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To protect our rights, we must protect our institutions

Since martial law, the Philippines has come a long way when it comes to protecting human rights. On paper, our human rights regime is robust. The 1987 Constitution is a legal framework motivated by human rights, its drafting having been framed by our experience of martial law. We have ratified human rights conventions and enacted legislation to further protect us from state abuse and atrocious crimes such as torture, genocide, and crimes against humanity.
Apart from legislation, the Constitution established democratic institutions to control the exercise of state power that would, in turn, affect the exercise of our rights. It provided for an elaborate scheme of checks and balances as well as the separation of powers among the different branches of government. It established the Office of the Ombudsman, which has the broad power to prosecute public officials for any administrative and criminal offense committed through abuse of official position. It also created the Commission on Human Rights (CHR), the independent body mandated to investigate human rights abuses.
We celebrated these positive developments on Human Rights Day (Dec. 10). At the same time, we must also ask if these guarantees have become a lived reality for the people.
LOSSES
Duterte’s “war on drugs” has exposed the inefficacy of some of these guarantees. Since Duterte came to power, more than 30 human rights lawyers have been killed. Staunch critics have been arrested, ousted, threatened with legal proceedings, and harassed or trolled on social media. Journalists are no less safe.
It was only last year that Congress moved to reduce the annual budget of the CHR to P1,000. This can be construed as an effort to constructively abolish the only institution that could provide independent, accurate documentation of the killings arising from the drug war.
Another possible loss is the state’s withdrawal from the Rome Statute. If this happens, it gives the appearance of the state’s unwillingness to be held accountable amid allegations of crimes against humanity. The pending petition before the Supreme Court on the constitutionality of the withdrawal will thus test how real our commitments are to human rights accountability.
NO ACCOUNTABILITY FROM THE POWERFUL
Just less than two weeks ago, Kian delos Santos’s killers were convicted by the Caloocan Regional Trial Court for his death. This is a cause for celebration in a country notorious for impunity. However, some believe that the cops who were convicted are just scapegoats for the real masterminds of the drug war. Notably, the drug war provided the backdrop for Kian’s murder. And at present, there is still no person most responsible for the drug war who has been held accountable for the thousands of civilian deaths arising from the government’s anti-drug campaign.
We have also seen impunity in action in the past month. The recent Sandiganbayan conviction (but not really) of Imelda Marcos and the acquittal (but not really) of Bong Revilla arguably show this. These narratives are consistent with the country’s track record to let powerful people off the hook.
A MORE POWERFUL CHR
In connection with its primary mandate to investigate human rights abuses, the CHR can issue subpoenas addressed to the relevant government agency for the disclosure of information on matters subject of its investigation. However, should the agency fail to comply, the CHR does not have the power by itself to issue a contempt order. It must petition the relevant court for this remedy.
The weak sanction that backs up the CHR’s power of subpoena can make the work of the CHR more challenging. It also provides an incentive for noncompliance. After all, noncompliance does not immediately lead to sanction, thanks to an elaborate arrangement for the exercise of its contempt power.
Should the investigation call for prosecution, the CHR is mandated to submit its findings and recommendation to the proper prosecutorial office to act on the matter. Notably, the CHR does not have the power to prosecute, it can only investigate. The authority to prosecute for human rights violations is still lodged with the Department of Justice and the Office of the Ombudsman, which are free to disregard the CHR’s recommendations and conduct their own investigation.
The drug war exposed the flaw of this setup. Since the Department of Justice is an Executive department, it would be challenging to push for accountability for the persons most responsible for the drug war, given that this campaign is motivated by executive policy.
Thus, although the 1987 Philippine Constitution provided for the creation and independence of the CHR, the structural arrangements put in place for its operation are not well-equipped to facilitate accountability.
INSTITUTIONS ARE EQUALLY IMPORTANT
Having our human rights spelled out in our laws is important, but we must equally ensure that an adequate system is in place to make those rights real.
Our democratic institutions must not be prone to capture if the Philippines were to live up to its commitment to promote human rights. This can be avoided by re-examining the framework that makes it excessively hard for some of our institutions to fulfill their duty to protect human rights, and exploring alternatives for those arrangements that facilitate impunity. Perhaps we should focus more on how the processes we have put in place in our system affect the exercise of the rights we have on paper. It is not enough to know what our rights are, we must also make sure we keep them by being vigilant. This is the only way to continue the remarkable progress we have made since martial law.
 
Jenny Domino is an attorney and a non-resident Fellow for Human Rights at Stratbase ADR Institute.

