How PSEi member stocks performed — January 18, 2018
Here’s a quick glance at how PSEi stocks fared on Thursday, January 18, 2018.
Some at BoJ said to flag need for future normalization talks
A SMALL SHIFT is taking place in internal discussions among Bank of Japan (BoJ) policy makers, with a minority raising the need to eventually start discussing policy normalization, even though they agree the current stimulus program must continue unchanged for some time, according to people familiar with talks at the central bank.
Some of them think the change is natural given the improvement in the economy, according to the people, who declined to be named because discussions are private. Japan’s extended economic recovery and a slow but steady rise in inflation are creating the need in the medium-term to at least begin talking about normalization, the people said.
BoJ officials caution that the market’s expectations for policy normalization have moved well ahead of their own. They see a long way to go before the BoJ’s 2% inflation goal is reached, noting that excluding energy prices, inflation is far weaker than even the 0.9% registered by the core gauge in November, the people said.
With the Japanese economy on solid footing, investors have begun to wager that the BoJ is about to join its global peers and begin unwinding its extraordinary monetary stimulus, particularly after a tweak to the central bank’s purchases of long-dated bonds on Jan. 9.
The yen has strengthened by more than 1% since the Jan. 9 bond operation, and traded at 111.31 per dollar as of 11:41 a.m. in Tokyo on Thursday. Japan’s 10-year bond yield held steady at 0.08% on Thursday after rising just after the open as high as 0.09%, the highest since July.
BoJ officials have stressed that the reduced bond buying carried no policy implications. Bond purchases remain in line with a policy shift made in September 2016, when the BoJ changed its priority from the quantity of asset purchases to controlling interest rates, they said.
BoJ Governor Haruhiko Kuroda has repeatedly said that it’s too early to talk publicly about possible exit strategies because the central bank remains so far from its inflation target. He said any such discussions would likely confuse markets.
Some of the people familiar with talks at the central bank pointed signs of small changes in the thinking of some BoJ policy members in the summary of opinions from the most recent policy meeting, on Dec. 20-21. The summary of opinions don’t necessarily represent a consensus or even a majority view of board members, and don’t identify people by name.
One point in the summary was a nod to the prospect of higher interest rates on the horizon.
“When it is expected that economic activity and prices will continue to improve going forward, the situation may occur where the Bank will need to consider whether adjustments in the level of interest rates will be necessary,” the summary cited one board member as saying. The policy maker noted “strengthening the sustainability” of the policy framework as a possible goal.
The December summary noted for the first time, in reference to the central bank’s purchase of risk assets like exchange-traded funds, that “stock prices and corporate profits have substantially improved.” This appears to indicate that at least one member thinks the need to lower risk premiums through the asset purchases is fading.
BoJ officials also see a possibility that the central bank won’t cut any inflation forecasts when it releases its quarterly outlook after its next two-day policy meeting, which ends Jan. 23. That would be the first time in nearly four years.
Most economists surveyed by Bloomberg forecast no changes to policy settings next week. — Bloomberg
Most fuel stations seen raising prices due to TRAIN by end-Jan.
MOST SERVICE STATIONS are expected to increase fuel prices by the end of January as they sell inventories taxed at higher rates under the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
The Department of Energy (DoE) made the projection at a presentation to the Senate, which heard testimony on the impact on coal and fuel prices following the implementation of the tax reform law.
“Based on the projections, (half of service stations will raise prices) by the end of the month,” DoE Assistant Secretary Leonido J. Pulido III told Sen. Sherwin T. Gatchalian, who chairs the committee on energy.
The government is monitoring when inventories of key commodities like fuel, which were taxed at the old rates before the end of 2017, are due to run out, to better gauge the timing and impact on price hikes when retailers sell new inventory taxed at higher rates in 2018.
The DoE and the Department of Finance have warned fuel retailers not to raise prices using tax reform as a pretext, particularly if they are still selling 2017 inventories.
At the hearing, Mr. Pulido said the average date for old fuel stocks to run out at the retail level is 15 days after January 1.
He said some service stations have already raised their fuel prices, including those in the Caltex Philippines, Petron Corp., Shell Philippines, and Flying V networks.
Mr. Pulido said tax reform will add P2.97 per liter of gasoline. The corresponding increment for, diesel is P2.80, kerosene P3.36. Liquefied petroleum gas (LPG) prices will rise P1.12 per kilogram.
Also at the hearing, Mr. Gatchalian queried Mr. Pulido regarding the DoE’s efforts to curb possible profiteering from old stock being retailed at higher prices.
