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Government debt yields end flat as market searches for new leads

YIELDS ON government securities (GS) moved sideways last week as investors remain on the lookout for fresh leads amid lack of clear direction for a rate hike next month.
GS yields rose by an average of 1.67 basis points (bps) week on week, data from the Philippine Dealing and Exchange Corp. as of April 20 showed.
“Yields were still moving within range while investors continue to wait for more solid leads,” said Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines (UnionBank).
“Expectations are mixed about a possible rate hike from the BSP (Bangko Sentral ng Pilipinas). On one side, the economy is overheating, thus, a case for tightening soon. The other side see the inflation upward pressure merely transitory, therefore a hike may be coming later rather than sooner,” Mr. Asuncion said alluding to the upcoming Monetary Board meeting on May 10.
For Land Bank of the Philippines (LANDBANK) market economist Guian Angelo S. Dumalagan: “GS yields moved sideways this week, with a slight upward bias, as upbeat assessments from the BSP and some US Federal Reserve officials pushed yields higher, despite safe-haven buying amid the decline in equities and lingering geopolitical concerns abroad.”
In its first quarter inflation report released last week, the BSP said the current monetary policy settings “are seen to be appropriate given the prevailing outlook for inflation and economic activity” but also noted that “economic growth remains solid enough to absorb some policy tightening if warranted.”
Market players also took their cue last week from statements made by Boston Federal Reserve President Eric S. Rosengren who expressed optimism for the US economy. The alternate member of the Federal Open Market Committee (FOMC) said he expects a tighter labor market coupled with faster inflation, and that “tightening may end up being needed than is currently reflected in the projected median for the federal funds rate.”
Meanwhile, other investors focused on domestic auctions by the national government as well as movements of Treasuries abroad. Last Monday, the Bureau of the Treasury (BTr) fully awarded P5-billion worth of 91-day Treasury bills (T-bills) that fetched an average yield of 3.493%, up from the 3.346% quoted at the auction a week prior.
On the other hand, demand for the 182- and 364-day papers were P3.33 billion and P3.3435 billion, below the offers of P4 billion and P6 billion, respectively. However, the Treasury only awarded P2.080 billion and P1.735 billion worth of the said tenors which were respectively quoted with an average yield of 3.684% and 3.83%
The following day, the BTr raised P10 billion from reissued 10-year bonds after they were fully awarded with an average yield of 6.213%.
“Government bond yields ended higher by 3 to 5 bps across the board on higher and partial auction awards,” said Carlyn Therese X. Dulay, Head of Institutional Flows Desk at Security Bank Corp.
Meanwhile, a bond trader said GS yields continued to track US Treasuries, rising on expectations of faster inflation, adding that US President Donald J. Trump’s “risk on, risk off tweets” also contributed to last week’s yield movement.
At the secondary market last Friday, the yield of the 91- and 364-day T-bills respectively rose 10.45 bps and 7.32 bps to close at 3.4761% and 4.2625%. On the other hand, the 182-day paper ended lower by 30.85 bps week on week, yielding 3.6111%.
Yields at the belly of the curve that moved up were of the three-, four-, five- and seven-year T-bonds, which increased by 1.31 bps (4.5998%), 4.44 bps (5%), 8 bps (5.3098%) and 0.69 basis point (5.7512%), respectively. The yield of the two-year paper went down by 3.38 bps to 4.2073%.
At the long end, the yield on the 10-year T-bonds climbed 19.04 bps to 6.2404% while that of the 20-year bond inched down by 0.35 basis point to 7.0929%.
“I see more of the same [yield movements this] week as the market is seemingly waiting for the first week of May when decision time for the BSP happens,” UnionBank’s Mr. Asuncion said when asked for his outlook.
For Security Bank’s Ms. Dulay: “With more auctions scheduled this week, expect yields to [move] range-bound to slightly higher depending on the outcome of the 20-year reissue scheduled Tuesday.”
LANDBANK’s Mr. Dumalagan, for his part, said: “[Y]ields are expected to move sideways with an upward bias, tracking the increase in US Treasury yields last Friday evening amid easing concerns over the flattening of the US yield curve.”
“The upward bias in yields, however, might be capped by lingering geopolitical concerns abroad and views that the European Central Bank and Bank of Japan policy meetings might be less hawkish than previously expected.”
The economist likewise noted uncertainties in the geopolitical front such as the lingering US-China trade war and the question of how Russia will respond to US-led missile attacks in Syria and recent sanctions imposed by the US on Russian companies.
“Caution ahead of Friday’s first-quarter US GDP growth report may also limit the rise in yields,” he said. The US economy is expected to grow 2% in the first quarter, lower than the previous quarter’s expansion of 2.9%, but higher than the 1.2% gain in the first quarter of 2017. — Gillian M. Cortez

