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Vehicle sales continue to slump in Nov.

VEHICLE sales dropped by 23% year-on-year in November, according to the joint report issued by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA).
Data from CAMPI-TMA showed its member-companies sold a total of 31,258 units last month, lower than the 40,799 units sold in November 2017.
Month-on-month, vehicle sales fell by 5.7% from 33,150 units sold in October 2018.
Despite the negative numbers, CAMPI President Rommel R. Gutierrez said in a statement: “We remain confident that the industry will continue to recover as the year ends.”
Auto industry sales plunged this year with the implementation of the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) law last January.
The law increased excise taxes on vehicles, with those costing P600,000 and below being taxed 4%, up from 2%. The tax on cars priced between P600,000 and P1 million was adjusted to 10%, from the previous charge of P12,000 plus 20% of the amount in excess of P600,000.
For the 11-month period, the industry saw a 14% decline in vehicle sales to 325,465 from 380,179 units a year ago.
Across vehicle categories, sales slipped by double-digits in November versus the same month in 2017.
During November, passenger car sales fell by 22.7% to 9,197 units, while commercial vehicle sales went down by 23.7% to 22,061 units. Sales of light commercial vehicles (LCV) dipped 13.5% to 17,594, while Asian utility vehicles (AUV) sales plunged 54% to 3,142 units.
For the January to November period, sales of passenger cars reached 99,719, 20.4% lower than the same period in 2017. Commercial vehicle sales declined by 11.5% to 225,746, while AUV sales dropped 39% to 44,732 units.
LCV sales showed positive growth at 1% to 167,467 units during the 11-month period.
Toyota Motor Philippines Corp. continued to dominate with a 42.55% market share, after selling 138,476 units during the January to November period.
Rounding out the top five were Mitsubishi Motor Philippines Corp. with a market share of 19%, Nissan Philippines, Inc. with 9.7%, Ford Motor Company Philippines, Inc. with 6.6% and Honda Cars Philippines, Inc. with 6.5%.

Philippines urged to boost cybersecurity amid Huawei concerns

By Denise A. Valdez, Reporter
AS several countries start cutting ties with Chinese technology companies particularly Huawei Technologies Co., Ltd. due to security concerns, cybersecurity experts in the Philippines urge the government to start improving the country’s defenses to avoid a bigger problem in the future.
Cybersecurity expert Angel “Lito” S. Averia, Jr. said recent reports about Chinese-made network products should raise red flags on local telcos’ existing partnerships with Chinese companies such as Huawei.
“Rather than simply stating that Huawei has supplied equipment to the duopoly for a number of years, the Department of Information and Communications Technology together with the National Security Council and perhaps the Armed Forces of the Philippines (must) investigate and assess the risks and impact of foreign technologies on our national security and identify vulnerabilities that may weaken the countries national security posture and implement the appropriate security measures,” Mr. Averia said in an e-mail interview.
In the past weeks, United States, United Kingdom and New Zealand have barred the use of products from Huawei Technologies for the fifth generation (5G) network rollout of its telco firms, citing security concerns.
A report from the US-China Economic and Security Review Commission published last month raised possibilities that tech partnerships with Chinese companies could result in compromised state and corporate information.
“China’s central role in manufacturing global information technology, IoT (Internet of Things) devices, and network equipment may allow the Chinese government — which exerts strong influence over its firms — opportunities to force Chinese suppliers or manufacturers to modify products to perform below expectations or fail, facilitate state or corporate espionage, or otherwise compromise the confidentiality, integrity, or availability of IoT devices or 5G network equipment,” the report said.
Both PLDT, Inc. and Globe Telecom, Inc. have partnered with Huawei for their 5G networks.
PLDT inked an agreement with Huawei in February last year for the development of its 5G network, which involves the establishment of an innovation laboratory and showcase network. The two also signed in January a $28.5-million deal to overhaul PLDT’s wireless service delivery platforms.
On the other hand, Globe forged a deal with Huawei in 2011, which was renewed in 2015, for the upgrade and expansion of its networks and the formation of a mobile innovation center.
Chinese firm China Telecommunications Corp. is part of the Mislatel Consortium, which was named as the new telco player last month.
“What makes Huawei challenging is that it is privately held and isn’t subject to the typical corporate governance other companies are subject to. (But) I do agree that the state should have a hand in increasing our information security posture. At least, it should serve as an example of good infosec (information security) practices,” William Emmanuel S. Yu, cybersecurity expert and founder of the Philippine chapter of Internet Society, said in an e-mail interview.
Last week, outgoing DICT Chief Eliseo M. Rio, Jr. told BusinessWorld he does not see issues surrounding Chinese tech firms as a cause of concern.
“(The) countries you mentioned that are prohibiting Chinese products in their telecommunication networks, have more cybersecurity issues threatening their national security than our country,” Mr. Rio said in a text message, referring to US, UK and New Zealand.
Mr. Rio said the government has a “simple solution” to such threats — employing a third party cybersecurity auditor that will monitor existing telecommunications networks.
“Our telcos, including the third telco, are required by our government to get an independent cybersecurity audit team to monitor their network, because any breach in their network that would threaten our national security could lead to their franchise being recalled by the government, not to mention possible payment of huge fines and even imprisonment of concerned personnel,” he said.
“So far we have not experienced any major threat to our national security. But even now we are strengthening our cybersecurity measures to further protect our cyberspace,” Mr. Rio added.
Mr. Averia said the government must facilitate research and development activities that would improve products and devices used in government networks and encourage the private sector to be involved in such activities.
National Privacy Commission Chairman Raymund E. Liboro said in a text message the government is already doing its part to increase cybersecurity awareness.
“Everywhere, stricter laws are being introduced to protect citizens… Also, counter technologies are being developed for threat detection, prevention and response, giving us data users a better chance against external actors with malicious intent,” he said.
Sought for comment, PLDT and Globe did not reply.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.

