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Astros’ Verlander, Red Sox’s Sale to pitch Game 1 of ALCS

NEW YORK — Houston Astros ace Justin Verlander will face off against his Boston Red Sox counterpart, Chris Sale, when the two teams meet in Game 1 of the American League Championship Series (ALCS) on Saturday.
Game 2 on Sunday will see Astros right-hander Gerrit Cole duel Red Sox southpaw David Price.
Price’s nod is perhaps the biggest surprise of the group. The left-hander has a history of struggles in the postseason as a starter, a narrative that was strengthened by his performance in Game 2 of the American League Division Series against the New York Yankees.
Price allowed three runs on three hits — two of which were home runs — and two walks in 1 2/3 innings against the Yankees.
“We trust him,” Red Sox manager Alex Cora said after Price’s rough start. “He bounced back before. We’ll talk to him and make a few adjustments, and we’ll go from there.”
Price is 0-9 with a 6.03 ERA in 10 career postseason starts.
Cole, meanwhile, dominated in his first playoff start with the Astros, striking out 12 and allowing just one run on three hits in seven innings in a Game 2 win over the Cleveland Indians during the ALDS.
Sale and Verlander facing off is a rematch of Game 1 of last year’s ALDS between the Red Sox and Astros. Houston won the contest 8-2, with Verlander allowing two runs in six innings to earn the win. Sale allowed seven runs on nine hits — three home runs — in five innings.
The right-handed Verlander allowed two runs on two hits and struck out seven across 5 1/3 innings in his Game 1 win over the Indians.
The left-handed Sale beat the Yankees in Game 1, then came out of the bullpen to pitch the eighth inning of Boston’s decisive Game 4 victory on Tuesday. Sale threw 13 pitches in a perfect frame. — Reuters

Filipino chess players living up to billing at Asian Para Games

PINPOINTED as one of the sports that could provide the medals for the Philippines in the ongoing Asian Para Games in Indonesia, chess has delivered with Filipino wood pushers adding six hardware, including three gold medals, to date to the country’s total medal haul.
On Wednesday, the Philippine chess bets helped jack up the country’s standing in the medal race as FIDE Master Sander Severino topped the individual standard P1 (physically handicapped) competition and joined forces with Henry Lopez and Jasper Rom to rule the team event.
Also winning gold was the trio of Menandro Redor, Arman Subaste, and Israel Peligro, who won the team standard B2-B3 (visually impaired) category.
Mr. Redor, too, copped silver in the individual standard B2-B3 while Messrs. Rom and Subaste bagged a bronze each in the individual standard P1 and individual standard B2-B3, respectively.
The chess team was still expected to add more medals as rapid play started yesterday.
MEDAL HAUL
Meanwhile, as of 12 noon on Thursday, the Philippines sat at 11th place with six gold, six silver and, six bronze medals.
Apart from the three gold, one silver and two bronze medals from chess, accounting for the Philippine medal haul were two gold, two silver and two bronze medals from swimming, one gold and one silver from tenpin bowling, one silver from table tennis, one silver from powerlifting, and two bronze medals from cycling.
China continued to sit on top of the leader board with 106 gold, 53 silver and 42 bronze medals, followed by South Korea (38-31-26), Iran (33-23-29), Uzbekistan (26-12-10), and Japan (25-44-45).
Rounding out the top 10 were Indonesia (23-30-34), Thailand (17-24-32), Malaysia (9-16-16), India (7-14-19) and Hong Kong (6-9-19).
The 2018 Asian Para Games in Jakarta is happening until Oct. 13.
In the last Asian Para Games in Incheon, South Korea, in 2014, the Philippines finished at 24th place with five silver and five bronze medals. — Michael Angelo S. Murillo