Mr. Pulido told Mr. Gatchalian that the Energy department is validating the inventories of oil companies to check when they start selling inventory taxed at new rates.
Mr. Pulido said some oil companies have yet to comply with an order to report their year-end inventories, though the department has responded with random inspections.
In an interview with reporters, Mr. Gatchalian said the DoE should fast-track its validation of the oil companies’ old stock.
“Petroleum is being sold everyday so the process should be quick. What is important is that we should know that the government is doing its job to protect consumers,” he said. — Camille A. Aguinaldo
Buzz cuts paired with custom designer coffee? The modern barbershop, according to a startup
When quaint barbershops started to mushroom three years ago, there was a surge of modern men seeking clean, classic, and dapper hair styles.
But the huge patronage also presented a problem: suddenly businesses needed to accommodate more customers while walk‑in customers fought over slots. Men could line up for a couple of hours and still end up unaccommodated.
Some barbershops in the metro are addressing this issue by going beyond the usual over‑the‑phone booking process with the help of BaseUp, a tech startup that provides small businesses with an online booking system.
Established two years ago, BaseUp is the brainchild of three young men—Carlos Salazar, Jeph Fernandez, and Gino Gervasio—who had their fair share of complaints about the cost and process of getting their hair done.
“We all spent some time in the U.S. where haircuts are rather expensive,” Salazar told SparkUp in an interview. “So when we came to the Philippines, we looked forward to getting a haircut.”
The first thing they did was to Google the hippest barbershops in town. Unsatisfied with the results, they solicited recommendations from friends, and proceeded to make phone calls to the shops.
But eventually, hope was snipped: lines were almost always busy, and if they did reach someone, the response was only that they were already fully‑booked for the day.
Come 2016, in the middle of developing a booking platform for a fitness space, the team realized that the same model could also work for the beauty and grooming industry.
Their first capital? Their own individual skill sets. Salazar held an MBA from F.W. Olin Graduate School of Business, U.S., and previously worked for a family business, developing and operating a system that allowed multinational clients to order products like business cards online. Fernandez worked at American corporate communications firm The Berman Group creating graphic designs for clients like Intel and HP. Gervasio, meanwhile, whose expertise is in the field of computer science, previously developed IT infrastructure for machine learning platforms of a network security group also based in the States.
“That’s when we started playing ideas on what kinds of solutions we could create for businesses in the service industry,” he said. “We wanted to focus on the experience of a customer when dealing with small businesses. And we started with answering the question, ‘How do we help potential customers find them?’ We found that there weren’t a lot of solutions out there that help businesses do this.”
Imagine going to a barbershop and they know that you like GQ Magazine, so by the time you come in, there’s GQ Magazine and maybe a cup of your favorite coffee.
In rolling out its booking system, the company incorporates the BaseUp widget to a client’s existing website or Facebook page. Businesses that have no website can utilize a customized landing page that can immediately take appointments from desktop or mobile.
At present, the platform has 7,500 users nationwide. It has generated more than 21,000 bookings for quaint barbershops including the more popular Felipe and Sons in Manila, and TUF barbershop in Cebu.
Aside from a booking platform, BaseUp also provides its clients with business analytics that indicates the number of new and returning customers, the strongest and weakest days of the week, and products or services to cut from their line of offerings.
“As we talk to business owners, we realized that the more information that they have about their business, the better that they will be able to run and even expand it,” said Gervasio. “Just looking at the top line revenue isn’t enough anymore.”
PERSONALIZED SERVICE
BaseUp also allows its users to know their customers’ behavior through a customer relationship management support, a tool that analyzes a customers’ quirks and presents their preferences.
“Imagine going to a barbershop and they know that you like GQ Magazine, so by the time you come in, there’s GQ Magazine and maybe a cup of your favorite coffee,” he added. “It’s really like a personalized experience. That’s where we also help the businesses; enabling them to track what’s important for their customers, what’s their behavior in terms of the type of services they get.”
According to Gervasio, BaseUp is an initial step to make daily transactions here in the country easier.
“The three of us had that common goal of improving how things are done here in the Philippines. In the U.S., your normal day‑to‑day is so convenient, making bank transactions is so easy, coming up with a business is so easy, just doing the everyday things,” he said.
While the company’s current product focuses on online booking, Gervasio said BaseUp aims to come up with products that can address small businesses’ pain points such as payment process, product promotion, and driving up sales and marketing.
