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A tribute to her

By Nickky F. P. de Guzman, Reporter
GALLERY OWNER and art patron Silvana Ancelotti-Diaz is, first and foremost, a mother. The Italian citizen, who left her home when she was 18 and decided to stay in the Philippines for good when she was 23, has four children of her own. But, over several decades, she became a mother to hundreds more through one exhibition or another.
Forty-three years ago, Ms. Diaz opened Galleria Duemila, now the oldest running commercial art gallery in the Philippines. Since then, the gallery has exhibited the likes of Pacita Abad, Julie Lluch, and National Artist for Visual Arts Arturo Luz.
As thanks to their “mom,” three of Ms. Diaz’s artist-children—Jonathan Olazo, Trek Valdizno, and R.M de Leon—have mounted a tribute show for Ms. Diaz, featuring their abstract works.
Titled An Italian in Manila: An Exhibition Tribute to Mrs. Silvana Diaz, it is on view at Galleria Duemila until Sept. 29. “Tribute is a very big word,” Ms. Diaz said, blushing and brushing off the praise. “It could have been named, I don’t know, ‘An Exhibit for Silvana’?,” she said in an interview with BusinessWorld on Aug. 30.
A YEAR IN THE MAKING
Curated by Mr. De Leon, the tribute, which was one year in the making, is composed of a series of 26 abstract paintings. “I don’t know if they painted with any reflection of me and our friendship, but there is a lot of dynamic. Right?,” said Ms. Diaz as she walked past the works and admired them.
Mr. Olazo’s works are all textured oil-on-canvas paintings chiefly in pink, yellow, green, and blue. His father, the late artist Romulo Olazo, was a close friend of Ms. Diaz. And she saw the younger Olazo follow in his footsteps. “It takes mastery to achieve this abstraction process,” said Ms. Diaz.
Another artist on showcase is Mr. Valdizno, whose large works feature a regal color palette of red, gold, and black. Mr. De Leon, meanwhile, contributed nine works of mixed media on paper bursting with a cacophony of brush strokes.
“It’s moving. You’re surprised and bewildered and I didn’t expect anything. It brings me happiness and I said ‘wow, I am thankful’,” Ms. Diaz said.
But who is Silvana Diaz, and why is she deserving of a tribute?
It was in 1975 when it all started. On Dec. 5, three years after Martial Law was declared Ms. Diaz opened the gallery in Vernida building in Makati City. Now located on Loring Street in Pasay, Galleria Duemila has exhibited artists like Gus Albor, Alfredo Juan Aquilizan, Jinggoy Buensuceso, Nilo Ilarde, Tony Twigg, Justin Nuyda, Edwin Wilwayco, Luis “Junyee” Yee, Jr., and many more.
“[We] really associate with professionals. I feel that a lot of galleries are giving prominence to young artists. I believe they’re represented,” said Ms. Diaz, on why she has decided to champion mid-career artists. “My idea is to focus [on them] and then inject one or two young artists.”
Prior to opening Galleria Duemila, she worked as a gallery assistant at Miladay Art Center in 1973 and 1974 under art director-artist Lino Severino. She organized her sister-in-law Isabel Diaz’s exhibit in 1974 at Miladay. It was sold out, said Ms. Diaz, save for a piece of furniture, which is still with her today. Because of her success, she was offered a position in the gallery. “It was a big challenge because I didn’t know many artists,” she said. To widen her network, she attended exhibitions here and there, and joined conferences and workshops to learn. The foreigner had to be acquainted with Manila since she was an outsider coming in.
“I was supportive and was there all these times. The CCP came and then MET (Metropolitan Museum) came, and the other galleries. I would go to them and learn to see the practice. And then slowly I met people. It’s been gradual,” she said.
Ms. Diaz’s enthusiasm led her to artists like Mr. Nuyda and Onib Olmedo, who invited her to join the Saturday Group, an organization of artists. In 1975, she was also asked by National Artist Vicente Manansala to be the corporate secretary of Samahang Tubiglay (Watercolor Society of the Philippines), whose members included Edgar Doctor, Ang Kiukok, and Romulo Olazo.
“I am not from here,” she said, “my first priority was to get to know the artists, know their works, and understand their art. I wanted to understand their vision, their concept, what brought them to paint. Art was just a hobby for me, so I learned. I learned the ropes. I am very curious. I love the arts.”
She opened Duemila after she felt that she had enough experience and knowledge, after Martial Law was lifted, and after Miladay closed.
Ms. Diaz recalled the long journey she went through to get where she’s today: “I was a foreigner. Nobody knew me and each one has their own way of business. At that time, there were a lot of revolutions, coup d’etat, brownouts—setback after setback. It’s been two steps backward, one step forward. I would say that Madam Marcos [former first lady Imelda Marcos] in the arts provoked an awakening. She brought art to the fore when there was none before. People didn’t even know what’s a gallery or a museum. Pro or against Marcos, I don’t care at this point, but the thing is that the medium and the art and the culture were brought to the people.”
HOME OF CONTEMPORARY, MODERN ART
Duemila is an Italian word that means “the 20th century.” While we are obviously in the 21st century—the age of technology and information—the idea behind the gallery remains relevant: “to cement contemporary and modern art,” said Ms. Diaz.
“The idea is modernity, to continue renewing attention in art. There is awakening. Art is like fashion, there are trends,” she said.
As a European, Ms. Diaz said “art is given to you,” meaning people in the West are exposed to museums, theater plays, dances, and music early on in life. But in Asia—to be specific, in the Philippines—it’s a different story. We’re not as invested in studying humanities, culture, and arts.
Was she frustrated by these cultural differences? “Yeah, I cried many times,” she said.
“It’s frustrating that I cannot share the beauty of art. Frustration for the artists who put effort and are not understood. Their work is beautiful and not appreciated. They put so much soul, effort, anything, and then the public doesn’t understand.”
But the Italian in Manila is upbeat about the Philippine scene. “Many artists are going out of the country to exhibit. They’re also getting didactic. I think we’re on the right track. I am very positive,” said Ms. Diaz, who sounded like a proud mother excited for her kids’ future.
An Italian in Manila: An Exhibition Tribute to Mrs. Silvana Diaz is on view at Galleria Duemila, 210 Loring St., Pasay, Metro Manila, until Sept. 29.

