Global innovation index 2018

July 12, 2018 | 12:31 am

THE PHILIPPINES’ rank in terms of innovation was unchanged from a year ago, despite “high scores” in business environment, education and information and communications technology (ICT), according to an annual report of the Cornell University, INSEAD and the World Intellectual Property Organization (WIPO). Read the full story.

Global debt load at a record $247 trillion in Q1 — IIF

July 12, 2018 | 12:30 am

NEW YORK — The amount of debt held by both mature and emerging markets tracked by the Institute of International Finance (IIF) rose to a record $247 trillion in the first quarter of 2018, up 11.1% from the same period a year ago.
The report released on Tuesday by the IIF, a global bank lobbying group, said the ratio of debt to gross domestic product (GDP) of these nations, which include the Group of Seven industrialized nations and the majority of emerging market economies, increased to 318%.
That is the first quarterly increase in the debt-to-GDP ratio since the third quarter of 2016.
“With global growth losing some momentum and becoming more divergent, and US rates rising steadily, worries about credit risk are returning to the fore, including in many mature economies,” the IIF said.
Since December 2015, the US Federal Reserve has raised interest rates seven times to a range of 1.75-2.00%, with more increases expected.
Debt levels for household, non-financial corporate and general government sectors rose to $186 trillion in the first quarter of 2018. Financial sector debt rose to a record high $61 trillion.
High debt levels in the non-financial sectors could be problematic, although unlikely to become a debt crisis akin to a decade ago, IIF Executive Managing Director Hung Tran told reporters ahead the data release. “Non-financial borrowers in the corporate sector, in the household sector, in the government sector having very high debt levels, will find it very costly and difficult to refinance and borrow more in order to sustain investment and consumption going forward. That is really causing growth to falter, so what I term headwinds to growth,” he said.
Emerging market debt rose by $2.5 trillion to a record $58.5 trillion in the first quarter.
Variable-rate debt holders face greater risks because of rising benchmark interest rates, the IIF said, noting that over 10% of emerging market corporate bonds are pegged to this asset class.
“For many emerging markets, which rely heavily on bank financing, higher borrowing costs for banks could be passed through to the corporate and household sectors, so something of a hidden risk in terms of this floating rate borrowing,” said IIF Senior Director Sonja Gibbs.
Mature economies are even more reliant on variable rate debt, the report said, with the ratio among G7 economies ranging from 18% in Canada to 38% in the United States and Italy. — Reuters

CIC expects single-digit growth amid challenges

July 12, 2018 | 12:09 am

By Arra B. Francia, Reporter
CONCEPCION Industrial Corp. (CIC) is looking at a single-digit growth in both earnings and revenues for the year, calling 2018 an “even more challenging year than 2017” due to inflationary pressures and the weakening peso.
“I think economy-wise, it will be even more challenging, with the full effect basically of inflation going up, continued peso devaluation,” CIC Chairman and Chief Executive Officer Raul Joseph A. Concepcion told reporters after the company’s annual shareholders’ meeting in Makati City on Wednesday, July 11.
Mr. Concepcion noted higher inflation — which accelerated to a fresh five-year high of 5.2% in June — may affect consumer spending over the near future.
“But as a company, we still look at single-digit growth,” he said.
The listed firm, which supplies air-conditioners, air-conditioning solutions, and refrigerators under the Carrier, Toshiba, Condura, and Kelvinator brands, was able to sell over a million appliances in 2017. CIC expects sales to grow in the teens for this year, as it introduces new products in the refrigeration and washing machines category.
“A lot of the things to make sure that we are strong is to keep on introducing new products. We had 25% more SKUs (stock keeping units) last year. This year, another 25% in terms of new product launches,” Mr. Concepcion said.
To support the introduction of new products, CIC plans to invest between P150 million to P200 million to expand capacity in existing plants.
CIC manufactures a select range of its air-conditioners inside a factory in Light Industry and Science Park, where it produces 500,000 air-conditioning units a year. It also has a manufacturing facility for refrigerators, with a capacity of 300,000 units per year.
To-date, Mr. Concepcion said the facilities’ utilization rate is at 70-80%. Should sales continue to grow at a pace of 15-20% in the coming years, the company’s manufacturing facilities are expected to be fully utilized soon.
Since the Philippine peso has been depreciating, the CIC official noted local manufacturing has also become more competitive. With this, the company is looking at locally producing some products that they used to import.
“With that, if you look at the horizon demand, penetration level, the capacity of our plants are not sufficient to handle that. So as early as now we are investing,” Mr. Concepcion said.
CIC reported on Wednesday that sales grew by 14% in the second quarter, while profit after tax after minority interest (PATAMI) went up by 12%.
“It’s partly because you have price increases, but the big part is demand of the consumers as well as operational efficiencies, new products that we’re doing,” Mr. Concepcion said.
Shares in CIC gained 20 centavos or 0.37% to close at P53.95 each at the stock exchange on Wednesday.

