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Delay in PEZA approvals hampers BPO sector expansion

EXPANSION of the business process outsourcing (BPO) sector next year may be hampered by the continued delay of the Philippine Economic Zone Authority (PEZA) in approving applications, according to Colliers International Philippines.
The real estate property consultancy noted in a statement that only six PEZA applications have been approved in the first nine months of 2018, with no approvals seen in the fourth quarter.
Since President Rodrigo R. Duterte started his term in 2016, only 36 out of 78 PEZA IT Center and Park applications have been approved, or an approval rate of 46%. The most number of approvals were seen in the fourth quarter of 2017 at 11 PEZA applications, which prompted an increase in take up of office spaces in 2018.
“Colliers believes that a major reason why office demand from outsourcing firms picked up in 2018 is the accelerated PEZA proclamation of office spaces in 2017 which are now about 70% occupied,” the company said.
PEZA-accredited buildings include Megaworld Corp.’s McKinley Hill, Filinvest Land, Inc.’s Northgate Cyberzone, Robinsons Land Corp.’s Bridgetowne, and Ayala Land, Inc.’s Vertis North, among others.
“Colliers encourages the government to expedite the approval of PEZA applications. We believe that a couple of applications can still be approved before the end of the year, which should contribute to a stronger pre-leasing of office space due to be completed in 2019 and 2020,” it said.
As of the third quarter of 2018, there are 821,742.31 square meters (sq.m.) of office spaces with pending PEZA applications in the country, 637,630 sq.m. of which are in Metro Manila. Provincial sites with pending PEZA applications include Bataan, Benguet, Cavite, Cebu, Davao del Sur, Iloilo, Laguna, and Negros Occidental.
Next year, about 41% of the buildings to be completed have already been granted PEZA accreditation.
The proclamation of more PEZA buildings could further ease fears of the enactment of the second package of the tax reform law, or the Tax Reform for Attracting Better and High-Quality Opportunities (TRABAHO), which diminishes tax incentives given to PEZA locators.
Colliers noted that a number of BPO firms have already adapted a wait-and-see stance due to the TRABAHO bill.
The BPO sector contributed the largest share of Metro Manila office space transactions in the first nine months of 2018, at 42% of the total 1.14 million sq.m.
While the BPO sector has been the primary driver for office demand in the previous years, Colliers encouraged developers to start targeting traditional and non-BPO firms that have been expanding in Metro Manila, citing the country’s strong economic growth.
“The country’s economic managers are expecting a GDP growth of 6% to 6.5% this year and 7% to 8% from 2019 to 2022 and a strong macroeconomic backdrop should support the expansion of these businesses. This should eventually compel firms to occupy larger office space,” Colliers Director for Office Spaces Dom Frederick Andaya said in the same statement. — Arra B. Francia

U2, Coldplay top Forbes list of highest-paid musicians

LOS ANGELES — Irish rock band U2 topped the 2018 Forbes magazine list of the highest-paid musicians on Tuesday thanks in part to the group’s successful Joshua Tree world tour celebrating their classic 1987 album.
That tour helped the band collect $118 million in pre-tax earnings from June 1, 2017 to June 1, 2018, the magazine said. The performances featured well-known hits from The Joshua Tree album including “Where the Streets Have No Name,” “With or Without You” and “I Still Haven’t Found What I’m Looking For.”
The band’s earnings also included revenue from a new tour, Experience + Innocence.
British band Coldplay finished second on the Forbes list with $115.5 million, mostly from its A Head Full Of Dreams tour.
Billions of streams helped 27-year-old British singer Ed Sheeran finish third with $110 million. He was followed by Bruno Mars with $100 million, and Katy Perry with $83 million. — Reuters

China’s Didi announces reorganization plan to address safety after two deaths

SHANGHAI — Chinese ride-hailing firm Didi Chuxing on Wednesday announced a reorganization plan aimed at improving safety on its platform, as it works to address public and government concerns raised after the murders of two of its users.
In a post on its official WeChat account, the company said it would create two positions at the top of its leadership structure — a chief safety officer reporting to Chief Executive Cheng Wei, and a chief information security officer reporting to Chief Technology Officer Bob Zhang.
“Safety is the number one priority for our users. The committee members responsible for safety will promote and implement safety reform work, invest in online and offline resources, and thoroughly improve our standards for safety,” the company said, attributing the comment to both Mr. Cheng and Didi President Jean Liu.
Didi has been the subject of a public backlash since a 20-year-old woman from the eastern city of Wenzhou was raped and killed by one of its drivers in August, about three months after another Didi user was murdered.
Last week, the Ministry of Transport called the ride-hailing firm “out of control” and criticized its management and background check procedures.
In its WeChat post, the firm also said it will consolidate some of its ride-hailing divisions — each responsible for different services — to form a single business unit in which it would invest to improve compliance and services standards.
It said it would similarly move its bike rental, designated driver and public transportation units into a single entity. — Reuters

