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Cebu Pacific expands contract with AFI KLM

CEBU PACIFIC said on Wednesday, it is expanding its contract with aircraft maintenance provider Air France Industries KLM Engineering & Maintenance (AFI KLM E&M) to cover 39 more planes.
Its listed operator Cebu Air, Inc. said in a statement it wants its seven A321ceo (current engine option) and 32 A321neo (new engine option) to be part of the component support deal.
“Operations under significantly extended contract will partly take place in Singapore at Singapore Component Solutions (SCS), a local joint venture between AFI KLM E&M and Sabena technics. The array of services provided under the long-term contract includes component repairs from Europe and Singapore, as well as access to local spares pool,” it said.
The budget carrier and AFI KLM E&M first signed its deal last year to only cover its Airbus A320 fleet.
Cebu Pacific is currently increasing the number of its aircraft, with orders of 32 A321neo, five A320neo, two A321ceo and six ATR 72-600 aircraft expected to arrive until 2021.
Its fleet currently consists of 67 aircraft: 36 Airbus A320s, five A321ceos, eight A330s, eight ATR 72-500s and 10 ATR 72-600s. — Denise A. Valdez

Restaurant Row (11/08/18)

Privatus’ Yule Ball

PRIVATUS Private Dining, Plato PH, and Patronus Events, Inc. will hold a Harry Potter-themed Yule Ball on Dec. 14, 8 p.m. in La Castellana, Cabildo corner Beaterio Sts, Intramuros, Manila. The Harry Potter-inspired formal dance is expected to be attended by 250 witches and wizards and champions and partners in their best ball gowns, dress robes, and character re-creation. The menu will also be Harry Potter themed, with items like Cauldron Soup, Hogwarts Christmas Ham, Molly’s Magical Meat Pie, Golden Egg Custard, and Butterbeer. There will be a live band. There is currently an early bird promo for the first 100 registrants — P1,800 instead of the standard rate of P1,950. Sign up at https://goo.gl/forms/J15zZ8BOvpjjgNQn1. For Yule Ball reservations and inquiries call 0917-636-2272, 0917-580-5883, or e-mail patronusevents@gmail.com.

German-Filipino food exchange

THIS month the Goethe-Institut Philippinen has lined up a series of events to foster Filipino-German cultural exchange through the medium of food. Under the umbrella title Wanderlust Küche (literally “wanderlust kitchen”), the events include an exhibition, crash courses in German, film screenings, and a special dinner prepared by M Café’s Kalel Chan and guest chef Steffen Burkhardt. The exhibit, Sausage Salads & Potato Pancakes, features a number of special cookbooks from Germany and contains a myriad of interesting trivia on German cuisine. It is on view until Nov. 28 at the Goethe-Institut. There is also a free crash course on Nov. 17 dubbed “Beyond the Beer: A Crash Course on German Culinary Culture.” The fusion dinner, called “The Magic Hour,” is set for Nov. 29 at M Café in Makati. For more information on the individual events, visit Goethe.de/WanderlustKueche. For inquiries, e-mail info-goethe@goethe.de.

Wine dinner, champagne class

EDSA SHANGRI-LA, Manila’s Cantonese restaurant Summer Palace, in partnership with Premium Wine Exchange, presents a wine dinner, “Summer in Canton,” on Nov. 9, 7 p.m., at Peony Private Room. The five-course dinner will showcase classic and brand new creations, paired with wines from France’s Jura, Alsace, Beaujolais, Rhone, and Loire regions. The dinner with wine pairings is on offer at P3,950 net per person. Meanwhile, the first and only Chinese master sommelier in the world and Corporate Director of Wine at Shangri-La Hotels and Resorts, Yang Lu, will introduce both iconic and fledgling champagne wineries on the rise in an intimate champagne master class, “Houses vs Growers: The Rise of Small Champagne Growers,” on Nov. 8, noon, at the Peony Private Room. Get a 20% discount when booking both the wine class and the wine dinner. For bookings and inquiries, call 633-8888 or e-mail summerpalace.esl@shangri-la.com.

