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Unbeaten streak

Last year the “New in Chess Magazine” (issue no. 2 of volume 2017) carried an infographic page entitled “Streaks of Invincibility” which listed down the records for most classical, or slow, games played in competition without a loss.

Mikhail Tal. 95 games from October 1973-October 1974

Mikhail Tal. 86 games from July 1972-April 1973

Vladimir Kramnik. 82 games from January 1999-July 2000

Wang Yue. 82 games from March 2008-December 2008

Jose Raul Capablanca. 63 games from 1916-1924

Wesley So. 67 games from July 2016 to April 2017. Note: The infographic gave his record as 56 games, but the streak was still live at the time of the magazine’s publication and Wesley extended this to 67 before he lost to Shakhriyar Mamedyarov on April 21, 2017 in the Vugar Gashimov Memorial.

Magnus Carlsen. 42 games from November 2015 to April 2016

Comments:
GM Milan Drasko is in the “New in Chess” list and has a claim to an unbeaten streak because he went 84 games from October 2006-September 2007. I have taken his name out of the list though as the Montenegrin GM is a 2500+ player whose opponents whose opponents were largely in the 2300-2400 range.
GM Sergey Tiviakov and GM Bogdan Lalic both claim to have gone 110 games without defeat. Lalic divides his time between Croatia and England and obtained his highest rating of 2600 in 1997. Tiviakov is a former candidate and obviously a strong player – during his unbeaten period in 2004-2005 he reached a rating of 2700. The quality of his opposition though is definitely not on par with the ones in the list above, as they include games played against 2100 players.
Maybe we should have a separate list for unbeaten streaks of players below the elite level, for I cannot in conscience compare Tiviakov’s streak with someone like Wesley So, whose unbeaten period has less games but comprises of the most powerful tournaments in the world, for example the Sinquefield Cup, London Classic, Tata Steel, the Isle of Man tournament (perhaps the strongest open of the year) and the Baku Chess Olympiad.
Anyway, for what it’s worth Mikhail Tal’s record has recently been broken by Ding Liren, who went 100 games without loss. This is an impressive performance. He lost to Anish Giri in the 2nd game of their 2017 match and after that his next loss was to Maxime Vachier-Lagrave in the 2nd Du Te Cup last month (November). In between he competed in the following without loss:
2017 Tbilisi FIDE World Cup – this included mini-match victories over GMs Martin Kravtsiv, Vidit Santosh Gujrathi, Wang Hao, Richard Rapport, Wesley So. He lost in the finals to Levon Aronian but they fought to four draws in standard chess before the Armenian demi-god broke through in the rapid games. Ding Liren is an awesome tactician but the chess he showed in Tbilisi was calm, controlled positional chess with a drop of tactical poison. The following technical exercise was very impressive.

Ding, Liren (2777) — Wang, Hao (2702) [E05]
FIDE World Cup 2017 Tbilisi (4.2), 13.09.2017

1.d4 Nf6 2.c4 e6 3.g3 d5 4.Bg2 Be7 5.Nf3 0–0 6.0–0 dxc4 7.Qc2 a6 8.a4 Bd7 9.Qxc4 Bc6 10.Bg5 h6 11.Bxf6 Bxf6 12.Nc3 Bxf3 13.Bxf3 c6 14.e3 a5 15.b4 axb4 16.Qxb4 Ra7 17.a5 Na6 18.Qb6 Qa8 19.Ne4 Bd8 20.Qb2 Nb8 21.Nd6 Bxa5 22.Nxb7! Qxb7 23.Qxb7 Rxb7 24.Rxa5
Black has a weak c-pawn and temporarily awkward-placed pieces. Ding manages to convert these apparently small inconveniences into a win.
24…Rc8 25.Rc1 Rbc7 26.Ra8 Kf8 27.h4 Ke7 28.h5 Kd6 29.e4! Ke7 30.e5
The game looked like it was headed for a draw until this move.
30…Rd8 31.Kg2 Rb7 32.Rc4 f6 33.Be4 fxe5 34.dxe5 Rb2 35.Bg6 Nd7 36.Ra7 Re2
[36…Rf8 37.Bc2! Kd8 (otherwise Rd1 and Ba4) 38.f4 Rb6 39.Rd4 Rf7 40.Bg6 Re7 41.Be4 Black’s position is under tremendous pressure and will give in sooner or later]
37.Re4!
Ding Liren said after the game that this is the move which won the game for him.
37…Rxe4 38.Bxe4 Rc8 39.f4 Kd8 40.Kf3 c5 41.Ke3 Rc7 42.Ra8+ Rc8 43.Ra6 Ke7 44.Ra7 c4 45.Kd2 c3+ 46.Kc2
The white king catches the passed pawn on time, after which the win is clear.
46…Kd8 47.Bd3 Rc5 48.Ra8+ Ke7 49.Ra7 Kd8 50.Ra3 Nb6 51.Rxc3 Rxc3+ 52.Kxc3 Nd5+ 53.Kd4 Ke7 54.Be4 Nb4 55.Kc5 Na2 56.Kc4 Nc1 57.Bd3 1–0
A few days after the World Cup Ding took part in the European Club Cup and then went home for a rest, but of course he could not refuse the request of his home team to play in a league match where he produced the following “Game of the Year.”