PNOC says will negotiate sale of its banked gas

PHILIPPINE National Oil Co. (PNOC) will be negotiating the sale of its banked gas amounting to 97.67 petajoules at a lower price than what it was willing to sell before.
“Ibibigay ko sa pinakamataas at magbabayad agad (I will award it to the one with the highest offer and who will pay immediately),” PNOC President and Chief Executive Officer Reuben S. Lista told reporters at the company’s head office at the Bonifacio Global City, Taguig.
This year, the government corporation twice invited buyers for the banked gas but none came forward with an offer.
Mr. Lista said he would seek authorization from the PNOC board to allow management to enter into “comprehensive discussions” or “negotiations” at a price lower than the $6.616 per gigajoules under the Ilijan gas-fired power plant’s gas sale and purchase agreement (GSPA). A petajoule is equal to a million gigajoules.
Under a negotiated deal, the Ilijan price will become PNOC’s price ceiling, he said.
Mr. Lista disclosed that First Gen Corp. offered to buy the gas at $4.50 per gigajoules during a verbal discussion, but when a formal invitation was made, the Lopez-led group offered $3.48 per gigajoules.
He said First Gen and its subsidiaries Prime Meridian Powergen Corp. and First Natgas Power Corp. were keen on the banked gas. The units own the 97-megawatt (MW) Avion and 414-MW San Gabriel gas-fired power plants, respectively.
As of Monday, Mr. Lista said the price of natural gas in the international market was at $9.47 per gigajoules, making PNOC’s expected price ceiling an attractive proposition for interested buyers.
PNOC last month posted in its website an invitation for interested parties to submit offers to buy its banked gas amounting to 97.67 petajoules. The deadline was set for Sept. 3. It previously valued the banked gas at P11.9 billion.
The gas, which was paid by the government for its future use, is banked in the reservoir of the Malampaya deepwater gas-to-power project offshore Palawan. A PNOC unit is part of the consortium that developed and operates the project.
The banked gas was bought by PNOC from the Department of Energy in 2009, including all the rights, benefits and entitlements of the total 108.6 petajoules valued at P14.4 billion.
The corporation since then has been trying to sell the gas but was only able to sell 4.61 petajoules to Power Sector Assets and Liabilities Management Corp. in 2013 for P937 million. Another portion at 6.324 petajoules was sold to Pilipinas Shell Petroleum Corp. in 2015 for P2.5 billion. — Victor V. Saulon