Philab sees return to profit growth

By Arra B. Francia, Reporter
PHILAB Holdings Corp. targets to return to profitability in 2019, banking on the wider distribution of its dengue testing kits coupled by higher revenues from its medical laboratory business.
In a statement issued Thursday, the listed health care and biotechnology firm said its dengue testing kits by LABit will help its unit Philab Industries, Inc. quadruple its revenues by next year.
The dengue testing kits are designed to help people with fever determine if they are infected with the dengue virus or not. Working much like a pregnancy test, a patient will have to draw about three drops of blood and pour it onto the kit, which will then provide the results 12 minutes after.
The company said that each kit retails at about P340, much lower than the P1,300-P2,500 price that patients would have to pay for the same service currently available in hospitals.
“The Philippines alone is a huge market for this product. Indonesia, Sri Lanka, Thailand, Vietnam, there’s a huge market for this product,” Philab Holdings Chairman and Chief Executive Officer Hector Thomas A. Navasero told reporters during a round table interview in Makati on Wednesday night.
To expand its distribution, the company has recently signed a five-year licensing agreement with Januarius Holdings, Inc. (JHI) to manufacture and distribute the dengue testing kits. JHI is investing P30 million into LABit, and has also extended a P20-million credit facility for Philab Holdings.
“That’s why we needed the support and assistance of Januarius to get this out there faster, and maybe one day the volumes go up, we can produce these test kits in larger volumes locally,” Mr. Navasero added.
JHI is headed by businessman Januario Jesus Gregorio B. Atencio III, the former president and chief executive officer of listed property firm 8990 Holdings, Inc. Mr. Atencio told reporters that he is a strategic investor in Philab.
Aside from JHI, the company has recently secured a P71.5-million investment from Highgarden Investments Ltd.
Philab Holdings also looks to be back on the trading board of the Philippine Stock Exchange (PSE) by next year, after it resolves pending issues surrounding its P2.4-billion contract with the Department of Education (DepEd).
The company still has P1.6 billion worth of receivables from DepEd, which prevented Philab from securing the PSE’s approval for its 2017 annual financial statement. This has prompted a trading suspension on the company’s shares since May.
“We’ve complied with all the requirements. I pray, not promising, that we can be back on trading early next year,” Mr. Navasero said.
Philab Holdings booked a net loss attributable to the parent of P107.85 million in the first nine months of 2018, compared to an attributable loss of P860,006 in the same period a year ago. The company managed to book gross revenues of P155.15 million during the nine-month period.