Video Experience in East Asia

Video Experience in East Asia

How PSEi member stocks performed — November 7, 2018

Here’s a quick glance at how PSEi stocks fared on Wednesday, November 7, 2018.

 
Philippine Stock Exchange’s most active stocks by value turnover — November 7, 2018

NFA rice auction attracts 13 potential international bidders

THIRTEEN international companies participated in the pre-bid conference of the National Food Authority (NFA) on Wednesday for an import order covering 500,000 metric tons (MT) of long-grain white rice of the 25% broken grade.
The companies are: Asia Golden Rice Co. Ltd., Thai Hua Co. Ltd., Ponglarp Co. Ltd., Gia International Corp., Shwe Wah Yaung Agriculture Production Co., Ltd., Vietnam Northern Food Corp. (VinaFood I), Hiep Loi Joint Stock Co., Phoenix Global DMCC, Meskay & Femtee Trading Co. (Pvt.) Ltd., VinaFood 2, Tan Long Group Joint Stock Co., Olam International, and Capital Cereals Co. Ltd.
The companies are from Singapore, Vietnam, Thailand, Pakistan, and the United Arab Emirates. Bids for this round are set to be opened on Nov. 20.
According to Angel G. Imperial, NFA spokesperson, the terms of reference (ToR) for this bidding round are the same as those of the Oct. 18 round, during which offers for only 47,000 MT of rice were accepted, out of the 250,000 MT up for auction.
Mr. Imperial said the participants all bought bid documents for P75,000 each.
Mr. Imperial said that the NFA’s priority is to ensure immediate and direct delivery to the ports designated for each lot.
The 500,000 MT of rice is divided into nine lots with 14 designated discharge ports receiving the following quantities: 118,000 MT for Subic; 75,000 MT for Manila; 65,000 MT for La Union; 40,000 MT for Batangas; 32,500 MT for General Santos City; 30,000 MT for Tabaco, Albay; 26,700 MT for Cagayan de Oro; 25,000 MT for Cebu; 20,000 MT for Iloilo; 20,000 MT for Tacloban; 17,300 for Zamboanga; 12,500 MT for Davao; 10,000 MT for Surigao; and 8,000 MT for Bacolod.
Half of the volume, or 250,000 MT, has a Dec. 31 delivery deadline, while the other half has until Jan. 31, 2019 to arrive.
Mr. Imperial said the Philippines currently has 2.16 million MT of rice classified as buffer stock, equivalent to about 34 days’ consumption, according to the Philippine Statistics Authority (PSA). The estimate was made on Sept. 1. It has no data yet for October.
He said he is confident inventories will rise because the harvest is ongoing, and discounted the impact of recent storms that hit northern Luzon. — Reicelene Joy N. Ignacio

Fuel tax hike suspension stands, review possible next year — DoF

THE SUSPENSION of additional increases in fuel excise tax next year will continue even amid signs that international oil prices will not breach $80 per barrel in the last quarter of the year, Finance Assistant Secretary Antonio Joselito G. Lambino II said.
In a briefing at the Palace on Wednesday, Secretary Alfonso G. Cusi of the Department of Energy (DoE) also announced that fuel prices, for the fifth consecutive week, “will be rolled back again next week because of the improvement in the price of oil in the international market.”
On the oil price outlook for the coming months, Mr. Cusi said: “We are very dependent on what is happening in the international market, so our information is based on the forecast of the developing, producing and exporting countries. If I would just share with you what the forecast for the coming months, it said that it would remain at the $70 level — I mean, low 70s and the high 70s.”
In a chance interview, he also said: “That would be the forecast for the last quarter and also for next year. That is on the basis of the current production volume capacity.”
During the briefing he explained that the basis of this forecast is “the softening of the sanctions imposed by the US against Iran.”
The US, Mr. Cusi said, has issued a waiver to eight countries to continue importing oil from Iran.
He added that the US “is maximizing its production, as well as Saudi Arabia. So with those volumes, we hope that would keep the price within the $70 range,” he said.
The tax reform law calls for the suspension of scheduled excise tax increases if the Dubai crude benchmark hits or exceeds $80 per barrel, but the government’s economic team, under pressure over rising inflation, opted to recommend suspension of the fuel tax increase even before the three-month threshold required by law.
Asked for comment during the briefing, Mr. Lambino said: “As you know, the economic managers submitted their recommendation to suspend the next tranche of the increase in excise [tax on fuel] scheduled for January 2019. That recommendation stands.”
He said that this recommendation “was made when the price per barrel for Dubai crude and MoPS (Mean of Platts Singapore, a widely-followed basket of oil prices) was above $80, and the futures markets also showed $80 and above for November and December.”
“Futures prices until the end of the year were also above $80 at the time the recommendation was made,” he added. “Ideally, the recommendation will be reviewed after it is implemented… at some point next year.” — Arjay L. Balinbin