Take a seat, take 10 of them


By Joseph L. Garcia, Reporter
THE CLACKING tiles of the Chinese game mah jong are laid out and dealt for you, just like your lot in life. But at some point in the game, you are allowed to exchange them for better ones as you see fit. The game is as much about skill and strategy as it is about chance.
Roche Bobois’ Mah Jong sofa, designed by Hans Hopfer in 1971, follows the same principles. It isn’t static; the sectional still grants its owner the freedom to switch or stack individual components, which follow the lines of a mah jong tile.
Last week, Roche Bobois in the Philippines tapped 10 designers from different disciplines to dress the Mah Jong sofa according to their will. This isn’t new for the French furniture company: it has called on the design prowess of people like couturiers Jean-Paul Gaultier and Kenzo Takada to create new versions of the Mah Jong.
“One can dress their pieces in a bright mix of fabrics by Missoni or choose from fabric collections created by Jean-Paul Gaultier or Kenzo Takada. If one prefers a more understated or conservative look, a mix of plain fabrics from the likes of the Designer’s Guild is also an option,” said Eugene Lorenzana, managing director of Roche Bobois Philippines. “There are endless ways in which one can mix and match the sofa’s fabrics, as well as its configuration to fit various homes and aesthetics.”
“We wanted to have a diverse mix of collaborators so we selected first based on the field of expertise—architecture, interior design, art, fashion, and industrial design,” said Mr. Lorenzana. “Then we selected based on their achievements and how each has contributed to art, culture, and even commerce.”
Architect Bobby Manosa came up with a Mah Jong set taken from indigenous weaving traditions of the Philippines, in line with his philosophy of showcasing Filipino identity. In each panel is a different fabric: for example, a pattern from Mindanao forms the seat and the backrest, while Luzon is represented on the seat as well. The sofa’s base in woven, laminated rattan, represents the Visayas, as inspired by banig patterns from Samar. Architect Ed Calma, meanwhile, placed irregular pleats on his, while playing around with the sofa to alter its surface without altering its shape. “The chair ended up having some kind of armor, like an armadillo,” he said.
Interior designer Chat Fores dug deep into her roots for her version, such as wrapping components with her mother’s obi. Furniture designer Vito Selma, known for his complex woodwork, used his favorite medium for his version of the Mah Jong. “Like my other pieces, I wanted to give people comfort while showcasing its raw beauty,” he said. Jewelry designer Bea Valdes, did hers up with a nod to vintage travel posters. Intricately done, her piece featured embroidery, appliques, and fabric manipulation, playing around with denim and chambray. Fashion designer and heiress Paloma Urquijo-Zobel, known for her brand Piopio, used her talent for upcycling and repurposing and came up with a design using Inabel from Ilocos, as well as using retaso (fabric scraps).
Jojo Lofranco turned his version into a veritable work of art, transforming his sofa into an abstract with splashes of black and yellow. Geraldine Javier meanwhile, in the spirit of collaboration, designed and stained the fabric for the upholstery, while five others helped her with needle and woodwork. The design is apparently based on her dog, and the result is inviting, with hinged doors on the side suggestive of a warm embrace. Artist Costantino Zicarelli meanwhile, said that he would regret to work on a sofa that was “so white and clean.” “My approach was to go the opposite direction: make it really dirty. My idea is to erase the white of the sofa with black.” The result is a black block, with textures and smudges suggesting an aging monolith.
Artist Nikki Luna used her version of the sofa to serve a political platform. “They say mah jong relies on the relationship of chance and necessity. These days, not everyone gets a chance to live. We hear and see people’s lives taken away brutally. The chair is based on three core values: form, function, and more importantly freedom. How much freedom do we have now?” The result of this righteous anger is a stark white sofa with a white neon sign that says “Dangerous Times,” achieving a look that is dignified, funereal, but still with the ability to shock.
Each collaborator created just one Mah Jong sofa, and the pieces are to be auctioned off at Interactions, an exhibit on the Mah Jong on Sept. 19. A portion of the proceeds from the sale of each will go to the artists’ chosen charities, which would include main beneficiary Asian Cultural Council (ACC) Philippines Foundation, Inc., PAWS, Tukod Foundation, and AHA Learning Center.

Japan-based Universal plans backdoor listing for PHL casino operator

OKADA MANILA is one of three integrated casino resorts operating in Entertainment City.

