Facebook Instagram Linkedin X Youtube
Home Blog Page 11966

Philippines not yet growth ‘outperformer,’ but still a ‘very recent accelerator’

By Elijah Joseph C. Tubayan, Reporter
THE PHILIPPINES fell short on being an economic “outperformer” among emerging markets, according to a discussion paper from McKinsey Global Institute (MGI) which nevertheless noted that the country’s rapid growth in recent years signals its potential to be so in the medium to long term.
MGI classifies “outperformers” as economies with an average of at least 3.5% annual per capita gross domestic product (GDP) growth over 50 years or five percent annual growth over 20 years.
In its latest report, MGI found that Association of Southeast Asian Nations (ASEAN) accounted for eight of the 18 developing countries in the category. Notable were Indonesia, Malaysia, Singapore, Thailand that grew above 3.5% in 50 years, as well as Cambodia, Laos, Myanmar, and Vietnam whose economies expanded by at least five percent in 20 years.
“While the Philippines did not meet either (criteria), its recent rapid growth could lift it to the ranks of outperformers in the future,” the report read.
It said the Philippines could grow at an average of 5.3% annually from 2015 to 2030, faster than the ASEAN forecast average of 4.1%, and faster than current outperformers, with Vietnam estimated to grow 4.9% annually in 15 years; Malaysia, 4.3%; Indonesia, 4.2%; Thailand, three percent and Singapore, two percent.
Latest state data show that the Philippines’ GDP grew 6.3% last semester versus 6.6% in 2017’s first half.
MGI described the Philippines as a “very recent accelerator”
“After several decades of strong and sustained economic growth, members of the Association of Southeast Asian Nations (ASEAN) make up almost half of the world’s best-performing developing economies. The challenge for the region is to maintain its growth momentum-and continue narrowing the per capita GDP gap with high-income countries-in changing times marked by rapid technological advances and demographic shifts,” it said.
“While people in ASEAN countries have benefited from this economic surge in the form of rising prosperity, income inequality is growing in some countries and will need to be addressed.”
The report found that common characteristics of outperforming countries include a “pro-growth policy agenda of productivity, income and demand that features steps to boost capital accumulation, including forced savings and the growth of financial institutions.”
Large companies also play a “powerful role” in outperforming economies that not only boosted economic output but also “encouraged productivity improvements in small- and mid-sized local suppliers.”
“These firms are not only large but competitive, as the best-performing companies are subject to fierce competition at home. They also support the development of small- and medium-sized enterprises (SMEs) via purchasing and subcontracting, in which business generated by large firms is directly transmitted to smaller firms; large firms in turn benefit from a diversity of suppliers.”
McKinsey said “almost all the growth in the Philippines comes from private-sector conglomerates.”
“The Philippines attracted private investments in three airports by giving private firms a voice in how the facilities will be built and operated,” it noted.
The report also said that demographic change, urbanization and technological disruption will generate growth opportunities in Southeast Asia.
“For the growth momentum to continue, regional policy makers and business leaders will need to focus on three areas: digitally driven productivity, a reinvented labour force, and infrastructure development. These opportunities can support renewed productivity growth,” the report read.
“Big companies can lead this economic transformation by taking risks, responding to disruption and making technological leaps, while midtier firms help diversify ASEAN economies and benefit from the growing consuming class,” it added.
“Governments can support demand, particularly through infrastructure investments. In large countries such as Indonesia, Myanmar, the Philippines and Vietnam, such investments can equalize opportunities in areas still at the periphery of revolutionary changes in transport, technology and supply chains and boost industrial manufacturing where these countries still have room to grow.”
The Philippine government targets infrastructure spending to be equivalent to 7.3% of GDP by 2022 from the actual 5.6% last year.
This, in turn, is meant to drive economic growth rate to 7-8% in 2018 to 2022 from a 6.3-6.5% average in 2010-2016, cut unemployment rate to 3-5% by 2022 — when President Rodrigo R. Duterte ends his six-year term — from 5.5% in 2016 and cut poverty incidence to 14% also by then from 21.6% in 2015.

