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Looking to buy property? Kylie Verzosa’s startup can help you.

Kylie Verzosa is not a noob when it comes to business.

The 26-year-old celebrity, who won the Miss International title in 2016, hails from the family who owns Forest House in Baguio City. She also has a degree in business management from the Ateneo de Manila University.

Adding to her endeavours outside the pageant arena, Verzosa is now also a managing director at PropertyAccess.co, a website that allows users to connect with real estate brokers.

“I come from a marketing background,” she told SparkUp during the launch of the platform on April 19 in Makati City. “Ever since I was young, I always helped out in the family business and I would do small things like manning the registration. I would also serve as a waiter for short time.”

Verzosa’s role in the tech startup company doesn’t end in just shelling out money. She said she is involved in developing marketing strategies and assuring the security of the website.

PropertyAccess.co aims to digitize local transactions in buying and selling properties amid the country’s booming real-estate industry.

In the last quarter of 2017 alone, for example, Metro Manila has recorded the highest number of condominium units ever sold in the capital region. According to Colliers International Philippines, about 52,600 units were bought during the period, which was significantly higher than the previous year’s 42,000 units sold.

“We always saw that there was a demand, it’s just that people don’t know how to find an agent because everything is traditional, you have to go to a real estate brokerage firm,” Regina Rocio, co-managing director, said.

PropertyAccess.co is also banking on the booming internet penetration in the Philippines. The real estate sector was seen benefitting from online purchases growth in the country last year, as many Filipinos resorted to the digital space to buy products—including properties. For instance, Lamudi Philippines—PropertyAccess.co’s counterpart in the market—has recorded about five times growth in its online traffic since 2014, generating 15 million user visits in 2017.

“We understand that it’s the age of digital marketing, so we want to take advantage of it,” Rocio said. “It’s the digital world, so I think the Philippines is ready for it since most people are now online. You can buy groceries and clothes online, why not property?”

The platform is free for end-users while brokers have to pay depending on their chosen subscription package. A one-month subscription costs ₱1,799 while three- and six-month subscriptions are available for ₱1,399 and ₱1,699, respectively. All packages come with unlimited listings.

Property brokers can join by creating their own profile on the platform, which includes key-ing in their license number and birthdate to assure their credibility. Verification both of membership and listings take about a week.

PropertyAccess.co boasts of its loan calculator feature as the selling point that sets its apart from its counterpart. The calculator enables users to know the amount of loan that they need to apply for from different banks depending on the price of the property they wish to buy and their preferred tenure.

For 2018, the company aims to generate at least 100,000 listings and tap 10% of the total number of real-estate agents in the country. It also plans to launch the platform in Japan, Singapore, and Malaysia.

Chocolate and cheese: your new favorite pairing

“Poets have been mysteriously silent on the subject of cheese,” wrote G.K. Chesterton in Alarms and Discursions, in an entire chapter dedicated to the pressed curd foodstuff. He goes on talking about how poets never write about cheese at length, despite the word having “every quality which we require in exalted poetry:” it is a “short, strong word,” that “rhymes to ‘breeze’ and ‘seas’.”

It’s a pity that G.K. Chesterton, who died in 1936, will never be able to see the day cheese takes a step closer to being romanticized. In particular, its pairing with chocolate: the quintessential food item associated with love.

Joe Baird, cheese expert and consultant for dairy organizations in America, heralded this during his recent trip to Manila last week when the California Milk Advisory Board, which represents California’s more than 1,300 dairy farm families held a tasting event. California, after all, produces 2.4 billion pounds of cheese and over 250 varieties and styles.

Cheese and chocolate, he says, is a pairing that enjoys great attention in California, ever since the trend began about eight to 10 years ago. “Cheese has different levels of strength, same with chocolate,” he says. “Cheese is made of one ingredient or multiple ingredients. Same with chocolate, which is primarily composed of the cacao bean.”

Bars with high percentages of chocolate, he added, go great with blue cheeses because they balance each other out. The younger chocolates, meanwhile, go with the younger cheese. “It’s a great marriage for each other,” he notes. “It’s sweet and salty.”

sparkup-inside-cheese-and-chocolate-joe-baird-california-cheese
Art Samantha Gonzales

And indeed, the pairing is heavenly. The experience begins when you snap a thin bar of chocolate. Depending on the amount and quality of cocoa butter, as well as how finely ground the chocolate particles are, the snap will will be either gentle or firm. Put it in your mouth and it begins to melt: smooth, creamy, and perhaps with a little nutty feel.

Then, the cheese. You might think the two would contrast each other—the former being associated with desserts, and the latter having a more pronounced salty taste. The cheese is relatively softer, chewier, and even gummier, which cuts through chocolate’s sweetness.