MANILA — Japan’s Universal Entertainment Corp. is taking its Philippines casino operator public through a subsidiary’s purchase of a majority stake in Manila-listed Asiabest Group International.
Asiabest, a holding company, said on Tuesday its shareholders signed a deal for Tiger Resort Asia Ltd. to acquire two-thirds of the company for P46.5 million ($12 million).
Tiger, which owns the operator of the $2.4 billion Okada Manila integrated casino-resort, is a subsidiary of Universal.
The special block sale, which will take effect on Nov. 12, would allow the casino operator to join the Philippines’ stock exchange, the worst performing bourse in Southeast Asia this year.
The move comes amid a difficult political climate for casinos in the Philippines, with President Rodrigo Duterte saying he hates gambling and vowing there would be no new casinos set up during his presidency.
Okada Manila is one of three integrated casino-resorts operating in the Philippine capital’s version of the Las Vegas gaming strip. Melco Resorts and Entertainment (Philippines) Corp. (MRP.PS), which operates City of Dreams Manila in the same gaming strip, plans to de-list from the stock exchange.
Tiger would offer to buy out minority shareholders of Asiabest, which implemented a voluntary trading suspension on Tuesday.
Universal and Tiger representatives were not immediately available for comment. — Reuters

‘Will You Still Love Me?,’


THE CULTURAL CENTER of the Philippines (CCP) in cooperation with the Julia Buencamino Project presents “Will You Still Love Me?” for its second edition of the Festival of Arts and Ideas, which runs from Sept. 14–16 at various CCP venues.
The interactive arts festival aims to develop awareness of mental health, build mental resilience, and overcome the stigma of mental illness through therapeutic arts activities. The festival will feature performances, workshops and film screenings that will shed light on struggles with mental health as well as motivate participants towards artistic self expression and hopefully, healing.
It encourages self-expression among participants by providing them with a variety of workshops to choose from—prose or poetry writing, creative movement, painting, printmaking, and playing music through the ukulele.“Will You Still Love Me?” is a line taken from the poem penned by the late Julia Buencamino, daughter of actors Shamaine Centenera Buencamino and Nonie Buencamino. Julia died from suicide on July 7, 2015.
The poem reads: “When my mask shatters/ and you see how broken I really am,/ will you still love me?”
Julia’s poem, said Ms. Buencamino, who is the festival director and curator, “speaks of the fear that most people struggling with mental health suffer—the fear that they won’t be accepted and loved.”
The Julia Buencamino Project is a mental health advocacy founded by the Buencaminos to honor their daughter’s memory, to help children suffering from mental illness and to educate people about mental health.
The Festival at the CCP, Ms. Buencamino said, will continue the dialogue started by the Julia Buencamino Project “in exploring tools for carers of people with mental health conditions as well as harness the arts for mental health through performances and workshops.”
“The festival is for everyone,” she emphasized, “because our health includes mental health. Mental health affects everyone.”
During the festival, a paper crane tree will be installed at the CCP Little Theater Lobby. The paper crane tree serves as the unifying symbol of the festival as it carries messages of hope and self affirmation of participants in the festival.
Also in the same venue, an exhibit/installation inspired by the Julia Buencamino Bench Project will be mounted by artist Alwin Reamillo with contributions from visual artists from the Philippine High School for the Arts.
Each day of the festival will begin with a mindfulness exercise using breath, visual imagery and body awareness. The checking-in activity will be followed by workshops and film screenings in the afternoons and performances in the evenings.
According to Ms. Buencamino, the workshops are designed to teach participants skills to practice the arts as a way to improve the mind and manage stress. Film screenings will give viewers more information on different mental conditions as well as an opportunity to ask psychologists questions to understand mental illness more. Performances will allow audiences to empathize with those who suffer and to continue fighting mental illness by living inspired lives.
“We hope to create a community that helps build mental resilience through the arts,” Ms. Buencamino said. “Art heals. Art helps focus the mind. Art even changes the way the brain functions.”
For more information about “Will You Still Love Me? Festival Of Arts And Ideas,” call 832-1125 local 1606 or visit culturalcenter.gov.ph.