Fashion and environment: an uncomfortable fit for designer Stella McCartney


LONDON — The booming fashion industry is medieval in its approach to manufacturing and needs to modernize in order to radically cut the damage it is doing to the environment, British designer Stella McCartney has said.
McCartney, known for her understated designs and refusal to use fur or leather in her work, said that while demand for garments and shows had soared thanks to growing middle classes around the world, methods had stagnated.
“If you think about how much fashion there is, whether it be luxury or fast, it is sort of swamping the planet,” she told the BBC on Friday.
“We have been relying on an industry that is essentially medieval. It really is an amazing moment we are living in… (with) change on everything, on energy, on architecture, this is the moment to look to the future for our children.”
McCartney, daughter of the Beatles’ Paul McCartney, was speaking ahead of the launch of an exhibition at London’s Victoria and Albert Museum on Saturday called Fashioned from Nature.
The exhibit demonstrates fashion’s history of plundering the environment for product and the attempts by designers to try and modernize, recycle and use different methods to ease the burden.
Pheasant feather hats from the 1940s sit alongside loud, multicolored trousers made from surplus yarn and a leather jacket produced with off cuts off material.
McCartney said designers needed to adopt cleaner methods.
“In fashion we only use about 10 materials, I’m trying to challenge that,” the London-born designer said.
“I’m trying to look at technology, I’m trying to grow silk in a lab, I’m trying to use dying in a whole new way and I don’t think you can tell the difference. It is science, but it is sexy science.”
Textile production was responsible for 1.2 billion tons of greenhouse gas emissions annually, according to a 2017 report by the Ellen MacArthur Foundation, more than the combined total of all international flights and maritime shipping.
The MacArthur report, which McCartney co-launched last year, said a lack of recycling meant around $500 billion was lost every year, while clothes released 500,000 tons of microfibers into the world’s oceans, equivalent to 50 billion plastic bottles. — Reuters