BoI-approved projects increase over 26% in 10 months to October

PROJECTS approved by the Board of Investments (BoI) in the 10 months to October rose just over 26% by value, with foreign-funded projects more than doubling.
In a statement on Wednesday, the investment promotion agency said the value of projects it approved during the period totaled P515.9 billion, up 26.2% year on year.
The 10-month totals account for 75.87% of the BoI’s 2018 target of P680 billion. The target would beat by 10.21% the 2017 record of P617 billion.
Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo said:
“The rest of the year should be pretty exciting. There are several big-ticket projects undergoing strict evaluation process, to ensure that incentives are needed to realize their strategic impact.”
Foreign investments accounted for P39.3 billion of the 10-month total, well above the year-earlier P15.3 billion.
Indonesia accounted for P6.4 billion, followed by Malaysia at P2.9 billion and Japan at P2.8 billion.
Other sources of foreign projects were Australia at P1.1 billion; China at P1.1 billion; the US at P612 million; Italy at P485.7 million; Singapore at P404.1 million; and Switzerland at P357.7 million.
Power, manufacturing, transportation and storage, construction and real estate made up the top five industries attracting investments during the period.
The BoI said the highlights include Petron Corp.’s P81.9-billion condensate processing complex; FGEN LNG Corp.’s P62.5-billion LNG Terminal; Pulangi Hydro Power Corp.’s P38-billion renewable hydropower resources project; and Citra Central Expressway Corp.’s P25.7- billion Metro Manila Skyway project.
Others include SteelAsia Manufacturing Corp.’s P24.1-billion heavy steel section project; various Solar Philippines Commercial Rooftop Projects Inc. development projects worth P19 billion, including one in Zambales and P13.6 billion each in Tarlac and Batangas; APO Agua Infrastructure, Inc.’s P13.3-billion bulk water supply project; and Ionic Cementworks Industries, Inc.’s P12-billion cement production project.
The BoI also noted significant increases in manufacturing investment projects in the 10 months, totaling P142.86 billion, compared with the P38.47 billion registered a year earlier.
“We are pleased with the remarkable increase in manufacturing investments. With the strong domestic demand being serviced by merchandise imports, additional investment is needed to boost our manufacturing base that will also expand our capacity to export and address the perennial structural issue of our trade deficit for the past many decades,” Trade Secretary and BoI Chairman Ramon M. Lopez said in the statement.
“We need to work together to attract more investment and address all roadblocks to achieving a competitive industrial structure such as power costs, logistics costs, greater access to major agricultural inputs to many industries like sugar, and agriculture supply at competitive prices,” Mr. Lopez added.
The bulk of the projects propose to locate in Calabarzon and Central Luzon, accounting for P165.3 billion and P165 billion respectively.
Investment projects to be located in the National Capital Region amounted to P66.1 billion, followed by Northern Mindanao at P40 billion, and the Davao Region at P17 billion. — Janina C. Lim

