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Standard Chartered sees BSP hiking rates by 25bps this week

By Melissa Luz T. Lopez, Senior Reporter
THE CENTRAL BANK may find room to raise rates by just 25 basis points (bp) this week, a bank analyst said, provided it comes with a hawkish statement from policy makers in order to temper further price pressures.
The Bangko Sentral ng Pilipinas (BSP) will reassess monetary conditions on Thursday and decide on benchmark rates. A BusinessWorld poll among economists saw seven betting on a 25-bp hike, while six are expecting the Monetary Board to turn aggressive and announce a 50-bp increase.
Several analysts expect a 50-bp rate hike as the realization of BSP Governor Nestor A. Espenilla, Jr.’s hints of a “strong policy response” as inflation surged to a nine-year high in June at 5.2%, with signs that prices spikes are becoming more widespread.
For his part, Standard Chartered Bank economist Chidu Narayanan said there is scope for a third 25-bp rate increase this week, which will match the BSP’s moves in May and June.
“BSP has stated its concern about inflation expectations, but a hawkish rhetoric is sufficient to reduce expectations, even with only a 25 bps rate hike,” Mr. Narayanan said via e-mail.
Benchmark rates currently range between 3-4%. The last time the BSP raised rates by 50 bps in one go was in July 2008, when inflation surged to a 17-year high at 12.2% against a 3-5% target that year.
Still, Mr. Narayanan did not dismiss a 50-bp rate adjustment for the upcoming meeting and said it could be “close call” on Thursday afternoon.
“Inflation is high and likely to remain so, supporting the case for a 50 bps hike (as the market is expecting),” the bank analyst said. “However, BSP is not worried about inflation, which it expects to fall to an average of 3.3% year-on-year in 2019 — this would make a 50 bps rate hike disingenuous.”
The final print for July inflation — which will be announced by the Philippine Statistics Authority today — will play a huge part in the BSP’s decision. Mr. Narayanan expects prices to have climbed faster at 5.6% last month, hitting a fresh high and remaining beyond the central bank’s 2-4% target.
“Accelerating inflation will likely prompt a hawkish rate hike from the central bank at its 9 August meeting; this would be the third straight hike,” the economist said, noting that the pace will quicken further this month before eventually easing back to target.
“Medium-term risks to inflation lie to the upside, in our view, on higher oil prices, a weaker currency or higher-than-expected infrastructure investment.”
On the other hand, Mr. Narayanan said the Philippine economy likely grew by 6.7% during the second quarter, which if realized will soften from the 6.8% pace clocked in during the first three months of the year.
A surge in infrastructure investments, coupled with robust household spending and strong factory output growth likely sustained the “strong, broad-based” domestic expansion, although short of the government’s 7-8% growth goal.

ABS-CBN income slumps in Q2

ABS-CBN Corp. reported a 61% drop in net income attributable to equity holders of the parent company during the second quarter, dragged by higher production costs.
In a regulatory filing, ABS-CBN said its attributable net income fell to P397.35 million during the April to June period, from P1.03 billion during the same period a year ago.
This brought the six-month attributable income to P849.88 million, 41% lower than the P1.45 billion posted a year ago.
Second quarter revenues inched up 1.6% to P9.925 billion, bringing the first half total to P18.936 billion — 2% lower than a year ago.
Advertising revenues went up 4% to P5.23 billion in the April to June period. For the first half, advertising revenues fell 3% to P9.57 billion, while consumer sales dipped 1% to P9.35 billion.
“Advertising revenues decreased by P302 million or 3.1% lower, attributable to fewer advertising placements from first half of 2018. Consumer sales decreased by P106 million mainly resulting from lower theatrical receipts from Global and ABS-CBN Films and lower revenue from Sky Cable’s cable business,” ABS-CBN said.
Expenses increased by 4% during the first half to P18.494 billion from last year’s P17.783 billion. This was mainly due to a 9% rise in production costs to P6.45 billion.
“The increase (in production cost) was due the growth in depreciation and amortization expenses by P10 million and P90 million, respectively, year-on year. The Company’s facilities-related expenses and employee related costs grew also by P271 million or 15% increase year-on-year,” the Lopez-led media giant said.
By business segment, ABS-CBN reported its media networks and studio entertainment business saw a 33% drop in net income to P1.01 billion during the first half, as operating revenues slipped by 3% to P13.45 billion.
On the other hand, the cable, satellite and broadband business under Sky Cable slumped to a net loss of P81 million, as operating revenues fell by 3.6% to P4.4 billion.
“The decrease in Sky’s performance was triggered by the decrease in cable subscriber count by 80,000. In total, subscriber count of Sky increased by 168,000, significantly attributable to direct-to-home subscribers,” the company said.
Shares in ABS-CBN added 15 centavos or 0.61% to P24.55 each on Monday. — D. A. Valdez