But once its highly complex taste—sweet, sharp, grassy, nutty, spicy, acidic, fruity, bitter—travels around the mouth, its creaminess melts with the creaminess of chocolate. Like two lovers who have gone around the world searching for their one true pairing, the formerly polar opposites embrace each other.

“Cheese is addictive. There’s nothing else like it,” Baird said. “You can have a bottle of wine, a winemaker will put a label on it, and then they will sell it with attention to the label,” he added. “But if you see a big wheel of cheese, even without a label, it’s already impressive.” The same logic, perhaps, can be applied to chocolate.

Perhaps we owe this discovery to millennials. With 90% of California dairy farms being family-owned, millennial descendants are slowly taking over the business.

“They grew up in a more artistic generation and they also grew up eating these specialty cheeses as food for entertainment,” Baird said. “Social media is a huge way of finding what’s popular. The millennial generation has started eating better than people in their 40’s. For those taking over the business, sky’s the limit. They’re creating new things and following what’s trending as well.”

But at the end of the day, no matter what the internet says, “it’s the way you taste the cheese, what you think it tastes like,” Baird says. Like love, finding solace in the pairing of cheese and chocolate may be a bit like finding a match in an unlikely place: there’s nothing else like it.

California dairy products, with the Real California Milk seal, are available in leading supermarkets such as S&R, Robinsons Supermarket and SM.

A day in the life of Uber and Grab drivers

By Bjorn Biel M. Beltram, Special Features Writer
Before becoming an Uber driver full-time, Ismael Mamaril Villanueva spent 30 years working for the government at the Bureau of Customs. Tired of the negative publicity that had plagued the bureau since time immemorial, and his children having finished their education, he decided that a change of pace was what he needed, a relief that Uber had provided him.
“I could feel that I was getting old,” Mr. Villanueva told BusinessWorld in an interview. “With Uber, I could take an early retirement.”
Coming upon the now-closed Uber Partner Center along Shaw Boulevard in Mandaluyong City, he lamented that the ride-hailing services firm had ceased operations in the Philippines. In his own words, he was an “Uber-loyal” for more than a year now.
Since he had his own car, Uber provided him with a relatively easy job that he can do on his own time without answering to anyone. He also enjoyed receiving compliments in the Uber app from his customers (Great Conversation! Excellent Service!), a feature that the Grab app sorely lacks.
At the end of March this year, the ride-sharing firm Grab announced that it has acquired its primary competitor Uber’s Southeast Asia operations, leaving many drivers like Mr. Villanueva without much choice but to switch platforms. As of April 16, Uber Philippines has shut down despite orders from the Philippine Competition Commission (PCC) to continue operating independently pending the antitrust body’s review.
Grab (MyTaxi.PH, Inc.) has now become the biggest ride-sharing app in the Philippines, an event that the PCC fears will lead to a “virtual monopoly” and increased prices.
Jeffer Carlo Ragil, who had been a driver for both Uber and Grab, fears the same. “I really don’t know what will happen,” he admitted in an interview.
“It used to be that depending on demand and pricing, you can choose between the two apps. There was a choice. If there’s just one, then the consumers could suffer,” he said.
Mr. Ragil noted that Grab is noticeably better for the drivers due to higher prices, lower thresholds for incentives (Grab drivers get bonuses for making 40-50 trips a week, as opposed to Uber’s 60-70), and the ability to view their riders’ destinations and cancel trips. However, for the longest time, Uber had a lot more demand.
“What works for us drivers isn’t the same as what the customers want,” he said.
A worthwhile service
Mr. Ragil chose to start driving full-time after spending 11 years working for the car battery manufacturer Motolite. It was not particularly hard to make the switch, he said, as both Uber and Grab had simple registration processes for drivers. He already had the car; all he needed was the paperwork to start driving.
“I like the freedom. The feeling that my time is my own. I could choose not to work whenever I want to. Right now, I’m waiting on a relative to finish a dialysis, so I thought why not work for an hour or two?,” he said.
“The people you get to meet also make the job worthwhile,” he said, telling the story of how he once had the pleasure of escorting members of the Mocha Girls to the airport one early morning.
“I remember it because it was one of the smoothest trips I’ve ever had. I thought we wouldn’t make it at first, but there was almost no traffic. We made the flight with time to spare. I couldn’t believe it, first because I was driving the Mocha Girls, and second, because EDSA was empty.”
Seizing opportunity
Rogelio Rivera, who had worked various jobs in the past, the most recent of which had been a salesman, found that he was drawn to the unpredictability of working for Uber and Grab.
“I get easily bored,” he said in an interview, noting that he rarely stays in one job for over a year. “I like being challenged.”
Mr. Rivera doesn’t own the car that he drives, and so he needs to meet a boundary each day if he’s to make any profit. Along with the fuel expenses, that means he has to make over P4,000 a day if he wants to see any money for himself.
“It’s not hard. Plus it lets me practice my driving,” he said. “I haven’t really driven that much before because I had a motorcycle.”
Mr. Rivera admitted that his goal was to be good enough at driving vehicles with manual transmission that he could take up a job driving trucks for a construction firm near his place in Rodriguez, where many real estate firms are developing new properties.
He argued that his goal is the reason why he had no qualms about switching to Grab after driving under Uber for three months. Filipinos are resourceful people, he said, and if Grab ended up becoming a monopoly and becoming bad for the public then Filipinos will find a way to adapt.
“I try to take any opportunity that’s presented to me,” he said. “That’s what all any of us can do, given whatever situation.”