Alsons to decide on EPC contractor for coal-fired power plant by April

ALSONS Consolidated Resources, Inc. (ACR) targets to select the company to handle the engineering, procurement and construction (EPC) component of its 105-megawatt (MW) coal-fired power plant in Zamboanga City by April.
“We will be making our final selection by April next year. Shortly thereafter is the notice to proceed, [in] May or June,” Joseph C. Nocos, vice-president for business development at ACR’s power group, told reporters on Thursday.
Mr. Nocos said four groups are vying to be the EPC contractor of the P17-billion power plant under subsidiary San Ramon Power, Inc. These are Dongfang Electric International Corp.; Jurong Engineering Ltd.; Northeast No. 1 Electric Power Construction Co., Ltd. (NEPC 1); and Shandong Electric Power Construction Co.
ACR described Dongfang as based in Chengdu, China, while NEPC 1 is a wholly owned subsidiary of China Energy Engineering Group, and Shandong is a unit of Power Construction Corporation of China. Jurong is based in Singapore.
The project will be financed through a loan being arranged by Land Bank of the Philippines, Mr. Nocos said. The loan proceeds at around P11.9 billion will account for 70% of the project cost.
“We hope to capture some of the load growth of some of the electric cooperatives of Mindanao,” he said.
Of the plant’s capacity, 85 MW had already been contracted to Zamboanga City Electric Cooperative. The project is expected to start commercial operation by January 2022.
“With the expected completion of the Mindanao-Visayas interconnection project, we can expand our market to some of the utilities in the Visayas,” Mr. Nocos said.
Aside from the Zamboanga City power plant, Alsons is also developing the P4.25-billion 15.1-MW Siguil hydropower plant at the Siguil River basin in Maasin, Sarangani. It is expected to start commercial operations in 2021. It will provide power to Sarangani, General Santos City and municipalities of South Cotabato.
The group runs the Southern Philippines Power Corp. in Alabel, Sarangani and Western Mindanao Power Corp. in Zamboanga City.
It also operates the 103-MW Mapalad Power Corp. diesel plant in Iligan City and the first 105-MW section of the 210-MW Sarangani Energy Corp. baseload coal-fired power plant in Maasim, Sarangani province.
The Sarangani plant’s second 105-MW section is expected to begin commercial operations in the first quarter of 2019. — Victor V. Saulon

Mitsubishi to start exporting PHL-made vehicles by 2019

MITSUBISHI Motors Corporation (MMC) has committed to exporting Philippine-made vehicles to the Association of Southeast Asian Nations (ASEAN) market next year, according to Trade Secretary Ramon M. Lopez.
During a meeting with MMC Chief Executive Officer Osamu Masuko, Mr. Lopez said he requested the company to begin producing vehicles that can be exported “in order to tap a larger market for the country’s manufacturing base and help address the Philippines’ trade deficit, especially with two ASEAN vehicle exporters — Indonesia and Thailand.”
“The intention is to produce specific models that will be exported to our neighbors in ASEAN. The good thing here is, as MMC is already present in other ASEAN countries like Thailand and Indonesia, they are planning to make certain countries as production hub for certain models, which will serve their respective domestic and export markets,” Mr. Lopez was quoted as saying in a statement.
The DTI statement also quoted Mr. Masuko as saying MMC plans to manufacture more units of Mirage, Mirage G4 and L300 in the country and start exporting them to ASEAN next year.
Mr. Masuko also broached the possibility of working with the Philippine government to develop the local electric vehicle industry.
Mitsubishi Motors Philippines Corporation (MMPC) locally produces the compact passenger vehicles Mirage and Mirage G4 under the government’s Comprehensive Automotive Resurgence Strategy (CARS) program.
The CARS program grants P27 billion worth of incentives to three auto companies to boost domestic vehicle production to 700,000 units during the six-year period up to 2022. As of now, only MMPC and Toyota Motors Philippines Corp. are part of the program.