LANDBANK: 43% of PDS shareholders accept offer

July 12, 2018 | 12:08 am

THE LAND BANK of the Philippines (LANDBANK) said shareholders representing 43% of the fixed-income bourse have accepted its offer to buy their shares, with the share purchase agreement (SPA) expected to be signed this week.
“We can just say that 43% have already accepted our offer, and we are just finalizing now the share purchase agreement. So we hope that this share purchase agreement would be finalized within the week,” LANDBANK President and Chief Executive Officer Alex V. Buenaventura told reporters on the sidelines of the signing of the Pantawid Pasada program on Wednesday.
He noted shareholders have signed nondisclosure agreements to proceed with further negotiations before the SPA for shares in the Philippine Dealing System Holdings Corp. (PDSHC) is finalized.
“I cannot disclose the names. I can just generalize that many have given us acceptance letters, representing 43%,” he added.
Mr. Buenaventura did not say whether the Philippine Stock Exchange (PSE) was among those willing to sell its stake in the fixed-income bourse.
Last month, LANDBANK said PSE — which had earlier planned to take over the PDSHC — has indicated its interest to sell its shares.
LANDBANK had offered to buy the PDS shares at P360 apiece, higher than the PSE’s P320 per share offer in its previous SPAs that has already lapsed.
In April, only one shareholder has accepted LANDBANK’s offer, and Mr. Buenaventura said that once PSE agrees to the terms, others may follow.
The state-run lender currently owns 1.56% of PDSHC through the BAP, which holds a cumulative 13.26% share for itself and its member banks.
The government wants to take at least a majority stake in the fixed-income bourse through LANDBANK to expedite the development of the capital markets and to improve the bank’s finances to deliver more robust credit for farmers and small enterprises.
The planned PSE-PDS merger had dragged on due to the PSE’s failure to secure exemptive relief from the Securities Exchange Commission on the 20% single-industry ownership limit.
The PSE was able to increase its stake to 72% of the fixed-income exchange before the SPAs expired, but did not complete the merger. — Elijah Joseph C. Tubayan

Grab: P2 per minute charge is legal

July 12, 2018 | 12:07 am

GRAB Philippines maintained that its P2 per minute waiting time charge was legal, saying it will study its legal options regarding the Land Transportation Franchising and Regulatory Board (LTFRB) order that slapped a P10-million fine on the company for allegedly overcharging passengers.
“We stand by the legality of the P2 per minute fare component and we are disappointed by the order of LTFRB. We would like to reiterate that it is legal, pursuant to the Department Order 2015-011,” Grab Philippines Country Head Brian P. Cu said in a statement.
Mr. Cu said the company is studying its legal options regarding the LTFRB order. “But no matter how we decide to move forward from this, be assured Grab will stay,” he said.
Meanwhile, LTFRB Board Member Aileen Lourdes A. Lizada issued a dissenting opinion on the LTFRB order, saying Grab Philippines’ fare structure had a legal basis.
“The authority given the transport network companies to formulate their fare structure can be clearly seen from Department Order No. 2015-011 of the Department of Transportation,” she said, in a dissenting opinion released on Wednesday.
Ms. Lizada said the P2 per minute charge was communicated to the LTFRB board through the Office of the Chairman, contrary to what the LTFRB said in its order released to reporters on Tuesday.
Last month, Transportation Secretary Arthur P. Tugade signed a new department order putting LTFRB in charge of setting fares for transport network companies (TNC), superseding the 2015 policy which allowed Grab to set its own fare matrix.
But Ms. Lizada said since the Department of Transportation (DoTr) order was issued was after the P2 per minute component was implemented, Grab Philippines should be “afforded good faith in setting its fare structure.”
“Penalties should be imposed upon effectivity of the regulatory policy,” she added.
In its July 9 order, the LTFRB imposed a P10-million fine on Grab Philippines for allegedly overcharging its customers, saying it failed to inform the board of its P2 per minute waiting time charge. It also ordered the company to reimburse riders through a rebate system the P2 per minute charge it implemented from June 5, 2017 to April 19, when it was suspended.
The order indicated Grab Philippines “failed to impress the Board that its imposition of the per minute travel fare is within purview of its discretion or authority.” It noted the P2 per minute charging scheme is “invalid and without authority from the Board.”
Grab Philippines may file a motion for reconsideration within 15 days since the LTFRB order was issued. If denied, it may appeal its case to the DoTr. — Denise A. Valdez