Bai, Jinshi (2553) — Ding, Liren (2774) [E21]
TCh-CHN 2017 China CHN (18.4), 04.11.2017

1.d4 Nf6 2.c4 e6 3.Nc3 Bb4 4.Nf3 0–0 5.Bg5 c5 6.e3 cxd4 7.Qxd4!?
A rare move. Usual is 7.exd4 where Black can play 7…d5, 7…h6, or even go into obscure complications with 7…Qa5.
7…Nc6 8.Qd3 h6 9.Bh4 d5 10.Rd1 g5 11.Bg3 Ne4 12.Nd2 Nc5 13.Qc2 d4! 14.Nf3 e5 15.Nxe5 <D>
Position after 15.Nxe5
15…dxc3!? 16.Rxd8 cxb2+ 17.Ke2?
Correct is 17.Rd2
17…Rxd8 18.Qxb2 Na4 19.Qc2 Nc3+ 20.Kf3 Rd4!!
With the idea of 21…g4+ 22.Nxg4 Bxg4 mate.
21.h3 h5 22.Bh2 g4+ 23.Kg3 Rd2! 24.Qb3 Ne4+ 25.Kh4
[25.Kf4 Rxf2+ 26.Nf3 (26.Kxe4 Bf5+ 27.Kd5 Rd8+ and mate) 26…gxf3 27.gxf3 Nd2 attacking b3 and f3]
25…Be7+ 26.Kxh5 Kg7 27.Bf4 Bf5 28.Bh6+ Kh7 29.Qxb7 Rxf2
Intending Ng3 checkmate.
30.Bg5 Rh8! 31.Nxf7 Bg6+ 32.Kxg4 Ne5+ 0–1
The finish will be 32…Ne5+ 33.Nxe5 Bf5+ 34.Kh5 Kg7+ 35.Bh6+ Rxh6#
In November 2017 Ding played in the Palma de Mallorca Grand Prix (one win over Inarkiev eight draws), 2nd IMSA Basque Tournament (victories over Le Quang Liem, Wang Hao and twice over Korobov), then the powerful FIDE Candidates’ Tournament (the one that Caruana won to book a match with Carlsen) where he had one win over Mamedyarov and drew his other 13 games. Then he had the star-studded Vugar Gashimov Memorial, the Norway Chess tournament where he broke his hip and had to withdraw after 3 rounds.
After a two-month rest he played a match vs. Veselin Topalov (two wins two draws) and then the 43rd chess Olympiad in Batumi.

Ding, Liren (2804) — Duda, Jan-Krzysztof (2739) [D24]
43rd Olympiad 2018 Batumi GEO (10.1), 04.10.2018

The Poles were the surprise team of Batumi. They went berserk and defeated top seed USA, 2nd seed Russia, and powerhouses Ukraine and France. China stopped them in round 10 with a big 3–1 victory and Ding Liren even got the brilliancy prize as well for defeating the Polish Champion Jan-Krzysztof Duda. Here is the game.
1.d4 Nf6 2.c4 e6 3.Nf3 d5 4.Nc3 dxc4 5.e4 b5 6.e5 Nd5 7.Nxb5 Nb6 8.Be2 Nc6 9.0–0 Be7 10.Qd2! 0–0 11.Qf4 Rb8 12.Nc3 f5 13.Qg3 Kh8 14.Rd1 Nb4 15.b3 cxb3 16.axb3 a6 17.Bc4 Nc2 18.Ra2 Nb4 19.Ra1 Nc2 20.Ra2 Nb4 21.Re2 a5 22.d5! exd5 23.e6 Bd6 24.Qh3 Qf6!
The bishop on c4 cannot be taken: 24…dxc4? 25.Ng5 h6 26.Nf7+ Rxf7 27.exf7 followed by Re8+ because 27…Bd7 is met by 28.Bxh6!
25.Nb5!!
This appears to be an only move:
25.Bg5 Qg6 (not 25…Qxc3? 26.Rc1 the queen has nowhere to go) 26.Bb5 Bxe6 Black has parried all threats and White’s forces are uncoordinated. For example, 27.Bd2 c6 28.Ba4 Bd7 White’s bishop on a4 is completely shut out of action;
25.Ng5 h6 26.Nf7+ Rxf7 27.exf7 Qxf7 White has no attack.
25…dxc4 26.Nxd6 cxd6 27.e7 Re8 28.Ng5 Qg6
[28…h6 29.Qh5! Bd7 30.Rxd6! Qxd6 31.Nf7+]
29.Rxd6! f4! 30.Qh4 Qb1
Now everything is hanging.
31.Re1 Bf5 32.Rd8! Bg6
[32…Rbxd8 33.exd8Q Rxd8 34.Nf7+ Kg8 35.Qxd8+ Kxf7 36.Re7+ Kg6 37.Qd6+ Kh5 38.Qxf4 h6 (otherwise Qg5 mate) 39.Rxg7 mate is coming up]
33.Rxb8 Rxb8 34.Qxf4 Rg8 35.Nf7+ Bxf7 36.Qxf7 Nd7 37.e8Q Nf6 38.Bg5! 1–0
Threatening both the black queen and mate.
After that the European Club Cup and finally the 2nd Du Te Cup where the streak was broken when he lost to Maxime Vachier-Lagrave in the 7th round.
Did I mention the reason why I am not so excited about these “unbeaten streaks”? I think they are counter-productive. Even Vladimir Kramnik’s chess quality suffered during his unbeaten streak – in his wish not to lose a game he had to avoid taking risks and this stifled his creativity.
To prove this immediately after losing to the Frenchman with three names Ding Liren came through with a victory over Yu Yangyi, definitely someone who is not easy to beat. Liren got a slight endgame advantage and just keep grinding away until his opponent slipped up and lost.
I am not so sure keeping track of unbeaten streaks is good for the player. Former world champion Veselin Topalov kept playing in his usual risky style and he did not mind losing because he reckons that the additional wins he gets from playing like that will more than compensate. That, I believe, is a more noble attitude.
 