ING sees cuts in key rates, reserve requirements

By Melissa Luz T. Lopez, Senior Reporter
SLOWER GROWTH and tighter liquidity will prompt the central bank to stop its tightening cycle, a global bank said, expecting cuts in interest rates as well as bank reserves in 2019.
Nicholas Antonio T. Mapa, senior economist at ING Bank NV-Manila, said he expects the Bangko Sentral ng Pilipinas (BSP) to reduce key rates by 50 basis points (bp) next year plus a 200-bp cut in the reserve requirement ratio (RRR).
Broken down, Mr. Mapa sees a 25-bp rate cut within the second and fourth quarter. Meanwhile, 100-bp cuts in bank reserves are expected in the first quarter and in the third quarter.
However, the bank economist said there are three conditions that need to be met before these adjustments are enforced.
“Possibly by the second quarter, we can see them (BSP) cut the policy rates and on top of it, reserve requirement mainly on three premises: first, inflation has to slow back to within target,” Mr. Mapa said in a media roundtable session yesterday in Makati City.
“We’d also like to see the Fed[eral Reserve] dot plots more dovish than they are right now and lastly, growth is expected to slow down so maybe this gives the BSP a leeway to give the economy a much-needed break.”
The BSP has fired off five consecutive rate hikes since May worth a total of 175 bps, the latest of which a “proactive” move to temper inflation expectations going into 2019. Now, rates range from 4.25-5.25%, with the 4.75% benchmark the highest in nine years.
The series of increases are meant to rein in price pressures, which have been consistently climbing since January until a sharp fall recorded last month.
Inflation has so far averaged 5.2% this year versus the original 2-4% target band, although economic managers said the rate will consistently decline going into 2019.
Higher interest rates are viewed as a growth risk coupled with faster prices increases for basic goods which dampen consumer spending.
Already, household spending has been decelerating so far this year, with growth easing to 5.2% in the third quarter from 5.9% logged in the April-June period.
Mr. Mapa said they expect inflation to ease to 3-3.1% next year, which should “invigorate” business spending and restore some purchasing power among retail shoppers.
These are expected to help stoke the economy, with overall growth expected to ease to 6.1% in 2019 coming from a 6.2% forecast this year. Gross domestic product (GDP) growth has averaged 6.3% as of end-September.
Growth is seen to slump to 5.9% this quarter, which if realized will slump from 6.1% logged in July-September and will be the slowest pace in over three years. This trend is expected to be carried over through the first half of 2019, as a boost from election spending could be cancelled out by a five-month ban on government projects ahead of the May 2019 polls.
“Basically we see growth possibly struggling in the first half (of next year)…,” Mr. Mapa said. “High rates and growth just don’t mix.”
Meanwhile, fresh RRR cuts are projected next year in line with BSP Governor Nestor A. Espenilla, Jr.’s long-term goal of bringing the reserve level down to single digits. The RRR is currently at 18%, down from 20% previously after two cuts which took effect earlier this year. Reducing the mandated bank reserves will free up cash, letting lenders deploy more funds for lending and investments.
Some respite is expected from robust government spending, which has been driving GDP expansion. However, Mr. Mapa said the delayed passage of the 2019 national budget — which is still pending at the Senate just days before the year starts — could push back state disbursements including high-impact infrastructure projects.
“Because consumption is hampered to some extent by higher interest rates and high inflation, we’re counting on government spending to buttress the rest of the economy. If the delay happens, then we can see a subsequent delay in spending,” he added.
Going into 2019, exports are expected to remain a drag while the peso is seen to depreciate further to P54.45 against the greenback as concerns on a wider trade gap weigh down sentiment towards the currency.
The Duterte administration is targeting GDP growth at 6.5-7% this year and at a faster 7-8% in 2019.