Charging away anxiety over electric vehicles

Filipinos are receptive to the idea of purchasing vehicles running on electricity, even more so than their Southeast Asian peers. That’s one of the key findings of a study carried out by the business consulting firm Frost & Sullivan and commissioned by the Japanese automaker Nissan.
The study titled “Future of Electric Vehicles in Southeast Asia,” released in February of this year, found that 46% of the polled prospective car buyers in the Philippines, 44% in Thailand, and 41% in Indonesia are open to considering a purchase of an electric vehicle (EV). The respondents in these countries are, as the study put it, “the most eager to buy EVs.”
In the six Southeast Asian countries covered by the study, including the aforementioned three, plus Singapore, Malaysia and Vietnam, 37% of prospective buyers are willing to purchase a vehicle powered by electricity.
These findings bode well for EVs, which are hailed for their environmental benefits and cost-saving potential, especially as batteries become cheaper. But the study also uncovered factors that may hinder the translation of the openneness to buying an EV into an actual purchase in the region.
“While there is significant demand potential for EVs, there are adoption barriers as well. Lack of requisite knowledge underlies the slow uptake of EVs in recent years,” the study said. “Customers are also unsure about the safety standards EVs adhere to,” it added.
But the barrier that 60% of the respondents consider to be a “very important” barrier is neither safety nor operating costs nor high purchase price. “Range anxiety is the main drawback for the adoption of EVs,” the study said. This is a worry over running out of power before reaching a destination or a charging station.
Range anxiety may be overblown, at least in the US, according to a study by the Massachusetts Institute of Technology and Sante Fe Institute, a nonprofit research firm. “What we found was that 87% of vehicles on the road could be replaced by a low cost electric vehicle available today, even if there’s no possibility to recharge during the day,” Jessica Trancik, senior author of the study published in the journal Nature, was quoted as saying in a Washington Post report.
Prospective Filipino buyers of EVs vehicles can make a case for why the range anxiety they may be feeling is not overblown, based on a glaring reality: There aren’t a lot of charging stations around.
The government is doing something about it. In 2017, the Department of Energy Secretary Alfonso G. Cusi said that an Ad-Hoc Technical Working Group (TWG) was laying the groundwork for the installation of e-vehicle charging stations. TWG was created by Mr. Cusi himself to find out how suitable gasoline stations are as charging areas for EVs. The Department of Environment and Natural Resources announced last month of this year its plan of setting up quick-charging stations at its offices in Cebu and Davao. It already has one at its office in Quezon City.
The private sector is also helping address the need for charging stations. Last year, Pilipinas Shell Petroleum Corp. signed an agreement with QEV Philippines Electromobility Solutions and Consulting Group, Inc., a local start-up, to install electric vehicle charging posts at its gasoline stations.
SM Supermalls inked a similar deal with QEV, allowing the joint venture between Filipino businessman Enrique M. Aboitiz and his Spanish business partner Enrique Bañuelos to install fast chargers made by ABB, a Swiss automation giant, at its malls.
“The installation of EV charging infrastructure will support the proliferation of the EV industry as well as aid QEV’s mission to reduce carbon emissions and make use of a more sustainable source of energy in order to have cleaner and greener cities,” QEV said in a statement. It may also help ease – or eliminate altogether – the range anxiety Filipinos may have over electric vehicles.