Iconoclastic, destructive leadership

The appointment of Lucas Bersamin as chief justice of the Philippines is yet another blasphemy committed against one of our sacred institutions, the last bastion of justice in our country. Let us be kind. In his inaugural talk to his people, delivered during the flag-raising ceremony, Bersamin betrayed his small-mindedness. The presidential appointment came at about the same time as when our national leader bad-mouthed the Catholic Church and its leaders in no uncertain terms. Rodrigo Duterte seems to be on a rampage, weakening institutions that help ensure a sense of justice, civility, and of right and wrong among our increasingly confused people. Even Filipino women, regarded worldwide as competent, kind and fine human beings — from nurses and nannies, doctors to musicians, artists and designers — are not spared from his insults.
Justice Bersamin’s voting record — which includes voting in favor of the burial of Ferdinand Marcos in the cemetery reserved for our heroes, and legitimizing Eduardo Cojuangco’s ownership of coco levy shares in San Miguel Corp. (allegedly because “there was no evidence that he was a Marcos crony”) — betrays degraded values unbecoming of the head of the third branch of our government. There is enough judicial evidence that Marcos deprived the Filipino people of what belongs to them. As retired Justice Conchita Carpio Morales said in her dissenting opinion on Cojuangco’s right to the coco levy shares because he was not a Marcos crony: “it was the biggest joke of the century.”
Duterte’s many outlandish, nay, scandalous public statements are constantly dismissed by his many minions as “jokes.” What, you mean to say our national leader is only joking when he asserts his power by downgrading institutions long-held as sacred?
Of course, in this age of disruption, where the world turns on its head with revolutionary technologies such as electric and driverless cars, ride-hailing transport, robotics, landing research vehicles on the planet Mars, and online shopping and banking, disruption can be constructive; and we ordinary humans must try as best we can to adjust and catch up (we super-seniors can be excused).
But what, pray tell, is the purpose of our president’s iconoclasm? Does he think about these things? Or is our national leader just an undisciplined, impulsive and immature person who expresses his subconscious bitterness in public, with no thought as to its impact on the national consciousness and value systems? Does he realize his responsibility as our leader to inspire and edify our youth?
This president makes no bones about fighting a bloody “war on drugs,” no matter how many lives (mostly among the young and the poor) are taken every day. Does he really think, despite his campaign promise to erase the drug menace in six months, that he can, in fact, end this scourge? Perhaps this is an area where he can come up with some really creative and disruptive thinking on how to rid our people of this menace without resorting to so much bloodshed. It has been said that if you keep doing the same things over and over again, and still do not succeed — that means you are a moron.
This president seems to be tough on those he thinks he can intimidate with his macho powers: Leila de Lima remains in detention based on testimony provided by convicted felons. He constantly declares that his constitutional successor, Vice-President Leni Robredo is not capable of handling the presidency. Patricia Fox has been technically deported. Journalist Maria Ressa faces multiple charges of tax evasion, following various failed attempts to get rid of Rappler.
Why is he so obsequious when it comes to the People’s Republic of China? He unbelievably avowed in public that we can do nothing to protect our legally certified ownership of our marine territories, even before China openly admitted its brusque, invasive actions. He openly embraces disgraced public figures like the Marcoses and Gloria Arroyo, for what reason, it is interesting to conjecture. Early in his presidency, he avowed his debt of gratitude to the self-proclaimed “appointed Son of God” the wealthy Apollo Quiboloy who was publicly disgraced by US Immigration authorities in Hawaii for violating US laws.
How do we counter these unhealthy proclivities and serious threats to our hard-earned democratic freedoms and way of life? Is there any hope?
There are a few silver linings in the sky. Court of First Instance Judge Andres Soriano stuck his neck out to dismiss the charges against courageous Senator Antonio Trillanes IV. Jose Manuel “Chel” Diokno, De La Salle University College of Law founding dean, has decided to run for public office despite the tremendous odds against senatorial survey leaders Jinggoy Estrada and Juan Ponce Enrile who are still facing plunder charges; Lito Lapid, the Senate’s nonperforming member; and, who knows, the actor Bong Revilla, who has been incredibly acquitted of plunder despite all the evidence that should have convicted him. We have a confused electorate that does not know the difference between notoriety and mere fame.
As long as this administration stays in power, the odds get heavier against civility, justice, and decency. We need to mobilize what influence we can muster to strengthen resistance to the destructiveness threatening our value systems and our honor as a people. Every little bit of effort counts. We must protect what space is still left for democratic dissent.
 
Teresa S. Abesamis is a former professor at the Asian Institute of Management and an independent development management consultant.
tsabesamis0114@yahoo.com

Recognition and enforcement of foreign judgments in the Philippines

The Supreme Court recognized in the case of Saudi Arabian Airlines v. Court of Appeals (G.R. No. 122191, 8 October 1998, 297 SCRA 469) that “the presence of foreign elements (in transactions) is inevitable, since social and economic affairs of (persons and/or entities) are rarely confined to the geographic limits of their births or conception.” Thus, as an example, persons/corporations from various States may enter into contracts, which contracts may even involve properties located in an entirely different State. In case of breach, it could happen that a party will resort to its own local court to obtain relief, or may go to the courts of another State with a significance or connection to them or to their transaction.
In such situations, it is important to note that it is one matter to get a decision in your favor, and another to have it recognized and enforced by the State whose courts did not render the same but where the other party currently resides or conducts business.
Judgments obtained abroad may be recognized and enforced in the Philippines. It is required, however, that an action be instituted here specifically for such purpose. Our laws provide that a foreign judgment or order upon a specific thing shall be conclusive upon the title to the thing (e.g., judgments for sums of money or ownership over properties), and one against a person shall be presumptive evidence of a right between the parties (e.g., divorce decrees, etc.).
One of the requirements for the recognition and enforcement of a judgment obtained abroad is proof that the same was rendered by a court or tribunal which had jurisdiction over the parties and over the case. Otherwise, it may be questioned, and may not be recognized/enforced, on the grounds that there was no jurisdiction over, and/or no notice to, the other party. To effectively comply with this, the foreign judgment and law must at the outset be properly pleaded and proven like any other facts, as after all, our courts do not take judicial notice of them. This may either be by an official publication, or by a copy of the public document or law attested to by the officer having legal custody of the record. If the record is not kept in our country, the copy must be accompanied with a certificate that the attesting officer has the legal custody thereof. The certificate may be issued by any of the authorized Philippine embassy or consular officials stationed in the foreign country in which the record is kept, and authenticated by the seal of his office. Further, the attestation must state, in substance, that the copy is a correct copy of the original, or a specific part thereof, as the case may be, and must be under the official seal of the attesting officer.
There are exceptional instances when proof other than the foregoing may be considered as competent and therefore acceptable to our courts. In some cases, the testimony under oath of an expert witness was allowed, such as an attorney-at-law in the country where the foreign law operates, who quoted verbatim a section of the law, stated that the same was in force at the time material to the facts at hand. Thus, where the lawyer failed to testify on all aspects relevant to the foreign law invoked, or where no such lawyer actually appeared in open court and identified his/her affidavit, the same was deemed insufficient.
Other grounds to repel a foreign judgment are extraneous factors such as collusion, fraud, or clear mistake of law or fact.
Allowing recognition and enforcement of foreign judgments in the Philippines is important because it is based on comity with the international community. It also has another noble purpose — to give finality to litigation. Indeed, with our clogged court dockets, it would be more expedient that the merits of these cases be no longer tried here. Under present rules, our courts are not required to look into and decide on the correctness of the foreign judgment, as long as it does not violate public policy or prohibitive laws. On their part, litigants may be shielded from protracted legal battles and may reasonably expect that cases already subjected to full-blown trial and won in other jurisdictions may be enforced in our country.
The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes, and not offered as, and does not constitute, legal advice or legal opinion.
 