PHA taps Leechiu as marketing agent for West Palawan project

PREMIERE Horizon Alliance Corporation (PHA) has tapped real estate services firm Leechiu Property Consultants, Inc. (LPC) as the exclusive marketing agent for its West Palawan township project.
In a disclosure to the stock exchange on Monday, PHA said its tourism estate subsidiary West Palawan Premiere Development Corporation (WPP) signed a memorandum of agreement with LPC for the marketing of its 850-hectare master planned township in Puerto Princesa City.
“The agreement stipulates that LPC will assist WPP in identifying and selecting the ideal strategic partner for this new tourism hub with unspoiled beaches, a mere 30 minute ride from the Puerto Princesa international airport,” the company said.
WPP’s beachfront property in Nagtabon is being developed as an integrated tourism community. It is also expected to be the site of the first global hotel brand in Palawan.
“Horwath HTL, a global leader in tourism consulting has confirmed in a study conducted in the Nagtabon area, that global hotel brands are interested in seeking opportunities in Palawan and has specifically cited Nagtabon beach as an ideal location for a 5-star hotel brand,” PHA said.
At the same time, WPP also inked an agreement with MediPass, Inc. a Japanese marketing company, to be its exclusive marketing partner for the Nagtabon tourism development.
“Ongoing talks are being finalized as to the product that will be developed in the Nagtabon beach area that will cater to the Japanese market,” the company said.
PHA said WPP expects to generate over P500 million in revenue next year from lot sales and development. — CRAG

Murphy Brown to tackle sexual misconduct

ACTRESS Candice Bergen of the television show Murphy Brown speaks during the CBS segment of the Summer 2018 Summer Television Critics Association Press Tour at Beverly Hilton Hotel on Aug. 5 in Beverly Hills, California. — AFP

BEVERLY HILLS, Calif. — Emmy-winning comedy Murphy Brown will return to CBS television for the first time in 20 years with an episode that addresses the #MeToo movement of women breaking their silence about sexual harassment, the series’ creator said on Sunday. The new season starring Candice Bergen as a pioneering newswoman is scheduled to premiere on Sept. 27. Creator Diane English told reporters the fourth episode will be titled #MurphyToo. The episode was written months ago, English said, but her remarks came as CBS Corp. itself is investigating sexual harassment allegations. #MeToo sprouted on social media last year when women began sharing stories of sexual harassment and abuse amid widespread accusations against entertainers, businessmen and politicians. A July 27 New Yorker article detailed claims by six women who accused CBS Chief Executive Leslie Moonves of sexually harassing them in incidents between 1985 and 2006. Moonves has said he “may have made some women uncomfortable by making advances” decades ago, which he called mistakes that he regretted immensely, but that he understood “‘no’ means ‘no’’’ and had never used his position to harm anyone’s career. CBS hired two law firms to investigate the allegations and the network’s broader culture. The Murphy Brown cast and producers support the investigation fully, English said at a Television Critics Association meeting, adding that “none of us have had any negative experience in that regard at CBS.” She said #MeToo was “a powerful movement” and that they wanted to do it justice on the show. — Reuters