Sotto casts doubt on tax reform passage by June

THE second tax reform package is not likely to pass before the 17th Congress ends on June 7, with Senate President Vicente C. Sotto III saying that the chamber has other priorities and signalled an unwillingness to compromise on its version of the legislation.
Mr. Sotto said on Wednesday that the tax reform package, which will cut corporate income tax and streamline fiscal incentives, is more likely to move forward if the Senate version is followed.
“If you are talking about the version that has been broadcast talagang mahihirapan (it will be difficult). The Senate version has a chance. But if it does not make it by June, then we will just have to refile it in July,” he said in a briefing.
He identified 14 priority measures the Senate intends to pass in the third regular session, which did not include Package 2 of the tax reform program, initiated in the House as House Bill No. 8083, or the Tax Reform for Attracting Better and High-quality Opportunities” (TRABAHO) bill.
Asked for comment, Finance Secretary Carlos G. Dominguez III said in a Viber message that he hopes to hold discussions with the Senate on a timetable for passing the bill.
The House has approved its version of TRABAHO on third reading; while its counterpart measure, Senate Bill No. 1906, the Corporate Income Tax and Incentives Reform Act, is pending before the Senate Committee on Ways and Means.
Mr. Sotto later clarified that while he does not rule the possibility of the bill’s passage, he will push for other bills in the remaining days of the 17th Congress.
“What I will push for personally are the Medical Scholarship bill, the Human Security Act, and the UHC (Universal Health Care) Act and Public Services Act.”
The Senate is currently deliberating priority measures like amendments to the Human Security Act; the Medical Scholarship bill; amendments to the Public Service Act; Enhanced Universal Health Care legislation; Unified Uniformed Personnel Retirement Benefits and Pension Reform legislation; and bills reforming the budget process, the national government’s staffing levels, outlining the use of the coconut levy fund, among others.
Mr. Sotto said he is positive the priority measures will be passed, considering the Senate’s performance from June to October, which resulted in the enactment of 32 bills.
“If we were able to do this from June to October, I am confident that the priority measures we listed here will be able to see the light of day, hopefully before February, before the end of session by the second week of February,” he said.
Congress is set to go on break between Feb. 8 and May 20 to allow for the campaign period ahead of the mid-term election on May 13.
In the same briefing, Mr. Sotto disclosed the Legislative-Executive Development Advisory Council (LEDAC) has not yet reconvened.
“There was one scheduled but the House cancelled,” he said. — Charmaine A. Tadalan

Japan commits to ODA deals on MRT-3, helicopter maintenance

THE PHILIPPINE and Japanese governments exchanged notes yesterday on the official development assistance (ODA) funding for the Metro Rail Transit Line 3 (MRT-3) rehabilitation program, and various items of defense equipment.
The Department of Foreign Affairs (DFA) said in a statement yesterday that Foreign Affairs Secretary Teodoro L. Locsin, Jr. and Japanese Ambassador to the Philippines Koji Haneda signed the Exchange of Notes on the Grant Aid of the Government of Japan to the Philippines of the MRT-3 rehabilitation, and the Japan Ground Self-Defense Force (JGSDF) agreement to supply parts and maintenance assistance for the Philippine fleet of UH-1H (Huey) helicopters.
Japan will provide a P17.79-billion loan facility for the 43-month rehabilitation of the MRT-3, to restore its design capacity and reliability, covering the MRT’s fleet of 72 Light Rail Vehicles (LRVs). It also funds day-to-day maintenance.
The loan will also cover work on the rail line’s trains, power supply system, overhead catenary system, radio system, closed-circuit television system, public address system, signaling system, rail tracks, road rail vehicles, depot equipment, elevators and escalators and other station-building equipment.
The defense aid package includes P5 billion worth of spare parts and maintenance equipment for UH-1H helicopters.
“Throughout the years, Japan has vigorously and unfailingly supported the priorities of the Philippine government for the well-being of the Filipino people — and in particular through economic and development assistance as well as in enhancing our defense and security capabilities. It is help that has no agenda but friendship, decency, and a deep and abiding regard, as much for the safety and well-being of neighbors, as for oneself,” Mr. Locsin said.
“This is why we have elevated our relationship with Japan to a strategic partnership. Today’s Exchange of Notes affirms this ever-growing, mutually beneficial and gratifying relationship between our two countries and our two peoples,” he added.
Mr. Haneda, meanwhile, reaffirmed the Japanese government’s commitment to its relationship with the Philippines.
“With the signing of these two projects, let me assure you that we do not only mark our commitments on paper, we also pledge our all-out efforts in bringing these projects into successful completion,” he said.
The exchange of notes were witnessed by Defense Secretary Delfin N. Lorenzana, Transportation Undersecretary for Railways Timothy John Batan, Finance Undersecretary for the International Finance Group Mark Dennis Joven, Japan International Cooperation Agency (JICA) Senior Vice President Yasushi Tanaka, JICA-Philippines Chief Representative Yoshio Wada and officials from the DFA, the Departments of Finance, Transportation, and National Defense, the Japanese Embassy and JICA. — Elijah Joseph C. Tubayan

