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Moody’s says fresh rate hike should help temper ‘imported’ inflation

By Melissa Luz T. Lopez
Senior Reporter
ADDITIONAL rate hikes from the central bank will temper exchange rate movements and outbound capital flows, Moody’s Investors Service said, against a backdrop of a resilient and fast-growing economy.
In its annual credit update, the debt watcher said the Philippines shows “high” economic strength and is expected to weather the “temporary” episode of faster inflation.
“Bangko Sentral ng Pilipinas (BSP) the Philippines’ central bank, has already hiked policy rates twice to anchor inflation expectations. Tighter monetary policy will also serve to temper capital outflows, peso depreciation and, hence, imported inflation,” Moody’s said in the report sent to reporters yesterday.
The peso has been trading weaker than P53 per dollar since mid-June, but has been gaining strength in the past few days amid bets that the BSP will raise benchmark interest rates for the third time this year in next week’s policy review.
At the same time, the debt watcher said that it “expects the rise in prices since the beginning of 2018 to be temporary and not as a result of excessive overheating risks.”
Moody’s made these remarks after it affirmed the Philippines’ credit rating at “Baa2” with a “stable” outlook last month, keeping the country one notch above minimum investment grade. It took stock of the fast-growing economy and improving revenue base, but flagged rising prices and “domestic political developments” — particularly the planned shift to a federal government system — as key risks.
Credit analysts also noted that recent trends in commodity prices present a major challenge for policy makers in terms of managing inflation pressures, but pointed out that these remain “transitory.”
“We also do not expect the acceleration in the pace of growth in oil prices earlier this year to be sustained,” Moody’s said, noting that it expects inflation to return to the 2-4% target range by next year.
Inflation has shot beyond target to average 4.3% last semester, hitting a nine-year high of 5.2% in June.
For July, the central bank said prices may have picked up even faster by 5.1-5.8% year-on-year, which if realized will mark a fresh multi-year peak.
Simon Chen, senior analyst at Moody’s, earlier said that future rate increases from the central bank are likely to be “gradual” and “modest,” which will be manageable for both banks and borrowers as far as loan pricing is concerned.
NOMURA SEES 50 BP HIKE
In a separate market report, Nomura economists said they expect the Monetary Board to raise key interest rates by 50 basis points (bp) next week, taking cue from BSP Governor Nestor A. Espenilla, Jr.’s signal of a “strong follow-through” in monetary policy action next week.
“We read this as a step up from a ‘measured’ response, which was the language BSP officials used ahead of previous 25bp rate hikes,” the bank analysts said yesterday ahead of the Aug. 9 policy review.
“We put a lot of weight in Governor Espenilla’s comments because he tends to be deliberate in his signals, and — as decisions at the last two meetings demonstrate — there is ultimately follow-through action even though decisions are collective on the part of the Monetary Board.”
Meanwhile, Moody’s gave the Philippines a better score in terms of managing the economy.
“We set the Philippines’ institutional strength score at ‘Moderate (+),’ one notch above the indicative score of ‘Moderate,’ to reflect its track record of fiscal and monetary policy effectiveness,” the debt watcher said.
“The government’s demonstrated ability to pursue its economic and fiscal reform agenda in the face of heightened political noise informs our assessment, despite a deterioration in the Worldwide Governance Indicators.”
It noted that the Duterte administration was able to deploy “considerable” political capital to push key reforms, resulting in enactment of the first of up to five planned tax reform packages and the Ease of Doing Business law, as well as increased infrastructure spending and expanded social protection programs.
“Fiscal authorities have continued to focus on revenue reform, budgetary control, and proactive debt management, which have combined to result in lower debt and debt servicing costs over the past decade,” Moody’s noted.
“Political noise has not resulted in a significant reduction in the President’s approval ratings, negative spillovers to business and consumer sentiment, or a decrease in the government’s ability to advance its socioeconomic reform agenda.”
The credit rater gave the Philippines a “high” score for economic strength in the face of rising prices, a volatile external financial market and local political noise. Moody’s expects the Philippines to remain a growth leader in Asia, attracting even more foreign investments that, in turn, will support further expansion.
Moody’s expects the economy to expand by 6.8% in 2018, which would be faster than last year’s 6.7% but will fall short of the state’s 7-8% goal.