Goat cheese could be next big venture for Malagos group

By Maya M. Padillo
Correspondent
DAVAO CITY — It started with three goats — named Marvin, Jolina, and Rica after celebrities from the mid-1990s — but later became a sizeable collection of ruminants maintained by her veterinarian husband.
Olive O. Puentespina, a member of the family behind the Malagos AgriVentures Group, initially bottled fresh goat’s milk to sell, but the enterprise did not take off.
So her thoughts turned to how to preserve the milk — and the idea for Malagos artisanal cheese was born.
“My cheese journey — getting educated in dairying and cheese making — has brought me to the US, Mongolia, Canada, Switzerland, Italy. And each time I travel, I learn more,” Ms. Puentespina said in an interview.
She said the transformation of milk into cheese involves “science, cooking and adventure.”
A graduate of the University of the Philippines Los Baños (UPLB) who worked at the university’s Dairy Training and Research Institute, she later took lessons from a colleague, then from two Swiss cheese masters from Pontresina, and classes in San Francisco.
In 2008, Ms. Puentespina officially started producing cheese under the Malagos Farmhouse brand, which is now served in various hotels and restaurants in the country, and even during state dinners.
“I think I started European-style artisanal cheese making in the Philippines. I am proud that the cheeses I make are on the top tables of the best hotels, restaurants and resorts and airline in the Philippines. That is more than what I can ask for,” she said.
Malagos Farmhouse, with a GMP (Good Manufacturing Practice) certification from the Food and Drug Administration, has developed and sells over 25 cheese varieties.
“From 30 liters of milk production, now we make cheese from two to three tons of milk a week, all handmade and distributed to over 80 establishments in the country, albeit in small quantities,” she narrates.
Does she have a favorite cheese? No, she says, because that would be like playing favorites among what she considers her children.
“My day as a mom, a wife and cheesemaker starts early. After the household duties, I enter the cheese room and focus on the day’s work. I check what cheeses are to be shipped and produced, then enter to the aging room and manage my cheeses, go through about 200 wheels of cheese. When the cheese making starts, no one can disturb me until I am done. Around 5 p.m, I can accept private tasting sessions on cheese appreciation, and be home by 7 p.m for motherly and wifely duties,” she said.
“I also get to enjoy some personal time with friends without the cheeses, but I also get asked about them, like asking, ‘how are the kids?” she added.
Her daughter Ingrid, who is currently taking up Food Tech in UP Diliman, is being groomed to take over operations when she graduates.
She is a “working student” now and takes cheese-making lessons during school breaks.
“Now that my kids are practically adults needing less of my supervision, I get to perfect my craft. I get to travel to educate myself more and get to market my product, too. So yes, I probably have no life outside of the cheese room, but I am having so much fun,” said Ms. Puentespina.
And Ms. Puentespina said part of living her life is not having to wear a dress.
She will only wear one, she said, when she and her husband, Dr. Roberto P. Puentespina Jr., renew their marriage vows in the future.

Peso likely to weaken

peso dollar bills
BW FILE PHOTO

THE PESO could weaken against the dollar this week on bets of stronger economic growth in the United States as well as hawkish comments from foreign central banks.
The local unit moved sideways versus the greenback last Friday to end the week at P52.095-per-dollar. Week on week, the peso depreciated compared to the P51.95 finish on April 13.
“The dollar might move with an upward bias against the peso this week amid calming remarks from US Federal Reserve officials, likely upbeat US economic data, and bets of less-hawkish policy remarks from the European Central Bank and Bank of Japan,” Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines, said when sought for comment.
Reuters reported two officials of the Federal Reserve allayed concerns over a flat yield curve in the US, saying that growth prospects remain strong and increased state spending will push market rates higher and prevent a recession.
Meanwhile, the US is set to release initial growth data for the first quarter on Friday.
However, Mr. Dumalagan said that lingering geopolitical concerns involving the US-China trade war, and air strikes involving the US, Russia and Syria could urge some profit taking and could cap gains for the dollar.
“Speculations of a possible rate hike from the BSP (Bangko Sentral ng Pilipinas) next month may also limit the greenback’s strength against the local currency,” the economist added.
A currency trader said that the peso could keep moving sideways versus the dollar due to lack of leads in the local scene, as market players await key economic data which are due early May.
“I think everyone’s waiting for next Monetary Board decision and data on local inflation,” the trader said on Friday.
The central bank will review its policy stance on May 10, the same day when the Philippine Statistics Authority will report first-quarter domestic growth data. Several analysts expect the BSP to raise benchmark rates by 25 basis points, saying that the hike is necessary to curb inflation as it maintains its ascent.
Prices of widely-used goods rose by 3.8% year-on-year during the first quarter, hovering close to the high end of the central bank’s 2-4% target range.
Mr. Dumalagan expects the peso to move within P51.90 to P52.40 versus the dollar, while the trader sees the currency trading within the P51.80-P52.20 range this week. — Melissa Luz T. Lopez

How PSEi member stocks performed — April 20, 2018

Here’s a quick glance at how PSEi stocks fared on Friday, April 20, 2018.

Market to remain volatile amid overseas tensions

VOLATILITY may prevail in the week ahead, following the Philippine Stock Exchange index’s (PSEi) sharp decline last week due to a mix of geopolitical concerns and fears of an overheating economy. 