When bamboo becomes a transport disruptor

By Romsanne R. Ortiguero
Growing abundantly in the Philippines and the rest of Asia, bamboo is known for its versatility, multi-functionality, sustainability, and even for its tensile strength that can match that of steel.
In the local setting, this sun-loving, hyper-growing type of grass is commonly used for construction, furniture-making, handicrafts, and even as food. With seemingly endless possibilities for bamboo, the use of this natural material in modes of transportation like bikes has also been explored.
Just a few years ago, bicycles made of bamboo by Bambike, originated by Bryan Benitez McClelland, gained popularity. According to Bambike’s website, bamboo possesses qualities that make it the perfect for crafting bike frames. The specific species of bamboo that Bambike uses “are at least as strong as steel in tensile strength and have higher strength-to-weight ratios.”
In 2017, Filipino company Banatti (derived from the colloquial word “banat”, to push it, or in road use, to floor it) introduced The Green Falcon, an electric café racer motorcycle that used bamboo as one of its materials for design.
Asked why he thought of using bamboo as a material for the Green Falcon’s body shell, Banatti President and CEO Christopher Lacson told BusinessWorld in an interview, “It’s a very strong yet flexible material. In many cases, it is comparable to steel. Bamboo has never been used for building a motorcycle body. We can call it a disruptor. It’s a conversation starter. The Green Falcon was designed and built to inspire, to ignite, or spark and motivate our country men: the young, the old, our leaders.”
The entire body shell of the Green Falcon is made from bamboo — weighing under seven kilos, which is at least 30% to 40% lighter compared to fiber glass, the material often used for building a motorcycle’s shell. Because the Green Falcon uses bamboo, and is purposely pared down in design, it weighs approximately 50kg less than that of a similarly sized gasoline motor version. Since it is light in weight, it is easier to move it, and thus, is speedier because it requires less power.
Mr. Lacson said they are using the tinik variety of bamboo, which takes between three to four years to grow, and is quite sustainable to use.
Also, Banatti’s motorcycle is electric, leaves no pollution, and hardly makes any noise. The bamboo shell used is water resistant, having been treated with water proof coatings and marine epoxies.
“It’s already road-worthy. It has a city-geared speed limit of 60kph, and can traverse up to 45 to 50 kilometers in range,” Mr. Lacson explained.
The lightweight, pared down design, city speed limit, and range were all inspired from the café racer culture, which started in the 1960’s. Café racer bikes are known to be lightweight, optimized for speed, and are made to run in short distances (usually used to race from café to café).
“Café racer has always been one of our guiding design principles. A café racer is only what it needs to be and not more. We were not engineering it for long drives. We designed it for city use; for café racer riding. We speed limited The Green Falcon because that is the speed limit in the city. You can’t run 160kph here and, realistically, most of city riding is in traffic,” Mr. Lacson said.
With the Green Falcon, Mr. Lacson hopes to spark productive conversations and hopefully, to inspire citizens and the government to work on pertinent issues such as pollution, sustainability, and greener modes of transportation, among others.
“It’s unlike anything else. It’s a different way of looking at issues through design. We purposely wanted to inspire people to see things differently, to put things in a different context, to think about transportation and materials from a different perspective,” he said.
Meanwhile, for his other projects that hope to initiate conversation regarding issues in the transportation sector, Mr. Lacson also acts as the CEO and design director of Modular Energy Efficient Portage Inc. (MEEP), which has designed the Meepney transport system. The locally patented “plug and play” transport system can be placed in a community with designated charging stations where modern electric jeepneys can swap batteries and run on set routes.

Untangling the gridlock: A look into the Philippines’ first subway project

By Mark Louis F. Ferrolino
Special Features Writer
One big problem that hampers the Philippines in maximizing its economic potential is the worsening traffic congestion in the country’s capital region. The traffic jam, which was only experienced on the stretch of Epifanio de los Santos Avenue (EDSA) years ago, is now being felt in almost all major thoroughfares in Metro Manila.
According to the Japan International Cooperation Agency (JICA), the country is now losing P3.5 billion a day due to the traffic situation in Metro Manila, 45.8% higher than the estimated P2.4 billion in 2012. The updated figure was presented by JICA Philippines chief representative Susumu Ito during the 36th Joint Meeting of the Japan-Philippines Economic Cooperation Committee last February.
The amount can rise up to P5.4 billion a day by 2035 if transportation infrastructure in the region will not improve, Mr. Ito said.
Heavy traffic in Metro Manila not only affects the economy but also the Filipino commuters. Before Filipino workers could reach their workplaces, they have to spend time waiting beside the roads or at terminal stations to ride a public transport. Thereafter, they have to endure the hassle of getting stuck in the traffic, which often consumes their time that could have been used to do something productive.
Traffic congestion is paralyzing almost everything. Thus, the need for new and modern transport infrastructure, which will ease congestion and improve connectivity in and out of the capital region, is substantially needed.
One of the legacy flagship projects of the Duterte administration under its “Build, Build, Build” program is the construction of the Metro Manila Subway Project (MMSP), which is expected to ease traffic gridlock in the metropolis and address the linked problems in environment and land use.
MMSP is the first ever approved underground rapid transit in the country proposed by the Department of Transportation (DoTr), headed by Secretary Arthur P. Tugade.
The phase one of the 30-kilometer subway project will run from Mindanao Ave. in Quezon City to Ninoy Aquino International Airport (NAIA) in Parañaque City. It will consist of 14 stations located in Mindanao Ave. – Quirino Highway, Tandang Sora, North Ave., Quezon Ave., East Ave, Anonas, Katipunan, Ortigas North, Ortigas South, Kalayaan Ave., Bonifacio Global City, Cayetano Blvd. and FTI, with a provision for a five-kilometer extension and two additional stations to connect with Manila Light Rail Transit (LRT) Line 1.
DoTr Director for Communications Goddess Hope Oliveros-Libiran told BusinessWorld in a Viber message that the project allows consistent travel from Quezon City to Taguig City in just 31 minutes, serving 370,000 passengers per day on its opening year.
The Philippines’ first subway, which is estimated to cost P355.6 billion, is dubbed by some as ambitious and the project of the century.
Socioeconomic Planning Secretary Ernesto M. Pernia believes that the Philippines is ready for this infrastructure project, starting from the funding up to the maintenance operations. He told BusinesWorld in a text message that it has “more beneficial impact on the economy” once completed.
MMSP will be funded by the Japanese government through a loan from its aid agency JICA. Last March 16, the Philippines and JICA signed the first tranche of the Official Development Assistance (ODA) loan, amounting to 104.53 billion yen or about $935 million. It carries an interest rate of 0.10% per annum for non-consulting services and 0.01% per annum for consulting services, to be repaid within 40 years (inclusive of a 12-year grace period).
The target groundbreaking for the project is set on the fourth quarter of the year, which is months earlier than planned, and is expected to be competed in 2025. Meanwhile, partial operations of three stations is set on the second quarter of 2022.
Ms. Libiran said that the manpower for the construction of the project will come from the Japanese contractor. She added that the cooperation of other government units, including the Metropolitan Manila Development Authority (MMDA) and local government units (LGUs), will be needed for the management of traffic during the construction.

