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Swedish firms want in on government’s infrastructure program

SWEDISH FIRMS met with the Department of Finance (DoF) offering their engineering solutions for the Duterte administration’s infrastructure build-up.
Swedish Ambassador to the Philippines Harald Fries and Business Sweden country manager for the Philippines Ulf Wennblom told Finance Secretary Carlos G. Dominguez III that large Swedish companies such as the Volvo Group and the Saab group showed interested in participating in the infrastructure program.
“The Build, Build, Build program generates a lot of interest among Swedish businesses,” said Mr. Fries during the meeting.
“For infrastructure, we sell sustainable solutions. We have many decades of successful work in this area in Sweden. The Swedish infrastructure minister has invited Transportation Secretary Arthur [P.] Tugade to Sweden to study how we do it,” he added.
Mr. Wennblom, meanwhile said that they have been “in close contact” with the Transportation department in addressing traffic congestion, such as the possible provision of passenger buses along EDSA as an alternative to the Metro Rail Transit Line 3 (MRT-3) system. — Elijah Joseph C. Tubayan

Metrobank to raise up to P20 billion from LTNCDs

Metropolitan Banking & Trust Co. (Metrobank) is planning to raise up to P20 billion by selling long-term negotiable certificates of deposit (LTNCD).
In a disclosure to the stock exchange on Thursday, April 26, the Ty-led lender said it is set to issue peso-denominated LTNCDs of up to P25 billion as approved by its board of directors.
The capital raising activity will be done in one or more tranches of at least P2 billion per tranche with tenors of 5.5 years up to 10 years.
The offering is subject to regulatory approval and market conditions. The issued long-term papers will be listed on the Philippine Dealing & Exchange Corp.
LTNCDs are similar to regular time deposits which offer higher interest rates, but the difference is that these cannot be pre-terminated. Being “negotiable” means that these can be traded at the secondary market prior to maturity date. — Karl Angelo N. Vidal

SMC’s Bulacan airport proposal among projects approved by government

THE NATIONAL Economic and Development (NEDA) Board gave the go signal to 20 projects during its meeting on Wednesday, April 25, including large-scale projects such as San Miguel’s proposed P700-billion airport in Bulacan, and adjustments in previously-confirmed plans.
The following is a list of projects confirmed during the 6th NEDA Board meeting chaired by President Rodrigo R. Duterte on April 25, provided by Finance Secretary Carlos G. Dominguez III.
1. Subic-Clark Railway Project
Total Project Cost: P50.031 billion
2. Unsolicited Proposal for the Bulacan International Airport Project
Total Project Cost: P735.63 billion
“NOTE: Confirmation is subject to final review of the concession agreement.”
3. Clark International Airport Expansion Project- Operations and Maintenance PPP concession
Total Project Cost: P12.55 billion
4. Ambal-Simuay River and Rio Grande de Mindanao River Flood Control Projects
Total Project Cost: P39.22 billion
5. Pasig-Marikina River and Manggahan Floodway Bridges Construction Project
Total Project Cost: P27.368 billion
6. Bridge Construction Acceleration Project for Socio-Economic Development
Total Project Cost: P11.37 billion
7. Proposed Change in Scope and Cost and Loan Validity Extension of the Integrated Disaster Risk Reduction and Climate Change Adaptation (IDRR-CCA) Measures in Low-Lying Areas of Pampanga Bay (EDCF L/A No. PHL-17)
Total Project Cost: P6.151 billion
8. Rural Agro-Enterprise Partnership for Inclusive Development and Growth (RAPID Growth) Project
Total Project Cost: P4.78 billion
“NOTE: Confirmation subject to have a two-phased approach with up to 25% of total project costs as pilot-testing phase and upon successful performance evaluation, will expand the Project to second phase of up to 75% of total project costs.”
9. Davao Food Complex (DFC) Project
Total Project Cost: P1.02 billion
10. Proposed Restructuring for the Integrated Natural Resources and Environment Management Project (INREMP)
Total Project Cost: P7.24 billion
11. Proposed Change in Scope and Cost for Integrated Marine Environment Monitoring System Phase 2 (PHILO 2 Phase 2) Project
Total Project Cost: P1.68 billion
12. Proposed Increase in Cost of the New Centennial Water Source- Kaliwa Dam Project
Total Project Cost: P14.321 billion
The following projects were confirmed via ad referendum:
13. Change in Financing from local funding to Official Development Assistance (ODA) of the Arterial Bypass Project (ARBP) Phase III, Contract Packages I, II, and IV
14. Improving Growth Corridors in Mindanao Road Sector Project (Tawi-Tawi Bridges)
Total Project Cost: P25.26 billion
15. Proposed Change in Design and Increase in Cost of the Chico River Pump Irrigation Project
Total Project Cost: P4.37 billion
16. Conflict-Sensitive Resource and Asset Management (COSERAM) Program – Financial Cooperation
Total Project Cost: P 1.27 billion
17. Safe Philippines Project Phase 1
Total Project Cost: P20.3 billion
18. Request for Supplemental Loan for the New Bohol Airport Construction and Sustainable Environment Protection Project
19. Request for 24-Month Loan Validity Extension, Revision of Construction Period and Schedule, and Change in Scope of the Samar Pacific Coastal Road Project
Total Project Cost: P1.03 billion
20. Request for 46-Month Extension of Loan Validity and Project Completion Schedule for the Jalaur River Multi-Purpose Project, Stage II
Total Project Cost: P11.21 billion
— Elijah Joseph C. Tubayan