Jessa G. Wong-Cantano is an associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Cebu Branch.
(6332) 231-4223
jgwong@accralaw.com.

Safeguards against corporate opportunism remains squarely with the independent directors

As shown hereunder, it seems clear that ultimately the Corporate Governance (CG) Code for Publicly-Listed Companies (PLCs) places the ability to prevent corporate opportunism squarely on the shoulders of the independent directors (IDs), whether such attempts at corporate opportunism be on the part of the controlling stockholders acting through a majority of the members of the Board, or through Management.
1. Lead Director Must Be an ID. — CG Code for PLCs recommends that “The Board should designate a lead director among the IDs if the Chair of the Board is not independent, including if the positions of the Chair of the Board and CEO are held by one person.”
The CG Code recommends that in cases where the Chair is not independent, or where the roles of Chair and CEO are combined — which engender the abuse of power and authority, and potential conflict of interest — there should be appointed a strong “lead director” among the IDs, who should have sufficient authority to lead the Board in cases where management has clear conflicts of interest, and sets out the functions of this lead director to include, among others, the following: (a) Serve as an intermediary between the Chair and the other directors when necessary; (b) Convene and chair meetings of the non-executive directors; and (c) Contribute to the performance evaluation of the Chair, as required.
2. Key Board Committees Must Be Chaired and Majority Composed of IDs. — The CG Code recommends that “The Board should establish board committees that focus on specific board functions to aid in the optimal performance of its roles and responsibilities.” It explains that “Board committees such as the Audit Committee, CG Committee, Board Risk Oversight Committee and Related Party Transaction Committee are necessary to support the Board in the effective performance of its functions. The establishment of the same, or any other committees that the company deems necessary, allows for specialization in issues and leads to a better management of the Board’s workload.”
The CG Code then recommends that in the key committees, namely, the Audit Committee, CG Committee, Nomination and Remuneration Committee, Board Risks Oversight Committee, and the Related Party Transaction Committee, there should be at least three non-executive/IDs, and that the Committee Chair should be an ID.
It is through the IDs’ chairmanship and majority membership in key Board Committees that the problems of asymmetry of information and high transaction cost are overcome on behalf of the public investors whose interest in PHCs is primarily represented by IDs against corporate opportunism on the part of the controlling stockholders.
3. Material Company Transactions Overseen by IDs. — The CG Code recommends that “The company should make a full, fair, accurate and timely disclosure to the public of every material fact or event that occurs, particularly on the acquisition or disposal of significant assets, which could adversely affect the viability or the interest of its shareholders and other stakeholders. Moreover, the Board of the offeree company should appoint an independent party to evaluate the fairness of the transaction price on the acquisition or disposal of assets.”
It explains that “The disclosure on the acquisition or disposal of significant assets includes, among others, the rationale, effect on operations and approval at board meetings with independent directors present to establish transparency and independence on the transaction. The independent evaluation of the fairness of the transparent price ensures the protection of the rights of shareholders.”
4. Whistleblowing System Should Allow Direct Access to the IDs. — The CG Code supports the proposition that “The Board should establish a suitable framework for whistleblowing that allows employees to freely communicate their concerns about illegal or unethical practices, without fear of retaliation and to have direct access to an independent member of the Board or a unit created to handle whistleblowing concerns. The Board should be conscientious in establishing the framework, as well as in supervising and ensuring its enforcement.”
It explains that “A suitable whistleblowing framework sets up the procedures and safe-harbors for complaints of employees, either personally or through their representative bodies, concerning illegal and unethical behavior. One essential aspect of the framework is the inclusion of safeguards to secure the confidentiality of the informer and to ensure protection from retaliation. Further, part of the framework is granting individuals or representative bodies confidential direct access to either an independent director or a unit designed to deal with whistleblowing concerns. Companies may opt to establish an ombudsman to deal with complaints and/or established confidential phone and e-mail facilities to receive allegations.”
SAFEGUARDS AGAINST THE COOPTING OF THE INDEPENDENCE OF IDS
In addition to strict rules on qualifications and disqualifications pertaining to IDs to ensure utter lack of professional, contractual or filial connections with the company, its management and the controlling stockholders, the CG Code for PLCs has adopted certain safeguards that would preserve the ability of IDs to exercise independent judgment in corporate affairs. We shall evaluate the effectiveness of such safeguards in preserving the ability of IDs to exercise independent judgment.
a. IDs Must Have Business Acumen Necessary for the Industry in Which the PLC Operates
Against the criticism that IDs do not possess the personal or professional gravitas to be able act independently against the captains of the industries, the CG Code recommends that “The Board should ensure that its IDs possess the necessary qualifications and none of the disqualifications for an ID to hold the position.” It explains that “IDs need to possess a good general understanding of the industry they are in. Further, it is worthy to note that independence and competence should go hand-in-hand. It is therefore important that the non-executive directors, including IDs, possess the qualifications and stature that would enable them to effectively and objectively participate in the deliberations of the Board.”
The fact that the CG Code places the burden of “ensuring that … IDs possess the necessary qualifications and none of the disqualifications for an ID to hold the position” on the Board, which is majority-composed of representatives of controlling stockholders, tends to ensure that IDs would eventually fall under the spell of the controlling stockholders. As will be discussed hereunder, the true measure of ensuring that IDs would be accountable to the public investors against the corporate opportunism of the controlling stockholders, it is necessary that the public investors must have a certain measure of participation in the election and retention of IDs.
b. Nomination, Election and Retention in the Board of IDs
The CG Code for PLCs recommends that “The Board should have and disclose in its Manual on CG a formal and transparent board nomination and election policy that should include how it accepts nominations from minority shareholders and reviews nominated candidates. The policy should also include an assessment of the effectiveness of the Board’s processes and procedures in the nomination, election, or replacement of a director. In addition, its process of identifying the quality of directors should be aligned with the strategic direction of the company.”
It explains that “It is the Board’s responsibility to develop a policy on board nomination, which is contained in the company’s Manual on CG. The policy should encourage shareholders’ participation by including procedures on how the Board accepts nominations from minority shareholders. The policy should also promote transparency of the Board’s nomination and election process.”