Del Monte swings to profit in Q2

DEL MONTE Pacific Limited (DMPL) swung to profitability in the second quarter of its fiscal year 2019, as prices increases in the Philippines offset the lower sales for the period.
In a disclosure to the stock exchange on Thursday, the listed fruit products manufacturer said net profit for the August to October period reached $8.4 million, versus a net loss of $2.8 million in the same period a year ago.
DMPL attributed the positive performance to the implementation of prices increases for its local operations, accompanied by lower trade spend in the United States. The company also benefited from the reduction of tax rates in the US to 21% from 35% at $2 million.
This came amid a 7.5% decrease in gross profit to $118.7 million, dampened by lower prices of pineapple juice concentrate (PJC) and higher product costs.
Sales for the period went down by 11% to $556.3 million, with sales from US unit Del Monte Foods, Inc. (DMFI) dropping by 14% due to its planned divestiture of the Sager Creek vegetable business in September 2017. This forms part of the company’s plan to deprioritize non-profitable businesses.
Without Sager Creek’s sales, the decline would have been slower at 6%.
In the Philippines, sales slid by 8% in dollar terms and by 3% in peso terms. DMPL attributed the slowdown to the general trade and mixed fruit category, noting that it continues to address operational issues for the segment.
Meanwhile, sales from the S&W brand, which sells fresh pineapple, picked up by 17% during the quarter due to its strong performance in North Asia. The packaged segment however continued to be affected by competition with cheaper brands.
On a six-month basis, DMPL’s net profit stood at $11.4 million, a reversal of last year’s net loss of $2.1 million during the same period. Meanwhile, sales went down 9.6% to $993.5 million.
Excluding one-off items, DMPL’s net income for the six months ending October would have been at $3.6 million.
DMPL said it continues to strengthen its balance sheet, as gearing improved to 2.8x equity as of Oct. 31, versus 3.4x in the same period a year ago. The company purchased $225 million worth of loans by DMFI from the fourth quarter of 2018 to the first quarter of 2019, helping reduce interest expenses.
Its issuance of $100 million worth of preference shares in 2017 also help the firm raise equity and reduce debt.
DMPL said it expects to be profitable for the entire fiscal year 2019.
“The Group will continue to strengthen its core business by focusing on its innovation strategy, growing its branded business and reducing non-strategic, non-branded business segments. The Group also continues to review its manufacturing and distribution footprint in the US to improve operational efficiency, further reduce costs and increase margins,” the company said in a statement.
Shares in DMPL dropped 2.22% or 15 centavos to close at P6.60 each at the local stock exchange on Thursday. The firm is also listed at the Singapore Stock Exchange under the ticker DMPL. — Arra B. Francia

‘Is this the real life?’

THEY SAID it would never sell, with its six-minute playing time, operatic passages and lyrics about Galileo and Scaramouche, but the Queen song “Bohemian Rhapsody” on Monday became the most streamed song from the 20th century.
Boosted by the new movie Bohemian Rhapsody, the 1975 single and music video surpassed 1.6 billion streams globally, record company Universal Music Group said in a statement.
The song overtook the likes of Nirvana’s “Smells Like Teen Spirit,” and Guns N’ Roses’ “Sweet Child O’Mine,” and is now also the most streamed classic rock song of all time, Universal added.
The Bohemian Rhapsody film, starring Rami Malek as late Queen front man Freddie Mercury, has brought the music of the British rock band to a new generation. Five weeks after its release, it has also become the highest grossing musical biography movie ever, with a global box office take of $600 million.
Mr. Malek was nominated for a Golden Globe last week for his performance and is widely expected to get an Oscar nomination in January.
Universal said it had been promoting the single across streaming platforms in recent weeks. It used all registered streams on global on-demand services including Spotify, Apple Music and Deezer as well as streams from official song/video streams on YouTube to determine that “Bohemian Rhapsody” was the most streamed song from the 20th century. — Reuters