Gov’t rejects all bids for T-bonds as investors ask for higher yields

THE GOVERNMENT rejected all bids for the reissued 10-year Treasury bonds (T-bond) it offered yesterday as investors demanded higher rates amid market expectations of another rate hike from the local central bank.
The Bureau of the Treasury (BTr) opted to reject all bids for its P15-billion offer of reissued 10-year bonds on Tuesday, as tenders put forward by banks totalled P12.737 billion, below the amount the government wanted to borrow.
Had the BTr accepted all offers, the papers, which have a remaining life of nine years and six months, would have fetched an average rate of 7.64%, soaring by 129 basis points (bp) from the 6.35% recorded in the bond offer in May.
The Treasury also rejected all bids for the 10-year papers when they were offered last July 3.
The 10-year debt papers carry a 6.25% coupon.
At the secondary market prior to the auction, the papers were quoted at 7.5393%. The yield on the 10-year bond was unchanged at the market’s close.
After the auction, Deputy Treasurer Erwin D. Sta. Ana said the rates tendered by dealers were too high.
“Bids came in much higher than we expected given our initial survey from the [government securities eligible dealers] and based on where this security is trading on, hence the decision to fully reject,” Mr Sta. Ana told reporters yesterday.
He added that the recent tightening moves by the Bangko Sentral ng Pilipinas (BSP) were priced in by investors which led to a spike in rates.
The BSP has cumulatively raised rates by 100 bps since May, with rates currently ranging at 3.5-4.5%.
Another rate increase is expected during the September Monetary Board meeting, with some analysts predicting that the BSP will hike borrowing costs by another 50 bps.
“The market is reportedly expecting another one from the central bank, so those must be taken into account,” Mr. Sta. Ana said.
On Friday, BSP Governor Nestor A. Espenilla, Jr. hinted on another rate hike, saying the monetary authority will take “strong immediate action” to respond to emerging threats to prices and inflation expectations.
The average rise in prices of widely used goods picked up to a nine-year high of 6.4% in August due to higher food and oil costs.
“It could be several different factors, but it could be that participants are still waiting for what’s going to happen in the next couple of days,” Mr. Sta. Ana replied when asked why the 10-year bond offer was undersubscribed, noting that the market is also looking at the possible US Federal Reserve rate hike this month.
To cover for the previous rejections the BTr made, Mr. Sta. Ana said the government has enough cash on the back of “impressive” revenue collections made by the Bureau of Customs and the Bureau of Internal Revenue.
“To compensate for that, we would look into the collections… We still have that sufficient buffer that we have because of all these impressive revenue collections so we are okay.”
Meanwhile, a bond trader said the 10-year tenor is “not timely,” as appetite for long-term debt is expected to be weak with inflation at a fresh high and amid continued volatility in emerging markets.
“The 10-year-long bonds are not timely because the inflation number as well as the US Treasuries are up,” the trader said in a phone interview.
“There are problems in the emerging markets as well that’s why the BTr prompted to reject all bids.”
The government is set to borrow P300 billion from the domestic market this year through auctions of securities, offering P195 billion in Treasury bills and another P105 billion in T-bonds.
It plans to borrow P888.23 billion this year from local and foreign sources to fund its budget deficit capped at 3% of the country’s gross domestic product.
GLOBAL BONDS
Meanwhile, the BTr said it is still looking at offering dollar-denominated global bonds this year as it is still looking at market conditions.
“At this point, we are just looking to monitor what is happening in the RoP (Republic of the Philippines bond) space,” Mr. Sta. Ana said.
“Given what is happening externally [such as] the intensifying news about the trade war between the US and China [as well as] the [North American Free Trade Agreement] talks, we are just carefully monitoring where we are in terms of our dollar curve.”
In January, the government sold $2 billion worth of 10-year dollar bonds amid strong investor demand.
Aside from this, it is also looking at offering yen-denominated “samurai” bonds and yuan-denominated “panda” bonds within 12-18 months to maintain its presence in these debt markets. — Karl Angelo N. Vidal

NGCP aims to start VisMin grid components by January

DAVAO CITY — The National Grid Corporation of the Philippines (NGCP) is targeting to start installing some components of the Mindanao-Visayas Interconnection Project (MVIP) by January 2019.
Mae Roselle L. Curiano, NGCP regional communications and public affairs officer, said the plan is to begin setting up converter stations, and install transmission lines and submarine cables, simultaneously in the Mindanao provinces of Lanao del Norte, Zamboanga del Sur, and Zamboanga del Norte.
The MVIP is a 355-kilometer power grid link that will connect the converter stations in Dumanjug, Cebu, and Lala, Zamboanga del Norte.
“For Cebu to Zamboanga del Norte, a submarine cable will be constructed from Cebu down to Dumanjug. From Dumanjug down to Santander then Santander to Dapitan then Dapitan to Lala, a submarine cable approximately about 92 kilometers will be constructed,” Ms. Curiano said in an interview.
The project will also have 350,000-kilovolt overhead transmission lines, which is the first in Mindanao.
“All affected municipalities and cities were all ready, including the provincial government units wherein we already informed them about the project and they all expressed support,” she said.
Ms. Curiano said pre-construction activities are now ongoing, including engineering and parcellary survey, valuation of the affected properties, negotiation with the property owners, and securing construction permits.
“Only after the parcellary survey can we negotiate (with the) landowners. We need to show to them that a portion of their property would be affected and it could be their property or house or crops,” she explained.
Ms. Curiano said they are optimistic of completing the project by the target 2020 deadline with faster implementation supported by the certificate of Energy Project of National Significance (EPNS) given by the Energy Investment Coordinating Council.
“If projects are given (a) certificate of significance, approval of permits should not take long,” she said. — Maya M. Padillo