AEV’s first-half net income slips on forex losses

ABOITIZ EQUITY Ventures, Inc. (AEV) reported a first-half net income of P10.1 billion, lower by 2% compared with the P10.3 billion it recorded a year ago as the holding firm continued to suffer non-recurring foreign exchange losses on its dollar-denominated debt.
“Our first-half results reflect challenges that continue to test the resilience of our diversified portfolio,” said Erramon I. Aboitiz, AEV president and chief executive officer, in a statement on Wednesday.
AEV’s biggest income contributor, its power business, reported a 6% drop in income to P9.1 billion from P9.7 billion after booking non-recurring foreign exchange losses.
For AEV, the net foreign exchange losses reached P467 million, down from P495 million a year ago. Aboitiz Power Corp. placed these losses at P1.4 billion, bigger than last year’s P744 million.
During the semester, power contributed 68% of AEV’s income, followed by banking and finance at 22%, food at 22%, food at 6%, land at 3% and infrastructure at 1%.
“We continue to grow the business with the capacity additions and the expanding distribution business,” said Antonio R. Moraza, AboitizPower president and chief executive officer.
“Energy sales are up; however, margins are getting tighter due to competition. This is a reality that we have prepared for — and our organization is equipped to compete,” he added.
AboitizPower’s income contribution to AEV in the first-half dropped nearly 7% to P7 billion from P7.5 billion in the same period last year.
In contrast, UnionBank of the Philippines’ contribution rose by 9% to P2.3 billion from P2.1 billion. The bank and its subsidiaries recorded a net income of P4.7 billion, up 9% from P4.3 billion a year ago.
Pilmico Foods Corp. and its subsidiaries reported a net income of P662 million in the first semester, lower by 8% compared with P717 million a year earlier, largely because of higher raw material costs.
Aboitiz Land, Inc. posted a net income of P283 million, 40% higher than the P202 million recorded last year. Revenues for the period hit P2 billion, rising 30% from a year ago, due mainly to the industrial business having recognized more hectares sold.
Meanwhile, Republic Cement and Building Materials, Inc.’s income fell by 91% to P44 million from P494 million. The decline came because of the rise in fuel and power costs, which offset the modest growth in prices while demand stayed as is.
“For the rest of the year, we remain confident in ably executing our focused strategy. We look forward to more opportunities as well as the contributions of newly-acquired businesses as we stay true to our purpose of driving change for a better world by advancing business and communities,” Mr. Aboitiz said.
For AboitizPower, without the one-off losses its core net income was “flat” in the first- half at P10.5 billion. It recorded consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) of P24 billion, up 10% from the P21.8 billion a year ago.
Its consolidated EBITDA for the generation and retail supply business was at P20.2 billion, up 9% from the P18.5 billion recorded after the new contributions from Pagbilao Energy Corp.
“Higher contracting levels versus last year also contributed to the higher EBITDA. These upsides were partially offset by the lower contributions coming from the company’s hydro plants due to lower hydrology during the first six months of 2018,” the company said.
AboitizPower’s capacity sold for the period increased 8% to 3,319 megawatts (MW) from 3,086 MW, driven by new capacities sold from the Pagbilao plant.
For the first-half, the consolidated EBITDA of the distribution business was P3.9 billion, up 13% from the P3.4 billion. Energy sold during the period rose 7% to 2,719 gigawatt-hours (GWh) from 2,546 GWh.
The company said Improving margins also contributed to the increase in consolidated EBITDA during the period in review, resulting in a 14% increase in the income contribution of the distribution business to P2.1 billion.
On Wednesday, shares in AEV went up P2.35 or 4.10% to close at P59.70 each, while those of AboitizPower were higher by 75 centavos 2.02% at P37.95 apiece. — Victor V. Saulon

