “forever grateful” for the support of her fans and crediting the staff of Cedars-Sinai Medical Center in Los Angeles with saving her life. Lovato, who canceled a show in Atlantic City that had been planned for two days after her hospitalization, suggested that she may not be returning to the public eye soon. “I now need time to heal and focus on my sobriety and road to recovery,” she wrote. — AFP

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