MIBF 2018: books, more books, comics, and pop culture

ANYBODY OF THE opinion that no one reads physical books definitely hasn’t been to the annual Manila International Book Fair (MIBF), which traditionally welcomes hordes of bookworms. On its 39th season, the fair, which runs from Sept. 12–16 at the SMX Mall of Asia, is expecting around 150,000 visitors.
The annual festival hasn’t only grown in number of attendees but in scope as well. Aside from offering discounts on textbooks, fiction stories, limited prints, collector items, and school supplies, MIBF is also organizing a comic and pop culture event.
Called the “Pop Hub: Comic Splash x Fandom Fest,” it caters to all things millennial, like fandom groups. Following its success last year, the event promised that this year’s edition would be “bigger and bolder… not only for fandom groups, but also for the whole comic and pop culture community.” The lineup includes cosplay competitions, workshops, selfie opportunities, and panel discussions.
Prominent comic book creators, artists, writers, directors, animators, illustrators, collectors, academics, comic fans, editors—basically, anyone—is welcome to attend the event at SMX Mall of Asia Function Room 3 this the weekend, Sept. 15 and 16.
Pop Hub aside, MIBF will see thousands of best-sellers and new releases available at discounted prices, from young adult and fiction novels like Jenny Han’s To All the Boys I’ve Loved Before and Kevin Kwan’s Crazy Rich Asians trilogies. The inventory also includes children’s classics like J.K. Rowling’s Harry Potter and Jeff Kinney’s Diary of A Wimpy Kid series; non-fiction and reference books, ranging from academic, business, lifestyle, self-help, and more.
The schedule is packed. Fans will get to meet and greet literary legends Butch Dalisay and Lualhati Bautista, best-selling authors Marcelo Santos III and Juan Miguel Severo, and celebrity authors Mark Bautista and Lloyd Cadena. Meanwhile, Younger actor and queer poet Nico Tortorella will have a book signing event on Sept. 16; they will discuss their book all of it is you, and perform spoken word poetry.
More than a hundred exhibitors are joining this edition of MIBF, among them indie bookshops, bookstore chains, university publications, local publishing outfits, and religious publications. For the complete schedule of events, go to manilabookfair.com/schedule-special-events. — NDG

Global banks expect more BSP rate hikes until 2019

By Melissa Luz T. Lopez, Senior Reporter
THE BANGKO SENTRAL ng Pilipinas (BSP) may opt to raise rates several times until 2019 to make local yields competitive, two global banks said, noting that such moves would also boost the peso and help arrest surging inflation.
In separate reports, economists at ING Bank and Deutsche Bank both see successive tightening moves from the central bank, starting with another 50 basis points (bp) within September.
“Additional rate hikes are likely in the next 12-16 months to also bring real policy rates to positive and maintain interest rate differentials,” ING said in a research note published yesterday.
“BSP’s hawkish rhetoric and signals of further action has kept PHP trading in a range.”
ING expects the key policy rate to rise to 5.25% by end-2019, suggesting that several rate hikes will be introduced in succession.
The BSP has adopted three rate hikes in a row this year in the face of surging inflation, worth a cumulative 100 bps from May to August. The central bank even responded with an aggressive 50-bp increase last month as inflation leaped to a nine-year high of 5.7% in July, in a bid to temper future price spikes for basic goods and services.
The central bank is set to hold its next rate-setting meeting on Sept. 27, although BSP Governor Nestor A. Espenilla, Jr. said policy makers have the option to hold an off-cycle review following the shocking 6.4% inflation for August which was reported last month.
However, the BSP chief has pointed out that price pressures are largely due to thin rice supply and soaring world crude prices, which would require non-monetary measures to quickly address.
According to ING’s latest estimates, the BSP will raise rates by 50 bps this month, followed by a 25-bp increase during the fourth quarter to bring the overnight borrowing rate to 4.75% by December. This means that benchmark short-term rates will range from 4.25-5.25% by year’s end.
In a separate report, Deutsche Bank pointed out that the BSP would still raise rates by a total of 100 bps between September to December.
“Although we think headline inflation has peaked in the Philippines, it is at a rate well above BSP’s target, requiring further aggressive rate hikes. We expect rates to rise another 100 bps, including a 50 bps hike later this month,” the German lender said, adding that this will cushion peso depreciation and surging inflation.
Inflation has averaged 4.8% year-to-date, well beyond the 2-4% target band set by the BSP. Meanwhile, the peso has been trading above P53 versus the dollar in recent weeks, and is close to breaching the P54 level as of yesterday.
Last week, Mr. Espenilla said that the BSP will “take strong immediate action” to douse inflation expectations as well as “excessive” swings in the peso-dollar trading in order to maintain price stability.