Bobby Ang is a founding member of the National Chess Federation of the Philippines (NCFP) and its first Executive Director. A Certified Public Accountant (CPA), he taught accounting in the University of Santo Tomas for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.
bobby@cpamd.net

Wade’s star shines

There was a time when Dwyane Wade could not be stopped, when defenses bent precisely to contain him wound up being veritable instruments to his greatness. Just ask the Mavericks, who, in 1996, finished first in the regular season, breezed through to the Finals, took a two-games-to-none lead, and then finished bridesmaids. It wasn’t because Heat head coach Pat Riley suddenly found a complex solution off a Eureka moment. On the contrary, it was because of a keen understanding that the only one that could, and would, work involved handing the entire offense to the All-Star guard.
The result was a Heat sweep from Game Three of the Finals onwards, with Wade utterly dominating the proceedings. Consider his stats for the series while being the singular focus of the Mavericks’ coverage: 34.7 points, 7.8 rebounds, and 3.8 assists. He was particularly outstanding in the last four games, going for 42/13/2, 36/6/3, 43/4/4, and 36/10/5 splits via ridiculously high usage rates. It was as if Riley handed him the ball and simply told him to do with it as he pleased. And the oversimplification aside, there can be no haggling with the result.
Wade would become even better, much better, in the next half decade, but the relative lack of support told on the Heat’s competitiveness. Only when he managed to convince fellow marquee names from the 2003 draft class to join him did he again experience ultimate success in the sport’s grandest stage. Not coincidentally, it had him handing the reins to LeBron James and agreeing to a salary even lower than that of Chris Bosh. Needless to say, only he could have made the sacrifice, confident as he was in his worth and intent on cementing his status as an all-time great through the attainment of collective objectives.
Wade would go on to claim two more rings in four straight Finals appearances, with James’ departure in 2014 signifying the downside of his career. Meanwhile, his best buddy would continue to shine in his waning years. Which, in a nutshell, was why their last meeting on a court the other day ended predictably: a loss for the Heat. He wanted to play well under the klieg lights of Staples Center, where stars of stars gathered in recognition of his body of work. Instead, he had a woeful first half and, despite a more inspired showing after the break, he failed to produce the win he wanted.
Under the circumstances, Wade deserved to take the last shot. With the Miami Heat three behind and the clock ticking to zero, he had to fire from beyond the arc. Unfortunately, James was on his grill, and the tight guarding led to a prayer of an attempt. If nothing else, it proved that his playing days were on its last legs. Still, he has nothing to hang his head for. His 16 years of toiling in the National Basketball Association have made him a surefire Hall of Famer. No wonder he drew ovations from an otherwise hostile fan base; they recognized his place in the pantheon of performers. And, for one last night, despite the loss, the desperation heave, and the presence of his more accomplished peer, he found his light shining brightest.
 
Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

Trade deficit hits new record high

By Jochebed B. Gonzales
Senior Researcher
THE COUNTRY’s trade balance posted a fresh record-high shortfall in October as growth of imports continued to outpace that of exports, the government reported on Tuesday.
Preliminary data from the Philippine Statistics Authority showed the October trade deficit at $4.212 billion, bigger than September’s $3.723 billion and $2.585 billion in October 2017.
Import payments rose 21.4% year on year to $10.32 billion in October, easing from September’s 26.1%, but faster than the year-ago 17% growth.
Export sales rose 3.3% year on year to $6.108 billion, accelerating from the 0.8% growth in September, but slower than the 17.4% print in October 2017.
180912Export,Import_Performance_FINAL
“Exports climbed for a fifth consecutive month in October 2018 amid positive performance of manufactures and forest products,” the National Economic and Development Authority (NEDA) noted in a separate statement.
“Imports from our major trading partners continued to trace an upward trend, while exports improved modestly,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted in the NEDA statement as saying.
To date, exports were down 1.2% to $57.067 billion against the downgraded two-percent target of the Development Budget Coordination Committee (DBCC) for full-year 2018.
On the other hand, imports grew 16.8% to $90.985 billion versus the DBCC’s revised nine percent projection for this year.
On a cumulative basis, the balance of trade yielded a $33.918-billion deficit, bigger than the $20.128-billion gap recorded in last year’s comparable 10 months.
Outbound shipment of manufactured goods, which made up 83.7% of total sales in October, grew 5.7% to $5.113 billion. Electronic products, which made up around 53.2% of the total exports, inched up by 0.6% to $3.248 billion.
Forest products were up 28.7% to $30.752 million.
On the other hand, value of exports of agro-based products decreased by 13.7% to $429.584 million, while that of petroleum products and mineral products shrank by 51% ($37.134 million) and 7.1% ($319.972 million), respectively.
On the import side, purchases of major types of goods went up across-the-board.
Imports of raw materials and intermediate goods, which made up 37.7% of total imports in October, increased by 22.2% to $3.892 billion.
Capital goods, comprising 33.6% of the import total, grew 21.2% to $3.466 billion.
Also growing that month were imports of mineral fuels, lubricant and related materials (45.4% to $1.228 billion) as well as consumer goods (7.5% to $1.665 billion).
FUELING FUTURE INVESTMENTS
Economists noted the continued increase of importation of capital goods and raw materials signaled support for investment-led growth.
“[I]mport growth was much higher than expected…” Nomura economist Euben Paracuelles said in a research note, adding that “[t]his was led by capital goods and raw materials imports, while consumer goods imports slowed.”
“Overall, this remains consistent with our view that still strong domestic demand which reflects more infrastructure spending will sustain a large goods trade deficit.”
A similar assessment was made by ING Bank N.V. Manila senior economist Nicholas Antonio T. Mapa, who said: “[The] [r]obust import growth is yet another sign that the Philippines has moved into a new chapter in its growth story, requiring a shift in the country’s import dietary requirement.”
“In the past, import growth was driven largely by fuel and consumer goods, with only sporadic flows of capital goods and raw materials outside those used for electronic exports.”
Moving forward, sustained growth of imports is expected to contribute to the widening current account deficit.
“We maintain our forecast that the current account deficit will widen sharply to two percent of GDP (gross domestic product) this year from 0.7% in 2017. For 2019, we expect a more modest current account deficit, widening to 2.2% of GDP,” said Nomura’s Mr. Paracuelles.
“Slower electronics export growth and strong infrastructure-led domestic demand is a potent combination that could push the goods trade deficit wider, but there will be significant offsets next year, in our view,” he said, citing a drop in oil prices, higher overseas worker remittances and improvement in tourist arrivals.
For ING’s Mr. Mapa: “The trade deficit in October of $4.2 billion indicates that the current account will likely remain in the red for the fourth quarter of the year.”
“Imports will likely remain growing at a robust pace as the burgeoning economy needs more and more fuel to drive robust growth from all sectors. We may see a reprieve on the oil bill, given a likely depressed [dollar] value of oil imports, but overall we can see all other import subsectors to post strong growth,” he added.
“Exports, on the other hand, may continue to struggle no matter how much the peso depreciates as we will need to find a way to be generate export competitiveness above and beyond a peso depreciation. In total, we will likely see the trade gap widen, the current account follow suit and the peso to face bouts of weakness in 2019.”