Infrastructure, other outlays top target

By Elijah Joseph C. Tubayan
Reporter
STATE infrastructure and other capital disbursements continued their year-on-year surge in March on the back of roadworks as well as repair and construction of government facilities, enabling such spending to exceed the first-quarter target, the Department of Budget and Management (DBM) reported on Monday.
In its disbursement assessment report for March, the Budget department said that the government spent P63.4 billion on infrastructure and other capital outlays, 32.4% more than the P47.9 billion recorded in the same month last year.
Although March’s increase was smaller than the 43.9% pace logged in February, the government still spent 25.4% more than the month-ago’s P50.5 billion.
The DBM attributed increased spending in March “mostly to check floats and payments of accounts payable for the implementation of road infrastructure projects of the DPWH (Department of Public Works and Highways), completed construction of police stations by DILG-PNP (Department of Interior and Local Government-Philippine National Police), and repairs and rehabilitation of school facilities as well as purchase of office fixtures and furniture in various DepEd (Department of Education) schools nationwide.”
The first quarter saw infrastructure and capital outlays surge 33.7% to P157.1 billion from the P117.5 billion recorded in 2017’s comparable three months.
The DBM also noted that it exceeded the P143.4-billion first-quarter target for infrastructure and other capital outlays by 9.6%.
Infrastructure and capital outlays accounted for 20.09% of the P782-billion overall government disbursements in the first quarter that, in turn, were up 27.1% from P615.4 billion in 2017’s first three months.
“The first-quarter numbers suggest that the reforms we are implementing — in terms of budget planning and utilization — are gaining foothold,” Budget Secretary Benjamin E. Diokno was quoted in a statement as saying.
“We will not let up in our efforts to limit underspending and continue with the efficient and accountable management of public resources,” he added.
FOCUS ON RURAL AREAS
Sought for comment, University of Asia and the Pacific economist Bernardo M. Villegas said that the government should now focus on more projects in rural areas.
“If they are in urban areas like Manila and Cebu, [it] should be undertaken mostly via the PPP (public-private partnership) approach… We should use mostly private money for these projects that have a rate of return to private investors. Infrastructure in the countryside are not financially attractive to private investors,” Mr. Villegas said in an e-mail yesterday.
“It is the government that has the responsibility of building them. We should use ODA (official development assistance) money for big projects that are not economically attractive to private investors such as the Mindanao railway system or the railroad from Manila to Bicol which will not make money for many years to come because the volume is not big enough.”
At the same time, Mr. Villegas said “[w]hat can disrupt the ‘Build Build Build’ program is the inability of the government to effectively apply the principle of eminent domain in acquiring right of way.”
“It can also be disrupted if we depend too much on Chinese promises to build our infrastructures.”
The DBM also bared the government’s quarterly fiscal program yesterday, showing national government spending on infrastructure alone will total P699.312 billion for the entire 2018, equivalent to four percent of gross domestic product.
It also noted that total capital expenditures, which includes infrastructure, “are concentrated in the last quarter of the year (31.3% of the total) as payments for completed infrastructure projects become due and demandable.”