A Kadayawan kind of feast at the Seda Abreeza


By Marifi S. Jara, Mindanao Bureau Chief
THE ANNUAL celebration of Davao City’s Kadayawan Festival during the month of August is timed with nature’s calendar.
It is within the period of what has historically been the peak of harvest season, not just in Davao, but also in other parts of Mindanao where such fruits as durian, mangosteen, and pomelo grow.
While modern agricultural practices have allowed for the year-round supply of the fruits, albeit in smaller quantities, the impact of climate change has also been disrupting crop cycles.
“In 2015, there was so much durian, but in 2016 we were hit by drought and there was so much rainfall in 2017. We are recovering this year,” Candelario B. Miculob, president of the Davao City Durian Industry Council (DCDIC) President said in a media forum earlier this month. (http://www.bworldonline.com/growers-seek-to-tap-china-demand-for-frozen-durian/)
“We are expecting a lot of production this year… Mangosteen is coming also as well as lanzones and rambutan. There’s a lot of fruits this year, luckily,” Mr. Miculob said.
In this anticipated bumper year, the Seda Abreeza hotel is celebrating its 5th year with dishes that honor the agricultural goods that Davao takes pride in.
“The region’s food products are an attraction of the city,” Seda Abreeza General Manager Kennedy V. Kapulong said, enumerating the varied fruits that do not readily grow in other parts of the country, the seafood from the Davao Gulf, and the Malagos chocolates and cheeses that he calls the “rising stars” in culinary art. (http://www.bworldonline.com/goat-cheese-could-be-next-big-venture-for-malagos-group/)
“Fruits are one of the attractions of Seda Abreeza in our breakfast buffet,” he said.
The ala-carte menu of the hotel’s Misto restaurant includes their own version of the tuna kinilaw (ceviche), Malagos dark chocolate cheesecake, and durian panna cotta.
For this year’s Kadayawan, the Misto kitchen is serving up specials such as a twist on its popular crispy prawns with Misto chili sauce by adding mangosteen to the dip.
Another main course special for the festival season is pan-seared red snapper filler with a generous dressing of Malagos blue goat cheese sauce.
The normally big serving of Malagos dark chocolate cheesecake has been tapered, and paired with a banoffee tart with a real banana slice inside.
“Davao’s culinary offerings have become particularly exciting in the past few years since some Davao exports gained prominence on the world food stage,” Mr. Kapulong said.

PT&T appeals for rehab exit

THE PHILIPPINE Telegraph and Telephone Corp. (PT&T) has appealed to the regional trial court (RTC) of Makati City to be allowed to leave its court-assisted corporate rehabilitation to proceed with its operations.
In a disclosure to the stock exchange late on Tuesday, the telco company said it filed a request to the Makati RTC on Monday to exit rehabilitation, given that it will be subjected to the requirements as outlined in the approved Rehabilitation Plan.
“Part of the compliance is for PT&T to conduct a stockholders’ meeting to increase its authorized capital stock. This will enable PT&T to pay its debts through debt-to-equity conversion as mandated by the approved Rehabilitation Plan,” it said.
PT&T is currently lobbying for its 14-year rehabilitation plan for its P8.8-billion debt at the Supreme Court. The rehabilitation plan was reversed in a decision by the Court of Appeals in May 2017. But in its recent appeal, it said it wants to leave the program.
“The exit from rehab is well within the plan of our new shareholders and another proof point that PT&T is serious in it’s intention to be a major player in the Philippines telecommunications industry,” PT&T president and chief executive officer James G. Velasquez said in a statement on Wednesday.
The telco company, which was once PLDT, Inc.’s biggest rival in the telco industry, has expressed its interest to participate in the government’s search for the so-called “third telco player.”
“PT&T’s exit from receivership enables the company to raise additional capital in the stock market to fund our expansion plans, both in fixed broadband and beyond,” PT&T chief operations officer Miguel Marco A. Bitanga said in the statement.
In March, the company signed an agreement with state-owned National Transmission Corp. (TransCo) to allow for the use of the government’s national fiber optic backbone facility.
PT&T has scheduled its annual stockholders’ meeting on Sept. 14. — Denise A. Valdez

Nick Malgieri: A date with a pastry chef

WHILE PEOPLE say cooking is a relaxing habit, we don’t think it could compare to the act of baking. Sure, measuring and mixing might make you sweat a bit, but once you pop your confection in the oven, all you’ll have to do is wait, cool, and taste. It’s not that it’s easier, but the longer, more stretched-out timeline allows one to really immerse oneself in the act.
A person who might embody this relaxing activity is Nick Malgieri, a New York-based pastry chef who has been baking since the late 1970s. Mr. Malgieri has been honored several times for his baking and his cookbooks, awarded the Chevalier d l’Ordre de la Channe du Valais for promoting Swiss gastronomy, and receiving the Philadelphia Toque Award in 2006. He has written 13 cookbooks, some of which have received awards, including the James Beard Foundation cookbook award for Best Baking Book of 1995. He also appeared on TV next to Martha Stewart and the legendary Julia Child. Despite all this, he speaks with an air of a grandfather delighted with the achievements of his progeny, and enters a room with the same aura as a birthday cake: it doesn’t announce itself, has a soft glow around it, and it’s something we’ve wanted and waited for.
Mr. Malgieri is in Manila this week for a cooking demo titled “A Date With Chocolate” at the World Food Expo at SMX Convention Center at the Mall of Asia complex from 10 a.m. till 1 p.m. on Aug. 3.
“People love it,” he said of chocolate in an interview with BusinessWorld during a press conference earlier this week at The Conrad Manila. It’s supposed to stimulate the pleasure sensors of the brain, but I don’t know.
“Things that are made with chocolate, most of them taste really good!” he said. “I like chocolate. I like the smoothness; it feels good in your mouth.”
Of course, with a career as long as his, one picks up many influences along the way, like being mentored by Albert Kumin, the head pastry chef in the White House during the Carter administration. “He’s a very, very hard worker,” he noted. However, an earlier influence was his grandmother, an Italian immigrant who spoke the Neapolitan dialect. “I have a recipe in my grandmother’s handwriting, for something that I’ve never made. I have it framed with a picture of her.” His earliest memory of food was his grandmother’s pastina, made with milk, sugar, and cinnamon. “I hated it,” he recalls with some laughter.
Harried home cooks today have the luxury of ordering a cake from shops or some other great baker, but judging from Mr. Malgieri’s cookbooks, it means that some people would still find the time and energy to bake today. “I think it’s relaxing. People want to have that pleasure being able to do it,” he said. Of course, he warns about getting too carried away: “Anytime you start to go to the psychotic edge of something, it’s not pleasurable for anybody.”
“It’s satisfying to make something and have it turn out well.” — Joseph L. Garcia
The World Food Expo runs from Aug. 1 to 4 at the SMX Convention Center and at the World Trade Center.