P&A whistle-blowing service targets fraud

P&A GRANT THORNTON said it has upgraded its online subscription-only platform for whistle-blowers reporting fraud, known as the ProActive Hotline.
In a statement Thursday, the audit and tax advisory firm said the service allows whistle-blowers to report misconduct in the workplace securely and confidentially.
Persons reporting incidents can opt to remain anonymous and be assured of prompt reporting to the authorities.
“Unethical corporate practices sometimes go unreported in organizations because employees have become fearful of being targeted for reprisal or retaliation by perpetrators of fraud or misconduct,” Emiliano S. Librea III, partner and advisory services head of P&A Grant Thornton, said in the statement.
“This is why firms must provide an environment where witnesses can confidently yet anonymously report these malpractices,” he added.
The ProActive Hotline allows complaints to be tracked across the entire reporting process, ultimately generating anonymous reports for authorized individuals like the company’s internal auditor and chief executive officer.
“Whether one is a small-scale business or a huge conglomerate, any firm is vulnerable to fraud especially when its internal control systems are weak,” Mr. Librea said.
He also said early detection of fraud can save the company money. He cited a report by Association of Certified Fraud Examiners (ACFE), which found that companies with fraud hot lines are able to detect 46% of such incidents through tips.
Companies can subscribe to the service for an annual fee of P150,000.
Mr. Librea added: “Leadership must clearly define what fraud is and what it does to an organization. They have to be a good example to their people. Regular and frequent communication with employees about what is or is not acceptable behavior is best practice,” he said.
Punongbayan & Araullo (P&A) is the Philippine member of the Grant Thornton LLP network and a unit of Grand Thornton International Ltd. — Vincent Mariel P. Galang

D&L’s Batangas facility to get PEZA perks

THE planned manufacturing facility of D&L Industries, Inc. (DNL) in Batangas will be entitled to incentives, after getting the green light from the Philippine Economic Zone Authority (PEZA).
In a disclosure to the stock exchange on Thursday, the listed firm said its unit D&L Premium Food Corp. (DLPF) received a certificate of registration as an Ecozone Export Enterprise for its factory will manufacture vegetable fats and oils, as well as specialty food ingredients.
The facility, which targets to commence operations in 2021, will stand inside the First Industrial Township- Special Economic Zone in Tanauan, Batangas. This is one of two factories the company is currently constructing to expand its capacity for the next 20 years. The other factory is being built for DNL’s unit, Natura Aeropack Corp.
As a PEZA-registered company, DLPF will be entitled to tax incentives such as an income tax holiday; tax and duty-free importation of raw materials, capital equipment and machinery; and exemption from expanded withholding tax.
The listed oleochemicals and plastics manufacturer is pouring in P8 billion for this capacity expansion, which also involves the construction of about 50 storage tanks sized up to 2,000 cubic meters each.
The facilities will allow DNL to triple its current capacity, and support the company’s target to grow its export business to about 50% of revenues by 2025.
Shares in DNL gained 0.97% or 10 centavos to close at P10.40 each at the stock exchange on Thursday. — Arra B. Francia