A little bit of honesty from wines

July 12, 2018 | 12:07 am

THE SOUTHWESTERN region of France has played host to many films, from the classic Grace Kelly-starrer To Catch a Thief, to the comedy Dirty Rotten Scoundrels. But while they like to use it as a setting for movies about swindlers and con men, Thomas Dassé, Export Manager of Lionel Osmin & Cie, describes the people there as “more than honest.”
This honesty perhaps bleeds into the wines: Mr. Dassé says that one of the aims of Lionel Osmin is to promote the grape varietals in their most honest form. To do this, Mr. Osmin, just in his 40s, ages his wine in stainless steel tanks. Other lines from the wine company displaying an EU-designated AOC (appellation d’origine contrôlée; though on their website they’re listed as appellation d’origine protégée, AOP, which is used more for food products) follow tradition by using oak.
However, their basic line, with grape varietals such as sauvignon blanc and malbec, do not, because as Mr. Dasse said, “If you’re using oak, the aromas that you’re bringing are the aromas of the oak.”
“We don’t want to use oak, which in a way, hides the potential.”
Sofitel hosted a wine dinner earlier this week featuring Mr. Osmin’s wines. The meal began with a Bourbon Vanilla-flavored foie gras mi-cuit with a Coca-Cola reduction. This was paired with the Lionel Osmin La Reserve Sauvignon Blanc 2016. The wine has a flavor crystalline in its sharpness, rounded out with a hint of saffron and cream at the end. This cut effortlessly into the rich fatty flavor of the foie gras. This wine was also paired with a second course of prawns flambeed in Pernod, rich and indulgent. With this pairing, it lends a bit of cleanliness to the oceanic flavors of the prawn, though the pairing with the foie gras was definitely the winner here.
Next came a Tuna al Pesto with creamy polento, paired with a Lionel Osmin Villa La Vie en Rosé 2016. The robustly flavored tuna held its own against the rather unconventional rosé. See, while rosé is usually made with syrah, or else pinot noir, Lionel Osmin’s is made with a lesser-known grape, the negrette, which only grows in Southwest France and some parts of Canada where it’s known as the Petit Saint-George. This results in a rosé that is sharper and more pungent, like a strong perfume, and tasting a bit like what you’d imagine a certain shade of lipstick would taste like.
The last course, a herb-crusted cannon of lamb, didn’t receive rave reviews from my table, seeing as the other guests took only a few bites. The other guests at other tables, however, raved loudly about it, and their plates were licked clean. Food and wine are subjective, as seen in the following case: while this reporter says that the wine paired with the lamb, a Lionel Osmin La Reserve Malbec 2015 had a hint of smoke and a lot of tannins, and even ending on a peppery note, the other guests disagreed. They thought this wine lacked complexity, which was why it couldn’t hold its own ground against the lamb.
In any case, as we’ve mentioned above, Mr. Dasse believes that the people from his region are beyond honest.
“They are true, they don’t lie to you, and you can’t lie to them. Same with the wine.” — JLG