Huawei passes Apple in global market share for the first time

HUAWEI Technologies Co. pulled ahead of Apple, Inc. to claim the no. 2 position in global smartphone shipments in the second quarter just behind Samsung Electronics Co., solidifying the rise of Chinese competitors.
Global Market Share of Top Smartphone Makers
Huawei shipped 54.2 million phones in the quarter, 41% more than a year earlier, to jump ahead of the iPhone maker for the first time, according to market research firm IDC. The telecoms giant accounted for 16% of the market, compared with 21% for South Korea’s Samsung and 12% for Apple. Xiaomi Corp. and Oppo, both based in China, rounded out the top five.
Chinese smartphone makers have been gaining influence as their domestic market grows and they expand abroad. Huawei has pushed into Europe and Africa, though it’s failed to crack the massive US market. Apple tends to sell iPhones at higher prices than its rivals and profits from services like iTunes, which helped it top earnings estimates for the quarter.
“The importance of Huawei overtaking Apple this quarter cannot be overstated,” said Ben Stanton, a senior analyst at Canalys, which also reported the shift in quarterly market share. “It is the first time in seven years that Samsung and Apple have not held the top two positions. Huawei’s exclusion from the US has forced it to work harder in Asia and Europe to achieve its goals.”
Canalys pointed out that the second quarter has historically been a weak one for Apple. The Cupertino, California-based company introduces new phones late in the year, then usually sees sales climb in the fourth and first quarters. That momentum for the iPhone X, which starts at $1,000, wasn’t sustained into the second quarter, the firm said.
Globally, the smartphone market continued its slowdown with shipments slipping 1.8% for the quarter to 342 million units. The number of smartphones shipped in 2017 fell 0.3%, according to IDC, the first decline after years of strong growth.
Samsung earnings took a hit from the sluggish market when it reported earnings Tuesday. The South Korean company, which makes memory chips and screens as well as smartphones themselves, reported net income that fell short of analysts’ estimates.
“Huawei’s momentum will obviously concern Samsung, but it should also serve as a warning to Apple, which needs to ship volume to support its growing services division,” Stanton said in a statement. “If Apple and Samsung want to maintain their market positions, they must make their portfolios more competitive.” — Bloomberg

Pacific Online extends PCSO lease agreement

PACIFIC ONLINE Systems Corp. (LOTO) has extended its lease agreement with the Philippine Charity Sweepstakes Office (PCSO) by another year.
In a disclosure to the stock exchange on Wednesday, LOTO said PCSO has agreed to extend its equipment lease agreement in the period covering Aug. 1 to July 31, 2019.
The listed gaming firm provides technical and market expertise for the distribution of lottery products with the state-run lottery office. It has been providing online lottery systems in Visayas and Mindanao to PCSO since 1995.
LOTO’s subsidiary Total Gaming Technologies, Inc. leases Keno lottery system and equipment to PCSO over the country, while its other unit Lucky Circle Corp. operates PCSO lotto retail outlets in major malls nationwide.
The company reported a 50% drop in net income attributable to equity holders of the parent to P53.1 million in the second quarter of 2018. This came amid a 5% increase in revenues to P538.1 million during the period.
On a six-month basis, LOTO’s attributable profit fell by 17% to P216 million, while revenues rose by. 3.8% to P1.1 billion.
LOTO attributed the revenue growth to higher distribution revenues, following the acquisition of nine entities engaged in retail distribution of PCSO products last year. This however was hampered by a 4% decrease in lottery equipment rental revenues due to a dip in Lotto sales in the country.
The 19% increase in costs and expenses to P863.7 million also outpaced that of revenues for the first half, leading to the profit drop for the period. The company observed a 116% increase in rent and utilities, 44% uptick in personnel costs, and 7% increase in software and license fees.
Incorporated in 1993, the company’s core business is in the development and management of online computer systems, terminals, and software for the Philippine lottery industry.
Shares in LOTO slipped by 0.36% or four centavos to close at P11 each at the stock exchange on Wednesday. — Arra B. Francia