S&P hikes Philippine economic growth projections until 2019

S&P Global Ratings has bumped up its growth forecast for the Philippines, inspired by bets that domestic consumption will pick up further this year, enough to offset a slowdown in exports and other shocks from a trade row between the United States and China, the world’s biggest and second-biggest economies, respectively.
The credit rater now expects the Philippine economy to expand by 6.7% this year, faster than the previous forecast at 6.5%.
If realized, this will match the growth pace clocked in 2017 but will fall short of the government’s 7-8% annual target until 2022, when President Rodrigo R. Duterte ends his six-year term, that is supposed to result in significant cuts in both unemployment and poverty rates within that period.
“We expect an acceleration of consumption this year, driven by continued strong demographic trends plus a boost from the income tax cuts, to counter a moderation in export contribution in the second half of the year,” the debt watcher said in its monthly report published last week.
S&P’s 2018 growth forecast matches those given by the International Monetary Fund and the World Bank.
S&P also sees brighter prospects next year. Philippine gross domestic product (GDP) is seen growing by 6.8% in 2019 — faster than an earlier estimate of 6.6% — before returning to 6.7% in 2020.
Strong domestic demand will enable economic growth to remain robust despite some easing in merchandise exports, the debt watcher said, noting that bigger disposable incomes held by Filipinos will support household spending, which contributes about 60% to GDP.
Effective Jan. 1, Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law cut personal income tax rates but offset this with the removal of some value-added tax breaks; higher fuel, automobile, mineral and coal excise tax rates, as well as new levies on sugar-sweetened drinks and cosmetic surgery, among a host of other items. TRAIN has been cited as the cause for accelerating inflation, which surged to 4.3% in March — the fastest in at least five years. The Bangko Sentral ng Pilipinas (BSP) expects full-year inflation at 3.9%, versus the first-quarter average of 3.8%.
Despite this, S&P sees inflation remaining within the central bank’s 2-4% target band for the full year. For 2018, the overall pace of price increases is expected to average 3.6%, which S&P expects to be met with three policy rate hikes from the central bank.
At the same time, S&P said it was “closely watching” a potential trade war between the United States and China. “Besides having the US as a major trading partner, the Philippines also supplies a significant amount of intermediate inputs into China’s exports. With the current account not as strongly in surplus relative to previous years, a trade shock could increase the Philippines’ exposure to foreign funding and potential sudden capital outflows,” the debt watcher warned.
BSP Governor Nestor A. Espenilla, Jr. said it is “too early” to tell how the US-China trade row will pan out, but warned it will limit net exports’ contribution to Philippine GDP. China and the US are two of the country’s biggest trading partners, according to the Philippine Statistics Authority. Goods from China accounted for a fifth of total imports — the biggest segment — as of end-February, while the US received 14.7% of Philippine goods. — Melissa Luz T. Lopez