S&P, Nomura expect GDP growth to pick up in 2019

ECONOMIC GROWTH should pick up in 2019 following a slower-than-expected climb this year, according to two analyses issued on Tuesday, boosted by election spending and strong domestic demand.
S&P Global Ratings sees gross domestic product (GDP) growth improving to 6.4% next year from a 6.2% forecast for 2018. On the other hand, analysts at Nomura Global Research sees growth improving to 7.1% from 6.3%.
Philippine GDP grew 6.7% in 2017. The government targets growth to clock in at 6.5-6.9% this year before surging to 7-8% in 2019.
Growth has been underwhelming so far this year, averaging 6.3% in the nine months to September as rising prices discouraged household spending, a key growth driver of GDP growth.
Still, the Philippines will remain a growth leader in the region, as most rated economies here are expected to see slower expansion rates in 2019. India will post the fastest expansion at 7.6% next year, from 7.4% this year.
In a report, the credit rater pointed out that Asia-Pacific economies are “losing steam” amid slowing global trade, largely due to United States-China frictions that will take a particular toll on manufacturers.
“We do not expect these global growth drivers to reverse in 2019 and so growth should keep slowing,” S&P said, noting that growth across Asia Pacific will ease to 5.3% from a 5.4% forecast this year.
“We agree that some countries could, over time, benefit from higher inflows of foreign direct investment if multinationals relocate parts of their supply chains away from China. However, the short-term spillovers from worsening trade and investment friction would likely be damaging…”
Another risk comes from tighter financial conditions, especially if US interest rates were to rise faster than expected. In the Philippines, a surge in world crude prices and a weaker peso has stoked inflation, spurring five consecutive interest rate hikes, so far, from the Bangko Sentral ng Pilipinas (BSP), S&P noted.
The Philippines will also buck the regional trend in Nomura’s eyes, as growth is seen to pick up next year, driven by stronger domestic demand plus a “near-term boost” from election-related spending. The state’s aggressive spending push, largely for infrastructure, should also spur economic activity.
“Exports will remain a drag, given slower global growth and the tech downcycle. However, we note that, while electronics exports make up around 60% of total goods exports, import content is relatively high, and so Philippine value-added is low,” the bank said in a separate report.
“Importantly, we believe that any drag will be more than offset by still-robust domestic demand, particularly an expected surge in investment spending which should receive added near-term impetus as public infrastructure projects, including at the local level, are pushed for completion ahead of the elections.”
Playing a key role would be a surge in capital investments, whose growth should quicken to 23.9% from an already-high 16.5% this year.
Softer inflation should also assist a rebound in household consumption, Nomura said. — Melissa Luz T. Lopez