You can now buy shares in one of the world’s top cocktail bars

AS OF July 27, cocktail fans can pick up some equity along with their gin martini.
After 12 years as a single, award-winning establishment, Death & Co., the famed bar in New York’s East Village, is in the midst of a serious expansion. To facilitate this, co-owner David Kaplan and his team are fund-raising in a way that’s unconventional for a drinking establishment.
The bar, which was founded on the last night of 2006, and which opened a second location in Denver earlier this year, initiated its first equity crowdfunding round on Friday via the investing platform SeedInvest. It’s the first bar or restaurant to fund-raise on the platform.
Investors will be able to purchase ownership stakes in an umbrella company, Gin & Luck LLC, which owns the Death & Co. bars as well as the book deals, intellectual properties, and the hospitality consulting firm Proprietors LLC.
The company is valued at $13 million.
The company’s East Village bar, named best in America in 2010 at Tales of the Cocktail, recorded $1.8 million in net revenue in 2017, up 71% from 2008. The newest Death & Co. location, at the Ramble Hotel in Denver, notched $313,000 in revenue in its first month of operation. Gin & Luck has sold more than 120,000 copies of its book Death & Co: Modern Classic Cocktails, which added up to more than $379,000 in royalties. Consulting firm Proprietors billed $539,000 in revenue in 2017, with clients such as Hilton, Pernod Ricard, and Bacardi USA. A third location, a standalone Death & Co. bar in Los Angeles, is slated to open next year.
Unlike a Kickstarter campaign — now omnipresent for small restaurants and coffee shops — in which people contribute money toward a project but don’t have stakes in the business, an equity crowdfunding campaign allows investors to buy ownership shares in private companies. Investors make their money back in a range of ways, including if the company is sold or goes public. Gin & Luck is offering a preferred equity note; it’s essentially a mini-IPO, but the company remains private and the original founders retain control.
Gin & Luck is aiming to raise $1.5 million, with a minimum stake of $1,000 per investor. The company is headed by Kaplan (chief executive officer) along with Alexander Day (chief operating officer) and Ravi DeRossi (chief administrative officer).
The money it raises on SeedInvest will go toward new-store growth and new hires. According to its investor decks, Gin & Luck projects $385,000 in annual profits at the East Village bar in 2019 and $697,000 at the Denver location. Five revenue streams, including three bars, consulting fees, and a retail arm, are projected to add up to $1.89 million in total annual profits in 2019, and $2.68 million in 2020 via seven projects. The company hopes to open multiple additional locations, starting with LA in 2019; anticipated future projects include bars in Chicago, Atlanta, and Nashville, as well as new Ramble Hotel partnerships in Kansas City, Indianapolis, and Boston.
Whereas restaurants are generally regarded as bad investments with rising rents and labor costs, bars are considered a safer bet with high profit margins, thanks in part to alcohol, which is nonperishable and easy to mark up. But whether this style of fund-raising will take off with other bars remains to be seen.
“The best part about a crowdfunded project is that you have people who have a vested interest in the success of the company,” says Jim Meehan, co-founder of New York’s legendary PDT. “The worst is when you have people you don’t know walking into the bar saying they know the owner or that they own the place. Will they see themselves as owners in a respectful way? Or does it give them a sense of entitlement?”
Crowdfunded investing in small companies is a relatively new development; prior to the JOBS Act, signed into law in 2016 by President Obama, only accredited investors (who had to prove a net worth of $1 million or have an income of $200,000 for at least two years) could buy stakes in promising new ventures. Following the JOBS Act, nonaccredited investors can now buy into emerging businesses. Other companies raising money on SeedInvest include Jason Calacanis’s mobile news app Inside.com and Dash, a connected car platform. This spring, buzzy luxury denim line DSTLD raised more than $2.9 million on SeedInvest.
Death & Co. was key to the exploding speakeasy trend in high-end drinking. It’s known for ambitious, design-focused takes on cocktails, such as the Dawn Patrol, which is made with Absentroux (an absinthe herbal wine), Bowmore 12-year-old single malt, Granny Smith apple, egg white, and seltzer.
The bar has also been a launching pad for bartending talent. Notable alums include Thomas Waugh (now head bartender at the Pool Lounge at the Four Seasons); Jim Kearns (co-founder of New York’s Happiest Hour bar); Jillian Vose (beverage director at the Dead Rabbit, named World’s Best Bar); and Brian Miller (head bartender at the Polynesian, recently opened in Manhattan). — Bloomberg

