Alliance Global’s first-half profit rises 17%

August 10, 2018 | 3:37 pm

Alliance Global Group, Inc. grew its attributable profit by 17% in the first half of 2018, driven by the double-digit growth across its property, liquor, and fast food businesses, alongside the recovery in its gaming unit.
In a statement issued Friday, the holding firm of tycoon Andrew L. Tan reported a net income attributable to equity holders of the parent of P7.9 billion, versus the P6.9 billion it realized in the same period a year ago.
This was supported by a nine percent increase in revenues to P73.2 billion for the first semester.
“All the group’s major subsidiaries delivered strong topline and bottomline results, reflecting the improving outlook in their respective business segment,” AGI Chief Executive Officer Kevin Andrew L. Tan said in a statement. — Arra B. Francia

Central bank fires off third rate hike

August 10, 2018 | 12:32 am

By Melissa Luz T. Lopez
Senior Reporter
THE Bangko Sentral ng Pilipinas (BSP) raised rates anew yesterday in a more aggressive move as expected, to temper inflation amid signals that prices could remain elevated until next year.
The Monetary Board raised policy rates by 50 basis points (bp) on Thursday, marking the third consecutive tightening move this year as policy makers wanted to rein in price expectations.
This is also the central bank’s strongest response in a decade. The last time the BSP raised rates by 50bp in one go was in July 2008, which saw inflation surge to a 17-year high at 12.2% against a 3-5% target that year.
Rates now stand at 4.5% for the overnight lending rate, 4% for the overnight reverse repurchase rate, and 3.5% for the overnight deposit rate.
“In deciding to raise the BSP’s policy rate anew, the Monetary Board noted that latest baseline forecasts have shifted higher over the policy horizon, indicating some risk of inflation exceeding the target in 2019,” BSP Governor Nestor A. Espenilla, Jr. said in a media briefing yesterday.
The BSP tightened rates by 25bp each during its May and June meetings, at a time when monthly inflation started to log beyond four percent.
Inflation expectations — which play a huge part in terms of price movements — remain “elevated” as of now. The stronger adjustment is likewise seen to “prevent sustained supply-side price pressures,” even after previous tightening moves.
Prices of widely used goods surged to 5.7% in July, beating market expectations which brought the seven-month average to 4.5%, well above the 2-4% target range.
All 14 economists polled by BusinessWorld last week were sure that the central bank will raise interest rates this week, but were torn as to whether it will involve a typical 25bp increase or stronger. More analysts bet on a 50bp hike following the release of July inflation data on Tuesday.
“The Monetary Board believed that the series of policy rate adjustments thus far in 2018 will help reduce further the risks to inflation…,” Mr. Espenilla added. “Favorable conditions arising from sustained domestic growth also suggest that the economy can accommodate a further tightening of monetary policy settings.”
Thursday’s move is also in keeping with Mr. Espenilla’s hints of a “strong policy response,” versus a “measured” approach previously.
Meanwhile, the BSP chief said he has let go of plans to reduce bank reserves, saying that the 200bps cut introduced this year is sufficient for now. Mr. Espenilla has said the central bank will introduce fresh reserve cuts by next year, or when inflation returns to within target.
FASTER INFLATION
The central bank also expects further price spikes over the coming months.
BSP Deputy Governor Diwa C. Guinigundo said inflation is seen averaging 4.9% this year, versus a 4.5% estimate during its June meeting. The pickup is due to the P1 provisional increase in jeepney fares, higher water rates, the scheduled increase in tobacco excise tax, and higher Dubai oil prices.
By 2019, inflation will ease to 3.7%, although faster than the previous 3.3% forecast. Inflation is also seen to average 3.2% by 2020, against a 2-4% target range.
The BSP also noted the need for other government agencies to implement “non-monetary measures” to soften future price increases. The latest estimates do not factor in the passage of the rice tariffication bill, which the central bank said could bring down inflation by 0.2% if implemented during the fourth quarter.
The measure can also trim inflation down by 0.6% for 2019 once cheaper rice is imported to augment dwindling supply of the staple. Rice accounts for nearly a tenth of the consumer basket used in measuring inflation.
Mr. Espenilla said that while inflation is currently “on the high side,” authorities are carefully watching developments and is ready to take necessary actions “as needed.”
GROWTH INTACT
Central bank officials are confident the tightening moves — which cumulatively raised rates by 100bps so far this year — will not stunt overall economic growth.
“Certainly we are concerned about the country’s growth prospects. We also say that 6% GDP (gross domestic product) growth, while below our own estimates, is not a low number. It’s pretty decent growth by an economy, especially during this time of uncertainty,” Mr. Espenilla said, while stressing that price control is the BSP’s main mandate.
“We also argue that focusing on inflation right now is not necessarily anti-growth. One can argue it will sustain growth over the medium term.”
The Philippine economy expanded by six percent during the second quarter, well below market expectations and the state’s 7-8% goal. Still, Mr. Espenilla said the Philippine economy “continues to be strong” and can weather higher borrowing rates.
The BSP chief noted there are signs that lending rates “have started rising” to mirror upward adjustments in the benchmark rate, although pointed out that money supply remains “adequate.”
Still, bank analysts said this might not be the last tightening move from the BSP.
“We welcome BSP’s 50bps hike and its readiness to act further,” ING Bank N.V. Manila senior economist Jose Mario I. Cuyegkeng said.”We believe that this is not the end of BSP’s tightening as the immediate objective to anchor inflation expectations would need further action since inflation is yet to peak and would remain elevated for the rest of the year and early 2019.”