US, Philippines enhancing diplomatic connection through basketball

LONG have a good diplomatic relationship, the United States and the Philippines are continuously finding ways to enhance such link, including through sports, particularly basketball.
Recently, the US Embassy partnered with the Philippine Sports Commission (PSC) and Alaska Milk in conducting basketball clinics in Manila and Davao for children 10 to 15 years old.
The clinics, organizers said, were designed to promote youth and sports development as well as foster international relations between the two countries.
US sports envoys and National Basketball Association and WNBA stars Cherokee Parks and Alana Beard headed the clinics were they got to share their basketball knowledge to the kids and other valuable life lessons that participants could take cue from even beyond the sport.
The US Embassy said basketball is something that is very close to the hearts of both Americans and Filipinos and a good platform to bring the two together.
“Americans are crazy about basketball and it is something it shares with the Filipinos. Everywhere we go here there is a basketball court set up and there is really a connection through it between the two countries,” said Jeanie M. Duwan, Assistant Cultural Affairs Officer of the American Embassy Manila, in an interview with BusinessWorld on the sidelines of the clinics held at the Rizal Memorial Basketball Stadium on Oct. 2.
“And the beauty of it all is that there are no boundaries here. Regardless of economic background, language you speak, it is something where we can get together, enjoy and learn,” she added while also saying that the PSC and Alaska had been good partners in seeing the program through.
Ms. Duwan went on to say that they, along with their local partners, see a lot of value in using sports as an avenue to learn from one another.

basketball clinic 2
In this photo are the Davao boys who participate in the said basketball drills. — US EMBASSY IN THE PHILIPPINES FACEBOOK ACCOUNT

“This really goes two ways. I think it’s really effective. It lives on. This is something really valuable and important to do,” she said.
For former NBA player Parks, his experience as a sports envoy for the United States meant a lot to him and that he hopes to continue doing such in the future.
“This is something I welcome doing again. It’s different when you come here with a team and when you come as an individual. I love my country and it’s an honor to represent it the best way I can,” Mr. Parks, who played eight years in the NBA, said in a separate interview.
The 12th pick in the 1995 NBA Rookie Draft also said that he shares the end game that such programs have and very much pushing for them.
“This really brings countries together which have long relations. It is something that is representative of what the US and Philippines are as countries and I’m very happy to be part of it,” he said.
Adding, “The Philippines is a wonderful country, with very kind, warm and polite people. It means a lot to be here finally. Back in the States, I have met and played with a lot of Filipinos and that was my first introduction to the Philippines and the basketball culture here. To experience these firsthand and share from I end as well is truly an experience.”
Seeing the Philippines as a valuable partner, Ms. Duwan said they are committed to continuing to cultivate the long-standing partnership with other programs besides sports-based ones down the line. — Michael Angelo S. Murillo

MPBL: Manila outguns erstwhile unbeaten Muntinlupa

MUNTINLUPA is unscathed no more. Manila brought it’s A-game Wednesday night and dealt the Angelis Resort-backed Cagers their first loss after going perfect for eight games, making the race to the top a lot more interesting.
Not fazed by the wildly cheering crowd supporting Muntinlupa, the Robust Energy Capsule-supported Manila went to its fast breaking game, beating the Cagers to the ground. The disparity in fast break points told it all — 32-2, a new record in the MPBL — and the Stars took pride becoming the first team to deal Muntinlupa its first loss of the season.
“We were really challenged by the fact that we were playing them in front of their hometown crowd,” said PBA Hall of Famer Philip Cezar, head coach of the Stars. “This team has a tendency of playing relaxed when playing lowly-ranked teams, but plays good when matched up against top teams.”
Manila did just that as five players ended up in double figures for the Stars led by Marvin Hayes, who finished with 18 points. Fellow ex-PBA player Reil Cervantes added 17, Chris Bitoon contributed 16, Aris Dionisio had another monsters game of 15 points and 20 rebounds. Jhygruz Laude chipped in 13.
Earlier, Pasay made it two in a row as it outlasted Imus, 79-75, in the other game.
It was only the fourth win in 11 games for the Voyagers, but it was their second straight that could somehow spark the team from moving up into the team standings in time for the playoffs.
Jan Jamon, who had a breakout game last time around, played even better this time. He tallied a career-high 27 points, including 16 in the second half. His go-ahead lay up in the last 26 seconds put the Voyagers on top, 76-75.
Pasay then made some key stops in the next two offensive trips of Imus and Yvan Ludovice, who backed up Jamon with 23, sealed the win by sinking three of four shots from the charity stripes.
After winning four in a row, the GLC Truck and Equipment-backed Bandera lost two straight and fell to a 5-5 mark. — Rey Joble