Court recalls arrest warrants vs Alliance Select execs

ALLIANCE Select Foods International, Inc. said the warrants of arrest against its incumbent officials have been recalled, after a Pasig court upheld that these violated their right to due process.
In a court ruling penned Nov. 20, Branch 70 of the Pasig City Metropolitan Trial Court ordered that the warrants of arrest dated July 11 be quashed or recalled against Alliance Select President and Chief Executive Officer Raymond K.H. See, Chairman Antonio C. Pacis, and former company officials George Sycip and Jonathan Y. Dee.
The court said the warrants were issued prematurely and in denial of the defendants’ right to a full preliminary investigation by the Department of Justice (DoJ) in determining probable cause.
The warrants of arrest were issued in relation to inspection charges filed by Singaporean shareholder Hedy S.C. Yap-Chua, who requested for an inspection of the company’s books and records.
Ms. Yap-Chua questioned Strong Oak, Inc.’s P563-million private placement in Alliance Select back in 2014, which effectively diluted Singaporeans’ holdings to 24.52% from 34.4%.
She then said that the company’s refusal to open up their books constitutes a violation of Sections 74 and 75 in relation to Section 144 of the Corporation Code.
Section 74 of the Corporation Code states that “every corporation shall keep and carefully preserve at its principal office a record of all business transactions…,” while Section 75 details the rights of any stockholder or member of the company to be granted access to records such as their latest financial statement.
Alongside the recall of the warrants, the Pasig Court also ruled that the cases against Alliance Select officials be returned to the DoJ through its state prosecutors, so that it may complete the preliminary investigation and resolve pending motions for reconsideration.
“The DoJ through the state prosecutors concerned is hereby directed to make a report of its proceedings not later than the expiration of the period here allotted and to inform the court within a period of five days from notice as to the time and date when it received this order,” according to the ruling.
In a statement, Mr. See said that he is happy with the court’s decision “because the rule of law has been upheld.”
Alliance Select is a homegrown firm that engages in tuna processing, canning, and the export of canned tuna products to international markets such as Europe, North America, Asia, Africa, South America, and the Middle East.
The company booked a net income attributable to the parent of $3.23 million in the first nine months of 2018, 680% higher than the $414.33 million it posted in the same period a year ago. This followed a 39% increase in gross revenues to $74.15 million.
Shares in Alliance Select were flat at P1.02 each at the stock exchange on Thursday. — Arra B. Francia

A Star is Born, Black Panther are among AFI’s top films of 2018

LOS ANGELES — Musical drama A Star is Born, superhero movie Black Panther, and horror flick A Quiet Place were named as some of the 10 best films of 2018 by the American Film Institute on Tuesday.
The top movies also included coming-of-age tale Eighth Grade and family film Mary Poppins Returns, as well as historical dramas BlacKkKlansman, If Beale Street Could Talk, The Favourite, Green Book, and First Reformed.
The honors are among the first to be handed out during Hollywood’s awards seasons, which continues with Golden Globe nominations on Thursday through the Academy Awards in February.
The group also gave a special award to black-and-white family drama Roma, which did not meet criteria for the top 10 list of American films. Roma was shot in Mexico and the dialogue is in Spanish. The movie is being shown on Netflix and in a limited number of theaters around the world.
The AFI also named its top 10 TV series of the year. They were The Marvelous Mrs. Maisel, Succession, Atlanta, Pose, The Americans, The Assassination of Gianni Versace: American Crime Story, Barry, Better Call Saul, This is Us, and The Kominsky Method. — Reuters

Sanofi plans 670 job cuts in France by end 2020

PARIS — French drugmaker Sanofi told unions on Wednesday it was planning to cut 670 jobs in France, a union representative told Reuters.
The plan, which is to be set on a voluntary basis, would affect human resources, IT, and finances among others, Thierry Bodin, with the CGT union said. In addition, 80 IT jobs are to be outsourced, he said.
The group had said in September it would continue to implement cost savings after having reached a 1.5 billion euros ($1.70 billion) cost reduction target a year ahead of expectations.
A Sanofi spokesman confirmed the company’s intention to shed 670 jobs out of a 25,000 workforce in France and said the plan was to be completed by the end of 2020. — Reuters