Going for the goal and taking risks

August 10, 2018 | 12:31 am

goal 1
By Michelle Anne P. Soliman
Reporter
Malou Treñas-Del Castillo, who was then 27-years-old when she worked as a brand manager for multi-national company, came home early from work one evening due to a bad headache. She recalled receiving a phone call from a friend when she suddenly passed out leaving the other person hanging on the line. She regained consciousness unaware of what had happened.
Her sister visited that evening and asked to use her bathroom. While she was out of the room, Ms. Del Castillo received another phone call from another friend. “After a while, he [was still] talking and I realized I couldn’t speak. I was trying to say, ‘I can’t find the words to answer you,’” she recalled. However, she just kept stuttering, then she passed out for a second time.
Ms. Del Castillo was rushed to the hospital where the doctors found a growth from a bacterial infection on the Broca’s area of the brain — located at the lower left frontal lobe which controls speech and language comprehension. “It was a one in a hundred thousand case. It went to the brain, and because it was unchecked, it grew. And I didn’t know,” she recalled.
The operation to correct the condition carried the risk of her losing the ability to speak. Still, it was a success.
After the operation, she and her family struggled to pay the hospital bills, but surprisingly received help from a distant relative.
“Two days before I was discharged, a distant relative found out that I was in the hospital and sent somebody and paid the balance, without us asking [for it],” she said. “I felt so undeserving because it could have gone wrong in so many ways, but it didn’t.”
Ms. Del Castillo slowly recovered her speech and returned to work after taking a month off.
STARTING ANEW AND GIVING BACK
After this ordeal, Ms. Del Castillo realized the desire of wanting to give back. “There was something I was supposed to do to help other people, but I didn’t know what it [was],” Ms. Del Castillo said during an interview and lunch with the media in the Ortigas Center last week.
She then consulted a career counselor, took examinations and found out that she was suited to helping people “to find balance in their life” and managing their careers.
goal 2
Despite her success as a brand manager, she decided to leave the corporate world after 14 years to do freelance work as a career consultant, a career columnist for a lifestyle magazine, and to pursue a master’s degree in psychology and become a registered psychologist.
“I realized I knew the answers to these questions,” she said, referring to setting goals and managing one’s career. “I feel like there was a purpose in being able to speak again.”
Encapsulating everything she knows in a book was appropriate for her since this way she would be able to share her knowledge with more people.
Ms. Del Castillo began writing what would become The Career Roadmap: Your Personal Guide to Corporate Career Success in February of 2017 and self-published it in June the same year.
The 140-page guide contains four chapters: on setting one’s goals, going after them, managing one’s career, and exiting and seeking other opportunities. It also includes exercises and worksheets which the reader can use to plot goals and list their areas of focus.
She wrote the book “because in my workshops and one-on-one career consulting sessions with various employees, whether fresh grads, millennials or middle-aged persons, I realized there was a gap in information for our Filipino corporate workers. I became aware that most employees, whether fresh graduates or long-time workers, feel very nervous, unprepared and unsure of how to discern their job objective, make their resume, prepare for interviews, or even manage their careers once hired or working in a corporate job,” Ms. Del Castillo was quoted as saying in a press release.
TAKE IT FROM THE COUNSELOR
Ms. Del Castillo took the time to answer a number of career questions from members of the press.
Why do some people feel unsettled at the beginning of their careers?
“It can happen for many reasons. There are certain skills that we’re happy to use. We’re good at it and we love it. We’re good at it but we don’t enjoy doing it and we end up doing so much of it. Ideally, most of our time should be spent doing the stuff [you] like and [you’re] good at to put you in the zone,” she explained.
goal 3
Why do people feel restless at work?
“Sometimes, there is a dissonance in values between the employer, employee or the workplace. ‘I like to feel creative but I’m being stifled. I like to feel the sense of stability and security, but you don’t have a full-time job. I like having friends in the workplace that I can talk to, but there is no team since you work individually at home.’ There’s a whole series of values and the key is knowing what those and seeing are most of those present in the workplace,” she noted.
Why is there a tendency among some people to job hop?
These people have to “[figure out] what are the things you really want and enjoy doing,” she said.
“What are the most important values? Sometimes [they job hop] when nobody takes the time to figure that out. Something will seem attractive in the other place and then you go. Then another thing is attractive then you go. Figure that out first before you jump from the frying pan into the fire. What are your top 10 values? What are the top 10 things you want to work on that make you happy and rank it. Be clear on what’s important. [You] can’t say [you’re going to] get all of it but maybe there’s a place that can give you 80 to 90% of it and to what degree, that’s the place you go to, not just because one [job] seems better than the other on one thing.”
What is your advice to those who are affected by social media posts?
“What you see on social media is the tip of the iceberg,” she pointed out. “Don’t be so affected by what’s going on [with] other people’s lives. Get to know what’s going on in your life and what’s important to you. It’s not a competition. I know it’s easier said than done, but the competition is with yourself.”
What is your advice to fresh graduates?
“Things don’t have to be perfect or beautiful. What’s important is finding what you’re good at and what you want to learn more [about], and which [job] will give you the best experience to further those goals. It’s best to be with a group of people who do similar things to what you want to do.”
Is there a time when one can say, ‘I made it!’ or just continue doing better?
“I think that we set our goals and then when we get to them, man always wants to constantly improve… If all circumstances are fine and we’ve attained a certain amount of our goals, there’s a sense of wanting to set new goals. I would say, you’ve arrived when you’ve reached those goals. But it can happen that when you reach that, then you say, ‘I feel like I should be doing something more,’” she pointed out.
“For me, I guess, I attained my goals — what I set out when I became a marketer. And then I said, ‘what’s more?’ and that itch was there since the operation. And I finally needed to scratch it. It took a while, but I guess you can arrive and say, ‘Let’s start again.’”