A Star is Born leads film contenders for SAG awards

LOS ANGELES — Musical drama remake A Star is Born led a wide range of contenders for the Screen Actors Guild (SAG) Awards on Wednesday, landing four nominations, including best movie ensemble.
The film will compete for SAG’s top movie prize in a diverse group that includes superhero movie Black Panther, romantic comedy Crazy Rich Asians, rock biopic Bohemian Rhapsody and director Spike Lee’s historical drama BlacKkKlansman.
A Star is Born, released by AT&T Inc.’s Warner Bros, features Bradley Cooper and Lady Gaga in a classic story about a young woman trying to make it in the music business. Both actors were nominated for individual awards for their performances.
The SAG awards are closely watched as an indicator of likely Oscar success because actors form the largest voting group in the Academy of Motion Picture Arts and Sciences.
In the last 23 years, only one film has won the best picture Oscar without being nominated for SAG’s top ensemble prize, last year’s The Shape of Water.
SAG award winners will be announced on Jan. 27 at a ceremony in Los Angeles.
Black Panther and Crazy Rich Asians were both heralded as milestones for diversity in Hollywood, which has faced criticism for under-representation of actors and filmmakers of color. Black Panther was the first big-budget superhero movie to star a predominantly black cast, while Crazy Rich Asians was the first film with an all-Asian cast from a major Hollywood studio in 25 years.
Vice, which garnered the most Golden Globe nominations, earned SAG acting nods for Christian Bale and Amy Adams for their roles as former Vice-President Dick Cheney and his wife, Lynne.
Other actors nominated for leading roles included Rami Malek for playing Queen lead singer Freddie Mercury in Bohemian Rhapsody, Viggo Mortensen for road-trip comedic drama Green Book, and John David Washington for BlacKkKlansman.
In the running for lead actress were Emily Blunt in the musical sequel Mary Poppins Returns, Glenn Close for drama The Wife, Olivia Colman for British historical comedy The Favourite, and Melissa McCarthy in Can You Ever Forgive Me?
Ms. Blunt scored a second acting nod for her supporting role in horror film A Quiet Place. Ms. Adams and Emma Stone also earned two acting nominations each.
In TV, Amazon.com Inc. comedy The Marvelous Mrs. Maisel and Netflix Inc. drama Ozark topped the list of SAG nominees with four nods each.
Black Panther and Mary Poppins Returns were released by Walt Disney Co. Bohemian Rhapsody, The Favourite, and Can You Ever Forgive Me? were distributed by Twenty-First Century Fox Inc.
In addition to A Star is Born, Warner Bros released Crazy Rich Asians, while The Wife was distributed by Sony Corp. — Reuters

BPO industry to offer workers online tech courses

THE Information technology and Business Process Association of the Philippines (IBPAP) said it launched a new platform to offer online coursework to industry employees, allowing them to upgrade their skills and prepare them eventually for higher-value jobs.
IBPAP teamed up with CloudSwyft Global Systems Inc. (CloudSwyft) to establish the platform.
IBPAP said in a statement on Thursday that the platform is called the IBPAP Learning Switch portal, offering a number of in-demand workplace technology courses.
IBPAP President and CEO Rey C. Untal said in the statement that the program is “focused on upskilling and reskilling our workforce to ensure that they can adapt to the ongoing digital transformation. Programs such as this will aid the industry’s pivot to higher-value jobs and services.”
The Learning Switch Portal offers hundreds of Microsoft Corp. courses in eight learning tracks. The portal features exercises, quizzes and activities, allowing users to earn globally-recognized certificates from Microsoft.
Users that complete each track are eligible for a Microsoft Professional program Master Certificate.
CloudSwyft offers over 160 technology courses.
“Through our partnership with CloudSwyft, we hope to reach and encourage more Filipinos to take the initiative to learn and improve themselves. We have provided the necessary tools for them to succeed in the IT-BPM industry and we look forward to them taking advantage of this opportunity,” Mr Untal said. — Gillian M. Cortez

Bourse operator creates real estate subsidiary

THE Philippine Stock Exchange, Inc. (PSE) will establish a new subsidiary that will handle its real estate assets, including its old office in Ayala Avenue, Makati City.
In a disclosure posted on Thursday, the PSE said its board of directors has approved the incorporation of PSE Realty, Inc. (PRI). The wholly-owned unit will have a capitalization of P1 billion, of which P701.80 million will be subscribed and paid-up.
The PSE earlier said that it can either sell the office spaces in Ayala Tower One or rent them out instead.
The bourse operator moved out of its office in Ayala Tower One last February, in favor of the new PSE tower along Bonifacio High Street. The new building stands 26-storeys high and has a gross leasable area of 30,000 square meters. Aside from the PSE, the building also houses more than 100 active trading participants.
The PSE has already sold its old office, the PSE Tektite Building in Ortigas Center, to Philippine Realty Holdings Corp. (Philrealty) for P257.18 million in August last year. Philrealty was the developer of the Tektite Building. — Arra B. Francia

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