In essence, therefore, the policies and processes for the nomination, election and retention of all members of the Board, including those of IDs, are put under the charge of the Board which is majority-composed by representatives of the controlling stockholders.
The mandatory provisions relating to the nomination and election of IDs can be found in SRC IRR, which provides “The conduct of election of IDs shall be made in accordance with the standard election procedures of the company or its by-laws.”
It should therefore be pointed out that eventually those who become IDs on a PHC must achieve the majority vote from among other candidates through the support of the controlling/majority stockholders. The same is true with ID’s ability to be retained in the Board. In a recent study, it has been demonstrated that when the election and retention of IDs in the Board is dependent upon the controlling stockholders’ support, then they eventually become preempted in their corporate actuations, thus:
Independence requirements strengthen these market incentives by ensuring that directors have no conflicts that could undermine their effectiveness as monitors of management. For example, a director whose livelihood depends on her business ties with the company might fear that refusing to accept the CEO pay demands would provoke retaliation. Many investors and lawmakers, however, believe that such independence alone may not ensure directors’ accountability because management’s influence over the appointment of directors can also undermine the effectiveness of those directors as monitors. Even an ID might fear that adopting a skeptical approach toward the CEO, for example, would reduce her chances of reappointment. Moreover, to the extent that the CEO is involved in appointment decisions, directors may develop a sense of gratitude and obligation to accommodate the CEO’s preferences. These concerns underlie the post-Enron requirement that IDs control the board nomination process, thereby taking from managers the formal power to influence the process — and thus the outcome — of director elections.
The study concludes that “These developments offer two important lessons for controlled companies. First, controllers’ absolute control over the election of IDs undermines those directors’ effectiveness as monitors. Second, enabling public investors to influence the election of IDs would provide these directors with incentives to guard public investors’ interests,” thus:
At controlled companies, IDs are expected to exercise oversight to prevent the controller from expropriating value from public investors. Yet, the same election method that holds directors accountable to public investors at widely held companies currently also holds them accountable to the controller at controlled companies. Controlling shareholders have decisive power over director appointment. Directors at firms with controlling shareholders — including IDs — cannot be elected or reelected following their initial term — unless the controlling shareholder supports their candidacies. Nor will they stay in office once the controlling shareholder decides to end their service on the board.
The study proposes that the better rule of inducing IDs to be accountable to public investors, is by empowering public investors to determine or at least substantially influence the election and/or retention of IDs, such as granting public investors with veto rights over such nomination and/or election of IDs, or allowing the election of IDs to be supported by a majority of the public investors’ voting power.
c. Limiting the Terms of IDs
Against the criticism that eventually IDs lose their independence based on prolonged dealings with the majority members of the Board and Management, i.e., with the controlling stockholders, the CG Code for PLCs recommends that “The Board’s IDs should serve for a maximum cumulative term of nine [9] years. After which, the ID should be perpetually barred from re-election as such in the same company, but may continue to qualify for nomination and election as a non-ID. In the instance that a company wants to retain an ID who has served for nine years, the Board should provide meritorious justification/s and seek shareholders’ approval during the annual shareholders’ meeting.”
It explains that “Service in a board for a long duration may impair a director’s ability to act independently and objectively. Hence, the tenure of an ID is set to a cumulative term of nine years. IDs who have served for nine years may continue as a non-ID of the company. Reckoning of the cumulative nine-year term is from 2012.”
The CG Code further provides that “Any term beyond nine years for an ID is subjected to particularly rigorous review, taking into account the need for progressive change in the Board to ensure an appropriate balance of skills and experience. However, the shareholders may, in exceptional cases, choose to re-elect an ID who has served for nine years. In such instances, the Board must provide a meritorious justification for the re-election.”
The CG Code presumes that nine (9) years is the optimum period that assures that IDs can resist the temptation to begin to in consonance with the controlling stockholders. Nine years is really a long period of time in the life of a PLC against an ID who has lost his independence in just a couple of years that he has acted with in consonance with the ruling of the majority stockholders’ representative in the Board. Yet we can appreciate the need to have long-serving IDs who develop a more intimate workings of the PHC as against a situation of having completely “green horn” IDs every couple of years or so who have yet a long learning curve ahead of them, only to be replaced by a new set when they have developed the skills and competence to exercise their independent judgment.
On the other hand, the perpetual disqualification of IDs after the cumulative nine-year period really does not provide a strong incentive to act independent of Management and controlling stockholders because of the very terms provided for in the CG Code: there are two possible ways by which an ID may remain with the Board, both of which are dependent upon the support of the entire Board (controlled by the majority stockholders) being able to prove that he should remain an ID because of meritorious justification, or by remaining in the Board as a regular director. In either case, there is every incentive on the part of the ID, during his 9-year stint, to be cozy with the controlling stockholders who hold in their power the ability to retain him in the Board.
EVOLVING A MORE RESPONSIVE SYSTEM OF IDS
We conclude this study with the following recommendations.
It is probably time to introduce statutory amendment in the Securities Regulations Code, which is peculiarly applicable to PHCs, to clearly define the role, duties and functions of the IDs to be one primarily set to champion the cause of stakeholders, other than stockholders, to present in all Board proceedings the values promoted under the Stakeholder Theory.
We should study introducing provisions in the SRC that legally empower public investors the right to have a certain legal standing in the nomination, election and retention of IDs in order to ensure direct accountability to such stockholders.
It may well be worth it that the agencies at the forefront of corporate governance development, namely the BSP, the SEC, and the IC, should now begin to put together a full accreditation system for IDs in partnership with leading private sector organizations that allow the proper training and orientation of professional directors that would be made available to covered corporations, each bringing with them a special set of skills for the various fields covered.
Perhaps it should be, in order to preserve the independence of such accredited IDs, that each of the three agencies develop a system of setting up funds within their industries by special levy on their covered corporations, to constitute as the source of remuneration for IDs who shall then be paid by and hence be accountable to, the supervising government agency. Under such a system, IDs would truly become quasi-public officers.
The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
 