The Career Roadmap: Your Personal Guide to Corporate Career Success is available at National Bookstore and Powerbooks for P350. Send e-mail to Ms. Del Castillo at malou.delcastillo@thecareerroadmap.net.

Q2 GDP growth slowdown threatens full-year target

August 10, 2018 | 12:31 am

THE Philippine economy grew to its slowest pace in three years in the second quarter, leading some analysts to downgrade their forecasts despite the country remaining as one of Asia’s fastest-growing economies.
Gross domestic product (GDP) — the total amount of final goods and services produced within the country — grew 6% in the three months to June, lower than the revised 6.6% growth recorded in the same period in 2017, according to data released by the Philippine Statistics Authority yesterday.
The second quarter result was also below the revised 6.6% in the first quarter and the 6.8% median estimate in a BusinessWorld poll last week.

This is the slowest pace since the second quarter of 2015 when it recorded a 5.6% growth.
Year-to-date, GDP in the first half grew by 6.3%, which is also below the government’s 7-8% target band for 2018.
Gross national income — the sum of the nation’s GDP and net income received from overseas — recorded a growth of 5.8% in the second quarter, down from 6.6% previously.
In Thursday’s news briefing, Socioeconomic Planning Secretary Ernesto M. Pernia said the economy would have to grow “by at least 7.7%” in the second half to reach the low-end of the government’s growth target for this year.
“Although this growth still puts the Philippines as one of the best-performing economies in Asia, just after Vietnam at 6.8% growth and China at 6.7% growth, and ahead of Indonesia’s 5.3%, this growth rate is less than what we had hoped for,” Mr. Pernia said.
Mr. Pernia cited “policy decisions” in contributing partly to the economic slowdown such as the temporary closure of Boracay Island, and regulations affecting the mining industry such as excise tax on metallic and non-metallic minerals.
Services — the country’s mainstay that accounted for almost half of GDP — led growth among major sectors at 6.6%, faster than the 6.4% recorded in the same period last year.
Meanwhile, industry posted a 6.3% growth, slower than the 7.1% print in 2017.
Manufacturing remained the top contributor to industry growth even as it slowed down to 5.6% from the 7.6% growth in the first quarter and 8% in the second quarter of 2017, chipping in 3.7 percentage points to the 6.3% industry growth.
The construction sector grew by 13.5% in the second quarter compared to last year’s 4.3% and 8.8% in the first quarter.
Mining and quarrying, meanwhile, went the other direction as it declined by 10.9% versus the 6.9% expansion seen in the first quarter and the 19.2% growth in the second quarter of 2017.
Agriculture also grew albeit marginally at 0.2% versus the 6.3% growth posted a year ago.
Mr. Pernia noted the “dismal” harvests in palay (paddy rice), corn, sugarcane, and mango as well as the weak output in coconut including copra, livestock, and poultry.
“[T]his supports our premise that the main reason behind the high inflation is the gross deficiency in the domestic production of food, which was not augmented by imported goods, especially rice,” said the Cabinet official, reiterating the need to lift the quantitative restrictions on rice imports and impose a 35% tariff on the staple food item to help ease food inflation.
“[D]espite the price pressures, domestic demand remained buoyant at 10.1% [growth] — driven by household consumption and investments,” he said.
On the expenditure side, household spending — which made up roughly 56% of second-quarter GDP — was up 5.6% in the second quarter, slower than the 6% growth logged in the second quarter of 2017.
Exports of goods and services expanded at a slower pace of 13% compared to 2017’s 21.4%. Imports, meanwhile, grew 19.7% from 18.6%.
On the other hand, government spending went up by 11.9%, slower than the 13.6% in the first quarter, but faster than the 7.6% in the second quarter of 2017.
Capital formation, which is a measure of private investment, posted faster growth at 20.7% compared to 12.4% in the first quarter and 7.6% last year.
OUTLOOK
Market players now expect a slower full-year expansion for the country this year following the second-quarter growth turnout, noting that times have turned more “challenging” for the economy amid rising prices.
In separate commentaries, bank economists said they now see full-year GDP growth to be slower than their initial forecasts, leaving slimmer chances to hit the government’s 7-8% goal and could even settle below the 6.7% pace logged in 2017.
ANZ Research has scaled down its forecast to 6.6% from 6.8% following the first semester print, amid concerns on the trend for domestic demand as well as net exports.
ING Bank N.V. Manila senior economist Jose Mario I. Cuyegkeng was likewise of the same sentiment: “Downward revisions of 2018 GDP forecast are necessary not only as a result of the downside surprise of 2Q and the downward revision of 1Q GDP growth,” he said.
Previously, ING expects full-year growth at 6.8%.
Mr. Cuyegkeng also pointed out that the weaker peso — which has traded above P53 versus the dollar since June — has “not encouraged” significant investments in the export sector. It has likewise failed to lift outbound shipments of goods despite bigger valuations during the first half of the year.
A widening trade imbalance and soft farm output have dragged overall economic activity, aggravated by high inflation which “could have dampened household spending,” the ING analyst added.
Prices of widely used goods trended above four percent since April and even hit 5.2% in June. Year-to-date, inflation has averaged 4.5% as of end-July to surpass the 2-4% target range.
Nomura economists Euben Paracuelles and Charnon Boonnuch also flagged a possible scaling down of their 6.9% growth estimate for 2018 given dismal turnout for agriculture, mining, manufacturing and services.
“Still, we expect an acceleration of growth in H2, led by investment spending as the government makes more progress in implementing infrastructure projects, which should crowd-in private sector spending,” Nomura said.
Rajiv Biswas, chief economist at IHS Markit, said the easing growth momentum meant the central bank and the state economic managers “face a more challenging economic outlook.”
“Looking ahead, we expect the slowdown in GDP growth to continue over the second half of this year as tighter monetary policy and higher inflation weighed on consumer spending,” said Capital Economics Senior Asia economist Gareth Leather in a note.
“The economy is likely to expand at a decent pace over the next year, although growth will fall well short of the government’s target of 7-8% target. On the plus side, demand should be supported by a big increase in infrastructure spending,” he added.
Angelo B. Taningco, economist at Security Bank Corp., likewise revised the GDP growth forecast for 2018 downwards by 0.3 percentage points to 6.5% from 6.8% previously, adding that a 7% full-year growth is unlikely as inflation is expected to remain elevated for the rest of the year.
Economists cited key risks to growth such as further increases in world crude prices, and the escalating US-China trade war which could affect Philippine export products. — Carmina Angelica V. Olano and Melissa Luz T. Lopez