Watchdog seeks to make sure anti-dirty money checks meet standards

THE ANTI-MONEY LAUNDERING Council (AMLC) will spearhead the crafting in the next two years of a national policy to combat dirty money and terrorist financing as part of the country’s compliance with global standards.
The AMLC Secretariat said it will lead an interagency group to craft a national strategy versus money laundering, which forms part of a fresh evaluation process that will check if systems in place are compliant with international rules set by the Financial Action Task Force (FATF).
“As part of our compliance with the FATF Forty Recommendations, there is a need for the country to adopt a National Anti-Money Laundering and Combating the Financing of Terrorism Policy Strategy,” AMLC Executive Director Mel Georgie B. Racela said in a set of operational guidelines issued on April 20.
The Philippines will undergo a third round of peer evaluations this year, following similar reviews done in 2003 and 2008.
Under the latest round of evaluations, existing laws, regulations and legal issuances will be reviewed against FATF standards, and will be classified as compliant, largely compliant, partially compliant, or non-compliant.
A poor rating due to non-compliance and low effectiveness of anti-money laundering systems will return the Philippines to monitoring for being a “high-risk” jurisdiction, the AMLC previously said.
Other agencies to be tapped for the review are the Bangko Sentral ng Pilipinas, Insurance Commission, the Securities and Exchange Commission, the Philippine Amusement and Gaming Corp., Cagayan Economic Zone Authority, and the Aurora Pacific Economic Zone and Freeport. Moreover, 48 law enforcement agencies and offices have been identified as part of the working group, which will also include the Department of Finance and its attached agencies, the Department of Justice, the Philippine National Police, and the Supreme Court, among others.
Representatives of these agencies are expected to help craft a government-wide policy response “for the purpose of strengthening mechanisms to ensure compliance with international standards and effectively combat” the influx of illicit money.
The country had been kept out of the global watch list as of July 2017 for “significant progress” made in terms curbing dirty money transactions.
AMLC said most of the deficiencies identified in the second evaluations “have been addressed” through new laws. Republic Act No. 10927, signed into law last year, boosted defenses against dirty money by requiring casinos to report daily transactions worth at least P5 million to the AMLC.
National money laundering threat remained “high” in 2015-2016, according to the AMLC in December, while the US State Department described the Philippines as a “major” money laundering site in 2016. — Melissa Luz T. Lopez

Analyst who called stock rout sees more pain ahead

FOR the world’s most unloved stock market, things could get worse before they get better.
That’s the message from Manuel Cruz, who in January called for a 5-10% “deep correction” in the Philippine benchmark index on “stretched” valuations.
Now the Asiasec Equities, Inc. analyst — with over 20 years experience covering the local stock market — says first-quarter earnings season is the next risk for equities and the turbulence that wiped out over $30 billion in market value so far this year could escalate further.
The gauge has lost 16% since his Jan. 26 warning.
“We will see another round of selling if earnings aren’t as impressive as what some investors are still expecting,” said Mr. Cruz, adding that as companies release results, the benchmark index could test the 7,400 level or 2.6% below Tuesday’s close.
First-quarter earnings matter more than usual this year as the numbers will give investors an initial gauge of the impact of President Rodrigo R. Duterte’s tax reform on consumption goods. The changes pose a risk to earnings as while personal income taxes were cut, levies were raised on fuel, cars, tobacco, coal and sweetened beverages, creating short-term inflationary pressures.
A drop in earnings growth could spell more trouble for the Philippine Stock Exchange index, the world’s worst performer with a loss of more than 11% this year. Since its January 29 peak, the gauge has tumbled as rising inflation, higher oil prices, Asia’s worst performing currency and the central bank’s reluctance to raise interest rates stoked a selloff that saw over $870 million in foreign fund withdrawals over the 12-week period.
First-quarter results won’t support the consensus estimate of 12% growth in full-year 2018 earnings as margins were squeezed, said Mr. Cruz.
That trend will continue into the second quarter, when inflation peaks and the upward pressure on consumer prices caused by the government’s tax reform is fully felt, he said.
Mr. Cruz is wary of consumer stocks, citing competition and margin compression and sees the sector as “susceptible to a derating” because of high valuations.
But he’s bullish on bank earnings as strong lending growth and a drop in the cost of funding will aid profits as the central bank moves to cut reserve requirements.
Equity valuations sank last week to around 16 times estimated 12-month forward earnings, the lowest since December 2016.
While historically attractive, a rate increase by the central bank on May 10 is needed to provide a catalyst for stocks to move up as it would ease concerns monetary authorities are behind the curve in containing inflation, Mr. Cruz.
The benchmark index could fall to 7,200 without a rate increase next month, more than five percent from Tuesday’s level, he said.
“Foreign selling could get prolonged just like in 2015 and 2016,” Mr. Cruz said.
“And like in those times, the outflow will reverse because the fundamental story is still intact,” he added.
“First and second quarters may not be impressive but eventually the government’s infrastructure project and tourism growth will spill over into corporate earnings.” — Bloomberg