Energy department plans to put up solar-powered charging stations for e-trikes

July 12, 2018 | 12:06 am

By Victor V. Saulon, Sub-Editor
THE Department of Energy (DoE) has been tasked to put up solar-powered charging stations to go along with its deployment of 3,000 electric tricycles (e-trikes) in selected local government units (LGUs) all over the country.
“Part of the challenge right now with the e-trike is that we were also given the go-ahead to use the Clean Technology Fund (CTF), the grant from CTF . . . to put up solar charging stations. So we’re drafting terms of reference for that. We’ll have to bid it out,” said Energy Assistant Secretary Leonido J. Pulido III
“That’s gonna take a while because we’re waiting for certain consultants to come in and help us come up with a plan and terms of reference,” he told reporters in a chance interview during the 6^th Philippine Electric Vehicle Summit at the SMX Convention Center, Mall of Asia Complex, in Pasay City.
The CTF is a grant from the Asian Development Bank (ADB), he said, placing the allocation for the solar charging stations at around $4 million.
The charging stations are the latest twist in the DoE’s e-trike project that encountered delays in implementation under the past administration.
In January 2016, the DoE awarded the contract to supply 3,000 e-trikes to the consortium of Japan’s Uzushio Electric Co. Ltd. and its local unit Bemac Electric Transportation Philippines, Inc. The price of each vehicle ranged between P455,000 to P461,000.
The award followed a second round of negotiation to further lower the price offered by the qualified lone bidder for the project.
However, when Energy Secretary Alfonso G. Cusi took over in 2016, he canceled part of the loan contract as he wanted to revisit available options in view of “significant flaws” in the project’s design, the choice of just one e-trike model and its pricing.
After much delay, the DoE revived the project in June 2017 but scaled down to 3,000 units from the original 100,000 for a lower cost of P1.73 billion from P21.672 billion.
Mr. Pulido said for every deployment of the 3,000 units, the DoE is required to obtain a “no-objection” letter from the ADB, which funded the project. The signatories of the contract were the ADB and the Department of Finance.
So far, about 30 to 40 e-trikes had been physically deployed to LGUs. Around 1,600 to 1,700 units have been committed to be deployed to Marawi, Valenzuela, Muntinlupa, Las Piñas and Pateros, he said.
The DoE official said Marawi is almost done with the documentary requirements and is set to receive 190 units to bring the total deployment to the city at 200.
The rest of the units have not been committed but the DoE is considering a number of applications, Mr. Pulido said.
Boracay, which is undergoing rehabilitation, is a likely recipient as there are ongoing talks with the task force handling revival of the resort island, he said. An LGU’s tourism value is among the criteria for deploying an e-trike to that locality.

Aussie winemaker blending in fiery Chinese liquor

July 12, 2018 | 12:06 am

NOTHING IS sacred at Treasury Wine Estates Ltd. in the pursuit of profit.
The Australian maker of Penfolds is now lacing some of its most famous wine with baijiu, the popular fiery liquor from China that can smell like soy sauce. The result, Penfolds Special Bottlings Lot. 518, goes on sale in September. The added liquor will increase the alcohol level to 21.5%, similar to the strength of port, from about 14%.
Few people outside China ever drink baijiu, which is made from sorghum, rice, wheat, or corn and can contain as much as 53% alcohol. Treasury is betting that the combo of China’s liquor of choice with Shiraz can help recruit more drinkers in Australia’s biggest wine-export market.
“This will broaden our base and help future-proof Penfolds,” Penfolds Chief Winemaker Peter Gago said in a statement. Other new Penfolds products aimed toward that goal include brandy and Champagne. — Bloomberg

Primex breaks ground for San Juan office tower

July 12, 2018 | 12:05 am

PRIMEX Tower will stand on a 1,944-square meter lot at the corner of EDSA, Connecticut Street, and Florida Street at the Greenhills commercial district.