The bellwether PSEi ended 0.57% or 44.48 points higher to 7,726.72 last Friday, managing to eke out gains after its steep fall on Thursday. The main index had dropped by more than 3% in that session, but was able to pare down losses before the market’s close. 

On a weekly basis, the index lost 2.19% or 173.26 points. Volume, however, started to pick up, with value turnover rising 43% to P7.52 billion on average. Foreign outflows swelled to P580 million versus the P350 million recorded the week before.

“Negative undertone prevailed during the week and pulled gauges to weaker terrain. The threat for a potential border conflict in Syria following the firing of cruise missiles against Bashar al-Assasd’s regime prompted sellers to panic,” online brokerage 2TradeAsia.com said in a weekly report.

The online brokerage said these dips in the index can provide buying windows for investors.

“Regardless, the global economy moves in cycles and there are pain points to consider in any adjustment process. The reality is that there are people who will prevail in these trying times, versus those who are quick to throw in the towel. This phenomenon explains volatility that presents buying windows,” the company said. 

Eagle Equities, Inc. Research Head Christopher John Mangun gave two possible outcomes for the index this week, with the first scenario placing the market on a consolidation mode within the 7,600 to 7,750 range. On the other hand, the index could also trek lower by 200 points until it reaches a support level at 7,500.

“If this happens, we will see volume or value turnover pick up,” Mr. Mangun said in a weekly market report.

The Eagle Equities analyst, however, flagged concerns of rising oil prices, which have been hitting record high prices since 2014.

“Higher oil prices mean higher inflation, and this may have a negative effect on the market. Small and mid-cap companies still pose better opportunities for investors,” Mr. Mangun said.

2TradeAsia.com also pointed to first-quarter earnings results to guide investors in making decisions on buying stocks.

“Moving further, preliminary indications of first-quarter 2018 performance will serve as proxy guidance, that may convince skeptics whether growth targets will be in line this year,” the online brokerage said.

2TradeAsia.com placed the index’ immediate support between 7,500 to 7,600, while resistance will be from 7,800 to 7,900.

Meanwhile, Wall Street’s three major indexes declined on Friday as investors worried about a jump in US bond yields, with technology stocks leading the decline on nerves about upcoming earnings reports and iPhone demand. — Arra B. Francia with Reuters

US sorghum armada U-turns at sea after China tariffs

CHICAGO — Several ships carrying cargoes of sorghum from the United States to China have changed course since Beijing slapped hefty anti-dumping deposits on US imports of the grain, trade sources and a Reuters analysis of export and shipping data showed.
Sorghum is a niche animal feed and a tiny slice of the billions of dollars in exports at stake in the trade dispute between the world’s two largest economies, which threatens to disrupt the flow of everything from steel to electronics.
The supply-chain pain felt by sorghum suppliers on the Pacific, Atlantic and Indian oceans underscores how quickly the mounting trade tensions between the US and China can impact the global agricultural sector, which has been reeling from low commodity prices amid a global grains glut.
Twenty ships carrying over 1.2 million tons of US sorghum are on the water, according to export inspections data from the USDA’s Federal Grain Inspection Service. Of the armada, valued at more than $216 million, at least five changed course within hours of China’s announcing tariffs on US sorghum imports on Tuesday, Reuters shipping data showed.
The five shipments, all headed for China when they were loaded at Texas Gulf Coast export terminals owned by grain merchants Cargill, Inc. [CARG.UL] or Archer Daniels Midland Co. would be liable for a hefty deposit to be paid on their value, which could make the loads unprofitable to deliver.
Beijing, which is probing US imports for damage to its domestic industry, announced Tuesday that grains handlers would have to put up a deposit of 178.6% of the value of the shipments.
Traders said Cargill and ADM likely sold most of the grain in the cargoes that are on the water, traders said.
In a statement to Reuters on Thursday, Cargill confirmed it is the exporter. The company declined to confirm what is in the ships, the final destinations or the tonnage, nor name the customers. The company also declined to confirm why the ships stopped, or if they are being redirected — but said that it does not have any responsibility for costs that may result.
ADM representatives declined to comment.
The Panamanian-flagged ship called the N Bonanza, was churning its way northeast across the Indian Ocean earlier this week, carrying more than 67,000 tons of sorghum from ADM’s elevator in Corpus Christi, Texas, according to Reuters shipping data.
Eleven hours after the anti-dumping deposits were announced, the ship stopped and then slowly tracked northwest.
The RB Eden, a vessel carrying 70,223 tons of sorghum loaded at the same ADM terminal, was headed east-northeast through the Indian Ocean off the coast of South Africa. It turned around.
Hours later, the Stamford Eagle — hauling sorghum from Cargill’s elevator in Houston — turned around off the western coast of Mexico.
At least two other vessels have also suddenly changed course: the Ocean Belt and Xing Xi Hai, both loaded at Cargill’s terminal.
It is unclear where the vessels are now heading. — Reuters

