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Infrastructure delay, high interest rates to weigh on capital formation — ING

By Melissa Luz T. Lopez
Senior Reporter
CAPITAL FORMATION will likely hit a snag this year amid higher interest rates and delays in infrastructure projects, which in turn will pull growth below the state’s 7-8% goal.
ING Bank N.V. Manila senior economist Nicholas Antonio T. Mapa said investments may decelerate due to delays in the enactment of the national budget, and as the impact of last year’s increases in benchmark interest rates feed into commercial borrowing costs.
“We’re seeing that election boost, but it doesn’t come necessarily from your consumption numbers — it comes from capital formation,” Mr. Mapa said during the ING Economic Briefing held yesterday at the Fairmont Makati hotel.
“Capital formation is indeed hampered by rate hikes by the BSP (Bangko Sentral ng Pilipinas) and delays in the budget. We’ve had six percent-plus growth for 15 quarters and if we see that coming slightly below that, maybe that’s a good sign that it’s time to ease on [monetary] policy.”
The bank economist said that higher borrowing rates have crept their way into the wider financial system, with signs that both consumer and corporate clients have begun to feel the pinch.
Investments have been taking a bigger share of overall economic growth, with its slice expected to grow to 31% in 2019 from just 24% in 2015. Economic activity remains largely consumption-driven, although its share has eased to about 66% this year from 69% four years ago.
Capital formation grew by 3.3% in 2018, which helped drive the full-year gross domestic product (GDP) growth to 6.2%.
Mr. Mapa said he expects a steady pace in 2019, contrary to some market bets that growth will receive a boost this year owing to the May 13 mid-term polls. Citing data, previous election years saw capital formation grow faster at 4.4% in 2010, 4.3% in 2013 and 4.9% in 2016.
“I don’t think you can have that kind of capital formation this year. One, the BSP hiked rates by 175 basis points (bp) — capital formation will take a hit. Second… you don’t have that public construction boom,” Mr. Mapa said, referring to the delayed enactment of the 2019 budget.
“We’ll still get a decent number — maybe 3.3% — but it’s not gonna be enough to bring you back to close to 7% growth just because it’s an election year.”
ING sees 2019 growth at 6.3%, which if realized will slightly pick up from last year’s pace but will miss the 7-8% target set by the Duterte administration.
He added that the delayed enactment of the national budget — which cleared Congress just last Friday – will “definitely hit” investment growth.
The national government is currently operating under a re-enacted budget, since the proposed P3.757-trillion spending plan yet to be signed by President Rodrigo R. Duterte, hence, leaving new programs and projects unfunded.
Mr. Mapa clarified that his forecasts assume that the government will have to pause all public works during the 45-day ban ahead of elections.
Economic managers have said that they will ask the Commission on Elections to exempt priority construction projects from the ban.
Mr. Mapa is projecting a slow start for the Philippine economy, with GDP growth expected to ease to 5.8% this quarter, pick up to 6.1% in the second quarter, then 6.3% in the third quarter and at 6.4% for October-December.
The bank expects tempered GDP growth to result in a 25bp rate cut in May, followed by another reduction next semester. The reserve requirement ratio is also expected to be slashed by 200bp this year, Mr. Mapa added.