FDI net inflows fall in September

By Melissa Luz T. Lopez
Senior Reporter
FOREIGN direct investment (FDI) net inflows to the Philippines fell in September to their lowest level in over a year, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday, at a time of faster inflation and global trade tensions.
FDI net inflows dropped to $569.35 million for the month from the $750.35 million that entered the country in August, and by 29.4% from the $806.8-million capital that entered in September 2017.
Net inflows were the smallest since July 2017’s $344.19 million, according to latest central bank data.
These flows bring in capital for new business or business expansion, which in turn generate gainful jobs.
The drop in investments came as foreigners decided to withdraw equity capital that month, the BSP said in a statement released late Monday.
Economic growth eased to 6.1% in July-September from 6.2% the previous quarter, while September alone saw a nine-year-high 6.7% inflation rate that was sustained into October, fueled by higher food and oil prices and the impact on imported goods of a depreciating peso, which traded at the P54 level versus the dollar.
Equity flows resulted in a net withdrawal of $117 million, as $69 million in gross inflows were wiped out by $187-million outbound capital. This reversed the $258-million net capital infusion in September last year, as $270 million in net placements offset $12-million outflows.
“Equity capital outflows for the month of September 2018 could be partly attributed to proposed rationalization of fiscal incentives, higher inflation and weaker peso during that time,” said Michael L. Ricafort, economist at the Rizal Commercial Banking Corp.
September also saw the House of Representatives approving House Bill No. 8083, or the proposed Tax Reform for Attracting Better and High-quality Opportunities Act, which gradually reduces the corporate income tax rate to 20% from the current 30% by two percentage points every other year starting 2021, but removes redundant fiscal incentives as well, drawing concern from investors in the country about changing policies and rules in the middle of the game.
FDI data which the BSP released on Tuesday also saw investments of foreign parents in debt papers of their Philippine subsidiaries or affiliates grow by a fourth to $609 million in September from $490 million a year ago, while reinvested earnings increased by a third to $78 million from $59 million.
The BSP said that equity investments mostly came from the United States, Japan, Macau, Hong Kong and China, channeled mostly to real estate; manufacturing; as well as electricity, gas, steam and air-conditioning supply activities.
Despite September’s drop, cumulative FDI net inflows still appeared to be headed for an all-time high this year.
Net inflows amounted to $8.038 billion in the nine months to September, 24.2% more than the $6.472-billion net inflows received in last year’s counterpart period.
Placements in debt instruments amounted $5.524 billion, up by a fifth from 2017’s first nine months.
Reinvested earnings edged up to $614 million from $604 million.
Equity other than reinvested earnings grew 52.1% to $1.9 billion from $1.249 billion, with such capital going to manufacturing; financial and insurance; real estate; arts, entertainment and recreation; as well as electricity, gas, steam and air-conditioning supply activities, the central bank said.
Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, said “general confidence” in the Philippines’ growth story — despite worsening inflation — kept investors bullish.
At the same time, RCBC’s Mr. Ricafort said the volatile external environment may have forced foreign investors to take a second look at emerging markets like the Philippines.
‘The US-China trade has caused some shifts or increased flow of foreign direct investments from China to nearby ASEAN countries such as the Philippines to avoid higher tariffs imposed on Chinese exports to the US and to US exports to China,” Mr. Ricafort said, noting that the Philippines is now seen as an “alternative location for manufacturing.”
“Any continuation, at the very least, or further escalation of the US-China trade war, as well as increased tensions between the two countries involving their respective biggest businesses (e.g. Huawei) could result in further shifts of some FDIs from China to ASEAN countries such as the Philippines.”
The central bank expects FDI net inflows to reach $9.2 billion for the entire 2018, lower than the record $10.049 billion recorded last year. Revisions to the BSP forecasts will be announced on Friday.

House body eases retail trade rules further

By Elijah J. C. Tubayan
Reporter
THE HOUSE of Representatives Committee on Trade and Industry approved on Tuesday a bill reducing the minimum paid-up capital requirement of foreign retailers to engage in business here.
The bill amends Republic Act No. 8762, or the Retail Trade Liberalization Act of 2000, by reducing the minimum paid-up capital requirement of foreign firms engaging in retail trade business to $200,000 from $2.5 million currently.
Although the move has been anticipated by foreign businesses chambers, it is frowned upon by local retailers.
Philippine Retailers Association (PRA) President Paul A. Santos said that the measure removes the protection of micro, small, and medium enterprises (MSMEs) from better-funded foreign counterparts.
“For many Filipinos, retail entrepreneurship is the most accessible path way out of poverty. Famous Philippine brands owe a great deal of their prosperity and success today to a benevolent government policy that protected them of foreign competition,” Mr. Santos said during the hearing.
The PRA asked the committee to revise the minimum threshold to $1.5 million.
“We manifest that the capital requirements be increased to maintain a balance between Filipino entrepreneurs, Filipino retailers, the government and foreign investors,” said Mr. Santos.
Deputy Speaker Arthur C. Yap of Bohol’s 3rd district said there is still room for negotiation to adjust the minimum paid-up capital requirement for foreign retailers as the bill moves to the plenary.
“… Pag umabot ’yan sa second reading sa plenary debates, puwede pa ’yan mapalitan (That provision can still change as the bill moves towards second-reading approval in plenary). But, for now, we can see na reasonable naman ’yung $200,000,” said Mr. Yap in an interview after the hearing.
He said foreign businesses who will come in will not be competing against community sari-sari stores and similarly sized businesses.
However, Nerissa de Jesus, a lawyer with the Philippine Competition Commission’s legal division, told lawmakers in the same hearing that “[a] minimum capital requirement will not be effective in protecting domestic MSME retailers.”
“In fact, maintaining regulatory entry barriers against physical foreign retailers in the form of a capital requirement will do little to insulate MSME retailers from competition with foreign online retailers, with the latter becoming more prominent as the digital market continues to develop,” she said.
Ms. de Jesus added that local MSME retailers even have a competitive advantage versus foreign counterparts in terms of geographical proximity, ability to sell products in smaller volumes and extension of informal credit lines to customers.
NOT A ZERO-SUM GAME
American Chamber of Commerce of the Philippines senior adviser John D. Forbes told lawmakers in the hearing: “We are very supportive of the draft substitute bill.”
“I don’t think there is a challenge to micro and small entrepreneurs. It actually levels the playing field for medium enterprises,” he said, noting that since the original law was enacted in 2000, only about 28 foreign retailers have set up shop in the Philippines.
Julian H. Payne, president of the Canadian Chamber of Commerce of the Philippines, also said that foreign retailers will not crowd out locals.
“This is not a zero-sum game that every foreign investor will crowd out the market. The Philippines is the fastest growing economy. The number of small businesses is growing. It’s not a zero-sum game. There’s room for both to share [the market],” he said.
“There would be greater variety of new products, inflow of new technology, expansion of employment for the Philippines. In fact, there should be no minimum investment.”
The bill is part of a broader government effort to further liberalize the investment environment in a bid to boost economic growth and give more people jobs in order to lift them out of poverty.
President Rodrigo R. Duterte issued Memorandum Order No. 16 in 2017, which ordered state agencies to “exert utmost efforts” in reducing foreign investment restrictions.
Malacañang issued the 11th Regular Foreign Investment Negative List in October that, among others, allowed foreigners to take on regular teaching jobs in higher education institutions, except for courses that require graduates to secure licenses, as well as 100% participation of foreigners in wellness centers, Internet businesses, training centers outside the formal education system, adjustment companies, lending companies, financing companies and investment houses.
It also increased to up to 40% allowed foreign participation in contracts for construction and repair of locally funded public works, and private radio communication networks.
The government is also seeking to amend special laws like the 82-year-old Public Service Act in order to open up the telecommunications sector for 100% foreign equity.