Asked what motivated them to leave the U.S.—the proverbial land of milk and honey—to build a startup from the ground up in a third world country like the Philippines, Salazar simply quipped: “It’s more fun in the Philippines.”
But aside from helping purvey buzz cuts and french crops, while serving up custom designer coffee on the side, BaseUp has a larger mission.
“We wanna make products that will help entrepreneurs set up a business in a day,” Gervasio said. “We decided that one thing we could do a lot better here in the Philippines is customer service. There’s nothing that really delivers delightful experiences here. Our main point is we try to scale it down to the essentials and really study how we can deliver a good experience.”
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Car sales growth slows, still double-digit
VEHICLE SALES growth in the country slowed last year from 2016, but 2017 still saw an increase of nearly a fifth, sustaining the annual double-digit pace the domestic auto industry has been clocking since 2012.
Data jointly released yesterday by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) showed the groups’ member companies sold 425,673 vehicles last year, up 18.4% from 359,572 units in 2016.
Last year’s increase was slower than the 24.6% expansion clocked for the entire 2016, as well as the 22.9% and 29.5% increases registered in 2015 and 2014, respectively.
Statistics from the ASEAN Automotive Federation, which are based on CAMPI and TMA reports, showed the Philippine auto industry grew 16% and 11% in 2013 and 2012, respectively.
CAMPI and TMA members’ cumulative sales surpassed their 2017 target of 400,500 units and nearly hit the entire industry target of 450,000 units, the groups said.
Another domestic auto industry group, the Association of Vehicle Importers and Distributors, reports its member companies’ sales separately.
CAMPI and TMA attributed the positive performance to aggressive promos and new model updates, among others.
However, they maintained a cautiously optimistic outlook for 2018 with the imposition of higher taxes for vehicles.
“While exceeding our sales target for the year, we remain cautious in our projection for 2018. CAMPI remains confident that the market will be able to adjust to the new auto excise tax in 2018,” Rommel R. Gutierrez, president of CAMPI and a first vice-president at Toyota Motor Philippines (TMP), said in a statement.
President Rodrigo R. Duterte last month signed into law Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion, that raised the excise tax for vehicles, among other levies. But the rates were less severe than what was originally expected by the industry.
Automobile deliveries in December alone increased by 33.4% to 45,494 units from 34,104 in 2016’s counterpart month.
The passenger car segment booked sales of 14,182 units in December, up 13.4% annually, bringing the total for the year to 139,424 units, up 4.7%.
Sales of commercial vehicles, which accounted for 67% of industry sales, totaled 31,312 units in December, up 45% from 21,594 units. Full-year sales totaled 286,249 units, up 26.4% from 226,284.
December sales of Asian utility models, classified as commercial vehicles, edged up 2.9% annually to 6,472 units from 6,290. That brought full-year 2017 sales to 79,886 units, up 20.3% from 66,380 in 2016.
Light commercial vehicles — mostly pickups and sport utility vehicles — surged 64.6% in December to 23,434 units from 14,241, taking 2017’s total sales to 189,248 units, up 29.74% from 145,863.
TMP kept its dominance in terms of volume for 2017 as it secured a 43.2% share of the market with 183,908 vehicles sold. Mitsubishi Motor Philippines Corp. followed with a 17.3% share and Ford Motor Co. with 8.6%. Honda Cars Philippines, Inc. came in fourth with a 7.46%, followed by Isuzu Philippines Corp. with 7.07%. — Krista Angela M. Montealegre
Competition body zeroes in on 10 sectors in study
By Krista A. M. Montealegre
National Correspondent
THE PHILIPPINE COMPETITION COMMISSION (PCC) is embarking on a study of anti-competitive practices in 10 priority sectors that may touch on the impact of a contentious deal involving the country’s telecommunication duopoly.
Apart from telecoms, PCC Commissioner Stella Luz A. Quimbo announced in a briefing in Makati City on Wednesday that these sectors are rice, meat and poultry, pharmaceuticals, air transportation, land transportation, agricultural credit, digital commerce, retail, and certain areas of manufacturing.
“These sectors tend to be those that have big impact on consumers,” Ms. Quimbo said.
The PCC is tapping third-party experts to undertake the market study, citing its limited resources.
The review is expected to be completed within the year.
Commissioner Johannes Benjamin R. Bernabe clarified that the market study for the telco sector is a “separate exercise distinct from the review” of the acquisition by PLDT, Inc. and Globe Telecom, Inc. of telecommunication assets owned by San Miguel Corp. since it will be looking at the whole gamut of services provided in the industry.