Hanjin rehab draws interest of three ‘major’ shipbuilders

By Janina C. Lim
Reporter
THREE MAJOR shipbuilders have signaled interest in the rehabilitation of Hanjin Heavy Industries and Construction Philippines, Inc. by asking for meetings on the matter.
In an interview in Olongapo City on Friday last week, HHIC-Phil’s former rehabilitation receiver Stefani C. Saño said he has received three letters of intent from “big players” in the shipbuilding industry, with one meeting scheduled this week.
“Tatlong letters na na-receive ko (I have received three letters), but they still have to go through due diligence,” Mr. Saño said.
The letters of intent were “only general expressions of interest and proposals for initial meetings to discuss possible investments in the shipyard,” which defaulted on its loans to domestic creditors, worth about $412 million, Mr. Saño said.
He declined to identify the shipbuilders concerned, saying only that they are based in Asia and the United States.
Asked if the companies were open to a joint venture, merger or acquisition, Mr. Saño said, “all of the above were mentioned.”
Mr. Saño resigned as receiver last week, but will stay put until his replacement is appointed.
He said he will proceed with the meeting scheduled this week with one of the interested parties.
A HHIC-Phil official, who asked not to be named, said negotiations to seek further bank financing are under way.
“Lay-offs will happen if no banks will help us,” the official said in a telephone interview on Tuesday.
The company is set to shed more than 3,000 workers on Feb. 15, leaving the yard with a reduced staff of about 300.
Mr. Saño has said such numbers will not be sufficient to operate the yard.
HHIC-Phil last month defaulted on $412 million worth of debt to Rizal Commercial Banking Corp. ($145 million); Land Bank of the Philippines (reported at $85 million); Metrobank ($70 million); BDO Unibank, Inc. ($60 million) and the Bank of the Philippine Islands ($52 million).

Tax bureau sets targets, priorities for this year

THE BUREAU of Internal Revenue (BIR) expects to collect nearly P80 billion from the tax reform law this year, which should help boost total revenues to a fresh record high.
Revenue Memorandum Order 9-2019 spells out the bureau’s collection targets for the year.
The BIR, which is the government’s biggest tax collector, is tasked to raise P2.331 trillion, 14.3% more than the P2.044-trillion target in 2018 and 18% more than the P1.962 trillion that the bureau actually collected last year.
For 2019, the BIR is counting on Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law that took effect in January 2018, to bring in an additional P79.012 billion this year. That law reduced personal income tax rates for those earning below P2 million and put in place a simpler system for computing donor and estate taxes. These foregone revenues will be offset by the removal of some value-added tax (VAT) exemptions; increased tax rates for fuel, cars, tobacco, coal, minerals, documentary stamps, foreign currency deposit units, capital gains for stocks not in the stock exchange, and stock transactions; and new taxes for sugar-sweetened drinks and cosmetic surgery.
Actual 2018 BIR collections of P1.962 trillion fell four percent short of program even as they were a tenth more than 2017’s tax haul of P1.781 trillion. Income tax and VAT collections went down from 2017, with faster inflation discouraging household spending and, in turn, leading to lower consumption tax collected.
This year, the tax bureau expects to collect P1.06 trillion from income taxes to account for nearly half its collection goal.
This is followed by VAT which is expected to contribute P506.825 billion, while excise taxes are projected to bring in P400.51 billion.
Revenue from percentage taxes are targeted at P112.366 billion, while other taxes are projected to add P177.453 billion. Meanwhile, taxes from non-BIR operations — consisting of final withholding and documentary stamp taxes on government securities transactions — are seen to bring in P73.206 billion.
By office, the Large Taxpayers Service that covers big businesses is projected to generate bulk of collections at P1.441 trillion, while revenue regions — the bureau’s various offices nationwide — are seen to raise P816.115 billion.
The administration of President Rodrigo R. Duterte expects to raise P3.2 trillion in total revenues this year.
Together with borrowings and official development assistance, these funds are expected to fuel a planned boost in state spending to as much as P3.8 trillion, including for more aggressive infrastructure development. — Melissa Luz T. Lopez