Central bank seeks to assure amid market turbulence

CURRENT monetary policy settings remain appropriate despite some turbulence in local financial markets, the Bangko Sentral ng Pilipinas (BSP) chief said on Friday.
“We have to look at the fundamental drivers and not be too quick to play the blame game,” BSP Governor Nestor A. Espenilla, Jr. said when asked about policy direction in the face of a tumbling stock market and a depreciating peso.
Local stocks have shown weakness for much of this month, so far, with the Philippine Stock Exchange index hitting a one-year low on Thursday before staging a modest recovery on Friday that, nevertheless, did not stop another week-on-week slide.
At the same time, the peso has been trading at the P52 level this month and has been dubbed Asia’s worst-performing currency.
The central bank governor said the BSP does not have to react to these latest developments, adding that markets have the tendency to self-correct.
“[T]he key drivers of equity markets are corporate fundamentals including relative valuation that links potential earnings to share prices,” Mr. Espenilla said in a WhatsApp message to reporters on Friday.
“There is market discipline to this. Corrections happen as a reality check. That’s healthy and makes for sustainability,” he added.
“In my view, the sum of BSP actions remain appropriate for the situation.”
The policy-setting Monetary Board (MB) opted to keep borrowing rates unchanged at 2.5-3.5% during its March 22 policy review, unfazed by accelerating inflation despite analyst observations that the central bank could already be behind the curve as far as interest rate normalization is concerned.
Instead, policy makers cited robust domestic economic activity and little concern over inflation’s pick-up as reasons for keeping policy interest rates steady for now.
‘IN THE RIGHT DIRECTION’
The Monetary Board has said it was ready to “take immediate and appropriate measures” to carry out the BSP’s mandate of price and financial stability, arguing that currently robust economic activity can weather the impact of higher interest rates.
Mr. Espenilla said that the BSP is prepared to raise benchmark interest rates should price increases spread through the economy, but noted that latest inflation expectations show the annual pace of overall price increases still well within 2018’s 2-4% target band.
Latest available Philippine Statistics Authority data show headline inflation staying within target range at 3.8% year-to-date despite March’s 4.3% which pierced that band and was the fastest in at least five years.
Highlights of the March MB meeting which the central bank released on Thursday show monetary authorities then believing first-quarter gross domestic product growth — which the PSA is scheduled to report in the morning of March 10, just hours ahead of the third MB policy review for 2018 — “to be consistent with the government’s target” of 7-8% annually until 2022, when President Rodrigo R. Duterte ends his six-year term.
“We’re satisfied that TDF (term deposit facility) rates have been moving in the right direction, as guided and enabled by our open-market operations. This is having the desired effect on other market rates that in turn help regulate the economy and control inflation,” the BSP chief added.
Several analysts have pointed out that the BSP should already tighten rates to contain inflation and temper rapid credit growth, although the monetary authority has said that the Philippines is far from overheating.
LENDING STANDARDS STEADY
In a separate development, the BSP also reported unchanged lending criteria among Philippine banks in the first quarter.
Universal and commercial banks said they maintained the standards they used in assessing loan applications of both consumers and businesses, according to results of the BSP’s latest Senior Loan Officers’ Survey.
This marks the 36th straight quarter that borrowing standards were kept “broadly unchanged” for both corporate and individual clients, the BSP said, although some reported that they grew more stringent in granting consumer credit.
A total of 30 of 35 big banks responded to the poll.
Around 92.3% of the lenders said did not change criteria in deciding on loan applications filed by companies.
This came as banks had a “steady outlook” for the economy, a stable profile of borrowers and an unchanged risk appetite. This was seen through narrower loan margins, bigger credit lines and simpler collateral requirements.
Some 78.9% of the banks also reported that they used the same standards in deciding on personal loans, reflecting their bullish outlook for consumer activity.
At the same time, “credit standards for housing loans and personal/salary loans tightened due mainly to respondent banks’ reduced tolerance for risk,” the BSP said, noting stricter conditions for home loans and shorter maturities for personal loans.
Most banks said they expect to keep lending standards steady this quarter. — Melissa Luz T. Lopez