China fails to get India’s support for Belt and Road ahead of summit

BEIJING — China failed to get India’s support for its ambitious Belt and Road infrastructure project at the end of a foreign ministers’ meeting of a major security bloc on Tuesday, ahead of an ice-breaking trip to China this week by India’s prime minister.
The Belt and Road is Chinese President Xi Jinping’s landmark scheme to build infrastructure to connect China to the rest of Asia and beyond, a giant reworking of its old Silk Road.
India has not signed up to the initiative as parts of one key project, the $57-billion China-Pakistan Economic Corridor, runs through Pakistan-administered Kashmir that India considers its own territory.
Whether or not China will be able to bring India round to Belt and Road will likely be a key measure of the success of Indian Prime Minister Narendra Modi’s trip to China to meet Mr. Xi for an informal meeting on Friday and Saturday.
But India’s foreign minister did not express support for Belt and Road in the communique released after foreign ministers of the China and Russia-led Shanghai Cooperation Organization met in Beijing.
India, along with Pakistan, joined the group last year.
All the other foreign ministers — from Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan — “reaffirmed support for China’s Belt and Road proposal”, the statement read.
It gave no further explanation.
The communique otherwise was a broad expression of unity by the ministers on issues ranging from their support for the Iran nuclear deal to the need to combat the spread of extremism.
Mr. Modi is coming to China as efforts at rapprochement gather pace following a difficult year in ties between the two neighbors.
The Asian giants were locked in a 73-day military stand-off in a remote, high-altitude stretch of their Himalayan border last year. At one point, soldiers from the two sides threw stones and punches.
The confrontation between the nuclear-armed powers underscored Indian alarm at China’s expanding security and economic links in South Asia.
In comments carried on the foreign ministry’s Web site, Chinese Vice-Foreign Minister Kong Xuanyou said holding the meeting in an informal way meant the two leaders could have a deep exchange of views in a relaxed, friendly atmosphere to promote cooperation.
“This not only will benefit the two countries and two peoples, but will also have an important effect on peaceful development in the region and around the world,” the ministry paraphrased Kong as telling Indian media in Beijing.
Mr. Modi will visit China in June for a summit of the Shanghai Cooperation Organization.
China will also have to tread carefully to avoid giving its close ally Pakistan cause for alarm. China on Monday reassured Pakistan that relations between the two countries were as firm as ever and would “never rust.” — Reuters

SM Investments ramping up capital spending

By Krista A. M. Montealegre, National Correspondent
SM INVESTMENTS Corp., the holding firm of the country’s richest man Henry Sy, Sr., is hiking its capital expenditure budget for the year, as it eyes acquisitions in high growth sectors of the Philippine economy.
In a briefing after the stockholders’ meeting on Wednesday, SM Senior Vice-President Franklin C. Gomez said the conglomerate is planning to spend P75-90 billion this year, which will be financed mainly through internally generated funds.
Property firm SM Prime Holdings, Inc. will get the lion’s share of the capex at P80 billion, while the retail segment will corner roughly P5 billion of the spending plan. The balance will go to the banking units.
The conglomerate had budgeted P65 billion for capex in 2017.
“The government’s focus on spurring provincial growth and the momentum of which infrastructure, agriculture and tourism development (are) pursued gives fuel to our expansion plan,” SM President Frederic C. DyBuncio said.
SM downplayed the impact of the scrapped deal to purchase Goldilocks Bakeshop, Inc. on future transactions. The conglomerate abandoned the acquisition of Goldilocks after securing the go-signal from the Philippine Competition Commission, citing changes in the general business environment.
“We think that’s just a one-off event. We don’t think it will have an effect in the way we do our business and expansion or growth plans moving forward,” Mr. DyBuncio said.
The conglomerate is pursuing investments that will complement existing businesses, while capturing the high-growth trajectory of the Philippine economy.
Future acquisitions do not have to be industry-specific, Mr. Gomez said, noting that SM is taking into consideration growth potential, dominant market position, prospects for higher yield and strong management.
SM is also “focused” on opportunities in the e-commerce space that has disrupted the retail and shopping mall businesses in the United States.
“That’s an area which we believe is still in the early stage, but it will eventually happen so at this point we continue to explore which or how we can get into the e-commerce space,” Mr. DyBuncio said.
SM is not keen on investing in businesses that will put SM in competition with its customers such as fast-moving consumer goods, and food and beverage, Mr. DyBuncio said. The conglomerate also downplayed a possible investment in telecommunications because of the capital-intensive requirements of the industry.
“We’d rather be involved in businesses we are more familiar with where we could grow together with our partners and really have synergies with the rest of the group,” Mr. DyBuncio said.
SM’s portfolio now includes Belle Corp., Atlas Consolidated Mining and Development Corp., CityMall Commercial Centers, Inc., Philippine Urban Living Solutions, Inc., the Net buildings and 2Go Group, Inc.
SM delivered a 6% growth in earnings to P32.9 billion in 2017, higher than the P31.2 billion it posted in the prior year, fueled by the continued expansion of its core businesses.
Shares in SM fell P12.50 or 1.4% to close at P882.50 apiece on Wednesday.