Why a cashmere sweater can cost $2,000… or $30


A PLAIN, yet meticulously crafted, sweater made of the world’s finest cashmere can cost $2,000 or more from premier fashion labels such as Loro Piana. You can also grab a simple sweater of 100% cashmere off a discount rack at Uniqlo for as little as $29.90.
Made from the softest wool produced by certain breeds of goats, such as the Zalaa Ginst white goat and Tibetan Plateau goat, cashmere was once reserved for the wealthiest fashionistas. (Napoleon Bonaparte’s wife helped popularize the fabric.) But over the past two decades, its cachet skyrocketed and cheaper garments flooded the market.
Nearly $1.4 billion of cashmere garments were exported globally in 2016, up from $1.2 billion in 2010, according to United Nations trade data. That’s nearly 5 million kilograms worth of pullovers, cardigans, and other tops. Now it’s seemingly everywhere, at every price point. Ubiquity can spell trouble for a product as it becomes more of a commodity, especially one that’s been historically marketed as a luxury item.
So what makes one sweater better than another? The price depends on the quality of the yarn, where the garment was manufactured, the number of units purchased by the brand, and the markup.
The quality of the raw material often matters most. Lengthier cashmere fibers maintain their integrity for a longer time, allowing garments to retain their structure. Pilling — the small balls that form on the fabric as it chafes — is more common in garments made of shorter cashmere strands. These days, manufacturers frequently make the clothes out of a mix of lengths to balance quality with cost.
The thickness of the yarn used for the fabric determines its durability. So-called single-ply yarn is the weakest and can quickly lead to holes in a favorite sweater. Higher-quality cashmere pieces are typically two or three strands thick.
Finer and smoother individual strands create softer garments, but they are rare and thus, cost more. American consumers value this softness above all else.
“The customer cares more about the hand-feel than they care about the durability or the color saturation,” said Matt Scanlan, chief executive officer of sustainable cashmere label Naadam. “They don’t even care if it starts to pill. We’ve just become used to it.”
Cashmere goats are bred in various locations around the world, including Australia, China, and Mongolia, but Scotland and Italy are known for cashmere-manufacturing prowess. Luxury fashion houses such as Loro Piana and Brunello Cuccinelli depend on the expertise of their workers to wash, treat, and refine the fabric. Cashmere, for instance, repels a lot of dye. Italy, however, has developed ways to achieve strong saturation.
Not every manufacturer takes such care. Blended versions of cashmere sweaters, available at most retailers these days, can contain varying quantities of the fabric. In some cases, as little as 5% of a garment is made from the good stuff, with the rest a combination of mass-market fabrics such as polyester or nylon. The product is still marketed as a “cashmere-blend.”
Occasionally, even fake cashmere makes it to store shelves. “There is certainly fraud on this front,” says Frances Kozen, a director at the Cornell Institute of Fashion and Fiber Innovation. Deceitful sellers and counterfeiters sometimes create cashmere blends labeled 100% cashmere that contain wool, viscose rayon, and acrylic — and possibly even rat fur, she says.
The lower-quality blends, occasional outright fraud, and ubiquity has diluted cashmere’s luxe reputation, and shoppers have slowly gotten used to lower-quality product.
The industry is attempting to rehabilitate the fabric’s reputation by educating consumers as to where cashmere comes from. Naadam, Scanlan’s cashmere label, assures customers that it uses only the longest fibers, promising that this will make the garments last longer. The label touts its sustainable grazing practices and lack of chemicals or bleaches. Sweaters from Naadam aren’t cheap, going for $125 to $225, so the brand must show shoppers why it’s worth their cash.
“Cashmere still has a lot of meaning for people, even though a lot of brands have bastardized what a lot of words mean,” says Shilpa Shah, cofounder of clothing and accessories label Cuyana. The brand’s cashmere sweaters are manufactured in Scotland and Italy and cost from $155 to $495. They don’t match up to the quality of what you’ll find from designers at a much higher price, but Shah insists they get close.
As for the lesser-quality cashmere being sold, Shah has an optimistic view: At least shoppers are trying some kind of cashmere and may seek out better versions. “In some sense, I should be thanking them,” Shah says of the cheap cashmere sellers, “because it’s an introduction to what the material could be.” — Bloomberg