Hot money net inflow surges in Aug. — BSP

By Melissa Luz T. Lopez, Senior Reporter
MORE FOREIGN FUNDS entered the Philippines in August to mark a four-month high, with hawkish cues from the Bangko Sentral ng Pilipinas (BSP) perking up investor appetite.
Foreign portfolio investments posted a $225.85-million net inflow last month that was four times July’s $53.29 million and marked a turnaround from the $57.52-million net outflow recorded in August 2017.
This tally is the biggest inflow seen since April’s $279.29 million, according to latest available central bank data.
These flighty investments are often called “hot money,” as these funds enter and leave the country with ease in the face of developments and news.
Foreigners brought in $1.121 billion in funds in August, 16.9% more than July’s $959.44 million inflows seen and a fifth bigger than the $936.28-million inbound flows a year ago.
Such inflows were matched by $895.31 million in outbound funds, improving from the $993.8 million that left the country in August 2017. This is also the smallest outflow seen since January last year, according to BSP data.
In a statement, the BSP said the bigger hot money inflows reflected positive investor response to good second-quarter corporate earnings and the “forthcoming infrastructure initiatives” of the Duterte administration.
The recent resumption of trade talks between the United States and China also helped lift market sentiment, the central bank added.
Investments peaked in the second week of August when gross inflows reached $296.4 million that were partly offset by $185.22 million in outbound funds.
“It is also important to stress that the week of August 6-10 was the week that the BSP announced that it will raise rates by 50 basis points, signaling a more hawkish stance. This particular event has encouraged financial market gains,” said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines.
“With the possibility that the US and China are starting fresh trade negotiations, it may further encourage investment inflows,” he added.
While the government reported a disappointing six percent economic growth for the second quarter on Aug. 9, Mr. Asuncion noted that the Philippines’ macroeconomic fundamentals remain attractive “despite rising inflation and uncertainties of the external environment.”
Foreign investors were particularly upbeat about investing in peso-denominated government securities, yielding $180-million net inflows during the month.
This was followed by $39-million net inflows from shares of stock of listed companies.
Other peso-denominated debt instruments got $6-million net inflows.
The August figure brought the year-to-date hot money investments to a $602.01-million net inflow, a turnaround from the $318.88-million outbound capital in last year’s counterpart eight-month period.
The central bank expects hot money at a $900-million net outflow by yearend, which would be wider than 2017’s $205.03-billion net outbound funds amid financial market uncertainties.

Inflation storm brewing

gas pump
AFP

FILIPINOS queuing for hours to buy cheap rice from the government. Families eating fewer meals a day to save money. Locals venting their anger against President Rodrigo R. Duterte on social media.
These are the images and stories that have dominated media coverage in the Philippines after inflation soared to more than six percent in August, far higher than the rest of Asia.
Pressure started at the beginning of the year with higher oil prices and tax increases on fuel, sugary drinks and cigarettes, and quickly moved to rice, the nation’s staple food, because of supply shortages.
Now, everything from electronic gadgets to haircuts to t-shirts cost at least 10% more than a year ago, according to anecdotal evidence in Manila.
Alongside an almost eight percent slump in the currency this year, consumers are hurting.
A sentiment index contracted for the first time in more than two years, a worrying signal in a country where private consumption makes up about 70% of gross domestic product.
Consumers like Nica Aguilar, 30, are either switching to cheaper brands or changing daily routines to adapt. The energy compliance officer, who works in the Ortigas business district in Metro Manila, said she now uses part of her lunch break to cut down on her parking bill after hourly fees rose by 25%. She leaves her office to re-park her car, taking advantage of a cheaper rate for the first four hours.
Mr. Duterte’s government is now scrambling to get on top of the problem as mid-term elections loom next year.
Import rules on rice and sugar will be eased, while the police have been roped in to check for overpricing.
The central bank, which initially faced criticism for being too slow to act, has delivered 100 basis-points of interest-rate increases since May and pledged further strong action.
“Inflation is the most political of all economic risks because it can be felt immediately,” said Gene Pilapil, a political science professor at the University of the Philippines in Quezon City.
The Duterte administration is facing its first major economic test and could lose public support should prices go out of control, he said.
Two years into his six-year term, Mr. Duterte’s popularity has so far been supported by a strong economy, rising wealth and a tough anti-drug and anti-crime stance. The most recent opinion poll showed his popularity may be waning.
“The 2019 elections were supposed to be a clear victory for the administration but with inflation rising, it could become interesting,” said Mr. Pilapil.
Inflation accelerated to 6.4% in August, the fastest pace in nine years, with more pain in store as a super typhoon threatens farmlands in the Philippines just before the rice and corn harvest.
Economic growth weakened to a three-year low of six percent last quarter, while the peso slumped to the lowest level since 2005 on Wednesday.
Trade Secretary Ramon M. Lopez said the police are inspecting warehouses, markets and grocery stores and arresting those who are raising prices unjustly. Officials also met with manufacturers to convince them not to increase prices yet and have considered further easing import rules for various staples such as rice, fish and sugar, he said.
“Inflation is being addressed and we have both monetary and non-monetary tools” to solve the problem, Finance Secretary Carlos G. Dominguez III said on Wednesday.
With sales contracting, some companies are agonizing between raising wages and retrenching staff or risking workers picketing and closing shop.
“Our workers are pushing for an increase. Prices are so bad now, they’re threatening to strike,” said Vincenzo Tagle, who helps run his family’s car parts and repair company in Manila, employing 60 people.
Elsewhere in Southeast Asia, governments are taking stronger action to curb prices. In Indonesia, President Joko Widodo slapped controls on fuel costs and ordered additional imports of goods from salt to buffalo meat. In Vietnam, authorities are boosting subsidies on fuel and freezing electricity prices.
Central bank Governor Nestor A. Espenilla, Jr. has repeatedly said a broadening of price pressures to wages, transport costs and services would be a concern. He has flagged a rate hike could be on the cards at the Sept. 27 policy meeting.
“It’s only appropriate to aggressively tighten policy,” said Jose Mario I. Cuyegkeng, a senior economist at ING Groep NV in Manila, who is forecasting a 50 basis-point increase this month.
Strong rate action will anchor price expectations and support a weakening currency, he said. — Bloomberg