BPI upsizes peso bond issuance to P25 billion on strong demand

BANK OF THE Philippine Islands (BPI) raised P25 billion via peso-denominated bonds which will be used to diversify funding sources.
The Ayala-led bank has issued P25 billion worth of fixed-rate debt papers at the Philippine Dealing & Exchange Corp. (PDEx) in Makati City on Thursday, the largest local bond listing to date.
The papers will mature in 1.25 years and carry an interest rate of 6.797% per annum to be paid quarterly until March 2020.
The issuance marks the maiden tranche of its P50-billion bond or commercial paper program approved by the lender’s board last Sept. 19.
In his speech, BPI President and Chief Executive Officer Cezar P. Consing said the amount raised is five times larger than the P5 billion it initially intended to issue, but is priced at the tight end of the original price range.
“The order book exceeded P38 billion, indicative of the trust placed by thousands of investors,” he added.
Antonio V. Paner, BPI treasurer and global markets head, said the bank wants to raise peso-denominated papers to have alternative funding sources.
“As you know, we’re diversifying… Now, we’re doing bonds so that we will have an array of funding alternatives, [and] also we want to give our clients an alternative investment option,” Mr. Paner told reporters yesterday.
Lenders can now raise fresh funds through corporate bonds with greater ease as new rules do away with having to secure approval from the Bangko Sentral ng Pilipinas.
Metropolitan Bank & Trust Co. recently raised P10 billion via fixed-rate bonds, part of its P100-billion bond and commercial paper program announced last month.
Prior to the new and “market-friendly” regulation, banks usually raise fresh funds by issuing long-term certificates of deposits, which carry a tenor of more than five years.
“The reserve requirement of a bond is much lower than the deposit. So in terms of actual cost of the bank, it’s actually cheaper than a similarly priced time deposit,” Mr. Paner added.
“The savings in the cost would be shared. Some of that would accrue on the bank because of the saving, while some of them would accrue to the investors because we’re giving them higher yields.”
The Hongkong and Shanghai Banking Corp. Ltd. acted as the sole lead manager and bookrunner of the peso bond issuance. It was also the selling agent alongside BPI Capital Corp.
BPI’s listing brings the total volume of outstanding securities listed at the PDEx to P1.002.27 trillion, floated by 50 companies.
Earlier this year, BPI completed a P50-billion rights offer, with the proceeds funding its business operations and expansion.
The bank also raised $600 million in August through a drawdown from its $2-billion medium-term note program, which it said was the largest issuance by a local lender in the offshore debt market.
Looking ahead, Mr. Paner said the lender is looking at returning to the offshore bond market next year, as they are “contemplating on [issuing] green bonds,” or debt notes specifically allotted for environmental or climate projects.
The Ayala-led bank reported a P5.98-billion net profit in the third quarter on the back of the double-digit expansion of its net interest income.
BPI shares went down 30 centavos or 0.32% to close at P93.20 apiece on Thursday. — Karl Angelo N. Vidal

BMI to open 40 branch-lite units

BANK OF MAKATI (A Savings Bank), Inc. (BMI) is looking at opening 40 branch-lite units across the country next year to bolster its lending catered to small businesses.
In a statement on Thursday, the savings bank said it wants to open 40 branch-lite units starting next year, subject to central bank approval.
Broken down, the lender is eyeing to open 26 offices in Luzon including locations in Metro Manila, Cagayan Valley, Calabarzon, Mimaropa and Bicol Region.
BMI is also set to open another 14 branches in Visayas and Mindanao, particularly in Aklan, Negros, Cebu, Bohol, Samar, as well as in Zamboanga, Davao del Sur, Davao del Norte and Agusan del Sur.
“Expanding our branch network is integral to our goal of enabling Filipino savers and supporting their entrepreneurial endeavors,” BMI President Luis M. Chua was quoted as saying in the statement. “With our planned branch-lite units, we look to provide the unbanked and the underserved access to banking services tailored to their needs.”
BMI is positioning itself to become the preferred bank of micro-, small and medium enterprises.
BMI, the eighth-largest savings bank in asset terms as of end-June, currently has 62 branches as well as 703 Motortrade outlets which serve as collection agents. — K.A.N. Vidal

English test norms eased for UK nursing applicants

THE British Council said nurses from the Philippines seeking work in the UK will be allowed in with lower scores in a language proficiency test necessary for them to get into the region.
The Nursing and Midwifery Council (NMC) has revised its minimum score in one of the tests conducted by the International English Language Testing System (IELTS) for overseas workers seeking work in the UK.
“Nurses and midwives wishing to work in the UK will still be required to achieve a minimum overall score of 7.0 in IELTS. However, a 6.5 score in the Writing section of the test will be accepted alongside a 7.0 score in each of the Reading, Listening and Speaking sections of the test,” the British Council said in a statement on Wednesday.
The new Writing minimum score took effect on Dec. 5.
British Council Country Director Pilar Aramayo Prudencio said that the UK organization will continue to extend assistance and provide resources for Filipino health workers to help them accomplish the IELTS minimum scores.
“We look forward to continuing to provide support and guidance to nurses and midwives looking to work in the UK, so that they may achieve the IELTS score requirements announced by the NMC,” she said.
According to data from the Philippines Overseas Labor Office (POLO), nearly 95% of Filipino workers deployed to the UK last year are in the nursing profession. — Gillian M. Cortez