How much have wages increased across regions?

DoTr studying Cavite province proposal for Sangley airport

THE Department of Transportation (DoTr) said it is considering a proposal by the Cavite provincial government to develop an airport in Sangley Point.
Undersecretary Ruben S Reinoso, Jr said that the agency is considering the Cavite proposal, adding that by considering the new proposal an earlier proposal by the Sangley Airport Infrastructure Group, Inc. (SAIG) is not deemed rejected, contrary to reports, as the department still has the option to consider its proposal if the Cavite proposal is rejected.
It was earlier reported that the DoTr had rejected the SAIG proposal, a consortium run by Solar Group’s Wilson Y. Tieng and the SM group’s Henry T. Sy, Sr. “We rejected the unsolicited proposal for Sangley Airport since government is considering the (Cavite proposal)… to develop the Sangley Airport as a government undertaking (by the province of Cavite) in collaboration with the Philippine Reclamation Authority (PRA), Civil Aviation Authority of the Philippines (CAAP) and DoTr,” Mr. Reinoso said in a message.
DoTr Secretary Arthur P. Tugade said in February the department had received a proposal for Sangley airport development from the Remulla political family of Cavite. Mr. Reinoso said that the latest version of the proposal is structured as a government undertaking led by PRA, CAAP, and the DoTr, as well as the province of Cavite.
SAIG is fronted by the All-Asia Resources and Reclamation, Corp. (ARRC) of Solar Group and the Sy family’s Belle Corp. Last month it submitted a $12-billion proposal for the Philippine Sangley International Airport (PSIA). It involves a 50-year concession and the reclamation of about 2,500 hectares of land north of the Sangley peninsula, which juts out into Manila Bay south of Metro Manila.
“Since the Provincial Government’s proposal and the Solar Group unsolicited proposal are not mutually exclusive, therefore, once the Provincial Government proposal is implemented, the Solar Group’s unsolicited proposal can no longer be implemented,” Mr. Reinoso said in a message, but did not disclose any details about the Cavite government’s proposal.
He said, however, that the approval of any proposal is contingent on the “timely submission” of additional requirements as well as clarification on the implementing arrangements (IAs) for the involvement of government agencies.
“If the documents and clarifications required are not submitted, DoTr may consider the unsolicited proposal of (SAIG); thus, DoTr is not absolutely rejecting the unsolicited proposal but is contingent on the final approval of the Provincial Government’s proposal.”
Sangley airport is being positioned as another gateway option for the national capital. The government has yet to evaluate the two proposals for the rehabilitation of the Ninoy Aquino International Airport (NAIA).The consortium of conglomerates Aboitiz Infra Capital, Inc., AC Infrastructure Holdings Corp., Alliance Global Group, Inc., AEDC, Filinvest Development Corp., JG Summit Holdings, Inc. and Metro Pacific Investments Corp., first submitted to the government on Feb. 13 a P350-billion proposal with a concession of 35 years, while the consortium of Megawide Construction Corp and GMR Infrastructure Ltd. weeks later submitted a different rehabilitation proposal worth $3 billion.
A gateway proposal that is moving forward is San Miguel Corp.’s Bulacan International Airport proposal which is currently under review by the National Economic and Development Authority (NEDA) Board.
The government is also expanding Clark International Airport (CIA), with operations and maintenance (O&M) contracts set to be bid out within the year. — Patrizia Paola C. Marcelo