Dev’t finance law seen boosting US overseas investment

US INVESTMENTS in the Philippines are expected to increase with the passage of development finance legislation in the US, a US official said.
Overseas Private Investment Corp. (OPIC) Executive Vice-President David Bohigian said Tuesday that US firms retain a ”heightened interest” in the Philippines.
“There continues to be heightened interest in the Philippines. It’s something that we’ve worked with our partners to better understand the Philippine market,” he told reporters in a teleconference late Tuesday.
“I’d expect to see more investment under the BUILD (Better Utilization of Investments Leading to Development) Act and through the Development Finance Corp. in the Philippines in the near future,” he added.
US President Donald J. Trump on Oct. 5 signed into law the BUILD Act, which strengthens the US development finance capabilities. The law also reorganizes the OPIC, a government agency which helps US businesses invest in emerging markets, into an entity called the US International Development Finance Corporation (USDFC).
Mr. Bohigian also said the law will allow the US additional flexibility in financing Asian investments, with the USDFC’s additional authority to make equity investments, raise its investment portfolio cap to $60 billion from $29 billion, and provide technical assistance to projects.
“So, (we’re) being able to really go deeper into several countries where we have foreign policy and development needs,” he said.
US Secretary of State Michael R. Pompeo has said the BUILD Act offers “a better alternative to state-directed investments” and advances Washington’s foreign policy goals.
In the Philippines, Mr. Bohigian noted that the US is studying the information technology (IT) sector.
“I’m impressed by the entrepreneurial society that they’re building there within IT and their connectivity to the world. Ensuring that countries like the Philippines have more connectivity through telecom networks, through trade relationships, through having open societies is important,” Mr. Bohigian said.
The OPIC has invested $250 million in the Philippines in five projects. One is a $2.5-million loan allowing QuantumID Technologies, Inc. to invest in an air cargo management system.
Asked to describe the US approach to development finance relative to China’s, Mr. Bohigian said the US takes care to ensure that projects are a win for the country it is helping, and that its sovereignty is not threatened. It also strives to use local labor, and protect the environment.
“The US relationships in these countries run back hundreds of years, and our relationships are built to last. And the projects that US companies and the US government undertake are not merely the lowest cost on day one for the bid, but truly meant to ensure total cost of ownership so that we can be proud of the projects and societies that we’re creating in the 21st century,” he said.
“So I think that’s how the Build Act can help play into not just the Indo-Pacific strategy but truly how we can help modernize development finance,” he added.
Mr. Bohigian said that US Vice-President Michael R. Pence is also expected to highlight the BUILD Act during his visit to Papua New Guinea next week for the Asia Pacific Economic Cooperation (APEC) summit. — Camille A. Aguinaldo