Converge upgrades internet speeds for subscribers

CONVERGE ICT Solutions, Inc. is upgrading its internet speeds at no cost to its subscribers in a bid to expand its subscriber base as it rolls out services in more parts of the country.
The fiber internet provider said it has started the free upgrade of internet speeds for its existing subscribers on the P2,500 plan from 50 megabits per second (Mbps) to 75 Mbps, and for those on the P3,500 plan from 100 Mbps to 150 Mbps.
It is also offering an add-on speed of 10 Mbps to subscribers of its P1,500 plan, which has a speed of 25 Mbps for P99. Customers who would avail of the promo until end of January 2019 may get the add-on service free for one month.
“With higher speeds, all Converge home subscribers will definitely enjoy more digital activities, get equipped with more-than-sufficient network requirements as demanded by current technologies and just plainly experience better,” the company said in a statement.
Converge Chief Operating Officer Jesus C. Romero said in an interview the company is eyeing to double the number of subscribers by next year, as it targets reaching 7 million in five years.
“Based on our end base in 2017 and our end base by this month, December, just following trend, we will double our subscriber base (next year)… The target is to double again,” he said.
In August, Converge Chief Executive Officer Dennis Anthony H. Uy said it had 200,000 subscribers.
But Mr. Romero said Converge is not starting a “price war” with PLDT, Inc. and Globe Telecom, Inc., as he believes the market is still large to accommodate them.
“I don’t think we’re going in a price war. We think the market is big enough for all of us. We don’t have to kill each other. Many people are still waiting for a fiber connection,” he said.
PLDT currently offers its unlimited fiber network plans for P6,000 for 200 Mbps and P2,899 for 50 Mbps. Meanwhile, Globe’s offers are P2,899 for 100 Mbps and P2,499 for 50 Mbps.
“Our objective is to reach as much of the Philippines as we can. Luzon Island we’re working hard. We’re almost in Baguio. We’re now in Naga, in Bicol, and we’re rolling out our own back bone there. The only thing is to get to Visayas and Mindanao, you need submarine cable. That’s going to take maybe 18 to 24 months. But we’re going to do that, because we really need to try to reach as much of the market as possible,” Mr. Romero said.
The fiber company has tapped South Korea’s KT Corp., US-based Tyco Electronics Subsea Communications LLC (TE SubCom) and local firm Fibernet Konstrukt Corp. in August for assistance in its expansion plans, with a total investment of P1.8 billion for five years. — Denise A. Valdez

Actress Sandra Oh, comic Andy Samberg named as Golden Globe hosts

LOS ANGELES — Canadian actress Sandra Oh and US comedian Andy Samberg will co-host the 2019 Golden Globe Awards in January, organizers said on Wednesday.
The two celebrities will be first-time hosts for the Golden Globes, which honor both television and film. Nominations for the awards will be announced on Thursday and the televised ceremony on NBC will take place in Beverly Hills, California, on Jan. 6.
The Golden Globes, chosen by members of the Hollywood Foreign Press Association, are the first major ceremony in Hollywood’s awards season culminating with the Oscars on Feb. 24.
Ms. Oh is best known for her former role in the long-running television hospital drama Grey’s Anatomy, and is now starring in BBC America’s acclaimed murder-mystery Killing Eve.
Mr. Samberg is a former Saturday Night Live, cast member and a previous Golden Globe winner for television comedy series Brooklyn Nine-Nine.
The duo won praise for their chemistry when they were presenting at the Emmy Awards for television in September.
Ms. Oh and Mr. Samberg will “bring wit, charm and style to a room filled with the very best of film and television,” Paul Telegdy and George Cheeks, co-chairmen of NBC Entertainment, said in a statement.
Mr. Samberg and Ms. Oh, who earlier this year became the first woman of Asian descent to be nominated for a lead drama actress Emmy, were announced as hosts a day after African-American comedian Kevin Hart was named as a first-time host of the 2019 Academy Awards ceremony.
Showbusiness awards organizers have been under pressure in recent years to diversify hosts and nominees to include more women and people of color.
The Golden Globes are handed out at an informal gala dinner where the champagne flows and celebrities roast each other with inside barbs, and make topical and political jokes.
Late-night talk show host Seth Meyers hosted the last Golden Globes while previous hosts have included British comedian Ricky Gervais as well as comedy actresses Tina Fey and Amy Poehler. — Reuters

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