PRIMEX Corp. started the construction of its P3.6-billion office tower in San Juan City yesterday, banking on its prime location to drive demand for tenants.
In a statement issued Wednesday, the listed property developer said it has broken ground for the Primex Tower. The 50-storey office project will stand on a 1,944-square meter lot at the corner of EDSA, Connecticut Street, and Florida Street at the Greenhills commercial district.
Primex Tower is set to offer around 41,000 square meters (sq.m.) of leasable spaces with a cut of 200 to 300 sq.m each. Offices will be spread out across 37 floors, while 12 floors will be dedicated for above-ground and basement parking.
The project — envisioned to be the tallest one in the city — is expected to be completed in the next four to five years. Primex’s subsidiary Primex Realty Corp. is in charge of its development.
“With the project, the company is looking to take advantage of increasing demand in the office and hotel sectors,” Primex Chairman and President Ernesto O. Ang was quoted as saying in a statement.
Mr. Ang said a study made by real estate consultancy firm Colliers International Philippines had projected an average 10% per annum increase in rental rates across submarkets. This is amid rising vacancy rates in Metro Manila.
“The growth in the sector will be quietly led by knowledge process outsourcers,” Mr. Ang said.
The company said the Primex Tower will be able to attract tenants as the demand for office spaces shifts to new and higher quality buildings, instead of old structures.
The tower will also feature designs in line with Leadership in Energy and Environmental Design (LEED) standards. This includes surrounding the building with 90% double-gazed glass with vacuum in-between that reduces heat and noise penetration. In turn, the reduced heat gain will enhance the efficiency of the air-conditioning system in the building.
LEED standards are measures imposed by the United States Green Building Council to ensure that a development is healthy, highly efficient, and cost-saving.
The beginning of the Primex Tower’s construction followed the completion of the company’s 31-storey condominium project in Salcedo Village, Makati called The Stratosphere.
Moving forward, the company is looking for more local and foreign partners for the joint development of its existing land bank.
“These locations — in Malabon, Mandaluyong, Quezon City, and San Juan in Metro Manila and surrounding areas like Tagaytay — are showing equally exciting growth potential,” Primex Executive Vice-President Karlvin L. Ang said in a statement.
Primex reported a net loss attributable to the parent of P1.36 million in the first quarter of 2018, versus an attributable profit of P25.74 million in the same period a year ago. This followed a 92% drop in gross revenues to P7.44 billion for the January to March period.
Shares in Primex jumped 6.51% or 22 centavos to close at P3.60 apiece on Wednesday. — Arra B. Francia