The market study will encompass voice telephony, fixed broadband, delivery of Internet services and mobile Internet service provisions, among others.
The PCC has been barred from scrutinizing the duopoly’s purchase of San Miguel’s telecommunication assets after the Court of Appeals affirmed the P70-billion deal in an October ruling.
Last month, the competition body asked the Supreme Court to lift the injunction on the buyout review.
“In terms of looking at the effect of the consolidation of telco assets in the hands of PLDT and Globe, in a way, I think — without going too much into the review — it will be difficult to avoid looking at the consequences on the telecoms industry,” Mr. Bernabe said. “It is an indispensable element of the telecoms industry.”
The PCC can use the market study to open a case against any market player and help government agencies craft policies to prevent anti-competitive practices.
If faced with an “abuse of market dominance” in telecommunications for instance, “one of the remedies you can impose is to require divestment of certain assets — in this case frequencies — that the telco player can have,” Mr. Bernabe said.
The PCC estimates that 12.8% is the only portion that can be allocated to a potential third player.
The study can help a potential third telco player to compete in the market, with the PCC set to meet Department of Information Technology and Communications Secretary Eliseo M. Rio, Jr. next week to work on a possible memorandum of agreement on information exchange.
The department has released the guidelines on the qualifications and criteria in the selection of a new telco player in line with President Rodrigo R. Duterte’s order that a new player should be able to enter by the end of this quarter.
The PCC is set to seal more collaborative partnerships with a number of government agencies after signing cooperation agreements with the Bangko Sentral ng Pilipinas, Commission on Audit, Philippine Statistics Authority, and Insurance Commission, among others.
Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains an interest in BusinessWorld through the Philippine Star Group, which it controls.
Finance official sees 2017 budget gap close to program
THE FISCAL GAP likely stood at an equivalent of 2.6-2.8% of gross domestic product (GDP) for full-year 2017, signaling better state performance on the revenue collection and budget spending fronts, the Finance department’s chief economist said.
“Between 2.6% and 2.8% of GDP,” Finance Undersecretary Gil S. Beltran told reporters on Thursday when asked for the indicative deficit level.
If realized, it would be higher than 2016’s 2.4% deficit-to-GDP ratio, or P353.4 billion.
The government had programmed a P482.1-billion deficit for 2017, equivalent to 3.0% of GDP — a deficit ratio ceiling set until 2022.
The 11 months to November last year saw the budget gap at P243.5 billion, up 4.0% from P235.2 billion in 2016’s corresponding period.
Final data on the national government’s fiscal performance is scheduled to be released on March 2, according to the Bureau of the Treasury.
The government grew revenue collections by 11% to P2.25 trillion as of November from P2.031 trillion in 2016’s comparable 11 months. Last year’s 11-month haul was equivalent to 92.71% of the P2.427 trillion revenue program for 2017.
The same comparative 11 months saw state spending increase by 10% to P2.494 trillion from P2.266 trillion. Disbursements in last year’s first 11 months was equivalent to 85.73% of the P2.909-trillion program for 2017.
The government has programmed a P523.7-billion fiscal deficit for this year, 8.63% more than 2017’s deficit ceiling. — Elijah Joseph C. Tubayan
Philippines hopes for windfall as basketball comes home in 2023
By Michael Angelo S. Murillo
Senior Reporter
MORE THAN 40 years since hosting the biggest hoops event in the world, basketball is coming home to the Philippines after the country, together with Indonesia and Japan, secured hosting rights for the 2023 FIBA Basketball World Cup.
The Philippines bagging the rights to host the International Basketball Federation’s (FIBA) World Cup is viewed positively for the potential windfall it can give beyond basketball, as the current government pushes initiatives in tourism, infrastructure, and other fields to speed up overall economic growth.
Coming off a failed bid to host the 2019 edition of the quadrennial basketball meet, which went to China, the group of the Philippines, Indonesia and Japan bagged last month rights to host the 2023 World Cup, beating Argentina and Uruguay which jointly submitted a bid.
It marked the first time that the world basketball governing body had awarded the hosting of the World Cup to more than one country, with games to be held back-to-back within Asia.
The Philippines will play host for the first time since the 1978 edition of the tournament in which Yugoslavia beat the Soviet Union in Manila.
Half of the 32 matches will take place in the Philippines while the remaining 16 will be played in Jakarta and Okinawa.
Playoff games all the way to the championship will be held in the country.