Gross domestic product quarterly performance (Q2 2018)

August 10, 2018 | 12:31 am

China’s state companies cementing lucrative role in South China Sea

August 10, 2018 | 12:30 am

HONG KONG/SHANGHAI — Beijing’s giant state-owned enterprises (SOEs) are playing an increasing role in China’s build-up in the South China Sea and could seek to cement their dominant position in coming years, according to new research.
The work by academic Xue Gong and published by Singapore’s ISEAS Yusof Ishak Institute this week sheds light on a little-examined element of rising tensions across the vital trade route, showing extensive work by Chinese SOEs in developing infrastructure and tourism, as well as oil and gas, some in hotly disputed areas.
Some experts and regional diplomats believe the strong commercial presence could further complicate any future regional solution should Beijing, which research shows has encouraged firms to operate, protect them politically and militarily.
China’s state-owned enterprises operated in a complex and often opaque environment, serving national strategic interests as they sought new opportunities, Gong told Reuters.
“They cannot operate independently but they are ultimately opportunists and when the policy environment is favorable, then they will go for it. And we have seen signs of that behavior in the South China Sea,” said Gong, who is based at Singapore’s S. Rajaratnam School of International Studies. “If the Chinese government can maintain an upper hand and leverage while achieving stability, there might well be greater opportunities.”
While the research notes the difficulty in obtaining financial information, it suggests turning China’s seven reefs and cays in the Spratlys archipelago into man-made islands was a multi-billion dollar effort.
It cites state media estimates that building up Fiery Cross island alone, now home to a 3 kilometer runway and military facilities, including missile and radar installations, cost around $11 billion. The on-going build up of the seven islands deep in the maritime heart of Southeast Asia has alarmed the United States and other regional powers.
China’s so-called nine-dash line claim covers much of the South China Sea, overlapping claims of Vietnam, the Philippines, Malaysia, Brunei and Taiwan.
DIGGING IN
Gong’s research shows how China Communications Construction Corp. (CCCC) and its subsidiaries seized on policies advocated by President Xi Jinping in 2012 to expand its maritime capabilities via the South China Sea, in part by developing some of the world’s largest dredgers.
CCCC planned to list its dredging operation in 2015, but its application later lapsed, according to the Hong Kong stock exchange.
CCCC has formed new units centered on the Paracels, which China disputes with Vietnam, that are eyeing expansion in tourism, logistics, fishing as well as on-going construction business, according to the paper.
It has earmarked $15 billion for investment across various sectors — a plan that “stems from the fact that it has quietly benefited from land reclamation in the South China Sea through implementing national tasks”, the research states.
CCCC also collaborated with other state firms, including China Travel Service Group (CTSG), to develop a nascent cruise ship and tourism industry in the Paracels after state leaders in 2012 overcame earlier reluctance to back such moves.
CCCC, which has units listed in Hong Kong and Shanghai, did not respond to requests for comment. China National Travel Service, which oversees CTSG after a series of mergers, did not respond to requests for comment.
More than 70,000 tourists have traveled on four cruise ships that ply the South China Sea since the Paracels route was opened in April 2013, the Hainan Maritime Safety Administration said in January.
Some 680 commercial flights landed on the expanded runway at Woody Island, where Sansha City is now the administrative hub of China’s South China Sea operations, in the year ended December 2017.
ENERGY PUSH