Board announces Nov. 22 effectivity of P25 NCR wage hike

THE NEW minimum wage for Metro Manila was announced at P500-P537 starting Nov. 22, reflecting a P25 increase, the National Wages and Productivity Commission (NWPC) said Wednesday.
“The new minimum wage rates for Metro Manila workers will take effect on Nov. 22, 2018,” the NWPC said in a social media posting on Wednesday, two days after the commission and the Department of Labor and Employment (DoLE) officially confirmed the P25 wage increase for private sector minimum wage workers on Monday.
Wage Order No. NCR-22 was released to the public by the Regional Tripartite Wages and Productivity Board — National Capital Region (RTWPB-NCR) on Wednesday. The decision was approved unanimously by the board on Oct. 30 with only labor representative Angelita D. Señorin dissenting and German N. Pascua Jr. approving but with reservations.
Workers in agriculture (plantation and non-plantation); retail/service establishments employing less than 15 workers; and manufacturing establishments employing less than 10 workers will be entitled to a daily minimum salary of P500. On the other hand, non-agriculture workers’ pay was set at P537.
For minimum wage earners in private schools, the wage order states: “all private educational institutions shall implement the wage rates prescribed herein starting School Year 2019-2020.”
Those exempted from implementing the new wage adjustment are distressed establishments; retail/service establishments employing less than 10 workers; and establishments affected by calamities.
The wage order also provides that any party objecting to the new wage hike may appeal before the NCR wage board within 10 days of the wage order’s release.
“Any party aggrieved may file an appeal to NWPC, through the Board, in three printed copies not later than 10 days from publication of this Wage order,” it said.
Associated Labor Union — Trade Union Congress of the Philippines (ALU-TUCP) Spokesperson Alan A. Tanjusay has said that the labor coalition plans to appeal against the P25 wage increase. — Gillian M. Cortez

GIR falls to 7-year low in Oct.

DOLLAR reserves slipped to a fresh seven-year low in October as the central bank defended the peso and as the government paid down maturing foreign debt.
Gross international reserves (GIR) dropped to $74.773 billion last month, less than the $74.939 billion in September and down from the $80.419 billion booked a year earlier, the Bangko Sentral ng Pilipinas (BSP) said.
This is the lowest reserve level seen since July 2011, when the indicator fell to $71.884 billion.
In a statement, the central bank said the lower GIR is due to higher dollar outflows following payments made by the national government for foreign currency debt, as well as net withdrawals.
The central bank also dipped into reserves to temper sharp swings in the exchange rate as the peso continued to trade weaker than the P54 level against the dollar during the first few weeks of October.
The peso averaged P54.0086 during the month, weaker against the September average of P53.9419.
The BSP has been pursuing a policy of “tactical intervention” in managing currency swings, as it holds the view that the exchange rate should be generally market-determined but also be subject to regulatory intervention to control abrupt or steep changes in the day-to-day rate.
Foreign currency holdings also slipped to $5.432 billion from $5.842 billion a month earlier.
On the other hand, these declines were partly offset by higher gold valuations. The value of the BSP’s gold holdings rose to $7.854 billion last month, against $7.577 billion in September and down from $8.065 billion a year earlier.
A steady stream of income from the central bank’s foreign investments likewise propped up GIR. Total investments were valued at $59.819 billion, lower than the month-earlier $59.851 billion.
Reserves held with the International Monetary Fund (IMF) fell to $481.6 million from $483.4 million previously. On the other hand, the Philippines’ special drawing rights — or the amount which can be tapped under the IMF’s reserve currency basket — were unchanged at $1.186 billion.
The current GIR level remained below the $80-billion forecast for the entire year, and is also lower than the $81.57 billion reserves held in December 2017.
Despite the decline, the October GIR is sufficient for 6.8 months’ worth of imports, matching the September import coverage rate. This comes at a time of heavy importation of raw materials and capital goods.
The BSP said reserves represent an “ample” external liquidity buffer, well above the three-month global standard.
International reserves are made up of gold, the BSP’s assets expressed in foreign currency, country quotas with the IMF, and foreign currency deposits held by government and state-run firms. — Melissa Luz T. Lopez

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