Jollibee brings Vietnamese chain to Philippines

JOLLIBEE Foods Corp. (JFC) will be bringing is Vietnamese restaurant chain Pho 24 to the Philippines, the homegrown fastfood giant disclosed to the stock exchange on Wednesday.
The listed company said the expansion of the Vietnamese brand will be done through its wholly-owned unit, Fresh N’ Famous Foods, Inc. As the name suggests, Pho 24 serves Vietnamese noodle soup known as “pho,” as well as other traditional Vietnamese dishes.
Pho 24 forms part of the SuperFoods Group, JFC’s 60-40 joint venture with Viet Thai International Joint Stock Co. (VTI) through subsidiary, JSF Investments Pte. Ltd.
“(T)he SuperFoods Group aims to serve customers in Asia and key cities in the world with high quality and healthy Vietnamese food at affordable prices through the Pho 24 brands.
Aside from Pho 24, the SuperFoods Group also owns and operates the Highlands Coffee brand, as well as franchises Hard Rock Cafe in Vietnam, Macau, and Hong Kong.
JFC noted that it renovated all stores under the SuperFoods Group last year, as it shifted to a fast casual dining model instead of casual dining. The renovations allowed for faster ordering, product delivery, and cleaner store environments, according to the company.
At the end of 2017, the SuperFoods Group had a total of 281 stores under the Highlands Coffee, Pho 24, and other brands.
The move to expand the SuperFoods Group is in line with JFC’s commitment to take the company public in Vietnam by 2019.
JFC has also previously taken control of Denver-based burger chain Smashburger, which operates 352 stores in the United States, Costa Rica, Egypt, El Salvador, the United Kingdom, and Panama. This helped increase the company’s store network to over 4,000 worldwide.
In the Philippines, the company had a total of 2,895 as of the end of March under various brands such as Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, and Burger King.
In addition, the company has 943 stores overseas, under different brands such as Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Jollibee, Highlands Coffee, Hard Rock Cafe, and Pho 24.
The push toward more stores overseas is seen to help achieve JFC’s goal of seeing equal revenue contributions from local and international businesses by 2022.
JFC saw its net income attributable to the parent grow by 15% in 2017 to P7.089 billion, supported by a 15.6% uptick in revenues to P131.57 billion for the period.
This year, the company continues its aggressive store expansion as it rolls out P12 billion in capital spending.
Shares in JFC dipped P3.40 or 1.19% to close at P281.60 each at the stock exchange on Wednesday. — Arra B. Francia