The Singapore research also details how China National Offshore Oil Corp. (CNOOC) lobbied for funding and greater Chinese involvement in the South China a decade ago after facing criticism from scholars concerned at activities by rival claimants.
CNOOC later earmarked $32 billion for exploration and built a giant deep water drilling rig which was placed off central Vietnam in 2014, sparking tensions with Hanoi.
According to its first quarter filings of listed unit CNOOC Ltd. which is in charge of all the group’s exploration and production business, the South China Sea’s share of the company’s total oil and gas output rose to 45%, up from 43% last year. That was second only to its Bohai operations off north China.
CNOOC’s latest annual report listed eight new discoveries in the South China Sea, out of a total of 19 struck offshore China in 2017.
Some players like CNOOC “appear more skilful and effective in mobilizing resources to influence state policy, while some actors, such as enterprises in the tourism industry, respond only when the state provides incentives,” Gong noted.
In a statement to Reuters, CNOOC Ltd. said it had a deep water development strategy for the South China Sea and planned to extend investment on future exploration and development.
“All oil and gas companies among the globe are welcomed to jointly invest and operate in offshore China and to achieve success together with the company,” CNOOC Ltd. said.
A host of other state firms are reportedly eyeing slices of the South China Sea action, from nascent nuclear energy programs, telecommunications, fisheries and banking.
Ian Storey, a South China Sea expert at ISEAS, said the work showed “Beijing is incentivizing companies to become major players in the South China Sea.”
“This is something that China can do that the other claimants cannot do, particularly on this scale,” he said.
“The dispute is absolutely no closer to resolution, either a legal or a political resolution, and the role of China’s state owned enterprises only highlights that.” — Reuters

Frozen in time, Havana looks to put a modern stamp on its 500-year history

August 10, 2018 | 12:30 am

HAVANA, CUBA — Havana could be compared to the colorful 1950s classic American cars that fill its roads: an object of desire for historians and tourists alike.
To walk through its streets is to take a step back in time.
Run-down homes show signs of salt erosion as waves from the Caribbean Sea batter away at the city’s seawall, while at the day’s end the setting sun paints the sky orange.
Despite the visual signs of deterioration, Havana is spiritually alive.
The Cuban capital will celebrate 500 years in 2019, with an urban restoration plan aiming to give space to modernity while maintaining respect for its vintage character.
“Havana remains frozen in time. The revolution’s aims were to look after the country,” city historian Eusebio Leal, who’s in charge of restoring the historic center, told AFP.
“Undeniably there’s been a cost. When you go around you can see the city’s damaged and covered by a veil of decadence.”
“There have been no new bridges or wide avenues built in the city, there are no traffic problems and there have been no wide-scale demolitions like in other Latin American cities.”
But Leal insists the city has much greater depth than simple aesthetic beauty.
“Havana is not just a romantic ruin, nor a city of classic American cars, or a city of dancers and palm trees. It’s a city of intense culture,” he said.
“What’s surprising is that there isn’t enough time to sample the cultural life that extends from ballet festivals to book festivals, from historic cities to jazz.
“And its plastic arts are amongst the most desired in the world by collectors.”
CHANGING LANDSCAPE
The neo-baroque Great Theater of Havana Alicia Alonso, home to the National Ballet and guarded by marble statues, and the majestic Capitolio building with its impressive cupola really stand out, as does the music that greets visitors on every street corner.

Havana 2 — Followers of the Virgin of Regla (Orisha Yemaya, the sea goddess for the Yoruba religion and Saint Mary for the Catholics) take part in a procession in Havana during the Yemaya Day celebrations in Cuba, on Sept. 7, 2015. — *AFP*