Philippine Trade Year-On-Year Performance

THE COUNTRY’s trade balance posted a fresh record-high shortfall in October as growth of imports continued to outpace that of exports, the government reported on Tuesday. Read the full story.
180912Export,Import_Performance_FINAL

Honeywell expects strong revenue growth in PHL

DIVERSIFIED products and technology company Honeywell International Philippines, Inc. opened its central office in Taguig City on Tuesday, a sign of its bullish outlook on the country.
Honeywell Philippines President Jeffrey R. Estrella said the company has been recording a revenue growth of more than twice the Philippines’ gross domestic product (GDP) of 6.5% in the past two years.
“In terms of total revenues, without going in specifics, the last two years I would say that we’ve grown more than double GDP. This year is no exemption to that,” he said during a media round table at the company’s office.
For 2019, Mr. Estrella said revenue growth “should be between two to three times GDP” at the minimum.
Since one of Honeywell’s businesses is in aerospace, he noted delivery of new aircraft to local airlines helped push revenue growth. Its partnership with Petron Corp. for refinery expansion in July was another driver of Honeywell’s growth.
Even before it opened a central office in Taguig, Honeywell has been in the Philippines since 2003 through a facility for manufacturing and repair in Subic Bay. But Mr. Estrella said in terms of management, the team used to comprise only around 20 employees who worked from home.
Honeywell is involved in producing technologies installed in building systems, aircraft, refineries, retails and warehouses, among others. At present, 75% of the company’s total work force come from shared services with its global unit, Honeywell International, Inc., according to Mr. Estrella.
Honeywell President for ASEAN Briand Greer, who joined the round table discussion on Tuesday via conference call, said Honeywell aims to increase its presence and investment in leadership talent in the Philippines.
“We designated the entire ASEAN region as a high growth region for us. And that’s why we have Jeff and his team specifically based in the Philippines… This just really shows our commitment to what we’re doing overall for ASEAN,” Mr. Greer said.
Mr. Greer said about 15 years ago, Honeywell started boosting its presence in China, which generated higher revenues for the company.
“(Initially), we had a presence there (in China) but frankly it wasn’t very big. And so what we started doing was we invested in people… to help us design products, to manufacture products right there in the region. Because we figured out if we’re bringing our products over from the US, it’s not working out. So it’s really about being local,” he said.
“We have this framework that we figured out, where in China for us, we’re growing at over two times the GDP every single year. And we’re starting to apply that same formula around the world…and we’ve been very successful in doing that,” Mr. Greer added.
Mr. Estrella said Honeywell is expected to hire around 200 more employees and expand in the Visayas and Mindanao in the coming year. — Denise A. Valdez