Top chefs pick 9 of the best places to eat in Bilbao

July 12, 2018 | 12:05 am

BILBAO isn’t the first city that trips off the tongue when you recommend international dining destinations.
It’s only in the past 20 years or so that Bilbao has become much of a tourist destination at all. Before the Guggenheim Museum opened in 1997, some people just knew it as the airport where you landed en route for the charming seaside city of San Sebastian.
Yet Bilbao has a charm of its own, from the walkways and bars beside the Nervión river, through the parks, squares and plazas to hillside restaurants in the rolling countryside that almost reaches down into the city. The Guggenheim itself makes a visit to Bilbao worthwhile, but the city has much more to offer besides, and the food is a big part of it.
The Basque Country has a long and proud culinary history, and Bilbao is now home to many restaurants that celebrate it. Stroll the streets, pick a random bar and there is a good chance you will enjoy decent pintxos snacks and local wines whose low prices belie their quality. We asked leading chefs for their recommendations, for both casual snacks and fine dining.
Here’s what they had to say:
• ASADOR ETXEBARRI
If you are going to visit only one restaurant in the region, Etxebarri should be the one, though it is a trek. It’s almost an hour’s drive from Bilbao, set deep in beautiful countryside and overlooked by mountains. Chef Victor Arguinzoniz was raised in this farming community in Atxondo and serves the most beautiful meat, fish, and vegetables grilled over coals with minimal fuss. The tasting menu of about 15 courses is all about the ingredients, which may be as simple as scrambled egg with spring mushrooms or a beef chop. Chef Virgilio Martinez of Central, in Lima, which placed sixth in the World’s 50 Best Restaurants awards, is one fan; Enrique Valenti, of Marea Alta, in Barcelona is another.
San Juan Plaza, 1, 48291 Atxondo; +34 946 58 30 42.
• KATE ZAHARRA
This restaurant is housed in a stone building on a hillside overlooking Bilbao. You go for the views and stay for the food and wine, which are way better than you might expect in a place that looks like a tourist joint, complete with English-language menus. The Basque food is as simple as it is delicious. When I visited, the specials included one dish of boletus mushrooms in olive oil and another of anchovies, fried or grilled. There’s a separate wine cellar where you can enjoy local snacks. Kate Zaharra is recommended by Chef Ignacio Echapresto, of Venta Moncalvillo, in Daroca la Rioja.
Zabalbide Kalea, 221, 48015; +34 944 46 13 47.
• RESTAURANTE MARKINA
It would be easy to walk past this inexpensive restaurant: With sports playing on televisions and drinkers lined up at the bar, it is deceptively casual. But this pintxos joint is known for the quality of its local ingredients, including the freshest of fish. There’s no elaborate cooking because everything already tastes so good. The flavors are full on, from the Jamón Ibérico de Bellota, through the anchovies with olive oil to options such as the black pudding and the grilled hake (€22.80/$27). It’s the pick of chef Eneko Atxa of the three-Michelin-star Azurmendi. He says Markina is a longtime favorite of locals.
Calle de Henao 31, 48009, Bilbao; +34 944 232 540.
• RESTAURANTE MINA
It’s surprising that this restaurant has only a single Michelin star. Chef álvaro Garrido deserves more for cooking that is inventive and accomplished, with many ingredients coming from the local market. The dining room is housed above a former mine and overlooks the Nervión river. You can sit at the counter and watch the mostly female chefs turn out tasting menus (€85 for 10 courses) of pretty dishes that may include cod-liver cream and crunchy cod skin; and smoked txitxarro mackerel, cauliflower and cider. Chef David Muñoz, who holds three Michelin stars at DiverXO in Madrid, is one fan; Enrique Valenti of Marea Alta, in Barcelona, is another; Ignacio Echapresto of Venta Moncalvillo, Daroca la Rioja, is a third.
Martzana Kaia, s/n, 48003; +34 944 79 59 38.
• NERUA
Chef Josean Alija’s restaurant inside the Guggenheim Museum serves modern Spanish dishes with clean flavors that center on a single ingredient. The local guisantes lágrima tear-shaped peas, for example, are simply served with a squid juice; crispy pig’s ear comes topped with salted herbs and garlic. There’s an €80 lunch, but it’s worth going for the 14-course option at €145 if your budget stretches to that. Chefs who recommend Nerua include Enrique Valenti of Marea Alta; and Virgilio Martinez of Central.
Guggenheim Museum, Av. Abandoibarra 2, 48001; +34 944 00 04 30.
• EL PUERTITO
This tiny oyster bar in the center of Bilbao is worth seeking out. Sit outside with a dozen oysters (€18 and up) from around the world and a bottle of local Txakoli wine and life is sweet. There are only four stools inside and two or three tables on the pavement, so it pays to arrive early to beat the queues. The oysters are shucked to order, while the service is friendly and well-informed. “I always go here,” says chef Eneko Atxa of Azurmendi, who likes to grab a beer and sit outside to soak up the local atmosphere.
Poza Lizentziatuaren Kalea, 22, 48011 ; +34 944 02 62 54.
• SAN MAMÉS JATETXEA
This gastronomic restaurant is inside the San Mamés soccer stadium, with a dining room that overlooks the pitch. The menu is based on Basque culinary traditions: It’s slow food for a fast-moving game. There are tasting menus, or you can go a la carte, with options such as charcoal-roasted micro-vegetables in their juices (€9.50). I went for lunch and I have to say the place was lacking in atmosphere as I sat alone at a large table overlooking the deserted stadium. But I’d go back for chef Ion Gómez’s cooking. San Mamés is recommended by chef Ignacio Echapresto of Venta Moncalvillo, who says his two loves are food and soccer.
Estadio San Mamés, Puerta 14, C/ Rafael Moreno Pichichi, s/n, 48013; +34 946 412 432.
• TXAKOLI SIMÓN
This traditional Basque restaurant, a 15-minute drive from the city center, is known for serving some of the best steaks in Bilbao, as well as for its large wine cellar. Txakoli Simón is the choice of Eneko Atxa of Azurmendi, who likes the quality of the meat and enjoys eating outdoors on a sunny day, with views over the countryside. There are set menus at €45 and €50, featuring options such as Lodosa piquillo peppers with Cantabrian anchovies; and grilled chop.
Camino San Roque 89, 480150; +34 944 45 74 99.
• ZARATE
Chef Sergio Ortiz de Zarate is known for his love of fish and seafood. That passion is on display in his restaurant, where there are several menus, including the eight-dish Zarate, at €62. Plates may include crunchy asparagus with almonds; tuna tartar and oyster, yuzu creamy gel anchovy; and begihaundi (squid) noodles, carbonara of mushrooms. “I recommend accepting the chef’s daily recommendations, depending on what the sea gives him,” says Eneko Atxa. “He worked on the coast for years and knows fishermen well.”
Poza Lizentziatuaren Kalea, 65, 48013; +34 944 41 65 21. — Richard Vines, Bloomberg