Fitbit Ionic

FITBIT’S first flagship smartwatch, Ionic, got the bad raps when it hit markets globally in late 2017. Early adopters complained about its lack of aesthetic appeal and its laggy performance. For Fitbit fans, the Ionic was supposed to be their ideal smartwatch: it has GPS, it’s water resistant, and it can last almost a week without charging. The Ionic seemed to have failed to meet their expectations.
To rectify whatever Fitbit got wrong about the Ionic, the company launched its second smartwatch seven months later, the Fitbit Versa. The Versa sported rounded edges, was thinner and more lightweight, and it was loaded with a better operating system. It was also priced lower than the Ionic by about P2,000.
While the Versa has undeniably outrun the Ionic in terms of popularity, the latter is not about to bonk any time soon. After all, the Ionic and the Versa are two separate product lines, and rumor has it that Fitbit will announce an Ionic 2 within the year.
The good news is, the Ionic is getting better and smarter thanks to a series of firmware updates that Fitbit started rolling out in March this year. This review is meant to highlight the changes made since the Ionic received these updates.
NEW FEATURES
When the Ionic was first released, there was not much about the display to write home about. With its operating system updated, the Ionic now has a more intuitive user interface, giving users more ways to interact with the watch.
Swiping up from the clockface will bring up an on-device dashboard called Fitbit Today, which displays a summary of one’s daily or weekly health and fitness stats, such as the number of steps, distance covered, and calories burned. Before the update, the fitness summary could only be viewed on the Fitbit mobile or desktop app. The Today feature also displays some useful health and fitness reminders as well as tips on how to use the platform.
Swiping down from the clock will display notifications from one’s e-mail, text messages and other notifications from apps like Instagram and Facebook Messenger. To keep the watch from vibrating every minute, notifications for all the apps synced with the Ionic can be deactivated through the Fitbit mobile or PC app.
In the course of this review, syncing the Ionic to the Fitbit app had been challenging. At times, the Fitbit app couldn’t locate the Ionic even if the watch was sitting right next to my mobile phone or laptop. Transferring music from the desktop app to the watch has not been smooth either. It turns out the last one is a common problem among Ionic users, which is why Fitbit posted on its support site ways to solve the issue. At times, the solutions worked but then there were days when the watch was just unwieldy. After a series of firmware updates, syncing the Ionic to the app somehow improved, although there are still hiccups every now and then.
As part of the update, Fitbit also added music streaming Deezer onboard the Ionic. However, only paying Deezer subscribers can use the app on Fitbit. Deezer offers a free three-month trial for users signing up on the music service through Fitbit for the first time. After that, Deezer will start charging your enrolled credit card.
Last May, Fitbit rolled out a second firmware update, which introduced a feature that made the Ionic more likeable. There’s now a quick reply option to e-mails, text messages and chat applications. Tapping the Reply button at the end of an app notification will show five pre-written responses. Users may choose to override the default responses and write personalized short messages. The quick reply feature, Fitbit notes, is only available on watches paired with an Android smartphone.
In an effort to broaden the Ionic’s appeal for female users, Fitbit also introduced a female health tracking feature, which allows users to track their menstrual cycle. For those trying to get pregnant, this feature also provides information about their estimated fertile window. Fitbit says it uses the data the users provide to estimate its predictions. Initially, it takes into account the average cycle and period lengths the user provides during setup. For more accurate predictions, Fitbit recommends to log your period consistently.
PERFORMANCE
One of the best features of the Ionic is its battery life. This has consistently been Fitbit’s main selling point across all its fitness trackers. For most of the review period, the Ionic lasted for up to five days on a single charge. For days that didn’t include playing music on the watch and with e-mail notifications switched off, the Ionic was fully awake for about a week. It’s fast charging, too. Plugging it at empty-battery level only took about an hour to reach full battery level.
The Ionic also tracked most workouts and activities accurately. With GPS onboard, the Ionic showed me my running stats without taking my smartphone out. I took the Ionic for a jog around the University of the Philippines’ 2.2-kilometer Academic Oval on Sundays and, while I didn’t care much about my running stats at first, seeing my progress in terms of pace, the distance covered, and my heart rate during the run somehow motivated me to beat my stats in the succeeding sessions.
I also took the Ionic to swimming and it recorded laps accurately with additional insights such as calories burned and distance covered. The Ionic can also track other workout modes such as cycling, treadmill, weights, and interval training.
Besides measuring fitness activities, another great thing about the Ionic is that it’s also a sleep monitoring tool. It’s amazing to learn (and slightly creepy at the same time) that the Ionic gets to work the moment you doze off. Using a combination of body movement and heart rate patterns, the watch can record the number of hours your body enters into different stages of sleep: light, deep, and REM (rapid eye movement) stage. For someone who has an irregular sleep pattern, I learned a lot from looking at my sleep data.
VERDICT
While software updates can never change the Ionic’s unwieldy form, vast improvements in performance and onboard features still make this wearable hybrid a desirable choice for Fitbit followers. It’s still far from perfect but if Fitbit could bring more features into the device through software updates, the Ionic could get better and smarter through time. Fitbit Ionic now retails for P14,999 on Lazada.com.ph — Mira B. Gloria