Globe hikes capex to P63B

Globe Telecom
BW FILE PHOTO

GLOBE TELECOM, Inc. is raising its capital expenditure (capex) by 45% to P63 billion (about $1.2 billion) this year as it continues to expand its network to address rising demand for data services.
As a new telco player prepares to enter the market, Globe said its plan to expand and enhance its data network this year will require additional investments. In 2018, it spent P43.3 billion (around $821 million) in capex, the 77% of which was used for data-related services.
“We’re seeing increased demand from our consumers with respect to the data network and the data consumption… You saw our numbers, when it comes to data growth, 59% year-on-year in terms of volume. That has to be supported somehow, if not, the whole thing falls apart in terms of momentum,” Globe President and Chief Executive Officer Ernest L. Cu said in a briefing on the company’s 2018 financial results.
Globe said the capex will be funded by its operating cash and additional debt to be incurred this year.
The Ayala-led telco reported a 22% rise in its net income after tax for the full year 2018 to P18.447 billion, from P15.084 billion in 2017. Core net income, which excludes forex, mark-to-market gains/losses and non-recurring items, likewise grew 37% to P18.555 billion from P13.546 billion the previous year.
Globe said its fourth-quarter net income fell 21% to P3.809 billion from P4.85 billion in the third quarter, while core income also dropped 21% quarter on quarter to P3.789 billion.
Service revenues increased 10% to P140.232 billion for the full year. The bulk or 61% of service revenues came from data-related services as Globe customers grew 8% to 37 million.
Mobile revenues rose 9% year-on-year to P106.925 billion, with mobile data accounting for P55.3 billion, 28% up from the previous year.
Home broadband generated P18.5 billion in revenues (up 19%), while corporate data added P11.8 billion (up 15%).
On the other hand, revenues from fixed line voice services dropped 15% to P2.982 billion.
Globe said it continued to see a shift in demand for data-related services, as revenues from mobile voice fell 6% to P30.348 billion and for mobile SMS by 8% to P21.281 billion in 2018.
“Consistent with global trends, voice revenues declined given the migration of voice traffic to alternative internet-based applications… Similar to voice, mobile SMS declined with the continuous migration of mobile messaging traffic to over-the-top (OTT) messaging apps,” the telco said in a statement.
Globe’s mobile subscriber base ended 2018 at 74.1 million from 60.7 million in 2017, and home broadband subscribers to 1.6 million from 1.3 million the previous year.
HUAWEI PARTNERSHIP
In the same briefing, Mr. Cu addressed questions on growing concern in other countries over telco partnerships with Chinese technology company Huawei Technologies Co., Ltd.
“For us Huawei is the partner simply because they’re the ones ready… What we are seeing is that their technology is more than a year ahead of their competitors. So it enables us to have an advantage out there using their equipment on our network,” he said.
Globe has a partnership with Huawei for the upgrading and expansion of its networks, including fourth and fifth generation (4G and 5G), and the formation of a mobile innovation center in the Philippines.
Since last year, United States, United Kingdom and New Zealand prohibited their telcos from tapping Huawei for their network expansion over cybersecurity concerns involving the Chinese government.
But Mr. Cu said they’ve been assured by Huawei they will “continue on with their business” despite the allegations.
“We have had multiple conversations with them… We’ve been assured that from whatever accusations have been levied against them, they find that completely baseless,” he said.
Shares in Globe fell 1.21% or P24 to P1,956 each on Tuesday. — Denise A. Valdez

DICT to tweak common tower plan

By Denise A. Valdez, Reporter
THE Department of Information and Communications Technology (DICT) is looking to fine-tune the shared telco infrastructure initiative.
DICT Acting Secretary Eliseo M. Rio, Jr. said they organized a forum on Feb. 18 for Smart Communications, Inc., Globe Telecom, Inc., and the eight tower companies that have already signed memoranda of agreement with the DICT.
“Ang gagawin namin is to fine-tune, kasi this is the first time we did a common tower dito sa Pilipinas. Pati yung mga telcos (nao-overwhelm) sila… Kinakausap sila ngayon ng common tower providers.. in other words may learning curve pa rin sila [What we’ll do is we’ll fine tune the plan, because this is the first time we’re doing common towers in the Philippines. Even the telcos are overwhelmed. The common tower providers are talking to them but they are unable to sign contracts. In other words they have a learning curve],” he told BusinessWorld after the DICT signed its eighth MoU with a local tower provider on Monday.
Mr. Rio noted that despite having welcomed several tower companies since December, none have secured an order with any of the telcos for the shared tower facilities.
“As of now wala pang bumabalik sa amin to sign an MoA [As of now none has come back to us to sign an MoA],” he said, noting that the forum is expected to address this.
The MoUs guarantee that as soon as the tower providers receive orders from the telcos, the DICT will assist them in securing permits, which Mr. Rio said is a major hurdle encountered by Smart and Globe.
The DICT signed its eight MoU with MGS Construction, Inc. on Monday, which aims to provide at least 500 towers priced at P5 million per tower.
MGS Construction has a background of constructing buildings, hospitals, and condominium units, mostly for the Villar Group of Companies. The firm’s president Jerry M. Navarrete noted the Villar group has no stake in the incorporation. Mr. Navarrette was previously the president of Villar’s Starmalls.
Mr. Rio said they are expecting to sign deals with two more tower providers in the coming weeks, one of which will be with American Tower Corp.
The companies that have so far registered are ISOC Infrastructures, Inc.; ISON ECP Tower Pte. Ltd.; IHS Holding Ltd. (IHS Towers); edotco Group Sdn Bhd; China Energy Equipment Co. Ltd.; RT Telecom Sdn Bhd.; and Aboitiz InfraCapital, Inc.
Smart is the wireless unit of PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