The very best (and worst) wines from the 2017 Bordeaux vintage

By Elin McCoy, Bloomberg
WHEN I headed to Bordeaux to taste barrel samples from the region’s 2017 vintage, I was not hopeful.
I’d followed reports of the severe frosts over several nights in late April last year. The worst frost in 26 years decimated vines and drastically reduced the overall grape harvest by nearly 50%. “The frosts were biblical,” says Gavin Quinney, owner of Chateau Bauduc, who shows me photos of blackened vines on his iPhone as we compare notes at a château lunch.
But after 10 days of tastings during the annual event known as En Primeur, my main takeaway was surprise at how good many of the wines are.
The word I heard over and over again was “surprise.” The outstanding quality of wines from “not-frosted” vineyards is way better than everyone expected, given the challenges of the vintage.
The growing season started and finished early, with a fine spring, a heat wave in June followed by rain, and an exceptionally dry, cloudy July and August.
Eric Kohler, technical director of Château Lafite-Rothschild, says rain in mid-September, at harvest time, posed problems for the merlot. “But our grapes were beautiful, like in a fruit salad — you wanted to eat them,” he says, describing the character of the vintage as “perfect harmony.”
THE FROST
Despite the highlights, at every château, the main topic was how frost had affected the vines. Damage was unevenly distributed. Some estates, such as Château Corbin, one of my favorite properties in Saint-Émilion, and Château Fieuzal in Pessac-Leognan, lost their entire crop and made no wine at all.
The frost caused so much damage because the growing season started very early, and the emerging buds were destroyed. Worst hit were parts of Saint-Émilion, Pomerol, Pessac-Leognan, the Graves, and Sauternes, where many châteaux lost 30% to 50% of their crop.
To protect their best Pomerol estates, Christian and Edouard Moueix, of JP Moueix, had 28 workers setting up and lighting special bougies (candles) among the vines. The flames raised temperatures two degrees to three degrees, saving the day.
Château La Conseillante and Château Figeac employed helicopters to hover above their vines during the coldest part of the day; this, too, worked, as did wind machines elsewhere.
Other châteaux, especially those with top terroirs near the Gironde River in Saint-Estèphe, Pauillac, and Saint-Julien, escaped with no frost at all.
THE STYLE OF THE WINES
Veronique Sanders, who manages Haut-Bailly in the Pessac-Leognan region south of Bordeaux, explained that the summer’s cool nights and warm days added up to the wonderfully expansive, floral aromas that are another hallmark of the vintage.
The overall style of the 2017s is bright fruit, soft tannins, juicy acidity, and succulent, silky textures. The wines really show the different personality of each estate.
With a few exceptions, the reds aren’t as deep, rich, concentrated, and powerful as those from 2015 and 2016, while some of the dry whites, such as Château Margaux’s Pavillon Blanc, Haut-Brion Blanc, and Domaine de Chevalier are even better than those from last year.
The first growths — châteaux Mouton Rothschild, Lafite Rothschild, Haut-Brion, Margaux, and Latour — are superb, as are the Right Bank’s vibrant, complex Petrus, Le Pin, and Château Ausone. Of those, I’d single out as super-standouts Lafite and Haut-Brion. You’ll be happy with any of these, so I haven’t included them in my list of top picks below.
SHOULD YOU BUY THE WINES AS FUTURES?
Serious wine collectors — or speculators — will buy a volume of their favorite wines at a price set now, hoping that when bottles hit stores in 2020 with their final prices, early buyers will have stored bargains. There were a few hints during en primeur this year as to whether this would be a good idea.
At the annual press dinner at Château Kirwan in Margaux, the Union des Grands Crus president, Olivier Bernard, announced that more merchants have descended on the region than for the great vintage of 2016, despite French air and rail strikes, which marks interest. Enthusiasm, which is different, varied widely among those with whom I spoke. Consensus is that after the great vintages of 2015 and 2016, 2017 is not really a year for speculators.
So should you buy? The big question will be price, which the châteaux will release over the next two months. A weak dollar will add to the cost for American buyers, even if, as many negociants predict, prices will be lower than last year. (That may be wishful thinking.) It’s probably not a safe bet that you’ll end up ahead on your investment in the near future.
Buying futures means plunking down your money for a wine still aging in barrels and then waiting for the bottled wine to arrive in two years. My advice is to buy if you really want a wine from a particular estate to drink, as quantities from many will be in short supply. But remember: The great 2015s are on shelves right now.
TOP 12 WINES (BEYOND THE FIRST GROWTHS)
• Château Angelus — The dark, rich, ripe flavors are matched by bright, savory minerality.
• Château Belair-Monange — Power, elegance, and layers of flavor characterize this Saint Émilion.
• Château Ducru-Beaucaillou — Very spicy and elegant, this Saint-Julien wine has a mouthwatering energy.
• Château Figeac — Very plush and smooth, yet delicate and fresh, it’s also very structured.
• Château Haut-Bailly — This is an incredibly polished red, with pure cassis flavors and a silky texture.
• Château Lafleur — Sumptuous and dense, yet full of vibrant elegance, this is a star of the vintage.
• Château L’Eglise Clinet — Silky and sophisticated, it brims with floral aromas and fruit, earth, and truffle flavors.
• Château Leoville Barton — This generous, structured, and concentrated second growth from Saint-Julien is a stunner.
• Château Leoville Las Cases — Complex, serious, and intense, it has a seductive texture and rich, powerful flavors.
• Château Montrose — Plummy and dense, it’s also super-fragrant and almost juicy.
• Château Pichon Lalande — Very spicy, lively, silky textured, and refined. Super structure and aromatics.
• Vieux Château Certan — This luscious wine has lovely aromas of violets and a rich, yet fresh character.
SIX GOOD BUYS (TRADITIONALLY UNDER $35)
• Blason d’Issan — The delicious second wine of Château d’Issan brims with intense fruit.
• Château Haut-Brisson — The best vintage yet of this red is bright and juicy, with good structure.
• Château Le Pape — Charming, spicy and silky textured, this is made by the Château Haut-Bailly team.
• Château Montlandrie — Lush and lip-smacking, this insider wine is made by Denis Durantou of L’Eglise Clinet.
• Château Pibran — Scented and savory, this wine has more merlot than usual because of frost.
• Vieux Château Saint André — Jeff Berrouet and his father Jean-Claude, ex-wine maker at Petrus, made this fruity, fresh Montagne-Saint-Émilion red.
FOUR TO AVOID
• Château de France — Tough tannins and edgy acidity mar this wine from Pessac-Leognan.
• Château Maucaillou — This red from Moulis shows green, unripe aromas and tastes.
• Château Desmirail — Ugh. Overwhelming vanilla tastes come from aging in too much new oak.
• Château Magrez Fombrauge — Tasting this Saint-Émilion is like sucking on a two-by-four.