Balance-of-payments gap nearly halved in March

THE Philippines’ external payments position saw a smaller deficit in March, but first-quarter gap was still bigger than a year ago, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.
The country’s balance of payments (BoP) position settled at a $266-million deficit last month, improving from a $429-million deficit in February and a $550-million shortfall in March 2017.
March’s outflows sustained a deficit for the third straight month, but is the smallest since a $917-million surplus posted in December.
The BoP measures the country’s transactions with the rest of the world at a given time. A deficit means more funds fled the economy than what went in, while a surplus shows that more money entered the Philippines.
In a statement, the BSP said the outflows came as the central bank maintained a steady presence in the foreign exchange market. The monetary authority intervenes in the daily peso-dollar trading in order to temper sharp swings of the currency.
The peso averaged P52.0676 versus the greenback last month, compared to P51.7856 in February and P50.2752 a year ago, according to BSP data.
The deficit incurred last month also reflects payments made by the national government to settle foreign debt, the BSP said.
On the other hand, net foreign currency deposits held by the state as well as a steady stream of income from the BSP’s offshore investments helped offset these outflows.
The March BoP brought the first-quarter balance to a $1.227-billion deficit, bigger than the $994-million gap posted during the same period in 2017.
“The higher cumulative BoP deficit for the first quarter of the year may be attributed partly to the widening merchandise (trade) deficit for the first two months of the year,” the central bank said.
The country posted a $6.229-billion trade deficit as of end-February — 47% more than the $4.238 billion recorded in 2017’s first two months — as imports surged by 14.7% while exports edged up by a percent in the same comparative two-month periods, according to the Philippine Statistics Authority.
Analysts have flagged the widening deficit as a source of concern among investors since it weakens the peso further against the dollar.
However, central bank officials have said that the deficit is something to be expected from a growing economy, and should actually be regarded as positive since it is fueled by importation of capital goods and raw materials needed by businesses to expand.
The BSP expects the full-year BoP to settle at a $1-billion deficit for 2018, slightly wider than last year’s $863-million deficit but somewhat steady compared to the upward-revised $1.038-billion gap posted in 2016.
“We continue to expect the overall BoP position for the year to be very manageable,” the central bank added, noting that the Philippines has more than enough dollar reserves to cushion the impact of external shocks.
Gross international reserves reached $80.511 billion as of end-March, enough to cover 7.9 months’ worth of import payments. — Melissa Luz T. Lopez

Palace issues memorandum on monitoring labor-only contracting

By Camille A. Aguinaldo
MALACAÑANG on Friday ordered a crackdown on labor-only contracting as it directed Labor Secretary Silvestre H. Bello III to submit a list of companies engaged or suspected to be engaged in the illegal labor practice.
In a memorandum issued on April 17 and released to the media on Friday, President Rodrigo R. Duterte gave Mr. Bello 30 days to submit an inventory of erring companies and a “comprehensive report” on the implementation of the Labor Department’s policies on contractualization.
“The Department of Labor and Employment (DoLE) Secretary is hereby directed to submit to the Office of the President within thirty (30) days from issuance herof, a comprehensive report on the implementation of DOLE Department Order Nos. 174 and 183 (s. 2017), including violations thereof, and a list of companies engaged and/or suspected to be engaged in labor-only contracting,” the memorandum stated.
The National Labor Relations Commission was also ordered to coordinate with Mr. Bello and submit cases of erring companies involved in labor-only contracting.
The memorandum was released after Malacañang and Mr. Bello announced on Thursday that the President would no longer sign an executive order on contractualization, but would instead certify the Senate’s Security of Tenure bill as a priority.
During Friday’s briefing, presidential spokesperson Harry L. Roque, Jr. said the President’s orders to DoLE was meant to go after erring companies committing illegal labor practices, such as 555 (an arrangement where a contract is terminated and renewed every five months) and cabo (which refers to a group disguised as a labor organization or a cooperative).
“The promise of the President is that while not all forms of contractualization are not yet banned, he will ensure that there will no longer be 555 or cabo — 30 days,” he said.
He also called the memorandum as “Tokhang Laban sa Cabo,” a similar wording to the Philippine National Police’s anti-drug campaign called Oplan Tokhang where cops visit drug suspects at their homes. The “tokhang” campaign has drawn international concern following its rising fatalities.
“This is just a directive, so this needs to be implemented. Let’s call this as Tokhang Laban sa Cabo. In other words, in this 30 days, it’s not just for the list. It’s to tell them comply, otherwise the President will have you closed,” he said.
Labor-only contracting refers to the arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job for a principal. Under this practice, the contractor does not have substantial capital nor investments while employees are recruited to perform activities directly related to the business of the principal.
DoLE’s Department Order 174 issued March of last year placed absolute prohibition on labor-only contracting but also provided permissible contractualization arrangements.