Team Lakay’s Banario grabs grappling gold in two events

FORMER ONE Featherweight World Champion Honorio “The Rock” Banario (13-7) has been busying himself in grappling tilts, taking home three gold medals in two grappling events on Sunday, Oct. 7.
Banario won gold at the Philippine staging of Abu Dhabi Combat Club (ADCC), a premier grappling competition with distinct rules geared toward submission wrestling.
He also took home two gold medals at Asia Pacific Sub Only Gi and No Gi tilt, which was held on the same day. The medals were for winning both gi and no-gi matches at the blue belt level, where he competed at the “under 85kg” weight class.
Banario competed under the banner of John Baylon’s Clube de Jiu Jitsu Filipinas in both events.
“I’m hoping to compete more in BJJ (Brazilian Jiu Jitsu) in the future,” Banario said, adding that he will do so as long as it does not interfere with his schedule in mixed martial arts.
Banario said that he was “back to the drawing board” following his loss to Singaporean standout Amir Khan (11-3) in September.
“I hope I continue to improve,” he said.
Banario had his five bout win streak broken in September by Khan, who took his back in the first round and ended matters abruptly with a rear naked choke.
Team Lakay will have another crack at Khan this November through Eduard Folayang (20-6), who is slated to face the Singaporean for the vacant ONE Lightweight World Championship. Both athletes are scheduled to meet at ONE: CONQUEST OF CHAMPIONS, set for the Mall of Asia Arena in Manila on Friday, Nov. 23.
As for Banario, he said he is just waiting for the announcement of his next bout.

Not everyone involve in sport in favor of ESports in Olympic program

TOKYO — The possibility of esports joining the Olympics program has gained traction in recent years but not everybody involved in the sport favors it.
Rahul Sood, the CEO of esports betting company Unikrn, believes the benefits for the International Olympic Committee (IOC) far outweigh those for stakeholders already invested in electronic sports gaming.
Last November, the IOC recognized esports as a sporting activity and it is set to be a full medal event at the 2022 Asian Games in Hangzhou.
Organizations like the Asian Electronic Sports Federation (AESF) are looking to get esports in the Olympic fold and hope that the IOC, grappling with an ageing audience and waning appeal for some traditional sports, will see it as the future.
Not everybody within the esports community, however, sees Olympic inclusion as the holy grail for the sport, Sood said.
“Some of the esports community are pumped to see video games at the Olympics, but many don’t see the point,” Sood told Reuters via email.
“I believe esports doesn’t need the Olympics as much as the Olympics needs esports. They would have to make a really good case for this to happen, if I’m being honest.”
Sood said many of the top esports competitions, such as Counter Strike’s $1 million ELeague Premier and Dota 2’s The International, take place during the summer months and would clash with the Olympics. — Reuters

In & out

Jimmy Butler finally joined the Timberwolves for practice yesterday, capping his absence from team activities at three weeks. Since he met head coach Tom Thibodeau and enunciated his desire to be traded last month, he moved — and was granted permission — to stay away. Needless to say, the hope was that a deal could be done soon. With the start of the season just around the corner, however, he had to allow for the possible perpetuation of the status quo.
By all accounts, Butler took no time reasserting his alpha-dog status with the Timberwolves. He was extremely active yesterday, showing all and sundry that he, too, stayed in shape during the time he kept to himself. And if the intensity he displayed is any indication, he’s prepared to be front and center for the blue and black once the 2018-19 campaign gets under way. He was engaged from start to finish, his commitment to his craft evident even to his most critical teammates.
Which is not to say Butler has changed his mind. On the contrary, he made sure everyone knew where he stood, taking to task Thibodeau, general manager Scott Layden, fellow All-Star Karl-Anthony Towns, and 2014 top overall pick Andrew Wiggins throughout the practice session. He minced no words, saw fit to talk trash, and, just to make sure his message got through, reiterated his position during an interview with ESPN’s Rachel Nichols right after.
Whether Butler’s defiant stance makes him more or less desirable as a trade target remains to be seen. The Heat are said to remain interested in acquiring his services, but not to the point of being fleeced. Certainly, the Timberwolves’ bargaining power has been eroded by his publicized intent to test free agency next year. That said, they’re obviously ready to play the long game; they may acknowledge that he’s on the way out, but they want to let it happen on their terms. In other words, the seemingly inevitable is clear, but the when is not.
 
Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

How (and why) entrepreneurs should cash in on the coconut craze

A few days before Dr. Karin Michels, an adjunct professor at the Harvard T.H. Chan School of Public Health, called coconut oil “pure poison” in her now-viral lecture, the Philippines was busy holding the first World Coconut Congress.
In 2017, the Philippines’ coconut oil exports generated over $1.46 billion in total revenues, putting the country among the world’s top coconut and coconut-derivative producers. Harvard University has since distanced itself from Dr. Michels’ comments, saying they were “not made on behalf of the institution.” Similarly, organizations all over the world have written up countless rebuttals to the coconut oil put-down.
The fact stands, coconut oil is a huge market, one that Filipinos ought to capitalize on.

Tech bias

The emergence of tech startups today has created a huge and arguably disproportionate amount of interest in emerging tech products and services. As far as potential entrepreneurs and venture capitalists are concerned, new tech, like blockchain or AI, is the new oil.
This attraction to the tech sector is not necessarily bad. But, amid rising globalization in agricultural and non-agricultural supply chains, the lack of attention among entrepreneurs to invest, disrupt, and innovate in more traditional sectors puts these precarious industries, and the economy at large, at risk of falling behind.
Last August 14 to 16, the Philippines hosted the first World Coconut Congress at the SMX Convention Center in Pasay City. The theme: “The Time is Now”.
The conference and exhibition was the flagship event of the 32nd National Coconut Week of the Philippine Coconut Authority (PCA), bringing together global industry experts; business leaders;  government officials; NGOs; members of the academic, medical, and research communities; and key stakeholders in the coconut industry.
Here are some of the opportunities in the industry today:

Wide and diverse applications

The coconut tree is known as the tree of life, and for good reason. The fruit can be broken down into a wide range of coconut-based and derivative products spanning multiple consumer categories:

  • food (coconut cream, coconut milk, coconut oil, lambanog, coconut water, and coconut sugar),
  • food supplements and health and wellness (refined, bleached, and deodorized coconut oil, virgin coconut oil, and medium-chain triglyceride oil),
  • personal and home care (soaps, cleaners, and surfactants),
  • furniture,
  • and handicraft material and fibers.

Effectively communicating how versatile this product can be is key to making coconut-based and derivative products attractive to potential investors and industry players.
Global market values of coconut milk, water, and virgin coconut oil have grown steadily in both value and volume since 2014. Ken Gibson, senior vice-president of Franklin Baker Company of the Philippines, says this has sparked a renaissance for producers shifting away from more traditional products like desiccated coconut, towards newer offerings.
According to Divina Bawalan, an international coconut processing consultant and former senior research specialist at the Philippine Coconut Authority, this renewed interest in products such as coconut water and oil have done much to revitalize the industry that has been in decline since the early 2000s.

Increasing demand and growth potential

From Madonna to the Kardashians—massive investments and waves of celebrity endorsements in coconut derivatives placed within the health, beauty, personal care, and wellness categories have garnered a lot of attention for these products.
Whether it’s virgin coconut oil, sugar, water, vinegar, or amino, there is growing consumer acceptance and increased demand in export markets. Coconut-based products are being touted as a superfood for their health benefits, sold in massive quantities at countless big retailers like Whole Foods and Wal-Mart.
Marco Reyes, president of the Virgin Coconut Oil Producers & Traders Association of the Philippines, expects an annual compound growth rate of about 10% to 11% in global demand for virgin coconut oil over the next three years.

Health, beauty, and wellness properties

Academic research—such as that of Dr. Fabian Dayrit, chairman of the Asian and Pacific Coconut Community Scientific Advisory Committee for Health—has long extolled the benefits of coconut-based products. New research has found benefits in:

  • maintaining cholesterol levels,
  • weight loss,
  • increasing metabolism,
  • skin and hair care,
  • and treating cognitive illnesses such as Alzheimer’s disease.