PBB books lower Q2 income

PHILIPPINE BUSINESS Bank (PBB) booked a lower net income in the second quarter due to trading losses.
In a disclosure to the local bourse on Monday, the Yao-led lender said its net income stood at P166.9 million in the three months ended June, down by 7.9% from the P181.3 million logged in the same period last year.
Still, in the first six months of the year, PBB’s net profit grew 2.3% to P348.1 million from the P340.3 million tallied in the comparable year-ago period.
“A significant portion came from the core business of interest income on loans and trading gains/losses from the sale of peso securities,” the bank said in its quarterly report.
PBB’s other income came in at P55.1 million in the quarter, dropping 52.9% from the P117 million booked a year earlier.
Broken down, the bank logged a P26.7-million trading loss in the second quarter, a reversal from the P18.8 million in gains booked in the same period last year.
Meanwhile, service charges, fees and commissions grew 19.9% year-on-year to P30.1 million.
Net interest income was at P918.3 million, up 27.2% from P722.2 million last year. This was mainly driven by income on loans and other receivables which stood at P1.24 billion, up from last year’s P830.9 million.
PBB’s total loans and receivables amounted to P77.5 billion as of end-June, up 31.9% year-on-year.
On the funding side, total deposits climbed 29% to P79.1 billion as low-cost funds grew 19% to P30.2 billion. Time deposits likewise rose 36.1% to P48.9 billion.
From 2011 until end-June, the bank has opened 87 additional branches.
Rolando R. Avante, PBB president and chief executive offer, said the bank will “tactically expand” its branch network in the country to reach more clients.
The bank’s net interest margin improved to 4.12% from the previous year’s 4.06%, while its non-performing loan ratio “remained lower than industry” at 2.43%.
Overall, PBB’s total assets stood at P92.9 billion in June, growing by 26.1% year-on-year. Total equity also climbed 4.9% year-on-year to P10.5 billion.
Mr. Avante said PBB will continue to exercise prudence even as industry competition remains challenging amid rising inflation and continuous loan demand.
PBB was the fourth-largest thrift bank in the country in asset terms as of end-March, according to the latest central bank data.
Shares in PBB went down by 10 centavos or 0.84% to close at P11.80 each on Monday. — KANV

How PSEi member stocks performed — August 6, 2018

Here’s a quick glance at how PSEi stocks fared on Monday, August 6, 2018.