UK regulator to fine Facebook over data protection breaches

July 12, 2018 | 12:05 am

LONDON — Britain’s information regulator said on Wednesday she intends to fine Facebook FB.O for breaches of data protection law as her office investigates how millions of users’ data was improperly accessed by consultancy Cambridge Analytica.
Facebook CEO Mark Zuckerberg has faced questioning by US and EU lawmakers over how Cambridge Analytica improperly got hold of the personal data of 87 million Facebook users from a researcher.
Updating on her investigation into the use of data analytics by political campaigns, Britain’s Information Commissioner Elizabeth Denham said she intended to fine Facebook £500,000 ($663,850), a small figure for a company with a market value of $590 billion, but the maximum amount allowed.
Denham said that Facebook had broken the law by failing to safeguard people’s information and had not been transparent about how data was harvested by others on its platform.
“New technologies that use data analytics to micro-target people give campaign groups the ability to connect with individual voters. But this cannot be at the expense of transparency, fairness and compliance with the law,” she said in a statement.
Facebook can respond to the commissioner before a final decision is made, and said it was reviewing the report and would respond soon.
“As we have said before, we should have done more to investigate claims about Cambridge Analytica and take action in 2015,” Erin Egan, Facebook’s Chief Privacy Officer, said in a statement.
“We have been working closely with the Information Commissioner’s Office in their investigation of Cambridge Analytica, just as we have with authorities in the US and other countries.”
British lawmakers have launched an inquiry into “fake news” and its effect on election campaigns, and have increasingly focused on Cambridge Analytica.
Cambridge Analytica, which was hired by Donald Trump in 2016, has denied its work on the US president’s successful election campaign made use of data.
It has also said that, while it pitched for work with campaign group Leave.EU ahead of the Brexit referendum in Britain in 2016, it did not end up doing any work on the campaign.
However, the Information Commissioner’s report said other regulatory action would include a criminal prosecution against Cambridge Analytica’s parent firm, SCL Elections, for failing to deal with the regulator’s enforcement notice.
It also said it would send warning letters to 11 political parties to compel them to audit their data protection practices. — Reuters

Yields on BSP’s term deposits inch lower

July 12, 2018 | 12:04 am

By Melissa Luz T. Lopez, Senior Reporter
YIELDS on term deposits inched lower yesterday as market players swarmed the central bank’s offering with overwhelming bids across all tenors.
Demand for the short-term deposits reached P129.006 billion on Wednesday, well above the P100 billion offered by the Bangko Sentral ng Pilipinas (BSP) and rising from the P125.157 billion received during last week’s auction.
Tenders also improved for the longer tenors to mark a second straight week above offer.
Seven-day term deposits shored up P49.382 billion placements to settle above the P40 billion which the central bank wanted to sell. However, this is a marked decline from the P58.556 billion bids logged during the July 4 exercise.
Despite softer demand, average rates still settled lower at 3.7537% versus the 3.7779% fetched a week ago, coming from a narrow range of 3.625-3.795% sought by market players.
On the flipside, banks had bigger bets for the 14-day tenor as they offered to place as much as P51.39 billion, surging from the P44.335 billion in bids received last week to again log above the P40-billion offering of the BSP.
The strong demand pushed yields lower to average 3.9258% against the 3.9309% accepted a week ago.
Offers for the 28-day deposits also went up to P28.234 billion, improving from P22.266 billion previously to remain above the P20 billion on the auction block.
Strong appetite for the month-long papers pulled yields down to 3.9346% from the record 3.9442% tallied last week, which hovered close to the 4% ceiling.
“TDF has been fully subscribed… It means we are able to mop up the amount of so-called excess liquidity in the market,” BSP Deputy Governor Diwa C. Guinigundo told reporters on Tuesday.
The TDF stands as the central bank’s main tool in capturing excess money supply in the financial system. The BSP actively adjusts auction amounts each week in order to bring market and interbank rates within its desired spread, which currently ranges from 3-4%.
The Monetary Board introduced back-to-back increases in benchmark rates during their May and June policy meetings in order to temper inflation expectations, as price increases have been trending higher than their 2-4% target over the past few months.
Inflation has averaged 4.3% as of June following a 5.2% pace clocked in last month, with the central bank saying it sees the pace quickening further to peak between July-September. By next year, inflation is seen to average 3.3%.
Some market watchers have been pointing out that the BSP has been behind the curve as it kept interest rates low for far too long. Meanwhile, other economists point out that inflation remains supply-driven by way of rising world crude oil rates and a shortage of rice supply, which had little to do with interest rates set by the monetary authority.
Next week, the BSP will offer another P100 billion in term deposits to banks. Offer volumes for each term will remain at P40 billion apiece in the seven- and 14-day deposits and P20 billion in the 28-day tenor.

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