On the other end of the wellness spectrum, Mintel’s 2018 Report on Global Beauty Trends shows global consumer preferences shifting towards environmentally-friendly products made from natural ingredients. 
Glenn Apostol, a market development manager at oleochemical producer Chemrez, describes three main coconut derivatives under this category:

  • mild, hypoallergenic soaps and shampoos
  • petroleum and silicon-free skin moisturizers (that make for fantastic natural sunscreens)
  • natural antimicrobial lipids proven to be highly effective at treating skin infections

Coconut oil is a small component of global vegetable oil production

Compared to its closest substitute, palm kernel oil, global coconut oil production has stood at just over three million tons in 2017, less than half of the seven million tons of palm kernel oil produced in the same year. More aggressively marketing coconut oil as a substitute for palm kernel oil can potentially capture an extra three million tons of demand for palm kernel oil.
There remains, of course, a number of challenges: integrated processing facilities’ high barriers to entry, lack of support from the medical and scientific community in the west, decreasing supply and output, and a fragmented marketplace for raw coconut inputs, to name a few.

A need for inclusive growth

Government support in the form of subsidies, training, information dissemination, and R&D on coconut tree hybrids, spearheaded by the Philippine Coconut Authority, DTI, and DOST, are a good first step in the right direction.
The use of new technologies like blockchain applied to big multinational companies’ supply chains can allow for greater transparency in the way manufacturers source their raw materials, giving farmers a voice toward fair and ethical sourcing.
Innovations in tech mint a few billionaires here and there, but inclusive growth is the only way to ensure the Philippines’ coconut industry—and the agricultural sector as a whole— grows sustainably.
We need to deploy programs toward restructuring systems and reskilling the labor force such that more traditional sectors of the economy like agriculture can continue to thrive. By providing sustainable livelihoods to the workers and farmers in this sector, not only the intrepid entrepreneurs, but the nation at large, can reap the benefits of this coconut boom.

Ryann Chris Aninias is an economist by training, with a masters degree in Economics from the University of the Philippines. He currently serves as the associate director at a local tech startup.

FDI net inflows more than double in July

NET INFLOWS of foreign direct investments (FDI) more than doubled in July, marked by strong inflows for both intercompany loans and equity capital, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday.
FDI net inflows reached $914 million for the month, improving from $831 million in June and jumping from $344 million received in July 2017. This also marks the biggest net inflows since May’s $1.645 billion.
“This reflected the continued positive investor sentiment on the Philippine economy on the back of strong macroeconomic fundamentals and growth prospects,” the BSP said in a statement.
FDIs infuse additional capital for the Philippine economy, which in turn creates more job opportunities and spurs domestic activity by supporting business expansions.
The July inflows also brought year-to-date FDI net inflows to $6.669 billion, 52.1% more than the $4.385 billion investments that entered the country in 2017’s first seven months. This also brings FDI inflows closer to the $9.2-billion forecast given by the BSP for the entire year, coming from the record $10.049 billion recorded last year.
Both equity and debt placements surged in July, data showed.
Net equity investments reached $261 million for the month, nearly double the $137 million a year ago.
Broken down, gross placements surged by 60.6% to $278 million, which was partly offset by $17 million worth of outbound capital. This compares to $173 million worth of inbound equity capital in July 2017, offset by withdrawals worth $36 million.
Reinvested earnings totalled $69 million, slipping 2.3% from $71 million in July last year.
Lending by foreign firms to their subsidiaries or affiliates in the Philippines quadrupled to $584 million in July from $136 million a year ago.
The central bank said foreign investments went mainly to manufacturing; financial and insurance; real estate; wholesale and retail trade; and administrative and support service activities. The biggest sources of capital in July were Singapore, Hong Kong, Japan, the United States and China.
One observer said that the surge in FDIs shows that the Philippines remains a “legitimate investment destination” in Southeast Asia.
“The economy has been growing, in spite of recent — I would say — economic hiccups or challenges (high inflation, in particular), but this latest FDI release describes a robust appetite for Philippine business opportunities,” said Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, Inc.
Despite the steady climb in inflows, the Philippines continues to lag behind its neighbors in terms of attracting foreign capital. HSBC Global Research previously said this is because of Constitutional limits on foreign ownership plus market uncertainty over a new system for tax incentives which hold back investors from making big bets here.
The second tax reform package pending in Senate seeks to cut the corporate income tax rate gradually to 20% from 30% via two percentage-point reduction every other year starting 2021. The bill will also limit incentives to a single menu for all types of industries. Perks will be capped at five years and will replace all other forms of incentives granted by investment promotion agencies.
Business groups and ecozone locators have cautioned that changing the set of these investment “sweeteners” could dampen investor appetite towards the Philippines and derail expansion plans of foreign firms.
On the other hand, relaxation of the Foreign Investment Negative List that limits participation of offshore investors in select sectors awaits Malacañang’s approval more than a year after it had been expected. — Melissa Luz T. Lopez