PHL takes offense at resolution by European Parliament on GSP+, drug war

THE European Parliament, in a resolution on the Philippines on Wednesday, April 18, flagged anew the government’s drug war on President Rodrigo R. Duterte’s watch, and called for “procedural steps” toward the “temporary withdrawal” of the Generalized Scheme of Preferences (GSP+) status for the Philippines, under which the country has availed itself of as little as zero duties in its exports.
The European Union’s (EU) legislature called attention once more to this remedy “in the absence of substantive improvements” in Mr. Duterte’s drug war, which has raised international concern including by the EU.
The legislature, in its resolution, also “call(ed) on the Government of the Philippines to put an immediate end to the extrajudicial killings” in the drug war, whose fatality count it now pegs at 12,000, and ”reiterate(d) its call to release” Senator Leila M. De Lima. The detained opposition leader, a leading critic of Mr. Duterte’s drug war, found herself slapped with drug charges last year by Mr. Duterte’s government.
“(W)hile the progress in the implementation of the GSP+ conventions is largely positive, strong concerns remain around human rights violations related to the war on drugs,” the European Parliament said in a resolution notable for its many recommendations to the Philippine government and for what Human Rights Watch described as a “forceful message from the EU parliamentarians” to Mr. Duterte.
In response, the Philippines’ Foreign Affairs Secretary Alan Peter S. Cayetano said the EU legislature had “crossed a red line” with its resolution, which he also criticized as “based on biased, incomplete and even wrong information and does not reflect the true situation on the ground.”
For his part, Presidential Spokesperson Harry L. Roque Jr. said in his press briefing on Friday: “We, of course, find it unfortunate that members of the EU Parliament have once again interfered with the affairs of the Philippine state, rehashing issues and baseless claims that have been explained adequately by the Philippine government in several official statements.”
The new Philippine National Police (PNP) chief, Director-General Oscar D. Albayalde, said for his part, “If they can give us the details of those sinasabi nilang (they claim to be) 12,000 (deaths), probably we’ll be able to check kung talagang totoo ‘yung data nilang ‘yon dahil napakalaki no’n (if their data is accurate because the numbers are too big).”
PNP sets the number of deaths from anti-illegal drugs operations at 4,128.
Mr. Duterte also drew international attention anew for the detention this week of Australian nun Patricia Fox, which he said he had ordered because of her “political activities” in the Philippines.
Ms. Fox has been released but the Commission on Human Rights said it will investigate her detention by the Bureau of Immigration.
Sought for comment at his briefing, Mr. Roque said, “Bahala sila kung iyan ang gusto nila.” (It’s up to them if they want to.) — M.N.D.L.Cruz