 
Philippine Stock Exchange most active stocks by volume turnover — August 6, 2018

A MoMA curator’s art-filled New York mansion is on sale for $6.5 million

WILLIAM RUBIN (1927-2006), the head of the Museum of Modern Art’s prestigious painting and sculpture department in the 1970s and 1980s, is largely credited with transforming the institution’s collection from a treasure into a powerhouse.
By the mid 1990s, he’d become the department’s director emeritus and was busy working on what would be his last major show, Picasso and Portraiture, which opened in April 1996 with more than 220 artworks.
Rubin was based in New York but spent much of the year prior to the show working out of his condominium in Florida, a period that coincided with a particularly unpleasant El Niño. “He decided that there was more sunshine in New York than Florida,” says his wife, the curator and art adviser Phyllis Hattis. “So we started to look for a place nearer to the city.”
Soon after, they discovered a house in Pound Ridge, N.Y., that had been designed by Vuko Tashkovich, an architect who’d started out in the office of I.M. Pei. “He wasn’t a wealthy architect,” Hattis says of Tashkovich, “and what he’d do is squat in each house that he would build — and then when he’d sold it, he’d buy another property and build on that.”
When they bought the house for what Hattis says was “above $4 million,” it wasn’t quite finished, which left the couple free to do the interiors and landscaping as they saw fit. “Aesthetically, on the interior, it wasn’t as articulated as we wanted, and how we wanted it,” Hattis says.
After some light renovation, the couple moved in and used it as a vacation home until 2006, when Rubin died at the age of 78. Hattis continued to use the house for the next decade, but now she’s putting it on the market for $6.5 million, listing it with Neumann Real Estate, an affiliate of Christie’s International Real Estate.
The home, which has five bedrooms and six baths spread across 9,358 square feet, sits on a 3.5-acre property overlooking Mallard Lake, about a 50-minute drive north from New York.
After purchasing the house, the first thing the couple did was adjust the walls “and certainly changed around the lighting,” says Hattis, in order to “adapt the spaces, so that we could put art in them.”
Rubin, who was known for his own art collection, and Hattis began to fill the house with what she says was a combination of tribal and modern art.
Massive paintings by Frank Stella still hang on the walls; at one point, says Hattis, the house had works by Hans Arp, Alexander Calder, and Donald Sultan.
It also contained works by such Washington Color School painters as Paul Reed and Thomas Downing. There were even watercolors by Ernst Beyeler, a renowned art dealer who, Hattis says, would do his own paintings when he came to visit them at their house in southern France. “He was a good friend of both of ours,” she says. “He leaned on Bill, and Bill leaned on him.”
Art continued to cycle on and off the walls. “There were artists that we don’t have in the house anymore, but that’s just because the collection changes somewhat,” Hattis says. “There were times where we had to raise some money and sell the art.”
They sold what Hattis describes as a “tribal masterpiece,” for instance, in order to build the house’s indoor swimming pool, which is situated in a vaulted, glass-walled room.
The couple also entertained often, welcoming artists (including Frank Stella) colleagues (including Kirk Varnedoe, who succeeded Rubin in his position at MoMA) and friends (including Leon Black and Ronald Lauder) for what Hattis describes as informal lunches and dinners.
Crucially, Hattis says, Rubin spent as much time working on the house’s landscaping as he did its interior. “We embraced a home that is both exciting from the indoors, looking out, and the outdoors, looking in,” she says, “and then we enhanced both of those perspectives.”
The landscaping, she explains, is such that “every view from the house has a special tree and a rare combination of foliage and greens.”
Rubin, she says, “would hunt for trees like he would hunt for rare works of art; he had the eye of a connoisseur.” A particularly choice Japanese Maple, she says, “had the most exquisite trunk and cost $50,000.” Most people, Hattis says, “don’t really spend that much on a tree, but he had to have things that were so beautiful and rare that he reached for it. He loved to create paradises.”
Eventually, Rubin began to spend up to four days a week at the property, “driving down for concerts.” After he died, Hattis discovered that she was visiting the property less frequently. “I have a big home in the south of France,” she says, “and I’m spending more and more time there.”
Now, she says, she’s “biting the bullet” and putting the house on the market, “a very hard decision to make.” The art that remains on the walls may be “incorporated into the collection” that’s in her New York apartment. Or maybe, she continues, “it will find a new home one day.” — Bloomberg