August merchandise export growth fails to stem trade deficit

THE COUNTRY’s merchandise trade deficit lingered above the $3-billion mark for the fifth straight month this year in August as a pickup in export growth that month failed to offset a slower increase in imports, according to data the Philippine Statistics Authority (PSA) reported on Wednesday.
August saw overseas sales of Philippine goods increase by 3.089% year-on-year to $6.163 billion, outstripped by an 11.034% hike in value of inbound foreign goods to $9.677 billion, yielding a $3.513-billion deficit in trade in goods that was 28.393% bigger than the year-ago $2.737 billion. August’s trade gap was also 0.9% less than July’s $3.546 billion.
Year-to-date, exports dipped 2.049% to $44.908 billion while imports grew 15.043% to $70.911 billion, pushing the merchandise trade gap up 64.668% to $26.003 billion. The government has targeted exports to grow nine percent and imports 10% for 2018.
Philippine trade year-on-year performance (August 2018)
Merchandise export growth in August was the best performance for this year, so far, and was the third straight month of positive performance, while that of imports was the slowest in five months.
In a statement, the National Economic and Development Authority (NEDA) noted that exports in August were buoyed particularly by electronic products, mineral products, as well as fruits and vegetables. It said steps to help exports grow further include removing unnecessary regulatory impediments, raising productivity and competitiveness of businesses, upgrading export quality and standards, improving access to trade finance, and enhancing innovation.
Electronic products, which accounted for 54.282% of exports in August, grew 6.978% year-on-year to $3.346 billion. Year-to-date, this segment was up 5.712% to $24.987 billion.
NEDA also noted that import growth softened on weaker increases in purchases of consumer items, capital goods, as well as raw materials and intermediate goods. It added that the country’s total import bill can be expected to grow further in the coming months on increased purchases of capital goods for the government’s infrastructure development push as well as rising oil prices.
Electronic products, used as intermediate production inputs, made up 25.404% of August merchandise imports at $2.458 billion, up 9.95% from a year ago. Year-to-date, these products grew 19.219% to $18.352 billion.
Capital goods made up 34.466% of imports in August at $3.335 billion, up 12.944% from a year ago. Year-to-date, this segment was up 16.076% to $23.443 billion.
The peso, which on Wednesday was 8.5% weaker against the dollar year-to-date, has also been a factor, supposedly helping to make Philippine goods cheaper when sold abroad while at the same time making it more expensive to buy foreign products.
The eight months to August saw the United States lead overseas markets of Philippine goods with a 15.297% share with $6.869 billion, up by 6.781%. Hong Kong followed with a 14.612% share of $6.562 billion, up 15.196%; Japan came next with a 14.146% share of $6,353 billion, though down by 16.509%; while China accounted for 12.921% with $5,803 billion, up 12.031%.
The same period saw China top sources of products that went into the Philippines, accounting for 19.421% with $13.771 billion, up 24.774%. South Korea came next with a 10.138% share of $7,189 billion, up 38.204; Japan followed with a 9.932% share of $7.043 billion, down 4.181%; while the United States accounted for 7.296% at $5.174 billion, up 5.49%.
The growing trade deficit has fueled the increase in the country’s current account gap, which at $3.1 billion last semester had already hit the full-year projection of the Bangko Sentral ng Pilipinas (BSP). The current account provides a snapshot of the country’s overall economic interaction with the rest of the world covering trade in goods and services; remittances from overseas Filipino workers; profit from Philippine investments abroad; interest payments to foreign creditors; as well as gifts, grants and donations to and from abroad. The growing current account gap has been blamed for the peso’s persistent weakness against the dollar.
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a note on Wednesday: “The prognosis is for the current account to remain in the red, exerting further pressure on the local unit despite BSP’s already very hawkish stance,” referring to a cumulative 150-basis-point hike in policy interest rates since May as the central bank sought to temper inflation pressures and support the peso.
Sought for comment, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail that the country’s trade gap can be expected to grow further in “this kind of external environment of weak demand for exports.”
“By end 2018, I still expect the trade deficit to further widen and persist,” Mr. Asuncion said.
“Nevertheless, the said trade deficit is not major concern since there are ample international reserves and the macroeconomic fundamentals are fairly stable.” — Janina C. Lim