SM Prime opens shopping mall in Legazpi City

IN A statement issued Tuesday, the Sy-led mall operator and property developer said SM City Legazpi will open its doors on Sept. 14. Located along Imeda Roces Avenue in Albay, the mall will have a total gross floor area of almost 88,000 square meters (sq.m.) and will be the company’s second mall in Bicol following SM City Naga in Camarines Sur.
“SM Prime joins the City of Legazpi in bringing fun and adventure to the picturesque province of Albay with the opening of SM City Legazpi… Together with SM City Naga in Camarines Sur, this new lifestyle destination in Bicolandia will elevate the malling experience of both the locals and tourists with offerings from top local and global brands,” SM Prime President Jeffrey C. Lim said in a statement.
The three-storey mall will open with 85% of its leasable space already taken up by a mix of shopping, dining, and entertainment concepts. Tenants will include The SM Store, SM Supermarket, SM Appliance Center, Ace Hardware, Our Home, Watsons, Surplus, Sports Central, Bata Shoes, Miniso, The Body Shop, Uniqlo, and Banco de Oro.
The mall will also feature a food hall with a view of Mayon Volcano, six SM Cinemas, and SM Cyberzone.
The listed firm chose to locate in Legazpi City as it is considered Bicol’s center for tourism, education, health services, commerce, and transportation. SM Prime also noted Legazpi, with a population of more than 200,000 people, is one of the top provincial cities with remittances from overseas Filipino workers.
SM City Legazpi is the fourth mall that SM Prime will be opening this year, after SM Center Imus in Cavite, SM City Urdaneta Central in Pangasinan, and SM City Telabastagan in Pampanga. This will bring the company’s total mall count to 71.
SM Prime will open SM Center Ormoc in Leyte in the fourth quarter, bringing its total to 72 stores across 9.6 million sq.m. by end-2018. The expansion is part of the company’s goal to have 10.8 million sq.m. of gross floor area across all its shopping malls by 2022, with around 86% located in the Philippines and the balance to be seen in China.
The company generated a net income of P16.62 billion in the first six months of 2018, 16% higher year-on-year as consolidated revenues likewise grew 15% to P49.77 billion for the period.
Shares in SM Prime ended flat at P36.50 each at the Philippine Stock Exchange on Tuesday. — Arra B. Francia