Energy World revives talks with lenders for Pagbilao project funding

By Victor V. Saulon
Sub-editor
THE local unit of Australia-listed Energy World Corp. Ltd. (EWC) has revived talks with lenders to finance the completion of its 650 megawatt (MW) combined cycle gas-fired power plant after it has received certification from the government that the project is one of national significance.
“We are in the process of finalizing the project funding from the Development Bank of the Philippines (DBP) and Land Bank [of the Philippines] and other institutions, and hopefully we’re about six to eight months away from commercial operation of the first 200-megawatt gas turbine,” said EWC Director Graham S. Elliott in an interview.
The funding will be used for the completion of the power station, he added.
“It’s a re-working of the loan agreement that was signed about three years ago — an updated version of the existing loan agreement,” he said.
Mr. Elliott declined to disclose the amount being borrowed from the lenders, but said the project needs additional funding.
“It’s something around $75 million [that] we’re looking for,” he said.
Aside from the power plant being built in Pagbilao, Quezon province, EWC previously disclosed plans to build a liquefied natural gas (LNG) hub in an adjacent area with a capacity of 3 million tons per annum.
The LNG capacity can support gas-fired power plants with a combined capacity of 3,000 MW. It can provide expansion options for both the company and third-party gas customers.
Mr. Elliott said the hub is a strategically important asset for the country’s nascent gas industry. The facility is now 92% completed, he said.
“The delay in the project has been because in order to make the LNG hub terminal commercial we had to have the power station operational. In order to have the power station operational, we had to connect to the transmission lines,” he said.
“The delay came about because the funding banks insisted that we finalize the right of way to make sure that we could connect the power station to the transmission lines. That’s now being done and that’s why we now have the confidence that we’ll be up and running in the near future.”
Ahead of the completion of the LNG facility, EWC plans to source the fuel for its power plant initially from the spot market.
Mr. Elliott said EWC is developing its own LNG production in Indonesia where it has production-sharing contracts with the Indonesian government.
“But we’re also developing projects in the USA so that we can avail ourselves of some of the world’s most economically priced gas and as a long-term solution, we will be looking to bring that gas to the Philippines,” he said.
Despite the delay, there had been no changes in the components or capacity of the project.
“It’s going to be initially the first tank is 1,300 cubic meters of LNG. The second tank will be another 1,300 cubic meters of LNG. The first power station is two units of 200 MW each gas turbines and they will be linked with a 250-MW steam turbine when it’s in combined cycle phase so that would be 650 MW. And in the future we would like to add further expansion of the power generation at the site,” Mr. Elliott said. “We’d like to just keep repeating units up to possibly 3,000 MW.”
Sought for comment, Francis Nicolas M. Chua, DBP first vice-president and head of the bank’s corporate finance group, confirmed the revival of talks with EWC.
“We’re the arranger for the financing for them. We have actually gotten approval previously on the project. Unfortunately that did not pan out due to other circumstances. So we’re looking at it again and hopefully this time we’ll see it through,” he said.
Mr. Chua said DBP is syndicating the financing with several banks, but declined to disclose the loan amount.
He said the certification from the Department of Energy (DoE) that the Pagbilao power plant is an energy project of national significance would help, but the loan application would be evaluated based on the company’s capacity to complete the construction, ability to pay back, and the necessary regulatory approvals.
Patrick T. Aquino, director of the DoE’s Energy Policy and Planning Bureau, confirmed that EWC had been granted the certification but only for the power plant component.
“EWC has an integrated LNG-plus-power plant. The one that was awarded a certificate of EPNS (energy project of national significance) was for the power plant component,” he said.
Mr. Elliott said the certification would bring “tremendous benefit for us.”
“It helps all of the ancillary players such as NGCP (National Grid Corporation of the Philippines) to achieve their permitting, for instance, with the construction of the new substation. So it will help those players that are ancillary to the project make sure that they meet their deadlines as well,” he said.

Alfamart to add 200 PHL stores

INDONESIAN mini-mart chain Alfamart is planning to open 200 new stores in the Philippines next year, according to a report by Fitch Ratings.
In its report, Fitch said PT Sumber Alfaria Trijaya Tbk (Alfamart) is aggressively expanding its footprint in the Philippines where it partnered with the SM Group.
Fitch said Alfamart currently has 400 stores in the Philippines, after it opened 180 new stores this year.
It noted Alfamart is planning to open 200 new stores, which will bring its Philippine store network to 600 by end-2019.
“Alfamart’s investment risk for its Philippine expansion is mitigated by the strong presence of SM Group in the country…. Fitch expects Alfamart to have access to SM Group’s large business network and tap its widely known brand,” it said.
Alfamart has a 35% stake in Alfamart Philippines, which is under SM Retail, Inc. SM Retail is part of the Sy family’s holding firm, SM Investments Corp., which also has core interests in property and banking.
As of end-September, SM Retail had 1,729 stores nationwide, namely: 62 SM Stores, 56 SM Supermarkets, 194 Savemore stores, 50 SM Hypermarkets, 52 WalterMart stores and 1,315 Specialty stores.
Fitch also cited similarities between the Philippine and Indonesian market, which works to Alfamart’s advantage.
“Both Indonesia and the Philippines are consumer-driven markets with young populations and expanding middle classes. Both economies have similar income levels of GDP per capita of $3,000-U$4,000. Consumers in both markets also prefer to buy small amounts of bundled products rather than filling grocery carts,” it said.
The mini-mart sector in the Philippines “as untapped and having limited competition,” Fitch said.
“The existing players mostly operate convenience stores that carry more limited products. Alfamart’s stores offer additional products, such as fresh and frozen food, personal care and small household appliances, giving the company some competitive advantage in grabbing market share,” the ratings agency said.
Unlike convenience stores, Alfamart offer basic goods, fresh meat, poultry, vegetables and food-to-go products.
“Alfamart chose to expand in the Philippines as it believes it has more potential than other south-east Asian markets, such as Thailand and Vietnam,” Fitch said.
Fitch said Alfamart’s Philippine expansion may partially offset slowing growth in its home country. It noted Alfamart had 75 net store openings in the first 10 months of the year, after closing some underperforming stores. — Cathy Rose A. Garcia