Cesar L. Villanueva is the vice chair of the CG Committee of the MAP, the founding partner of the Villanueva Gabionza & Dy Law Offices, and the former Chair of the Governance Commission for GOCCs (GCG).
cvillanueva@vgslaw.com
map@map.org.ph
http://map.org.ph

UX crossover new Lexus entry point

Text and photos by Kap Maceda Aguila

APPARENTLY, Japan-headquartered luxury car maker Lexus doesn’t shirk from making bold predictions about the newest vehicle in its portfolio. There’s clear confidence in the UX, which the company debuted at this year’s Geneva International Motor Show.
During the entry-level subcompact premium crossover’s so-called Global Dynamic Press Launch held in Sweden in September, Lexus Asia Pacific vice-president David Nordstrom said that the UX is expected to make up “23% of Lexus sales” in the region. Along with the all-new Lexus ES, sales are projected to grow by a hefty 60%. “We’re confident that the UX will provide a highly attractive alternative to existing products in the market,” the executive had underscored.
The UX is a direct and clear product of the brand’s transformative journey over the last few years. “You have seen our design language change to become bolder and more distinctive, and hopefully you have experienced a significant change in our driving dynamics that pairs our world-renowned comfort with Lexus’ unique sense of dynamic handling,” explained Mr. Nordstrom. “The all-new UX showcases the Lexus design language and highlights our ability to craft luxury interiors.”
Lexus Philippines understandably wasted no time bringing the UX into the local market. Now here in two grades — the UX 200 and UX 200 F Sport priced at P2.478 million and P3.048 million, respectively — the vehicle is ready to commence with the real-world testing of the company’s avowed confidence. The market should be composed of “loyal Lexus owners looking for a crossover alternative to their sedan,” those who want to “downsize their SUV, upgrade from a mass-market brand, or [simply] change their luxury brand.”
Expressed more distinctly, the marque is looking at an “even mix of male and female customers in their 30s, with an average household income of $110,000.” These “urban explorers” (which the appellation stands for) are “styling, tech savvy, and seeking experiences [as] they make the most of their time and opportunities.”
COUPE PERFORMANCE, CROSSOVER LOOKS
During the press launch in Stockholm, BusinessWorld was able to speak with the design team head responsible for the UX. Chika Kako is an affable, brilliant executive — the first woman at Lexus to be accorded such an honor, and is its first female managing officer. Ms. Kako had posited that the UX is a “car developed for the customer who’s entering the luxury market for the first time — and for people joining the Lexus brand for the first time.” She had asserted, “That was my first mission. This may be the youngest of all the siblings, but for us, we don’t look at it as just small, medium and large sizes… We understand completely that there is a large base of customers who enjoys sedans. But here was a chance to create something new and exciting that we’ve never seen before. So think about something having the driving performance of a sporty coupe, but with crossover looks… That was something I really wanted to achieve. That’s why I went for this body type.”
Along with its entry-level pricing, the UX is should attract buyers with a showcase of new toys and tech — while staying true to the look that Lexus has proudly claimed for itself. The iconic spindle grille gives the vehicle an aggressive fascia and augments its muscular, taut presence that is consistently applied in and out.
In a statement, Lexus said that the “UX brings to the table the widest field of vision and best turning radius of any luxury compact SUV.” The design team also took inspiration from the traditional Japanese concept of Engawa that “blurs the boundary between a home’s exterior and interior” to create “a feeling of seamless continuity inside.” For instance, the upper instrument panel extends out beyond the windshield and provides the driver a sweeping view of the car and its surroundings.
The F Sport variant will reward drivers with more keenly tuned suspension through springs and stabilizer bars, along with a rear performance damper — resulting in a more refined ride. It boasts 18-inch, five twin-spoke aluminum alloys promising increased rigidity and, ultimately, heightened responsiveness and handling.
Aside from a sundry of distinctions largely out of view, the UX F Sport gets visible differentiators such as an alternative grille design with a mesh pattern comprised of individual L-shaped pieces, large fog lamp bezels with L-shaped chrome moldings, a revised rear bumper, and jet-black trim on the front and rear moldings. Inside, it receives front sport seats, a leather-covered F Sport steering wheel, leather-trimmed shift knob, and aluminum pedals and footrest. Even the TFT LCD display is larger, at eight inches.
Supplying power to the front wheels of the two UX variants is a 2.0-liter four-cylinder engine delivering 168hp and 205Nm — mated to a new Direct-Shift CVT “[combining] the smooth, fuel-efficient performance of a continuously variable transmission with a more direct driving feel.” The Direct-Shift CVT provides grunt without the deadened feel of some conventional CVT systems. Everything is within reach of the driver, and one will not be overwhelmed with an assortment of controls. Rather, the UX rewards your enthusiasm and sense of discovery with intuitive controls — such as the new scroll wheels just at the tip of the central driver armrest. Thirteen exterior colors are available on the UX, including three new unique colors dubbed Blazing Carnelian, Tarrane Khaki and Celestial Blue.
Industry observers predict a trend to hold — that of one in three vehicles sold globally will be a crossover. If this comes to fruition (and there are no signs to indicate otherwise), then the UX should be successful here and abroad.