Painting what your heart holds dear


AS PARENTS, Mario and Alma Miclat saw to it that their daughters—Maningning and Banaue—began honing their talents at a young age. Their eldest daughter, Maningning, was three years old when her mother saw her drawing of a “funny figure.”
“We made it a point that when they (including Banaue) were still young, we would bring them to museums and plays. So, I think it started there,” Ms. Miclat told BusinessWorld.
Maningning grew up to be a painter, and a multilingual poet and writer who published works in Filipino, English, and Mandarin Chinese.
The late artist’s given name was inspired by her parents’ love for the country. “When you live outside your own country, your patriotism is enhanced,” Ms. Miclat said. The couple was based in China when their children were growing up. Ms. Miclat recalled that they wanted to use a Filipino name for their daughters.
Maningning started her artistic career with Chinese paintings, which she learned to make from a teacher in Beijing. Her first solo exhibition of Chinese brush work was mounted at the Cultural Center of the Philippines in 1987; this was followed by the publication of Wo De Shi (My Poems), her first book of poetry in Chinese.
In 2000, the 28-year-old artist and art professor at Far Eastern University fell to her death from the seventh floor of the building where she taught.
Established in her honor in 2001, the Maningning Miclat Art Foundation, Inc., holds activities aimed to encourage young poets and artists aged 28 years and younger.
It recently launched an exhibit-sale featuring the artworks of the 18 finalists of the 2018 Maningning Miclat Art Awards.
The event was done in cooperation with District Gallery, and the FEU President’s Committee on Culture.
“Our vision is to support and encourage creativity in young people and give recognition to the most outstanding,” Ms. Miclat, president of Maningning Miclat Art Foundation, at the exhibit-sale’s launch.
Ms. Miclat noted that the competition carried no specific theme. “Kung ano yung pinakamalapit sa puso nila, ‘yun ang i-paint nila (Whatever is close their heart, that is what they should paint).”
The grand prize winner will be given a trophy designed by sculptor Julie Lluch, a check worth P28,000, a Maningning Miclat book collection, and a solo exhibit at District Gallery in Quezon City.
“Young artists need support. Most of the time they don’t need money, but recognition. Competitions like this give opportunities for them to be recognized,” Ms. Miclat said. “I feel that Maningning has a hand in all this. Perhaps, this is what she really wanted us to do.”
Since 2004, the foundation has hosted painting competitions on even-numbered years, and poetry competitions on odd-numbered years.
The exhibit-sale is on view at the Exhibit Hall of the Nicanor Reyes Hall at FEU.
The awarding ceremony will be held on Sept. 26 at the newly reopened FEU Auditorium to be followed by Ginugunita Kita, a performance featuring 11 of Maningning Miclat’s poems from Voice from the Underworld, set to music. — Michelle Anne P. Soliman
The exhibit-sale is ongoing until Sept. 26. For more information, call the FEU President’s Committee on Culture at 849-4145 or 736-4897. For ticket inquiries to Ginugunita Kita, contact the Maningning Miclat Art Foundation c/o Carmela (0999-8050681) or call Ticketworld (www.ticketworld.com.ph, 891-9999).

China bond traders boost leverage

CHINESE bond traders ramped up their leverage to a record high in August, and that could be catching the central bank’s attention.
The turnover of overnight repurchase contracts, a tool traders use to seek financing to fund their bond purchases, increased for a second straight month to hit 66.1 trillion yuan ($9.6 trillion), official data showed. In August, the People’s Bank of China (PBoC) conducted repo agreements — an instrument that hadn’t been used in about three years — to mop up about 300 billion yuan of liquidity from the banking system, according to people familiar with the matter.
“The PBoC’s move was likely aimed at slowing the buildup of leverage and reducing short-term liquidity,” said David Qu, Shanghai-based economist at Australia & New Zealand Banking Group Ltd. “But it won’t damp traders’ motivation to borrow cheap funding and buy bonds — they’d keep doing that as long as they expect money market rates to remain stable.”
The surge in leveraged buying of debt is a double-edged sword. On one hand, it could mean the central bank’s monetary easing will finally feed into China’s real economy as banks increase lending to companies via corporate bond purchases. On the other hand, it could signal a setback in the government’s efforts to reduce financial leverage. China will keep liquidity reasonably ample, without “flooding” the banking system through abundant cash supply, PBoC Deputy Governor Zhu Hexin said in late August.
The PBoC drained short-term funds last month in an unannounced repo operation, people familiar with the matter said last Wednesday. The central bank said the report is not true, declining to give further details.
The reported cash withdrawal came as interbank rates tumbled to multi-year lows in August. That has spurred some traders to use their money borrowed via short-term repos to purchase bonds, said Julia Ho, the head of Asian Macro at the Asian fixed-income team at Schroder Investment Management Ltd. in Singapore. Most of the leveraged-related trading is aimed at policy banks’ bonds as well as investment-grade state-owned enterprises’ debt and local government financing vehicles, she said.
“The carry trade will remain profitable until at least next year,” said Meng Xiangjuan, an analyst at SWS Research Co. in Shanghai. “Officials won’t put limitations on the trade, as long as the level of borrowing remains normal. That said, the room for significant spikes in leverage is limited, as officials have placed plenty of restrictions in the past years already.”
The benchmark seven-day repo rate dropped two basis points to 2.65% on Tuesday, after spiking amid tighter liquidity late last week. The overnight cost was little changed at 2.57%. That brings the gap between the overnight rate and the yield of six-month AA+ rated negotiable certificates of deposit to about 107 basis points, a spread that makes the carry trade still attractive, according to ANZ’s Qu.
That doesn’t mean the PBoC will keep its hands tied and watch leverage expand indefinitely. For Xu Hanfei, chief fixed-income analyst at Industrial Economics Research & Consulting Co. in Shanghai, the central bank may boost the overnight repo rate as it follows the Federal Reserve in an expected increase in borrowing costs this month. — Bloomberg

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