But the landscape has started to change, not least since the country eased open its doors to foreign investment, with luxury stores and “capitalist” brands, restaurants and hotels slipping into historic buildings and sharing public space with damp, old rooftop terraces and colonial-style balconies.
“Over the last decade, Havana has seen an injection of large private initiatives… which has given rise to an architectural renaissance and creation of jobs,” said Leal.
The admittance of private enterprise has had a dramatic effect, with 13% of the labor force now employed in the private sector. Private hospitals and restaurants cater to tourist demands.
One of the oldest cities in the Americas, Havana was a modern metropolis at the start of the 20^th century but also a haven for mafia organizations.
Following the 1959 socialist revolution, a spiritual cleansing saw the proliferation of brothels and casinos consigned to history, but physically the city was neglected.
Its streets are poorly maintained and badly lit, but Havana is a much safer city than many other Latin American metropolises. In 2017, it attracted 4.5 million tourists.
CULTURAL RICHES’
“Havana is a joyous and fun city and its people are welcoming and caring. It’s a place where I feel safe wandering its streets,” Brazilian tourist Debora Naves, 41, told AFP.
“However, I think it needs foreign investment to truly show off its cultural riches.”
Leal says it is that “vision of a lively but calm city, a peaceful country without major crime that makes it attractive.”
Another of its major attractions is the fleet of classic cars such as a 1956 Chevrolet Bel Air or a 1952 Dodge Coronet Sierra, lovingly and painstakingly upgraded with modern parts hidden by the retro exterior.
But to do so “costs a lot,” said Yoisel Fernandez, who drives a convertible 1960 Hillman.
After six decades of United States sanctions, the world has been opening up slowly to Cuba, Leal said, adding that there is still much more to come.
What the city needs, he added, is for citizens of the future to drive Havana “into a new economic and social age in which its beauty is preserved without limiting modernization.” — AFP

Property, retail drive SMIC profit higher

August 10, 2018 | 12:11 am

By Arra B. Francia, Reporter
SM Investments Corp. (SMIC) reported a nine percent increase in earnings during the first six months of 2018, boosted by the double digit growth of its property and retail units amid flattish results from the banking business.
In a statement issued Thursday, the Sy-led conglomerate said net income climbed to P18.1 billion in the first half, higher than the P16.6 billion it posted in the same period a year ago. This driven by a 12% uptick in revenues to P204.9 billion, against P183.2 billion in the first half of 2017.
“We are encouraged by the results of the first half, driven by the strong performance of retail and property, particularly the residential business. Our results show the strength of the economy and consumer sentiment but we remain vigilant about inflationary pressures. We are optimistic that consumption will remain resilient,” SM President Frederic DyBuncio said in a statement.
SM’s property business accounted for bulk of its consolidated profit at 45%, followed by banks at 33% and retail at 22%.
SM Prime Holdings, Inc. (SMPH) generated P16.6 billion in consolidated net income during the first semester, higher by 16% year-on-year. Revenues also accelerated by 15% to P49.8 billion.
The property giant benefited from higher mall revenues and same-store growth. Rentals, cinema and event ticket sales and amusement revenues, contributed P28.7 billion to total revenues, 12% higher from the same period a year ago.
The residential arm of SMPH expanded its revenues to 23% to P17.1 billion for the period, as it saw strong sales from the projects it launched from 2015 to 2017. Reservation sales went up by a fourth to P34.5 billion.
Both of SM’s banking units, BDO Unibank, Inc. and China Banking Corp. reported flat growth during the six-month period.
BDO’s net income stood at P13.1 billion, 1.5% lower year-on-year due to the lower non-interest gains and bigger operating costs. The listed lender noted that without the impact of the implementation of Philippine Financial Reporting Standards on the investment portfolio of BDO Life as well as the expansion of One Network Bank, its net income would have picked up by 13%.
China Bank’s net income was unchanged at P3.6 billion as of end-June, amid a 15% increase in recurring income to P13.3 billion due to the growth of its core businesses.
Meanwhile, SM’s retail unit saw its net income grow by 10% to P5.7 billion, on the back of a 10% increase in total sales to P145 billion.
The company operated a total of 2,149 stores at the end of the six-month period, consisting of 61 The SM Stores, 1,304 specialty stores, 55 SM Supermarkets, 49 SM Hypermarkets, 190 Savemore stores, 49 WalterMart stores, and 441 Alfamart stores. The specialty stores alone generated P37.3 billion in the first half, 17% higher year-on-year, fueled by the expansion of new formats such as Miniso.
Sought for comment, Timson Securities, Inc. Trader Jervin S. De Celis said the company is on track in terms of income growth.
“By the end of 2018, SM’s year-on-year earnings growth is estimated to reach 15.60% higher than last year’s annual growth rate… This year, estimates on the full year net income for SM is at P38 billion and I think the ‘ber’ months will help the company reach this,” Mr. De Celis said in a mobile message, referring to the upcoming holiday season.
Philstocks Financial, Inc. Research Associated Piper Chaucer Tan meanwhile said SMIC’s results were below expectations of a double-digit growth.
“Given the scope of SM and exposure to various industries, the prevalent culprit would be inflation, which affects consumer spending and cost on the part of SM. But we believe that the second half can regain or bounce back as ‘ber’ months are approaching and given that during those months consumer spending increases,” Mr. Tan said in a separate message.
Shares in SM dropped 0.41% or P4 to close at P960 each at the stock exchange on Thursday.