‘A BASKETBALL-LOVING COUNTRY’
“Winning the bid to host the FIBA 2023 World Cup together with Japan and Indonesia marks the country’s reemergence and rising prominence in the world of international sports,” Communications Secretary Martin M. Andanar said in a statement after the 2023 hosts were named on Dec. 9.
“We can expect this to spur tourism even further and provide added stimulus for businesses as well as investments.”
President Rodrigo R. Duterte — who met visiting FIBA officials in a courtesy call early last year — has expressed support for the initiative to host, spearheaded by the Samahang Basketbol ng Pilipinas, Inc. (SBP), seeing how it can unify the nation, apart from the benefits it can give the economy and to the sport of basketball.
The significance of the hosting beyond basketball is definitely not lost on SBP officials, on whose shoulders the event’s success now rests.
“We are a basketball-loving country so it is huge from a basketball perspective. Beyond basketball, foremost is showcasing the Philippines to the world that we are capable of hosting such events,” Alfredo “Al” S. Panlilio, SBP president, said in a recent interview with BusinessWorld.
“This is not the first time that we bid for it. We lost to China for 2019 but I think this time we had a compelling case along with Indonesia and Japan. As a group with Indonesia and Japan, we present more reach for FIBA to further the growth of the sport. We have a bigger market to promote products for commercial opportunities as well,” Mr. Panlilio added.
WELL-TIMED
“Hosting this event is a huge bonus for Filipinos. Knowing the culture we have of basketball, this event will greatly encourage many Filipinos,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said in a separate interview.
“In terms of its impact on the economy, it will definitely be huge as well. This type of hosting I would say would be equivalent to hosting the Miss Universe pageant or even more for the excitement, the hoopla and the energy it can generate,” he added.
“Definitely, first and foremost is the image that the country has in the international arena. This means that we are a country that is able to host such a magnitude of an event,” he explained.
“Secondly, it would be the tourism sector. This would be a great time to further promote the Philippines as a major tourist destination, knowing that only 8.6% of the economy comes from tourism as of 2016.”
The economist went on to say that the 2023 hosting should benefit from the current economic push, particularly the “Build, Build, Build” infrastructure development program of the Duterte administration which ends its six-year term in mid-2022.
“I think 2023 is the perfect time because of a lot of the big-ticket infrastructure projects that have been started and most probably which will be already (be) or almost (be) finished by then,” Mr. Asuncion said.
“If the current government plays its cards right and moves in the right direction, the country would be averaging about 7-8% GDP growth, which is a great complement to the hosting and vice-versa.”
The “Build, Build, Build” program — aimed at spurring economic growth to 7-8% annually from this year to 2022 from 2010-2015’s 6.2% — will see infrastructure spending increase to P1.899 trillion, equivalent to 7.45% of gross domestic product (GDP), in 2022 from a programmed P1.17 trillion, or 6.68%, this year.
The focus on infrastructure — particularly those aimed at easing traffic congestion like new roads, bridges, elevated highways and railways — is one of the things SBP is banking on to ensure the success of the Philippines’ hosting of the event.
“In 2015, I still feel we won that [bid]. We had a good presentation… but at that time we lost, aside from the bid price by China, also on infrastructure — they already have it built,” Mr. Panlilio noted.
The SBP official said as per agreement with FIBA, venues to be used for the hosting are Mall of Asia Arena in Pasay City, Philippine Arena in Bulacan and Smart Araneta Coliseum in Quezon City.
BENEFITS
On its Web site, FIBA cited four potential benefits of hosting FIBA events like the World Cup, namely: economic, sporting, social and capacity development.
Economic benefits come in the form of events’ impact on the overall economy and return on investment, branding on a global scale (advertising and sponsorship values), revenue opportunities (sale of tickets and local broadcast rights) and auxiliary events’ potential (associated events with economic value).
Take the case of Spain, for example, which hosted the last FIBA World Championship (now World Cup) in 2014.
An article published on the SportsBusiness Journal Web site on Dec. 5, 2014 — three months after the tournament — cited figures from a study by professional services provider Deloitte putting the value of its “total economic impact” for Spain at €408 million against an operational budget of €39 million to host the event then.
Economic impact included €75 million in taxes and €33 million in “direct profit to the State.”
An estimated €83 million came from more than 55,000 visiting basketball fans from around the world who spent on food, lodging and other items as they came to cheer for their national teams in the cities of Bilbao, Granada, Gran Canaria, Sevilla, Barcelona and Madrid.
A total of 672,000 spectators attended the 76 games, with the six venues filled to 80% of capacity.