4 gifts fit for a king

Text and photos by Aries B. Espinosa

HYUNDAI Asia Resources, Inc.’s (HARI) “Christmas gift” to the Filipino motoring public was a glimpse of what could likely be their immediate future, and the official distributor of Hyundai vehicles in the Philippines couldn’t have done it in a grander way — through a combined launch held on December 6 at a convention center in Pasay City.
With the center of the spacious hall occupied by an elevated walkway leading from the main stage to the launch program’s highlight vehicle, the new Accent, the stage was literally set for HARI president and CEO Ma. Fe Perez-Agudo to step up to the podium and declare the “Runway to the Future” open.
She said; “2018 brought extraordinary challenges in the marketplace, resulting from the tough economic environment that tested our capabilities. As such, we have remained focused by laying down the groundwork to ensure an unhampered and successful takeoff of our business for the brand in 2019. ‘Runway to the Future’ is our way of expressing our appreciation of the gallant men and women in the Hyundai dealership network, our esteemed friends from the media and partners in the banking industry who inspired us in braving this year’s headwinds and turbulence in our industry. Given this backdrop, we look forward to take off and fly high towards more notable achievements, and set new records through innovative mobility.”
HARI has already propelled itself for takeoff this 2018, as it has become the Philippines’ third top-selling automotive firm. And to finally take off and fly high this 2019, Ms. Agudo was directly referring to the four new vehicles laid out before her — the Grand Starex Urban, the face-lifted Tucson, the Ioniq Hybrid, and the new Accent.
Considered as HARI’s flagship vehicle, the Grand Starex’s 17-year evolution as the family vehicle has leveled up to become the Grand Starex Urban, a nine-seat luxury van powered by a Euro6-rated 2.5-liter CRDI VGT engine mated to the H-Matic five-speed automatic transmission. Its interior luxury amenities are highlighted by the flexible ergonomic seating and exclusive brown leather seats.
The price of the Grand Starex Urban is yet to be finalized.
The refreshed Tucson crossover SUV features upgrades inside and out. Sporting either the 2.0-liter Nu MPI gasoline engine or the 2.0-liter R CRDI e-VGT diesel mill with a six-speed manual or automatic (for the gasoline-powered variant) transmission and eight-speed automatic gearbox (for the diesel variant), the Tucson complements its power under the hood by a bold new physique, as defined by Hyundai’s Fluidic Sculpture 2.0 design philosophy.
Prices for the Tucson are between P1.308 million for the 2.0 GL 6M/T 2WD variant and P1.835 million for the top-spec 2.0 GLS CRDI 8A/T 2WD.
The Ioniq Hybrid is faithful to its purpose both in form and substance. The interplay between its efficient 1.6-liter CVVT gasoline engine mated to a six-speed dual clutch transmission and the electric Permanent Magnet Synchronous Motor that provides up to an additional 43hp of power and 170Nm of torque makes for a spirited yet environment-friendly driving experience. This experience can also be seen in its futuristic look, a product of Hyundai’s exterior design philosophy called Visual Aero, inspired by the movement of flowing air.
The Ioniq Hybrid retails for P1.498 million.
HARI’S bestselling compact sedan, the star of the launch program and Hyundai’s champion in fuel efficiency, now comes sleeker in style and stronger in body. The new Accent is more spacious, looks more sophisticated and dynamic, but, more important, its use of 50% advanced high-strength steel to reinforce critical areas of the body structure offers much better crash protection. Beneath the hood lies the renowned U-II 1.6-liter CRDi VGT diesel or the Kappa 1.4-liter MPI dual CVVT gasoline engines, both matched to six-speed manual or automatic transmissions, which provide outstanding fuel-saving performance in city and long drives.
The Accent costs between P725,000 and P1 million.

Toyota introduces new-generation Camry in PHL

THE eighth-generation Toyota Camry, premiered at the North American International Auto Show in 2017 and sold in Japan, the US and other markets later that year, is now available in the Philippines.
The car arrives today in all Toyota dealerships in the country. Two variants are available — the Camry 2.5 G that costs P1.806 million and the Camry 2.5 V priced at P1.992 million. Both variants can be ordered in a special white color for an additional fee of P15,000. Six other paintjobs are offered.
As the variants’ designations suggest, the latest Camry is powered by a revised 2.5-liter, four-cylinder engine fitted with dual VVT-i — Toyota’s variable valve-timing system. The engine makes 181hp at 6,000rpm and 231Nm at 4,100rpm. A six-speed automatic transmission, equipped with Sport and Eco modes, is matched to the engine. A new feature of the transmission is its ability to shift to a higher gear quicker and blip the throttle when downshifting when it is set in Sport mode.
Propping up the new Camry is a structure conforming to the Toyota New Global Architecture, which the car maker said is focused on rigidity and better handling. The car has a lower center of gravity than the previous model, and its suspension — MacPherson in front, double wishbones in the rear, both with stabilizer bars — is now tuned to respond more sharply. Wheels are 17-inch alloys for the 2.5 G variant. The 2.5 V gets alloys an inch larger, which should benefit handling even more.

Toyota Camry 2
Cabin of new Camry more stylish, better equipped than previous model.