PCC extends review period for Grab’s ‘voluntary commitments’

By Denise A. Valdez
GRAB PHILIPPINES (MyTaxi.PH, Inc.) said it is inching closer to settling its voluntary commitments to the Philippine Competition Commission (PCC) to address anti-competition issues flagged by the government regarding its acquisition of Uber Philippines in March.
“Negotiations with PCC are still ongoing. We met with PCC last Monday, July 30, and we are close to finalizing the Voluntary Commitments (VC),” Grab public affairs head Leo Emmanuel K. Gonzales said in a statement on Wednesday.
He added that the PCC has extended the period to review the commitments to Aug. 10 upon Grab’s request. Results were originally scheduled to be released end-July.
In a message to BusinessWorld, the PCC confirmed it has granted Grab’s request to extend the validity period of its voluntary commitments.
But it also noted, “In the event that PCC finds the proposed commitments unacceptable or insufficient in addressing our Statement of Concerns (SOC), the Commission will revert back to the Review Track. To this end, PCC is mindful of its mandate and hopes the outcome will benefit the riding public.”
Grab country head Brian P. Cu told reporters in mid July the company could not reveal its exact commitments, but noted “it has something to do with driver behavior, it has something to do with driver incentives, it has something to do with pricing, it has something to do with exclusivity of drivers.”
He added that the PCC’s initial feedback on the commitments was constructive. “They’re welcoming our remedies. They’re just clarifying some of them,” he said.
The ride-hailing company said in June it submitted the proposed commitments to PCC on May 30, which were set to be reviewed by the antitrust body for not longer than 60 days. This is the same process followed for other deals that went through questioning by the government for their supposed anti-competition effects, such as when SM Retail, Inc. proposed to acquire Goldilocks Bakeshop, Inc.
The submission of the voluntary commitments has put on hold PCC’s review of the Grab-Uber merger. After its assessment, the PCC will decide how to move forward with its verdict on the deal.

Cebu’s Rico’s Lechon makes its way to Metro Manila

WE’RE GOING to be the bearer of good news for your stomach and your soul, and bad news for your arteries and heart: Rico’s Lechon is now open in Manila.
The Cebu favorite was founded in 1995, and shot to cult fame when former president and now Manila mayor Joseph Estrada ordered a roasted pig from Rico’s. Rico’s was acquired earlier this year by Meat Concepts Corp., the company behind brands Ogawa Traditional Japanese Restaurant, KPub BBQ, Thai BBQ, Oppa Chicken, Modern China, and Tony Roma’s. The first branch in Manila is located in the BGC’s The Fort Strip, close to these outlets by Meat Concepts Corp. Other branches will open soon in Tiendesitas, Glorietta, Ayala Malls Cloverleaf, and UP Town Center.
BusinessWorld attended a preview at the restaurant earlier this week. Friends from Cebu and the Visayas took bites from the sinigang (sour soup) and bam-i (stir-fried noodles) and pronounced it “pwede na” (good enough), while the regular lechon, which of course was the reason why we were there, got the same rating.
The Spicy lechon variant, however, was a revelation. This is the stuff that lechon legends are made of. Shining with fat, covered in chili and spices, it teases and tantalizes the tongue ever so gently, massaging it to get a response, but will slide easily down the throat and land blissfully in your stomach. BusinessWorld found strands of leaves in it, first thought to be lemongrass, but Meat Concepts’ CEO George Pua corrected us and said it was onion leeks. Pressed further to reveal the secret of Rico’s Lechon, he laughed and said, “That’s why it’s called a secret!”
Be forewarned though: bringing in pigs and ingredients from Cebu was quite a hassle, so most of the ingredients are sourced from Luzon. Mr. Pua reiterates that no change would be noticeable in the taste (though Cebu-bred palates might say otherwise). “As long as it’s native, it doesn’t matter,” he said about the pigs, roasted on-site in BGC. “Basically, it’s the marination that will [make] a big difference.”
While Cebu is known for many things, getting Cebu lechon is treated like a quest for many tourists. Mr. Pua talks about the oft-repeated saying that Luzon lechon needs a sauce to give it a boost, while Cebu’s can stand up by itself. “It’s as natural as you can get,” he said. This apparently, says a lot about Cebuanos too. “They’re very proud of Cebu,” he says, which is probably why they wouldn’t need a sauce to cover up the taste of their pigs.
This is the first Filipino concept under the umbrella of Meat Concepts, and Mr. Pua says that the acquisition was natural as they don’t have a Filipino restaurant yet. But the scent of lechon wakes up something inside of Mr. Pua.
“When I was a teenager, we lived in Baclaran. Everytime I opened my window, I saw lechon. I craved for lechon.” — JLG