Promotion of the FIBA Basketball World Cup started 500 days before the event began, with such activities taking place around the world between January 2012 and September 2014.
The article did not give figures on advertising revenues during the tournament, whose games were broadcast in 179 countries, but a separate FIBA release on Dec. 3, 2014 said presence of the event logo in the advertising campaigns of 24 event partners yielded €212 million in revenues.
The SportsBusiness Journal article quoted Spanish Basketball Federation President José Luis Sáez as describing it as “the biggest sporting event of the decade in Spain.”
“We have had an exemplary tournament leaving a unique legacy for Spanish basketball. We are not going to stop here; we want to remain leaders in the future.”
UNQUANTIFIABLE
Mr. Asuncion said the event should similarly be positive overall for the 2023 hosts, even if there are three of them this time.
“…[T]ourism is one sector that will benefit from the hosting. It’s like the Olympics in a way that people really trek to [the country]and watch. It’s a good opportunity to show the world that we are capable of hosting such events and change whatever bad perception they may have of the Philippines,” he said.
“It’s just the start and can eventually translate to investors gaining confidence in us and may want to come in and do business,” he added.
Moreover, relations among the Philippines, Indonesia and Japan “can be enhanced with this hosting, even if Indonesia is a competitor of ours within ASEAN,” Mr. Asuncion said, referring to the Association of Southeast Asian Nations.
“This is sports after all and can bring people together. Overall it’s going to be positive.”
Mr. Panlilio said SBP, including chairman emeritus Manuel V. Pangilinan who was part of the presenting team in the FIBA headquarters in Switzerland, was now moving to ensure maximum benefits from the event.
“Now that it has been awarded to us, I think it will be easier to talk to people or groups as far as sponsors and partners for the hosting,” said Mr. Panlilio, who is also the representative of the Manila Electric Co. (Meralco) team in the Philippine Basketball Association (PBA) board and is a senior vice-president for Customer Retail Services and Corporate Communications of the country’s biggest electricity distributor.
“The partnership with the government is very critical like that with the Department of Tourism as well as the (Cabinet) economic cluster, considering the amount of economic activity that the event will generate,” he added.
Mr. Panlilio said sectors that will likely ride on the 2023 World Cup include retail, tourism, telecommunications and property developers.
SBP is also looking at foreign companies that will likely take interest in the event.
“Companies like Samsung, Huawei and others from Indonesia and Japan maybe want to come on board,” Mr. Panlilio said.
“Across the PBA family, like from the San Miguel group, companies from the retail sector, tourism like hotels and resorts, developers like Megaworld (Corp.) maybe will be interested. Telecoms, too, since social media traffic is also expected to be big.”
EARLY START
Considering the magnitude of the task ahead, Mr. Panlilio said SBP has begun preparations, starting with the establishment of the local organizing committee that will be in charge of the technical side of the tournament as well as commercial and marketing aspects.
The same group is expected to travel to China to observe the conduct of the 2019 World Cup.
“A lot of work is ahead of us. We have to establish a local organizing committee team that will be bigger than the SBP which is used to running such events especially on the marketing side. We need experts to ensure the execution goes well, timelines are met and we don’t go beyond the budget,” Mr. Panlilio said.
For Mr. Asuncion, ensuring the event’s success will be a “matter of great planning and anticipation.”
“All sectors of society should work together… to ensure success and reap the benefits of the World Cup hosting,” he said.
“The support of government for the event should be top and foremost, from the President to the ordinary person helping this event.
For Mr. Panlilio, the fact that it took more than four decades for the Basketball World Cup to return to the Philippines is in itself significant.
“It is a once-in-a-lifetime event to host at this stage. It took a while for us to get this,” Mr. Panlilio said.
“FIBA has shown confidence in us to host and it’s not for nothing. So everybody must come on board and make this a success.”
Metrobank, BPI plan stock rights offers
TWO OF THE COUNTRY’S biggest banks are looking to conduct stock rights offerings (SRO) to fund their core business expansion and other operations.
Metropolitan Bank and Trust Co. (Metrobank) and Bank of the Philippine Islands (BPI) said in separate disclosures to the local bourse that they will offer their common shares to stockholders to raise fresh funds.
Metrobank said its board of directors approved to conduct an SRO to sell 819.83 million common shares, equivalent to the remaining unissued shares from the lender’s authorized capital stock.
Proceeds from the offer will be used to fund the Ty-led bank’s loans and fully acquire its credit card arm.