Foreign investor group eyes majority stake in PLDT unit

August 10, 2018 | 12:10 am

By Denise A. Valdez
A GROUP of foreign private equity investors is looking to acquire a majority stake in Voyager Innovations, Inc., according to PLDT Chairman, President and CEO Manuel V. Pangilinan.
“This week, we signed a non-binding, fairly-formed and detailed term sheet with certain foreign investors, who will take an investment position and management participation in Voyager,” he said in a press briefing on PLDT’s first-half results on Thursday.
The telecommunications giant has four weeks to finalize deal with the foreign group over the Voyager investment.
“Once the definitive documents are signed, two things will happen: one, we will make a disclosure to the stock exchange, and secondly, we will notify the Philippine Competition Commission (PCC) with this particular investment to be approved by the PCC,” Mr. Pangilinan said.
The sale of Voyager, which registered a P1.3-billion loss in the first six months of 2018, is expected to have a positive impact on PLDT’s financials.
“It’s likely to produce a significant gain to the accounts of PLDT. I think if we can expedite the approval from the PCC, it is likely that we can see the gain some time in the fourth quarter of 2018,” Mr. Pangilinan said.
As the digital innovations unit of PLDT, Voyager manages PayMaya Philippines, Inc., Smart Money, FINTQ, Lendr and freenet.
“Since this will involve as well a significant amount to be injected into Voyager, it could fund the operations of Voyager on expanding in the next three to four years,” the PLDT chairman added.
Mr. Pangilinan declined to name the investors, except to say they are involved in financial technology.
PLDT is likely to remain the single largest investor in Voyager with its investment of P9 billion to P10 billion so far, but Mr. Pangilinan said the foreign investors as a group would take a majority share when the deal is done. He added PLDT will retain a 45% stake in Voyager.
On Thursday, the telecommunications giant reported its attributable net income dropped 58% to P4.862 billion in the second quarter, from P11.56 billion during the same period a year ago. Last year’s figure included proceeds from the sale of its equity interest in Beacon Electric Asset Holdings, Inc.
For the first half, attributable net income fell 29% to P11.76 billion, “primarily due to lower net income from wireless and other businesses, partly offset by higher net income from fixed line business.”
Excluding non-recurring items, the six-month core profit dropped 25% to P13.13 billion. PLDT maintained a full-year core income guidance of P23-P24 billion, excluding Voyager.
“We have stayed on the growth path through the mid-point of this year by banking chiefly on the momentum of our Home and Enterprise businesses. Our Individual Wireless business has taken further steps forward, making gradual additions to its revenues and subscriber base,” Mr. Pangilinan was quoted in a Thursday statement as saying.
Revenues rose 5% to P41.73 billion in the April to June period, bringing the six-month tally 4% higher to P82.2 billion.
The company said this was “primarily due to higher revenues from data services in the fixed line business, as well as higher non-service revenues from the wireless and fixed line businesses, partially offset by lower revenues from mobile and home broadband services in the wireless business.”
For the first half, data/broadband and digital services accounted for P39.6 billion in revenues, representing 54% of the total service revenues.
Fixed broadband revenues grew 58% to P13.2 billion; mobile internet rose 29% to P12.3 billion; and corporate data and data center generated P10.9 billion in revenues, up 13%.
By business unit, PLDT Home recorded a 14% increase in revenue during the January to June period to P18 billion, fuelled by a strong demand for fiber-powered broadband service.
PLDT Enterprise revenues went up 9% to P18.7 billion in the first half, driven by higher wireless data, cloud and other services.
The Individual Wireless business group’s revenues jumped 2% to P29.9 billion, as mobile data revenues grew.
Mr. Pangilinan said PLDT conducted a pilot test with Ericsson for its 5G roll out on Wednesday, targeting to launch this in early 2019.
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.

Rising jet fuel prices drag Cebu Air income lower in 2nd quarter

August 10, 2018 | 12:09 am

CEBU AIR, Inc. reported a 39% drop in net profit to P1.87 billion in the second quarter, weighed down by rising fuel prices and weakening of the peso.
In a regulatory filing, the listed operator of Cebu Pacific said its net income for the first six months fell 24% to P3.309 billion, from P4.334 billion recorded in the same period last year.
Second quarter revenues went up 4% to P19.57 billion, while the first-half tally increased 6% to P35.65 billion. Passenger revenues rose by 2% to P14.6 billion in the April to June, and by 6% to P28.3 billion in the six-month period.
“This increase was mainly due to the 3.7% increase in average fares to P2,734 for the six months ended June 30, 2018 from P2,637 for the same period last year,” Cebu Air said, adding passenger volume rose by 3% to 10.354 million in the first half.
However, expenses grew at a faster clip, jumping by 16% to P17.06 billion in the second quarter, and by 14% to P33.06 billion in the first half.
“The increase was mostly attributable to the rise in fuel prices in 2018 coupled with the weakening of the Philippine peso against the US dollar as referenced by the depreciation of the Philippine peso to an average of P51.98 per US dollar for the six months ended June 30, 2018 from an average of P49.93 per US dollar last year based on the Philippine Dealing and Exchange Corporation weighted average rates,” Cebu Air said.
An increase in the budget carrier’s seat capacity as a result of new aircraft also contributed to the higher expenses.
The bulk of expenses came from flying operations, which soared by 21% to P7.61 billion in the second quarter, and by 18% to P14.53 billion in the six months ending June.
Aviation fuel expenses surged 23% to P12.337 billion for the first half, as average jet fuel prices reached $84 per barrel during the period versus $63 per barrel in 2017.
In May, Cebu Pacific President and CEO Lance Y. Gokongwei said the budget carrier applied for a fuel surcharge of between P70 to P250 for domestic flights, adding the rising fuel prices is costing the company a P700-million increase in expenses every month. — D.A. Valdez