Besides better dynamics, the new Camry’s structure has also made the car safer — Toyota said the Camry scored the top 5-star rating in Southeast Asia’s version of the New Car Assessment Program. Among the car’s safety features are seven airbags, hill-start assist, stability control and ABS with electronic force distribution and assist.
While the two Camry variants are identical mechanically, distinguishing the 2.5 V from the 2.5 G are the former’s power-reclining backseat; touch screen controls for the sunshade, air-conditioning and backseat; a seven-inch touch screen multimedia panel (the 2.5 G has a 4.2-inch touch screen); a power sunshade; transmission modes; triple-zone automatic climate control (against the 2.5 G’s dual); power-adjustable steering wheel with memory function; and power-retractable side mirrors and multi-configurable, leather-wrapped front seats with memory settings.
Both variants are equipped with electric power steering assist; LED head lights, daytime running lamps and tail lights; rain-sensing wipers; smart entry with push-button ignition; multimedia with Android and Apple mirroring capability; and leather steering wheels.
Certainly, instantly recognizable in the new Camry is its more adventurous, edgier styling both inside and out. — Brian M. Afuang

Dashboard (12/12/18)

MG RX5
2019 MG RX5

MG cars come with low down payment plans

MG Philippines, under The Covenant Car Company, Inc., is offering until Dec. 31 down payment plans as low as P78,000 on purchases of MG models.
Included in the promotion are the 2019 MG ZS in Style M/T, Style A/T and Alpha A/T variants; the 2019 MG RX5 in Core M/T and Style A/T variants; and the MG 6 in Alpha 7TST and Trophy 7TST variants. The cars come with a five-year, or 100,000-kilometer, warranty coverage.
MG Philippines said the cars have access to after-sales services from MG Philippines-accredited outlets, as well as to a “Mobile Garage.”

Mercedes-Benz GLE

Mercedes-Benz cuts price of GLE

MERCEDES-BENZ Philippines is reducing by as much as P500,000 the price of the Mercedes-Benz GLE. The discount is offered until Dec. 31.
The GLE is a luxury SUV equipped with 20-inch alloy wheels, LED Intelligent Light System, and an infotainment system with a touch screen and a touch pad, among other items. Powering the car is a V6 engine matched to a 4MATIC all-wheel drive system. Some of its safety features are collision prevention assist, blind spot assist, radar-based and active brake assist with collision mitigation.

Shell Autohub
Pilipinas Shell president and CEO Cesar G. Romero (left) and Autohub Group president Willy Q. Tee Ten hold a Shell station replica to symbolize partnership.

Shell fuels now power Autohub Group

PILIPINAS Shell said it entered an agreement with the Autohub Group of Companies making its V-Power fuels the official choice for the brands sold by the vehicle distributor.
The Autohub Group distributes Rolls-Royce, Lotus, Nissan GT-R and Mini, as well as motorcycle brands Vespa, UM and Piaggio Ape, in the Philippines.
Signing the agreement were Pilipinas Shell president and CEO Cesar G. Romero, Pilipinas Shell vice-president for retail Anthony Lawrence Yam, Autohub Group president Willy Q. Tee Ten, and Autohub Group of Companies vice-president for marketing and PR Norweijann Cruz.
Purchases made from the Autohub Group will now include vouchers for Shell fuels, Shell Select and Deli2Go, as well as a motorist’s guidebook containing car maintenance and travel tips.

The shift to motorcycles isn’t limited to the masses

Based on figures available from the Land Transportation Office, motorcycles sales are going through the roof — quite expected considering their relative affordability, the horrible state of our public transportation, and the ever-worsening traffic situation in Metro Manila and similar city centers in the provinces. According to LTO records, there were a total of 1,408,835 brand-new motorcycles registered in the country in 2015, 1,572,322 in 2016 and a whopping 2,006,954 in 2017. And since 2018 isn’t over yet, the agency can only provide digits for the first six months of the year. Assuming the report is accurate, there were 1,093,044 new motorbikes registered from January to June this year — which means 2018 is very much on track to surpass 2017.
Now, many of us associate motorcycles with the masses. The messengers. The delivery guys. The traffic marshals. The blue-collar workers. These are the people we picture in our minds as enjoying two-wheeled mobility. Even their perceived reckless behavior on the road has been tied to ordinary folks. We even coined a term for their kind: kamote riders. These individuals, we’re convinced, are uneducated, undisciplined members of the motoring community.
Whatever makes us feel better behind the wheel of our cars, I guess.
But this notion can’t be farther from the truth. While it’s true that countless motorcyclists in the Philippines do belong to the lower rungs of our socio-economic strata, a good number of them are also moneyed dudes who ride either as a hobby or as a serious alternative to their slow-moving automobiles. And they’re growing in head count.
This realization struck me last Sunday, when I went to San Fernando, Pampanga, to attend BMW Philippines’ launch of two motorcycle models: the R1250 GS sport bike and the C400 X midsize scooter. The parking lot leading to the Laus Group Event Center was populated by hundreds of high-end BMW and Ducati motorcycles obviously owned by loaded riders capable of purchasing the latest offerings from Motorrad.
The event was particularly telling to me as this was my first time to get invited to a major (and out-of-town) motorcycle launch by BMW. I had always looked at the motorcycle beat as distinctly separate from the main automotive media pack. But the German automaker is apparently bent on tearing down the dividing wall between the two starting with last Sunday’s breakfast gathering.
“We are now trying to reach a much bigger market for motorcycles, and we are starting this by reaching out to motoring journalists who cover cars,” BMW Philippines president Adrian Spencer Y. Yu told me, as though needing to justify the inconvenience they had inflicted on me. “I think we’re the first motorcycle company to do this.”
BMW Motorrad director Gil Balderas patiently made me understand why the local distributor is suddenly going all out with its motorcycle offensive. In 2015, BMW sold 191 two-wheelers in our market. That total jumped to 280 units in 2016, and then to a record 470 units in 2017. From January to November this year, BMW moved a total of 697 motorbikes. With one more selling month to go, 2018 is looking like a blockbuster year for BMW motorcycles in our territory.
And so the importer wants to strike while the iron is hot. Hence the arrival of the affordable C400 X, a P450,000 scooter that is seen to coax a lot of wealthy car owners into ditching their sedans and SUVs for a quicker and more convenient way through traffic. With a 350cc single-cylinder, four-stroke engine (34hp and 35Nm), this urban transporter isn’t allowed on the expressway, but it’s plenty good enough for inner-city errands.
Judging by the crowd’s reaction to the unveiling, this scooter will sell like hotcakes, further padding motorcycle stats on LTO registration documents. It should also help change the way we perceive scooters and the people who use them. As a BMW executive shared with me, the brand’s motorcycle customers actually splurge more than its car customers during overseas incentive trips. So the next time you see a motorcycle rolling to a stop next to your car at an intersection, try not to sneer and be dismissive of its presence. Its owner likely has more cash than you’ll ever make in your lifetime. Assuming the motorbike is a BMW, that is.