AC venture unit to target emerging, disruptive technologies

By Krista Angela M. Montealegre, National Correspondent
AYALA Corp. (AC) said its venture unit will take the lead in identifying companies developing emerging and potentially disruptive technologies, with a mandate to invest $250 million by taking minority positions.
AC Chief Financial Officer Jose Teodoro K. Limcaoco said in a briefing that about $150 million has been deployed so far and the remaining $100 million will be disbursed in the next five years by AC Venture Holdings Corp.
AC Ventures was also the Ayala group’s vehicle for investments in Mynt, the fintech arm of Ayala subsidiary Globe Telecom Inc., and e-commerce platform Zalora Philippines.
“One of the objectives of AC Ventures is to look for these investments that can provide insight into new businesses that we can use for our own business units,” Mr. Limcaoco said.
In the last 18 months, AC Ventures has invested in financial technology, Silicon Valley-based firms engaged in artificial intelligence, a company developing new ways of doing business in real estate, a leading e-commerce company in China, and a consumer firm in Indonesia.
Artificial intelligence is an area of interest for the group, AC Chairman Jaime Augusto Zobel de Ayala said at the group’s shareholder meeting. The Ayala management team will visit Silicon Valley and China to learn more about the new technologies.
“It is evolving very fast. It ‘s going to transform the way we work. It is happening a lot faster than people expected. We’re looking at it very carefully. We’re looking at it across all industry groups,” Mr. Zobel said.
He added he is “not a believer in investing in cryptocurrency,” but is looking at the potential of the underlying technology behind the digital currency.
“We do believe, as a group, there is some validity in blockchain technology becoming a new platform to transact,” Mr. Zobel said.
The 183-year-old conglomerate’s business interests include real estate, financial services, telecommunications, water infrastructure development and manufacturing. It has recently entered power generation, transport infrastructure development, healthcare, education and e-commerce to better align the group with the country’s development agenda.
Apart from expanding its business portfolio, Ayala reaffirmed its commitment to grow overseas, with a target to raise the share of its international business to 10% by 2020 from 7% currently, by which time net profit is expected to have doubled to P50 billion.
AC Energy Holdings, Inc., which operates in Indonesia and Thailand, is looking to expand in Vietnam and beyond Southeast Asia as it looks to increase the share of its international operations to as much as 40% from 20%, ACEHI President John Eric T. Francia said.
Manila Water Company, Inc., now the largest foreign investor in Vietnam with a presence in Thailand and Indonesia as well. It aims to triple or quadruple the contribution of the overseas business in the next five years, Manila Water President Ferdinand M. Dela Cruz said. Overseas operations account for 5-6% of net profit.
Integrated Micro-Electronics, Inc. (IMI) is set to expand into Serbia with the opening of its 20th manufacturing plant, IMI CEO Arthur R. Tan said.
Ayala Land, Inc. will use Malaysian firm MCT Bhd. as the platform by which to grow the property firm’s international business, said Anna Maria Margarita B. Dy, ALI group head for strategic land bank management.
The Ayala group continues to invest heavily in the Philippines despite its aggressive expansion program. The conglomerate has invested P898 billion in the last six years, equivalent to half of the value of total foreign direct investment over the same period, Mr. Zobel said.
“To be relevant as an institution in the next 20, 30, 40 years, (AC President) Fernando (Zobel de Ayala) and I believe we have to start becoming comfortable competing in the international setting. What we are proud of is these are not standard operations. We’re beginning to compete in complex (and) competitive industries and that will do well for us here because we will bring those same standards here,” Mr. Zobel said.
Ayala Corp. rose P13 or 1.43% to P919 on Friday.

Industry revenue growth rises 8.9% in Q4 2017

By Jochebed B. Gonzales, Senior Researcher
COMPANY revenues grew faster in the fourth quarter as stronger sales were reported across key industries, the government reported on Friday.
Data from the Philippine Statistics Authority’s (PSA) latest Quarterly Economic Indices report showed that the total gross revenue index — a measure of sales generated by companies — expanded 8.9% in the final three months of the year, slower than the 9.4% recorded in the fourth quarter of 2016 but faster than the 8.6% logged in the third quarter of 2017.
Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, noted that revenues in 2017 had just come off from a higher base with 2016 being an election year.
“Historically, it is known that the Philippine economy gets an economic growth bump during an election year with a slower economic expansion a year after. However, it is fitting to note that the decline in growth from 2016 to 2017 was fairly smaller compared to previous same periods.”
Expansion was observed across all industries during the period. Leading the way was real estate whose revenues grew 11% in the fourth quarter of 2017 albeit easing from 13.4% in 2016’s comparable three months.
Next in line were growth seen in private services (10.6% from 6.6%); finance (10.2% from 8.9%); trade (9.5% from 9.2%); manufacturing (7.7% from 10.6%); and transportation and communication (5.1% from 8.8%).
On the other hand, employment slowed down during the period, with the total employment index expanding 1.6% in the fourth quarter compared to 1.9% in the fourth quarter of 2016. Sub-sectors posting the greatest growth were real estate (2.9%), transportation and communications (2.6%); manufacturing (2.2%); electricity and water (1.6%); mining and quarrying (0.7%); private services (0.7%); finance (0.5%) and trade (0.2%).
Compensation rose 5.8% during the period but was slower than the 6.5% registered in 2016. Backing this growth were manufacturing (9.5%); transportation and communication (7.7%); real estate (6.4%); trade (4.3%); finance (4.3%); mining and quarrying (4.2%); and private services (3.7%).
On the other hand, compensation in the electricity and water sector declined by 1.8%, a reversal from its 5.8% growth year on year.
Moving forward, the economist sees a “slight slowdown” in company sales in subsequent quarters due to the “immediate shock” brought by the increase in excise taxes from the Tax Reform for Acceleration and Inclusion law, which took effect last January.
“However, I still see that these would be supply-side induced. Thus, it will be temporary,” Mr. Asuncion said.

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