Metrobank said in October that it entered into an agreement with ANZ Funds Pty. Ltd. (ANZ) for the bank’s purchase of the latter’s 40% stake in credit card provider Metrobank Card Corp. (MCC).
MCC is a joint venture between Metrobank and ANZ formed in 2003, with the local lender holding the majority 60% stake.
In 2016, MCC reported total assets of P60.4 billion and a return on average equity of 36.3%.
Late last year, the lender bought a 20% stake in MCC from ANZ worth P7.4 billion, according to receipt of central bank approval obtained Dec. 29.
“The capital raising exercise is expected to enable the bank to pursue these business prospects to sustain the loan growth momentum, leveraging on the bank’s sales and distribution network that has rapidly expanded in the preceding years,” Metrobank said.
“Metrobank seeks to capitalize on the growth opportunities of large cap corporates and especially in its core franchise, the middle market and small to medium enterprises (SME) segments,” the lender’s disclosure read.
The bank also wants take the advantage of rising per capita levels, as this “[bodes] well for the potential in the growing consumer space, specifically in credit cards, auto loans and home mortgage.”
However, timing and size of the transaction is yet to be released, as these are still subject to other details such as offer price, receipt of regulatory approvals and market conditions.
UBS will serve as the joint global coordinator and joint bookrunner, while Metrobank’s First Metro Investment Corp. will serve as the joint global coordinator, joint bookrunner and issue manager.
BPI
Meanwhile, BPI said in its disclosure that its board of directors approved a rights offering which is expected to raise up to P50 billion.
The Ayala-led bank said the common shares will first be offered to eligible shareholders.
The final terms and conditions of the offer, including the issue size, entitlement ratio, offer price, record date, appointment of the parties and others, have yet to be determined, the lender noted.
“The bank expects to launch the rights offer after receiving required regulatory approvals,” BPI said.
“[T]he bank is conducing the rights offer in order to support the growth and strategic initiatives of the bank, including growing and strengthening its market-leading businesses and core franchises through the expansion of lending activities across consumer, SME, and microfinance segments…” it added.
It noted that it also intends to improve its infrastructure and will remain open to “inorganic growth opportunities.”
BPI said the offer will also improve the bank’s competitiveness and strengthen its capital base “as it seeks to pursue its growth strategy in the medium term.”
PSALM rejects P57.88-B prepayment from NGCP
By Victor V. Saulon, Sub-Editor
STATE-RUN Power Sector Assets and Liabilities Management Corp. (PSALM) said the P57.88-billion “prepayment” made by privately owned National Grid Corporation of the Philippines (NGCP) is not valid, in a rejection of an arrangement previously agreed by the two parties under the previous administration.
In a letter addressed to NGCP President and Chief Executive Officer Henry Sy, Jr., PSALM has informed the grid operator that its “remittance” of P57,883,053,062.96 made on July 15, 2013 “is not a valid prepayment under the CA (concession agreement) since at the time of payment, NGCP has outstanding obligations to the National Transmission Corp. (TransCo).”
“Accordingly, the attached Deferred Payment Amortization Schedule prior to the 15 July 2013 remittance would apply, such that, the maturities under the CA from January 2014 to January 2018 were settled using the P57.88-billion remittance of NGCP,” the PSALM letter read.
NGCP’s franchise came after the country passed Republic Act 9136 in 2001 or the “Electric Power Industry Reform Act of 2001” (EPIRA), which paved the way for the sale of government energy assets.
The law separated the different components of the sector, including power transmission, which was spun off to state agency TransCo ahead of its turnover to the private sector through concession.
Unlike outright sale, the concession agreement allowed the government to keep ownership of the transmission assets through TransCo. Payment of the concession fee is through PSALM.
Sought for comment, NGCP spokesperson Cynthia P. Alabanza said in a text message: “NGCP conducts its business in full compliance with its franchise under RA 9511, the concession agreement, and all laws, rules, regulations and other lawful issuances.”
“We are in receipt of a letter from PSALM on this issue, and we have referred the same to our lawyers for further study,” she added.
RA 9511 is the law that granted NGCP a franchise to engage in the business of conveying or transmitting electricity through a high voltage backbone system of interconnected transmission lines, substations and related facilities.
Melvin A. Matibag, TransCo president and chief executive officer, previously said he was against the prepayment because it deprives the government of interest earnings for the fees, which are paid twice yearly for the duration of the concession agreement.
NGCP won the 25-year concession in 2007 to operate the country’s power transmission network after an open, public and competitive bidding process. It officially started operations as power transmission service provider in 2009.