Music and love are the focus of Laxamana’s two film fest entries

August 10, 2018 | 12:09 am

WHEN FOUR brothers who make up a family band are forced to relocate to a remote town in Pampanga after a super typhoon destroys their home, a rich city girl passionate about music decides to help them record their songs. This is the premise of Jason Paul Laxamana’s Bakwit Boys, one of the entries in this year’s Pista ng Pelikulang Pilipino (PPP) which starts Aug. 15 in cinemas nationwide.
The film is Mr. Laxamana’s first musical film — a genre he wanted to work in for a long time.
“I’m not a musician but I love music,” he told the media shortly before a press conference on Aug. 7 at the Limbaga 77 restaurant in Quezon City.
Before becoming a filmmaker best known for sad love stories such as 100 Tula Para Kay Stella (2017) which was also one of the entries in last year’s PPP, Mr. Laxamana worked for a few years as a radio DJ in Pampanga and used his program to play songs from independent music artists.
His love for both his hometown and music led him to create this tale of growing up, family, and love.
“Bakwit Boys is about family, it is about the underdogs, and about dreamers. We hope that the movie will have viewers singing — and crying tears of joy — until the credits roll and until they step out of the cinema,” Mr. Laxamana was quoted as saying in a press release.
Bakwit is a Cebuano term which came from the English word “evacuate” and is used to describe evacuees. Mr. Laxamana said that while the word is not new, it gained popularity in Pampanga (and arguably the rest of the Philippines) after the Mt. Pinatubo eruption in 1991 (Mr. Laxamana was a survivor of the calamity). The word was again used to describe the Marawi evacuees after the siege last year.
The film features six original songs by Jhaye Cura, an old friend of Mr. Laxamana and an independent artist. The songs include “Ligtas Ka Na,” “Fiona,” and “Patibong.” “She’s got a gift of melody,” said Mr. Laxamana of the composer. “That’s why I wanted to give her songs a chance to be heard through this film.”
The director mentioned that one of the films he was inspired by was the Irish romantic musical drama, Once (2007), directed by John Carney.
Bakwit Boys — a T-Rex Production — stars Vance Larena, Mackie Empuerto, Ryle Santiago, and Nikko Natividad as the four Datul brothers while Devon Seron stars as the city girl, Rose.
Aside from Bakwit Boys, Mr. Laxamana has another film in the 2018 PPP, The Day After Valentine’s, about a girl who tries to mend a guy’s broken heart.
The film is produced by Viva Films, which also produced 100 Tula Para Kay Stella. The Day After Valentine’s features Bela Padilla and JC Santos who also starred in 100 Tula. Mr. Laxamana noted that in the citation given by the Cinema Evaluation Board (CEB), the film was described as “more heartbreaking” than its predecessor.
Both The Day After Valentines and Bakwit Boys received a grade of “A” from the CEB.
The two films and six other entries in this year’s PPP will be screened starting Aug. 15 in cinemas nationwide. — Zsarlene B. Chua

Meet a shield maiden at History Con 2018

August 10, 2018 | 12:08 am

SPEND THIS weekend at the World Trade Center in Pasay City and watch as some of HISTORY channel’s biggest stars — including Katheryn Winnick who plays shield maiden and Queen of Kattegat in the Vikings series — grace the stage at this year’s History Con which runs from Aug. 10 to 12.
The series, created by Michael Hirst, premiered in 2013 and has now been renewed for a sixth season. It follows the exploits of the Viking Ragnar Lothbrok, his crew and sons in their adventures in England, Scandinavia, and the Mediterranean. The show has consistently received emmy Awards nominations since its premiere, especially in the Outstanding Visual Effects category. Ms. Winnick’s portrayal of Lothbrok’s first wife earned her trophies from the Critics’ Choice Awards and the Canadian Screen Awards.
Aside from Ms. Winnick, the entertainment convention will see the return of Giorgio A. Tsoukalos of the show Ancient Aliens (now on its 13^th season) to the convention since gracing it in 2016.
Also returning is Jamie Dempsey of Ride N’ Seek who was also part of the 2016 convention. Joining her and the aforementioned stars are Mongchin Yeoh of Who Runs the World, and Simon Yin of HISTORY Hustle and Hidden Cities Extreme.
On the home front, Xian Lim and Diego Loyzaga will be present as they are the stars of the latest season of HISTORY Asia’s automotive reality show Celebrity Car Wars which airs again in September.
Now on its third year, History Con will be presenting “over 300 astonishing exhibits from historic displays to exclusive talks, workshops, and more,” according to a press release.
Last year’s convention attracted 68,800 attendees.
A three-day pass to History Con 2018 (called a History Maker pass) costs P2,500, while a General Admissions pass, which gives one day access, is P350. Tickets are available in SM Tickets (www.smtickets.com). More details can be found on History Con 2018 website (www.historyasia.com/historycon). — ZBC

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