The Ruined Table

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PHL stocks rebound as investors pick up bargains

LOCAL SHARES recovered on Tuesday as investors hunted for bargains following the market’s recent decline.
The bellwether Philippine Stock Exchange index (PSEi) went up 1.4% or 102.87 points to close at 7,451.08 yesterday versus the previous session’s 7,348.21. The broader all-shares index was also up by 0.84% or 37.59 points to 4,478.73.
“Our index ended up today as investors hunt for bargains after the PSEi fell for three days,” Jervin S. de Celis, equity trader at Timson Securities, Inc. said in a message on Tuesday.
“Foreigners, however, are net sellers…as they remain cautious due to the renewed tension between US and China over the arrest of Huawei’s [chief finance officer] and China’s ban of iPhone sales after granting Qualcomm an injunction against Apple,” he added.
Foreign selling was logged at P326.16 million on Tuesday, a reversal of Monday’s net buying worth P3.96 billion.
Huawei’s Chief Finance Officer Meng Wanzhou was arrested by Canadian authorities last week after allegedly violating trade sanctions against Iran.
Meanwhile, a Chinese court has ordered a sales ban of some older Apple, Inc. iPhone models in China for violating two patents of chipmaker Qualcomm, Inc. though intellectual property lawyers said enforcement of the ban was likely still a distant threat.
On the other hand, for Luis A. Limlingan, managing director at Regina Capital Development Corp. said in a text message that shares “staged a rally with the Brexit postponed and US stocks recovering from an early rout.”
Wall Street ended Monday’s volatile session slightly higher with help from technology stocks although bank stocks tumbled and uncertainty over Britain’s exit from the European Union kept investors on edge about global growth.
The Dow Jones Industrial Average rose 34.31 points or 0.14% to 24,423.26; the S&P 500 gained 4.64 points or 0.18% to 2,637.72; and the Nasdaq Composite added 51.27 points or 0.74% to 7,020.52.
Back home, majority of sector counters ended higher, led by holding firms which was up by 1.96% or 139.83 points to close at 7,275.80. Property rose 1.86% or 67.22 points to 3,667.62; industrials went up 0.99% or 106.78 points to 10,826.11; and financials gained 0.49% or 8.67 points to end at 1,775.66.
On the other hand, services went down 0.46% or 6.6 points to 1,401.07 and mining and oil dropped 0.07% or 6.44 points to 8,311.16.
Some 551.63 million shares valued at P4.72 billion switched hands yesterday, sinking from Monday’s P14.84-billion value turnover. Advancers beat decliners, 106 to 75, while 53 names remained unchanged.
“I assume the index may still go up [on Wednesday] as market participants try to retest the 7,500-7,600 resistance area. This level was also a former key support level from April to June and in the middle of the month of August… We probably need more positive catalysts to push our market higher,” Timson Securities’ Mr. De Celis said. — VMPG with Reuters

Peso inches up vs dollar

THE PESO strengthened slightly versus the dollar even as the country posted its widest trade deficit in October.
The local currency closed Tuesday’s session at P52.77 against the greenback, three centavos stronger than the P52.80-per-dollar finish on Monday.
The peso opened the session weaker at P52.83 per dollar, reaching an intraday low of P52.91. Meanwhile, its best showing stood at P52.76 versus the greenback.
Dollars traded grew to $906.85 million from the $603.12 million that switched hands the previous day.
A foreign exchange trader said the peso strengthened a tad versus the dollar even as the latest trade balance figures showed a wider deficit in October.
According to the Philippine Statistics Authority, the country’s import bill grew 21.4% to $10.3 billion in October, outpacing the 3.3% growth in exports, which stood at $6.1 billion.
This pushed the country’s trade deficit to widen to $4.21 billion from the previous month’s $3.92 billion.
“The trade balance data is actually negative for the Philippine peso, but I think there’s some correction at the P52.90 level due to technical views only,” the trader said in a phone interview.
Nicholas Antonio T. Mapa, economist at ING Bank NV-Manila, explained that capital imports and raw material growth are “not expected to slow down in the near term,” as the country continues to bring in infrastructure-related materials in line with the government’s “Build, Build, Build” push.
Michael L. Ricafort, economist at Rizal Commercial Banking Corp., attributed the slight peso appreciation to a lower dollar against major global currencies after the latest decline in the 10-year US government bond yields to a new three-month low and softer US jobs data, among others.
“Peso also stronger ahead of the seasonal surge in the conversion of [overseas] remittances…especially one to two weeks before Christmas for yuletide-related spending,” Mr. Ricafort said in a text message.
For today, the trader expects the peso to move between P52.70 and P52.90, while another trader gave a P52.65-P52.85 range. — K.A.N. Vidal

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