Resorts World Manila opens travelers lounge

RESORTS World Manila (RWM) has opened a travelers lounge at the Newport Mall, where passengers of Cebu Pacific can check in for their flights departing from Ninoy Aquino International Airport Terminal 3.
During the official launch of the RWM Travelers Lounge on Tuesday, RWM and Cebu Pacific officials said the new facility offers check-in services for Cebu Pacific passengers during mall hours, or up to eight hours before their scheduled flights.
The lounge is located on the ground floor of Newport Mall, which offers free shuttle service to the Runway Manila entrance. Runway Manila is an elevated walkway connecting Newport City to NAIA Terminal 3.
“We’ve been working extensively with Cebu Pacific, we forged a relationship over a number of years…. we have the Runway (Manila)… that links all of our hotels to Terminal 3, so the ease of access to guests when they come to our property,” Stephen Reilly, chief operating officer of RWM, told reporters after the launch.
Javier Massot, Cebu Pacific vice-president for airport services, noted that the check-in facility at the lounge uses the airline’s new system.
“What we provide is a check-in facility…. It’s flexible. We can go with the demand. We have now deployed a new system… which enables us to provide check-in facilities anywhere. It doesn’t have to be in a specific location… So, we are coming from a very static way of doing business to complete sandbox concept where we go where they need us,” Mr. Massot told reporters after the event.
Passengers can get their boarding passes before going to NAIA Terminal 3. Real-time flight status is also provided in the lounge.
“It’s great for our guests, it’s also great for Cebu Pacific because at the same time for them… NAIA Terminal 3 does get very congested at certain times. They are actually very grateful as well for an alternative site for people come and check-in, and then sit back and relax and wait for their flights,” Mr. Reilly said.
Mr. Massot said the new facility allows Cebu Pacific passengers to avoid the long queues at the airport.
“I think it’s a great opportunity for passengers that want to avoid queueing at the airport. They can come here with enough time. They can get their boarding passes, and they can spend their time having some fun using the facilities of this fantastic area… hassle free… It’s also a good opportunity for us because it will decongest the airport,” he said.
Mr. Massot said Cebu Pacific may consider opening other similar facilities in the future. — Vincent Mariel P. Galang

Treasury fully awards seven-year bonds

THE government made a full award of the seven-year Treasury bonds (T-bond) it placed on the auction block on Tuesday, indicating strong investor demand for medium-term instruments.
The Bureau of the Treasury (BTr) raised P20 billion as planned from the seven-year securities yesterday. Demand for the notes amounted to P66.917 billion, more than thrice the amount the government wanted to raise.
The seven-year bonds fetched a 6.25% coupon, with an average rate of 6.087%, slumping by 100.3 basis points from the 7.09% raked in the previous auction last December.
Meanwhile, market players asked for returns ranging from 5.75-6.25%.
Based on the PHP Bloomberg Valuation Service Reference Rates, the market rate of the seven-year bonds stood at 6.193%.
To capture excess demand, the Treasury decided to open a tap facility to raise another P10 billion, carrying the same rate.
The facility was offered from 2 to 4 p.m. to select financial institutions who have been named as market makers.
National Treasurer Rosalia V. De Leon said the surging investor appetite for seven-year T-bonds came as market players took advantage of current spreads, as they see interest rates tapering down further.
“I think their preference is on the belly of the curve. At the same time, they are taking advantage of the rates right now because they see that rates will eventually taper down given that they would expect inflation to really go on a downtrend,” Ms. De Leon told reporters yesterday.
Headline inflation eased further to 4.4% in January, marking the third straight month of decline from a nine-year high of 6.7% in September and October, although still above the 2-4% target band, as food and beverage costs grew at a slower pace.
The Bangko Sentral ng Pilipinas (BSP) now expects inflation to trend even slower until next year, with price movements seen to return to target as early as next month.
“They would expect inflation… to decline significantly coming from the pronouncements also from the BSP. They see that it would be going back to the target path of 2-4%,” Ms. De Leon added.
Sought for comment, a bond trader said the auction results were within expectations.
“Of course, the rates went down from last year given the low inflation, stronger peso as well as the dovish Fed (US Federal Reserve),” the trader said in a phone message.
For the first quarter, the government is planning to borrow P360 billion. Some P240 billion will be borrowed this quarter through 12 weekly T-bill auctions. On the other hand, P120 billion worth of T-bonds will also be issued through six fortnightly auctions. — Karl Angelo N. Vidal