Inflation for low-income households across regions

Inflation for low-income households across regions

Gov’t to appeal CA injunction against PLDT labor order

MALACAÑANG and the Labor department are preparing to appeal an injunction issued by the Court of Appeals (CA) which froze an order to PLDT, Inc. to provide regular employment status to more than 7,000 workers.
CA PLDT logo
In a briefing on Monday, Department of Labor and Employment (DoLE) Secretary Silvestre H. Bello III said: “The CA decision is being reviewed with a view to filing a motion for reconsideration.”
Mr. Bello added that the Office of the Solicitor General “agreed to represent DoLE” in seeking the motion.
Mr. Bello said the court ruling effectively freezes any move to recognize as regular employees more than 7,000 PLDT contractual workers.
Presidential Spokesman Herminio L. Roque said in a briefing on Monday that the executive branch was “saddened” by the CA’s intervention, and expressed hope that the Supreme Court will eventually see the DoLE order as a valid action by the executive branch.
PLDT had no comment on the government’s plans to seek reconsideration as of deadline time.
On July 31, the CA granted “an injunction against the regularization orders” of the Labor department, PLDT said in a statement on Monday.
In the 47-page decision signed by Associate Justice Edwin D. Sorongon, the CA said that Mr. Bello and PLDT’s union, Manggagawa sa Komunikasyon ng Pilipinas, “are ENJOINED from implementing, enforcing and/or executing” the compliance order and the resolutions issued by Mr. Bello.
The CA also instructed DoLE to “review and properly (determine) the monetary award on the labor standards violation of petitioner PLDT, Inc., and to conduct further appropriate proceedings, consistent with this Decision.”
DoLE issued a compliance order to PLDT on July 3, 2017. This was affirmed by the Labor secretary through resolutions he signed on January and April this year. The order and resolutions also called for the telco to pay almost P52 million in employee claims.
“The Court of Appeals agreed with PLDT’s contention that the Secretary’s regularization order was ‘tainted with grave abuse of discretion’ because it did not meet the ‘substantial evidence’ standards set out by the Supreme Court in landmark jurisprudence,” PLDT said in a statement following the granting of the injunction.
The CA found that PLDT was denied the right to submit its own evidence, and that claims made in the issuances “did not rise to the level of substantial evidence” and were “rendered not on the basis of the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected.”
The CA noted that DoLE’s regional director relied only on interviews with some workers and applied its findings to other workers who were not interviewed. “It is highly conjectural, if not purely speculative to consider the individual circumstances of some workers who were interviewed to be exactly similar to the factual circumstances pertaining to the other contractors’ workers.”
The court added that DoLE reached an “oversimplified conclusion that what is true for one is true as well for seven or eight others. The assailed issuances, without concrete evidence, simply assumed that every contractor’s worker is similarly, if not exactly, situated as with the rest,” and called some of the facts presented “anecdotal.”
“In the absence of facts supporting a general allegation or broad claim that employment relationship existed, the evidentiary standard could not be said to have been satisfied,” CA stressed.
The court also found that the compliance order “appears to have leaned in favor of the individuals deployed by the service contractors and against PLDT and the latter’s contractors,” suggesting partiality and bias on the part of the Labor secretary.
The CA, however, affirmed with certain modifications the resolutions signed by Mr. Bello in January and May. The CA ordered PLDT to offer regular status to “individuals performing functions and jobs that are usually necessary and desirable in the usual course of the business of the petitioner PLDT, Inc., specifically, as regards the installation, repair and maintenance of PLDT communication lines.”
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Gillian M. Cortez

NEDA-ICC Cabinet Cluster approves new budgets for Mindanao projects

THE CABINET Cluster of the National Economic and Development Authority’s (NEDA) Investment Coordination Committee (ICC) approved higher cost estimates for two Mindanao projects and flood management projects for three river basins across the country.
In a statement, NEDA said that the body approved on July 27 the widening of a two-lane road to four lanes for the Davao City Bypass construction project, as well as shifting the project to one phase from two.
The 45.2-kilometer bypass budget was also approved at P25.8 billion, from the earlier estimate of P16.8 billion.
The cluster also approved the increase in length of the Panguil Bay bridge to 3.77 kilometers from 3.48 kilometers, while widening it to 15.5 meters from 14.5 meters previously.
“The change in cost from P4.9 billion to P7.4 billion covers the actual expenses for Right-of-Way acquisition carried out by the Misamis Occidental and Lanao del Norte District Engineering Offices, excluding service charges,” NEDA said.
The bridge specifications were also modified to accommodate longer pile lengths, bigger boreholes, precautions against seismic events, and additional temporary facilities for construction activity such as docking lots, casting sites, crane ways, among others.
The panel also increased the authorized cost estimate for the Flood Risk Management projects for the Cagayan, Tagoloan, and Imus Rivers to P7.5 billion from P5.6 billion due to “inclusion of new work items; and increases in costs of land acquisition, construction materials, consultancy services, and administration.”
The Tagoloan river runs through Misamis Oriental.
After the Cabinet Cluster, the changes in project specifications and budgets need to be approved by President Rodrigo R. Duterte, acting as head of the NEDA Board.
“Of the regions involved, three (Regions XI, II, Calabarzon) posted Gross Regional Domestic Product (GRDP) growth rates last year of 10.9%, 7.2%, 6.7%, respectively. These are higher than the National Capital Region’s 6.1%,” NEDA said.
Region XI or the Davao Region is expected to grow by 10.5-11.5% by 2022, while Cagayan Valley is expected to grow between 6.5-7.5% over the same period, and Calabarzon growth is projected at 6-7.3%.
“The ICC and the whole of government is steadfast in sustaining these regions’ growth momentum. These improvements in the projects reflect this commitment,” said Socioeconomic Planning Secretary Ernesto M. Pernia.
The statement also said that the ICC urged the Transportation department to “fast-track the implementation of the Cebu Bus Rapid Transit,” which is part of the Metro Cebu Intermodal and Integrated Transport System, which is targeted to achieve interoperability by June 2021.
The integrated transport system will include the Cebu Bus Rapid Transit, a skytrain project, intelligent transport systems, light rail transit, and a greenways project, among others, to help address congestion and transport problems in Metro Cebu. — Elijah Joseph C. Tubayan