Philippine Art Award discovers new talents


THE Philippine Art Awards will be celebrating it 25th anniversary next year. There is a feeling of unease, however, with some wondering if the award-giving body is on the right track or if it is producing good art and artists.
Critic, writer, artist, and one of the judges in the competition, Cid Reyes, told BusinessWorld: “Every year or every competition year, we get a little anxious whether we will get good entries, but, to the credit of the Filipino artists, they always deliver naman. The success of the competition is in the quality it yields, not just the fact that you were able to have a competition held.”
The Philippine Art Awards was first held in 1994, initially as part of the ASEAN Art Awards where the Filipino winners would compete against artists from other ASEAN countries but it ended in 2005. Then cigarette company Philip Morris Philippines Manufacturing, Inc. decided to support and continue the Philippine competition, with the aim of recognizing emerging visual Filipino artists.
In 2007, the art awards was made into a two-tiered, bi-annual event where 10 winners were selected from each regional-level competition.
“I’m happy to say, having judged this just from the start — my goodness I’ve been around for a long time — the artists deliver the answer,” said Mr. Reyes.
The Philippine Art Awards was held at the Yuchengco Museum in Makati on Nov. 22. Five winners each were chosen from Luzon, Visayas, Mindanao, and Metro Manila.
This year’s overall champion was Mark Clinton Y. Velez from the Visayas. His work, Ninuno — made with a calendar on board, coffee, cocoa, construction cement, and soot — is about the forgotten tradition of mummifying the dead. He was chosen for his technical skills and the concept behind his art. Mr. Reyes said:
“The fact that we have these Filipino ancestors mummified and they are being stolen and being sold to European antique houses is truly pathetic and horrifying. The subject in itself, the idea of mummifying the dead which is an ancient art, shall we say, that goes way back to the Egyptians, and now we see that even our Filipino ancestors in the Cordillera and they’ve also been practicing this method of mummification, is a good discourse. This endorses the idea of the need to do meditation on life. There’s the mystery of death — Why do we need to preserve the dead? Why do we need to have a remembrance of the physical remains of the dead? So it brings up many, many discussions, arguments, discourses on the mysteries of life, the mystery of death. I think both the emotional and physical appeal, the work and the choice of the subject, are both intriguing, appealing, and disturbing.”
The Philippine Art Awards is a showcase of skill, talent, and ingenuity, said Mr. Reyes. The winners were judged based on their skill and their art’s discourse.
“Ingenuity” is one word to described the work of a winner from Mindanao, Mahaviir Ramirez, who used human hair to create his work In This Battle I Think of Tomorrow; each strand was attached to a piece of velcro to create an image of a young boy.
The 15 winners for 2018 are:

• Luzon: Isidro Santos (Angono, Rizal); James Mark Salorda (Rodriguez, Rizal); Jay Roque Marquez (Bulacan); Leonordio Onia, Jr. (Rizal); and Michael John Hilario (Bulacan).

• Visayas: Jeanroll Eljar (Iloilo); Leopoldo Aguilar, Jr. (Cebu); Mark Clinton Velez (Cebu); Paul John Cabanalan (Iloilo); and Rapson Ybanez (Cebu).

• Mindanao: Mahavir Ramirez (Davao); Michael Bacol (Cagayan de Oro); Victor Dumaguing (Tagum); Rodney Yap (Davao); and Michelle Lua (Cagayan de Oro).

• Metro Manila: Sam Penaso, Janelle Go, Karl Albais, Melvin Culaba, and Nestor Perez Ong.

The art awards are meant to inspire and encourage Filipino artists and to provide a platform for their art. Mr. Reyes, who is looking forward to the next art awards, said the Philippines will never run out artists. — Nickky Faustine P. de Guzman

Gov’t raises P15B from seven-year bonds at auction

By Melissa Luz T. Lopez
Senior Reporter
THE GOVERNMENT raised another P15 billion from its auction of Treasury bonds (T-bonds) yesterday, and decided to shore up more funds by opening a tap facility for the fourth straight week.
The Bureau of the Treasury (BTr) made a full award for reissued seven-year papers on Tuesday, which have a remaining life of six years and four months. Demand for the notes remained strong at P29.92 billion, double the amount the state planned to raise.
The long-term papers also saw a modest increase in rates. This week’s auction fetched a 7.09% average, 11.6 basis points higher than the 6.974% yield fetched when the seven-year notes were offered two weeks ago. It also settled slightly higher than the 7.016% market rate yesterday, based on the PHP Bloomberg Valuation Service Reference Rates.
These IOUs originally carried a 5.75% coupon when they were first offered in April. This week, market players asked for returns ranging from 7-7.145%.
National Treasurer Rosalia V. de Leon said the sustained appetite for the T-bonds come as market players are taking advantage of current spreads, as they see interest rates declining in 2019.
“They are really locking in the rates, anticipating that next year, eventually it will go down as inflation is tapering off,” Ms. De Leon told reporters after the offering.
Domestic inflation eased to 6% in November from a nine-year peak of 6.7% in September and October, affirming views that the pace of price increases will be on a downtrend to eventually return to the government’s 2-4% target.
Ms. De Leon added that global trade tensions as well as a “less hawkish” tone from the US Federal Reserve are bolstering views that yields will fall next year.
With this, the Treasury decided to open the tap facility from 2-4 p.m. yesterday to take advantage of the oversubscriptions for the offering.
This is the fourth straight time a tap window was opened, with the Treasury raising P53.136 billion from the facility in the past three weeks. Raising more funds from the tap facility may allow the Treasury to advance its fundraising activities and avoid higher interest rates in future note offerings.
The 10 banks and investment firms that have been named as market makers by the Treasury can use the tap facility. The Treasury was set to accept bids that match the average rate fetched during the afternoon auction and award the fresh batch of papers at 5 p.m.
Minimum placements are set at P10 million, while the bureau can decide to raise the volume of additional T-bonds it will accept.
“There’s a good chance BTr can sell at least P10 billion,” a bond trader said when sought for comment on the tap facility, noting strong demand for the papers just before inflation declines further.
The Treasury is raising P270 billion from the domestic market this quarter through auctions of securities, offering P180 billion in T-bills and another P90 billion in Treasury bonds. This is part of the P888.23-billion borrowing plan this year from local and foreign sources to fund the budget deficit and support increased government spending.
Meanwhile, Ms. De Leon said the government is “in no rush” to issue a fresh batch of dollar bonds to foreign investors, at a time of “aggravated” trade tensions between the US and China following the arrest of a top official of Huawei Technologies Corp. in Canada, which has shocked business executives from the Mainland and could see retaliation.

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