The Big Bad Wolf returns to Manila


ONCE UPON a time in Malaysia, there lived a couple named Andrew Yap and Jacqueline Ng who shared a dream of opening a book shop and starting a regular book fair. However, they had no money for advertising. So they enlisted the help of The Big Bad Wolf.
“We started very small. It was just me and my husband with no management staff. We don’t have resources, we don’t have proper background, we don’t have [an] investor… nothing,” BookXcess founder and executive director Jacqueline Ng told BusinessWorld.
Still the couple persevered and opened BookXcess, a book store dealing in excess or remaindered books from international distributors. There were so many books that the couple took them on the road.
But they needed to establish a name for their book fair, and the couple thought of one interesting literary character whose name would spark curiosity.
“We chose the Big Bad Wolf because it is a character that most of us know. The Wolf allowed us to be more creative and interesting,” she said. “When you are forced, you become more creative. It ended up to be a brilliant name.”
In 2009, the book sale opened with 120,000 books. Its success led The Wolf to travel to countries such as Indonesia, Dubai, and Thailand.
THE COMEBACK
The Big Bad Wolf Book Sale visited Manila last year and was so successful that it will return to Manila again this year. It will run from Feb. 22 to March 4 at the World Trade Center in Pasay City. This year, the 24-hour book sale is expected to carry 2 million books, from young adult fiction to romance, science fiction to crime thrillers, business and self-help, architecture, design, cooking, and children’s fiction, all with discounts ranging from 50% to 90% of normal retail prices. Admission is free.
“Big Bad Wolf is not just [about] someone selling books. We advocate reading. The whole purpose of bringing a huge volume and selection of good books at affordable prices is to bring the excitement that even if you are not a reader, you are excited just to come to the event, just to take a look at what it is about,” said Ms. Ng during a press conference on Jan. 29 at the Edsa Shangri-la hotel in Mandaluyong City.
“And hoping that by encouraging someone to come to an event, even though they’re not a reader, they do not intend to buy one book, they will be inspired to touch one. They’ll be inspired to be curious about [them],” Ms. Ng said.
This year, the sale will carry augmented reality (AR) books for children by Little Hippo books. Classic children’s stories such as Little Red Riding Hood and Goldilocks and the Three Bears are enhanced with digital pop-up images with the use of the free Hippo Magic App. Readers get to explore the pages of the book as they navigate the story through their phones.
BOOKS FOR A CAUSE
Aside from encouraging all kinds of people to read, The Big Bad Wolf is supporting communities with good works.
In October 2018, the Big Bad Wolf donated P5 million to Gawad Kalinga (GK) which was used to build and refurnish libraries in many of GK’s communities.
“This partnership of GK with Big Bad Wolf hopes to bring books to the poorest which can be life-changing. So, we built libraries and we intend to build more in Visayas and Mindanao,” said Luis Oquiñena, executive director of Gawad Kalinga.
“The building blocks of GK are the communities and the homes. The building blocks of Big Bad Wolf are the books… More than the commercial aspect of it, it’s really [about] starting an advocacy that can inspire the next generation,” he added.
The people behind the sale also have plans to schedule visits to Cebu and Davao. “We are definitely looking towards going back to the cities that we have been [to] last year. We know that having a reading advocacy is not about being there once. It’s about [being] able to continue to nurture,” Ms. Ng said.
“We are [also] looking into venturing into the smaller provinces so that we can have a wider reach, especially to the smaller areas that are even more deprived of books,” she said.
For information, visit www.facebook.com/bbwbooksphilippines. — Michelle Anne P. Soliman

Will collectors want it?