Philippine trade year-on-year performance (August 2018)

THE COUNTRY’s merchandise trade deficit lingered above the $3-billion mark for the fifth straight month this year in August as a pickup in export growth that month failed to offset a slower increase in imports, according to data the Philippine Statistics Authority (PSA) reported on Wednesday. Read the full story.
Philippine trade year-on-year performance (August 2018)

Singapore court ruling in favor of Maynilad’s claim vs gov’t final

THE DECISION of the Singapore High Court to uphold the arbitral award amounting to at least P3.4 billion in favor of Maynilad Water Services, Inc. has become final after the Philippine government no longer appealed the case.
In separate disclosures to the stock exchange on Wednesday, Maynilad’s major shareholders Metro Pacific Investments Corp. (MPIC) and DMCI Holdings, Inc. said the water concessionaire’s Singapore-based counsel formally confirmed on Tuesday that the decision of the court issued on Sept. 4, 2018 had become final as of Oct. 4, 2018.
The court last month dismissed the application of the Republic of the Philippines to set aside the first partial award dated July 24, 2017 that was issued by a unanimous three-man arbitral tribunal in the arbitration between Maynilad and the Philippine government. The Philippines on Feb. 13, 2018 filed an application to set aside the arbitral award.
The disclosures quoted Ramon S. Fernandez, Maynilad president and chief operating officer, as saying the company’s “latest victory” vindicates its position that there are no valid and meritorious grounds to challenge or set aside the arbitral award.
Maynilad holds the exclusive concession granted by the Metropolitan Waterworks and Sewerage System (MWSS), on behalf of the government, to provide water and sewerage services in the west service area of Metro Manila. Metro Pacific owns 52.8% of Maynilad, while DMCI has a 25% indirect economic interest in the utility.
The arbitral award upheld the validity of Maynilad’s claim against the undertaking letters issued by the Republic, through the Department of Finance (DoF). The award ordered the Philippines to compensate the company for foregone revenues, from March 11, 2015 onwards. The losses resulted from the refusal of the MWSS to implement Maynilad’s tariff adjustment for the period 2013 to 2017, which includes its recovery of corporate income tax payments.
The Singapore court’s decision became final after the Philippines decided to no longer appeal the dismissal within 30 days from Sept. 4 or until Oct. 4, the disclosures said.
Aside from dismissing the application to set aside the award, the Singaporean court also ordered the Philippines to pay Maynilad S$40,000 by way of costs.
Randolph T. Estrellado, Maynilad chief operating officer, said in a text message that details of the company’s next steps were not yet available. He said the company “will work towards an efficient collection of its claim in a manner that recognizes the interest of its various stakeholders including its shareholders and customers, taxpayers and the government.”
He said the arbitral tribunal previously ordered the Philippines to reimburse Maynilad P3,424,690,000 for losses from March 11, 2015 to Aug. 31, 2016.
Under Maynilad’s concession agreement with the government, it may request tariff rate adjustments based on movements in the inflation rate, foreign exchange currency differentials, a rate rebasing process scheduled every five years and certain extraordinary events.
Any rate adjustment needs the approval of MWSS and the agency’s regulatory office. Tariff adjustments that are not granted could have an adverse effect on Maynilad’s finances as well as those of MPIC.
Sought for comment, MWSS Chief Regulator Patrick Lester N. Ty said by phone: “That one (Singapore court case) is actually between the DoF and Maynilad. I am not party to the case. I wasn’t even informed about all these things.”
He said the national government could still decide to contest the case in the Philippines or pay the arbitral award.
“I’m going to wait if the DoF decides to pay it and then if it tries to claim against the MWSS. Right now, we don’t know,” he added.
The department’s undertaking letter provides that the government will indemnify Maynilad for any losses caused by a delay attributable to the Republic or to any state agency in implementing any increase in the standard water rates beyond the date of its implementation, in accordance with the Feb. 21, 1997 concession agreement.
MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon

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