Golden Bria allots nearly P6-B capex

By Arra B. Francia, Reporter
GOLDEN BRIA Holdings, Inc. is accelerating this year’s capital spending to P5.89 billion, in line with the company’s goal to beef up its land bank following its entry into the mass housing business.
In a regulatory filing, the Villar-led firm reported that P2.16 billion of the 2018 spending has been allotted for land acquisitions. Construction will corner P2.59 billion of the capex, while around P746.5 million will be for land development.
The remaining budget will go to memorial park development, memorial chapel construction, and for property and equipment.
This year’s capital expenditure is more than double the P2.79 billion Golden Bria actually spent in 2017.
The company noted there is no assurance that it can fully use up the allotted budget due to several factors, including possible cost overruns, construction or development delays, and the granting of regulatory approvals, among others.
The increase in this year’s capex came amid Golden Bria’s entry into the mass housing sector.
Previously called Golden Haven Memorial Park, Inc., the company was solely engaged in the death care business until 2017, when it moved to change its corporate name to Golden Haven, Inc. and primary purpose to reflect its intention to go into real estate development.
The company then officially changed its corporate name to the present one last March after acquiring Bria Homes, Inc., another Villar-led firm. Bria Homes develops mass housing projects across the country, with 27 developments across Bataan, Pampanga, Bulacan, Cavite, Laguna, Camarines Sur, Negros Oriental, Cagayan de Oro, and Misamis Oriental.
Golden Bria saw its net income jump by 288% to P699 million in 2017, versus the P180 million it generated the year before. On the other hand, net income attributable to Bria Homes stood at P482 million.
The profit growth was lifted by the 352% surge in revenues to P3.69 billion during the year, driven by higher real estate sales from Bria Homes recorded at P2.55 billion.
Under the death care business, sale of columbarium vaults and memorial lots went up by 32% to P1.02 billion, while interment income rose by 27% to P28 million for the period.
This year, the company cited higher interest and inflation rates as among the factors that may affect its performance.
“Higher interest rates tend to discourage potential consumers as deferred payments schemes become more expensive for them to maintain. An inflationary environment will adversely affect the company, as well as other memorial park developers, by increases in costs such as land acquisition, labor, and materials,” the company said.
Shares in Golden Bria gave up P6 or 1.95% to close at P302 each at the Philippine Stock Exchange on Wednesday.

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