Yields on term deposits drop as demand shifts to shorter tenors

By Melissa Luz T. Lopez, Senior Reporter
DEMAND for term deposits shifted towards shorter tenors yesterday, driving yields slightly lower ahead of monetary policy decisions in the United States and in the Philippines.
Banks wanted to place P120.679 billion in term deposits this week, lower than the P124.499 billion in bids received a week ago.
Still, the amount settled above the P100 billion which the Bangko Sentral ng Pilipinas (BSP) wanted to auction off.
Nearly half of the tenders went into the week-long papers, marking a shift in preference ahead of the release of key economic data and central bank decisions due early August.
Offers for the seven-day deposits surged to P51.935 billion on Wednesday, rising from last week’s P47.436 billion to surpass the central bank’s P40-billion offering. This pushed the average yield to 3.7405% compared to 3.7494% fetched during the July 25 exercise.
On the other hand, bids for the 14-day tenor slipped to P49.801 billion from the P54.352 billion received a week ago. Still, demand was overwhelming as banks wanted to park more funds beyond the P40-billion auction amount.
This brought margins lower to average 3.9016% this week versus a 3.9084% rate seen previously. Banks wanted returns within the 3.8-3.925% range, well below the four percent ceiling.
In contrast, banks veered away from the 28-day deposits and betted only P18.943 billion, down from P22.711 billion a week ago and below the P20 billion which the BSP wanted to sell. This gave them scope to demand for bigger returns, with the average yield rising to 3.9605% from 3.9471% a week ago.
The term deposit facility (TDF) is currently the central bank’s main tool to capture excess money supply in the financial system. The BSP holds the weekly auctions to bring market and interbank rates within its desired spread, which currently ranges from 3-4%.
The BSP has been offering P100 billion for its weekly TDF auctions since June.
The US Federal Reserve is broadly expected to keep interest rates steady this week, while the BSP is seen to announce another rate hike during their Aug. 9 meeting. BSP Governor Nestor A. Espenilla, Jr. has said the central bank is eyeing a “strong follow-through” to successive rate hikes in May and June in an attempt to rein in inflation expectations.
The central bank is studying further “refinements” to the TDF auctions, which include the chance to reallocate volume offerings across tenors, conduct the auctions more than once a week, and shorten the lead time in announcing offer volumes.
“The continuous efforts of the BSP to refine its monetary operations are meant to enhance its capacity to guide short-term market interest rates to move closely with the BSP policy rate, and in the process, strengthen the transmission of changes in the monetary policy stance to the rest of the economy,” the BSP said in its quarterly report on inflation published last month.
The International Monetary Fund earlier said that the central bank’s use of the TDF has proven to be successful in shoring up excess liquidity following the reduction in the reserve requirement ratio (RRR) imposed on big banks.
The BSP has trimmed the reserve standard to 18% as of June, in keeping with Mr. Espenilla’s goal to bring the level to single-digit over the next six years and make it at par with neighboring economies. However, he said last week that the central bank will resume the “gradual” cuts next year as the regulator waits for inflation to return to the 2-4% target range.
Some market observers have quipped that the reserve cuts appeared to be sending mixed signals, as it the two cuts were followed by two rate hikes from the BSP. However, policy makers have said that the RRR adjustments are procedural and should not be taken as a change in policy stance.

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