FOUR MONTHS ago, Christie’s said it held the first-ever auction of art created by artificial intelligence (AI). The $432,500 sale sparked a controversy among critics over whether it’s really AI-generated if a human was involved in making the portrait.
Next month, a new Sotheby’s sale in London may end the dispute and could even presage a boom in AI-generated art, which until now has been relatively scarce.
The firm will take bids for a piece made by German computer scientist Mario Klingemann on March 6 in London. This one was fully curated by a computer, according to the auction house. That’s different from the AI portrait the sold in October, which included some human intervention by Paris-based art collective Obvious.
Entitled Memories of Passersby I, Mr. Klingemann’s auction debut is made up of an AI “brain” that beams an endless stream of images of distorted faces onto two screens, the result of algorithms. Blurry faces come into focus, though none of the people portrayed ever existed.
Still, purists could insist the work isn’t fully computer-generated, as Mr. Klingemann admits he had to build the machine. But now it’s ready to create art endlessly, and soon it will be up to bidders to decide. After the Obvious sale smashed the original estimate of $10,000, Sotheby’s has put the estimate for this sale at £30,000 ($39,000) to £40,000.
Another successful sale could prove the art market is ready for more machines. — Bloomberg

Phinma Education invests P278M in Indonesia JV

THE education arm of Phinma Corp. is investing P278 million in a joint venture (JV) firm in Indonesia, marking its entry into the Southeast Asian country.
In a disclosure to the stock exchange on Tuesday, Phinma said its wholly-owned unit Phinma Education Holdings, Inc. signed on Feb. 11 a joint venture agreement with Indonesia’s Tripersada Global Manajemen for the establishment of PT Ind Phil Managemen (IPM).
Under the agreement, Phinma Education will subscribe to 66% of the shares of IPM, amounting to 74.45 billion Indonesian Rupiah (IDR), or about P278 million. Phinma Education will pay IDR 35 billion within the month to fulfill IPM’s initial capitalization requirements.
IPM will oversee tertiary institutions for Yayasan Triputra Persada Horizon Education, the first of which will be located in West Java, Indonesia.
The listed firm said its entry into the Southeast Asian market will further strengthen its position in the education industry.
“This investment represents Phinma Education’s entry into Indonesia as part of its regional strategy. Indonesia, with a population of over 260 million, provides the company with a new market to serve, and a new source of income,” the company said.
BusinessWorld earlier reported Phinma is on the lookout for possible acquisitions in Vietnam, as well as another one in Metro Manila.
“Our education business continues to do very well and we’re looking at more acquisitions, both in the Philippines and in Southeast Asian countries,” Phinma Corp. President and CEO Ramon R. del Rosario told BusinessWorld last Feb. 1.
The company currently owns six universities and colleges in the country, namely Araullo University, Inc., Cagayan de Oro College, Inc., University of Iloilo, Inc., University of Pangasinan and subsidiary Southwestern University, and St. Jude College Manila, Inc.
The expansion of its education business will be financed by a mix of cash flow from operating schools and the proceeds from the recent sale of its 51.48% stake in Phinma Energy Corp. to Ayala-led AC Energy, Inc.
The Phinma group had sold its stake in Phinma Energy Corp. via a secondary share sale worth around P3.42 billion. The company said the sale was a timely opportunity, given they have established the business 50 years ago and have grown it to the extent that it can.
Proceeds of the sale will also be used to finance the company’s construction businesses. The firm has a majority stake in iron and steel products manufacturer and distributor Union Galvasteel Corp. as well as PhilCement Corp.
Phinma’s attributable profit surged by 270% to P135.98 million in the first nine months of 2018, versus P36.7 million in the same period a year ago, after gross revenues climbed 48% to P7.01 billion.
Shares in Phinma closed unchanged at P9.36 each at the stock exchange on Tuesday. — Arra B. Francia