US tech industry revenue to reach $351 billion — CTA
THE US consumer technology industry, which serves as a benchmark for the global tech industry, is set to rake in a record-breaking $351 billion in retail revenues this year or 3.9% higher than 2017, according to new research from the Consumer Technology Association (CTA).
Released on Jan. 8, a day before the opening of Consumer Electronics Show (CES) 2018, the latest edition of the US Consumer Technology Sales and Forecasts noted that projection will be driven by “excitement about emerging technologies and the resilience of historically leading categories.”
The report also includes for the first time a projection for consumer spending on music and video streaming services — valued at $19.5 billion in revenue, 35% higher than just last year. CTA added streaming services sales — which include internet-enabled services that deliver on-demand or linear video content (e.g., Netflix, Hulu and Sling TV) and on-demand audio content (e.g., Spotify, Pandora or Apple Music) — to better capture the full expanse of the ever evolving and expanding consumer technology market. Excluding the addition of streaming services, total industry revenue would increase by 2.2% in 2018.
“Technology is improving our lives in more ways than ever — and consumer enthusiasm is growing just as quickly as companies can bring their innovations to market,” said Gary Shapiro, CTA president and CEO, in a statement. “Our forecast incorporates several key economic factors including a strong stock market, continued job growth and stable rules for international trade to forecast these record-setting sales for breakthrough technologies and longtime market leaders alike. And the driving themes of 2018, including voice computing, artificial intelligence and connectivity that make our lives better and more efficient, will be on display across the show floor this week at CES 2018.”
CTA is the US’s largest tech trade association — its semi-annual report charts the size and growth of underlying product categories. The CTA consensus forecast reflects US factory sales-to-dealers for more than 300 consumer tech products.
EMERGING TECHNOLOGIES EXPAND
Overall, US sales of connected devices are projected to reach 715 million units in 2018 — a 6.6% increase year-over-year. Specific products projected to contribute significantly to this growth include smart speakers, smart home, virtual reality (VR), drones, and wearables.
“Consumers are rapidly adopting new, emerging technology products — with voice-activated smart speakers as the stand-out of 2017 and 2018 — sparking growth in smart home devices, as voice interaction adds a new level of convenience and excitement to our lives,” said Brian Markwalter, senior vice president of research and standards, CTA.
“At the same time, core categories – such as smartphones, laptops and TVs – continue to surpass expectations. 2018 will prove to be a milestone year for TVs, especially as LCD 4K UHD TVs make up half of all TVs sold in 2018.”
MATURING TECHNOLOGIES CONTINUING
The top five revenue categories will contribute just over half of total wholesale industry revenue (51%) in 2018.
Smartphones: Following the introduction of new flagship models from major manufacturers in 2017, smartphones will continue to anchor the industry and see slight growth in 2018. Unit volume will reach 189 million smartphones (two% increase) shipping in 2018, with revenues expected to reach $62.9 billion (three% increase).
Laptops: In 2018, the commercial and consumer laptop market will sell 50.1 million units, up three% over last year, and earn $28.4 billion in revenue. Convertible models remain a high-growth area within computing.
Televisions: Performing better than expected in 2017, unit sales of total digital displays in 2018 are projected to reach 44.2 million units (two% increase) and $22.1 billion in revenue (two% increase). Future category growth will be driven by next gen features.
4K Ultra High-Definition (4K UHD): For the first time, 4K UHD TVs will make up half of all total digital displays sold in 2018, with unit sales forecast to hit 22 million units (27% increase) generating $15.9 billion in revenue (14% increase).
Automotive Electronics: Factory-installed automotive technology, from driver-assist features to entertainment systems, is projected to contribute $15.9 billion in revenue (5.9% increase) – the result of strong automotive sales, propelled by a rising tide of tech, from sensors and artificial intelligence to safety and infotainment systems.
Tablets: After tremendous adoption in recent years, some tablet sales have been cannibalized by convertible, 2-in-1 laptops as standalone tablet adoption has leveled off and replacement cycles have slowed. Tablet sales will decline in 2018. CTA expects sales of 45.6 million units (12% decrease) and revenues of $12.5 billion (13% decrease).
CTA publishes the US Consumer Technology Sales and Forecasts twice a year, in January and July, reporting US factory sales-to-dealers. It was designed and formulated by CTA, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer technology industry. Multi-year projections cannot account for unpredictable factors such as changes in trade laws, interest rates and federal policy.