Uber, Grab file explanation for Uber app closure

THE Philippine Competition Commission (PCC) said it has received both Grab Holdings, Inc.’s and Uber Systems, Inc.’s explanations for allegedly breaching one of its interim measures, while the regulator awaits the companies’ compliance report today which will be taken into account when it makes a ruling.
PCC Commissioner Johannes Benjamin R. Bernabe said both ride-hailing companies submitted before the April 17 deadline their explanations for their failure to comply with the PCC’s order that they keep the Uber app running pending the completion of the merger review.
“The primary reason really is they were also constrained to comply with the LTFRB [Land Transportation Franchising and Regulatory Board],” Mr. Bernabe said in a phone interview.
Uber advised its passengers last week of the termination of its operations in the country while endorsing the Grab app. Its action resulted from LTFRB’s directive that Uber cease operating as a Transport Network Company (TNC) by April 16.
In response, both Grab and Uber appealed that the LTFRB align its interim measures with that of the regulatory body.
“The parties are also asking for reconsideration of some of the interim measures because it will be difficult for them to comply given that they are already in the process of integrating,” Mr. Bernabe said.
“How compliance can be achieved with that, that’s what we are going to look at separately once we have the compliance report,” the official added.
Asked when the PCC will issue a decision on penalties due to the violation of the interim order, Mr. Bernabe said: “We will have to await their report on their compliance.”
The compliance report explains how the respondents plan to abide by the interim measures.
The interim measures imposed by the PCC include requiring both ride-hailing apps to operate independently pending the conclusion of the PCC review; refraining from sharing confidential information; and refraining from imposing exclusivity clauses, lock-in periods or termination fees on Uber drivers seeking to join Grab.
The PCC also directed Grab and Uber to take no further steps that will reduce viability and saleability of either company and from taking any actions that will prejudice the review.
If found non-compliant, both firms may be fined between P50,000 and P2 million daily for each interim measure violated until the review concludes. — Janina C. Lim

ECCP calls for greater effort to comply with EU privacy regulation

THE European Chamber of Commerce of the Philippines (ECCP) has advised domestic companies to work closely together with European Union (EU) firms to achieve compliance as the bloc implements its General Data Protection Regulation (GDPR).
“There must be a close coordination between Philippine companies and the European companies they deal with on the other hand to make sure that business transactions will not be disrupted because of this new development on data protection,” ECCP President Guenter Taus said in a text message over the weekend.
Philippine businesses that service EU-based companies or process information of citizens from the EU will have to adjust to the GDPR, he said.
The regulation will take effect May 25 and impose significant sanctions on violators of up to 4 million euros or 4% of a company’s global turnover.
Among the sectors that may be affected are the business process outsourcing industry which processes information of customers across the gobe.
The Contact Center Association of the Philippines, the umbrella organization of call centers in the country, said it has been undertaking preparations as the regulation takes effect.
The law requires businesses to appoint experts to handle EU-based client data to prevent any mishandling of information that may be confidential.
The National Privacy Commission has expressed confidence that the Philippine Data Privacy Act of 2012 will meet the GDPR data protection standards.
The country was the first in Southeast Asia to adopt a set of data privacy rules, mainly, in response to the rise of digital e-commerce and trade. — Janina C. Lim

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