Bank of Taiwan starts operations in Philippines

THE Bank of Taiwan has started its operations in the Philippines, the central bank said, which comes months after receiving its license from the regulator.
The state-run Taiwanese bank opened its representative office in Manila on Jan. 31, the Bangko Sentral ng Pilipinas (BSP) announced via Circular Letter 2019-011 issued last Friday.
This comes nearly a year after the Monetary Board approved the foreign bank’s pitch to open a marketing unit in the country.
However, the central bank clarified that the Bank of Taiwan cannot offer actual banking services or process transactions for clients based here.
“As a liaison office of the Bank of Taiwan which deals directly with the public, its function shall be limited to promoting and providing information about the services/products offered by Bank of Taiwan and shall not include those of its affiliates,” according to the circular letter signed by BSP Deputy Governor Chuchi G. Fonacier.
The Taipei-based lender registered with the Securities and Exchange Commission on Sept. 18, 2018. Later that month, the BSP also granted the bank a certificate of authority to operate a representative office here.
Bank of Taiwan started operations in May 1946, making it the oldest government-owned bank in that country. The commercial lender has since expanded its operations through overseas branches and banking offices in China, Hong Kong, Singapore, Japan, Australia, United States, United Kingdom and South Africa.
There are 13 foreign banks running representative offices in the Philippines.
Meanwhile, 12 other offshore lenders have ventured into the Philippine market following the passage of Republic Act 10641 in 2014. The law lifted the old limit that allowed only 10 foreign-owned banks to operate in the country at any given time.
Five Taiwanese banks have opened full branches in Manila over the last four years: Cathay United Bank, Yuanta Commercial Bank Co. Ltd., First Commercial Bank, Hua Nan Commercial Bank Ltd., and the Chang Hwa Commercial Bank, Ltd.
Central bank officials said foreign lenders are actively trying to enter the local market amid the country’s robust growth story, a strong middle class and as more of their corporate clients abroad engage increased trade and investments with Philippine firms. — Melissa Luz T. Lopez

The new Picasso? Meet Ai-Da the robot artist

FALMOUTH, England — Can robots be creative? British gallery owner Aidan Meller hopes to go some way towards answering that question with Ai-Da, who her makers say will be able to draw people from sight with a pencil in her bionic hand.
Mr. Meller is overseeing the final stages of her construction by engineers at Cornwall-based Engineered Arts.
He calls Ai-Da — named after British mathematician and computer pioneer Ada Lovelace — the world’s first “AI ultra-realistic robot artist,” and his ambition is for her to perform like her human equivalents.
“She’s going to actually be drawing and we’re hoping to then build technology for her to paint,” Mr. Meller said after seeing Ai-Da’s prosthetic head being carefully brought to life by specialists individually attaching hairs to form her eyebrows.
“But also as a performance artist she’ll be able to engage with audiences and actually get messages across; asking those questions about technology today.”
Her skeletal robotic head may stand disembodied on a workbench, but her movements are very much alive.
Cameras in each of her eyeballs recognize human features — she will make eye contact and follow you around the room, opening and closing her mouth as you do. Get too close and she’ll back away, blinking, as if in shock.
Ai-Da’s makers say she will have a “RoboThespian” body with expressive movements and she will talk and answer questions.
“There’s AI (artificial intelligence) running in the computer vision that allows the robot to track faces to recognize facial features and to mimic your expression,” said Marcus Hold, Design & Production Engineer at Engineered Arts.
Ai-Da’s makers are using “Mesmer” life-like robot technology for her head, and once finished she will have a mixed race appearance with long dark hair, silicone skin and 3D printed teeth and gums.
“(Mesmer) brings together the development of software mechanics and electronics to produce a lifelike face with lifelike gestures in a small human sized package,” Mr. Hold said.
Ai-Da will present her inaugural exhibition Unsecured Futures in May at the University of Oxford, and her sketches will go on display in London in November. — Reuters

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