Taiwan asks PHL to reciprocate on visa waivers for tourists

THE GOVERNMENT of Taiwan is requesting that the Philippines reciprocate by granting visa-free privileges to visitors from Taiwan.
Alfred Y.H. Wang, director for the Economic Division of the Taipei Economic and Cultural Office in the Philippines (TECOP), said he has been seeking reciprocal visa-free status but negotiations with the Manila Economic and Cultural Office (MECO) are still ongoing.
“We wish the Philippine side will also give us similar treatment on the visa-waiver program. Until now we’re still in discussions,” Mr. Wang told reporters at a media roundtable in Manila on Monday.
“They always say they are starting,” he said, noting that he respects the Philippine decision-making formalities “but we need reciprocal treatment.”
TECOP recently extended the 14-day visa-free program for Filipino visitors by another year. Initially intended as a nine-month trial, the program was extended to July 2019 after Taiwan received a record number of Filipino tourist arrivals last year.
MECO was asked for comment yesterday but had not responded at deadline time.
On its website, TECOP said Filipino visitors to Taiwan hit 291,000 in 2017, up 68.74%.
With the extension of the visa waiver policy, TECOP’s Mr. Wang said: “It would be reasonable to expect tremendous growth” in tourist arrivals this year,” and expressed the hope that 2018 levels will “double or triple” the 2017 performance.
Taiwan’s efforts to boost Filipino arrivals include promoting medical tourism.
On Monday the 2018 Taiwan Healthcare Industry Trade Meeting, organized by the Taiwan External Trade Development Council kicked off at the Manila Hotel.
Taiwan offers world-class medical services at the fraction of the cost for equivalent treatment in the developed world, and is hoping to generate more medical business from Southeast Asia. — Janina C. Lim

DA studying fish, pork imports for holidays

THE Department of Agriculture (DA) is moving to facilitate imports of fish and pork and chicken ahead of the yearend holidays to avert supply problems and their possible impact on prices.
Agriculture Secretary Emmanuel F. Piñol told reporters on Monday that he will be meeting with stakeholders on Friday to discuss the volume of imports required for pork and round scad, which is better known in the Philippines as galunggong.
“We are going to review whether it is the right time now to allow the entry of additional imports… for meat and whether it is advisable for us to allow entry of fish to ensure security of supply,” he added.
“Since there is a noticeable spike in the price in the market, I will consider issuing a certificate of necessity to allow the entry of additional fish to stabilize the price of fish in the market,” he added.”
Mr. Piñol said he will be holding consultations with hog suppliers in light of rising pork prices.
“According to BAI (Bureau of Animal Industry), the supply of hogs is almost equal to demand so its a very critical situation,” he said.
The Philippines can import up to 54,000 metric tons (MT) of pork under the Minimum Access Volume (MAV) scheme. Mr. Piñol said that he expects to authorize imports of an additional 8,000 MT to 10,000 MT of pork.
Poultry and beef exports are also being considered but are not deemed a priority due to the easier importation process for poultry and lower tariff rates for beef, Mr. Piñol added.
When asked about a proposed executive order to reduce tariffs on fish and meat, Mr. Piñol, however, said that he has yet to discuss with stakeholders.
“But this early, any suggestion to eliminate tariff for both meat and fish will certainly be met with strong opposition from agriculture stakeholders,” he added.
“They feel that in the World Trade Organization agreements they were made the sacrificial lambs. The sector feels that they were sacrificed so that the QR (quantitative restrictions) on rice were retained.” — Anna Gabriela A. Mogato