Kyushu and Kansai by train


By Lourdes O. Pilar, Researcher

EXPLORING the cities of the island of Kyushu and the western part of Japan in five days was beyond my imagination—but with the help of a detailed itinerary and Japan’s efficient transportation network, my travel buddies and I were able to tick several places off our bucket list.

We prepared for the trip by first securing a Japan Rail (JR) Pass for seven days of unlimited rides on the shinkansen (bullet train) network, express trains, and ferries. The pass covers different geographical regions; we availed of the one covering the northern part of Kyushu island up to Osaka in Kansai region for ¥22,000 or P10,700. Note that only tourists who have “temporary visitor” visas are eligible for the pass. (Tip: It is best to buy the pass outside Japan since you get a ¥1000 discount.)
Rides not covered by the JR Pass were paid in cash or through Pasmo, a smart card (similar to our local Beep card) that can be used in place of a train or bus ticket. A Pasmo card can also be used to purchase goods and services from stores that accept electronic money payments.
We landed in Fukuoka at 7:30 p.m. and headed straight to Hakata, where we stayed for two nights. Our night arrival limited us to only dinner, so we decided to try the ramen Fukuoka is famous for.
DAY ONE: NAGASAKI
On our first day of touring, we traveled to Nagasaki in the northern part of Kyushu Island, which is two hours away from Fukuoka by express train. As the train came to a halt in Nagasaki, I wondered if there were still any vestiges left from the atomic bombing of 1945.
Nagasaki today is a fully functioning city and a busy-yet-attractive port town. After 73 years, it seems to have completely recovered from the bombing. Monuments bear witness to the events that have been called the “greatest acts of terrorism in human history.”
Ten years after the plutonium bomb “Fat Man” detonated, the Nagasaki Peace Park opened to commemorate the atomic bombing of Nagasaki.
The park is located in the Zone of Hopes, one of the three symbolic zones in the destroyed area, (the other two being the Zone of Prayers, and the Zone of Study).
The park’s most important feature is the 9.7-meter-tall Peace Statue. Sculpted by Seibo Kitamura, the statue is of a seated blue man with his right arm raised and pointing to the sky, a gesture that symbolizes the threat of nuclear warfare. His left arm is stretched out horizontally, palm down, indicating the desire for peace.
Opposite the Peace Statue, one finds the Fountain of Peace, another meaningful landmark that commemorates the A-bomb victims who suffered from extreme thirst. The jets of water resemble a dove flapping its wings. A black plaque installed in front of the fountain bears the words of survivor Sachiko Yamaguchi, who recounted the desperate need for water during the aftermath of the bombing.
The Zone of Prayers marks where the A-bomb exploded above Nagasaki with the hypocenter cenotaph. The A-bomb was detonated about 500 meters above the point where this monument now stands. The area within a 2.5-kilometer radius of the hypocenter was devastated. All infrastructure in this area was reduced to debris and ashes. Many charred bodies were found. The zone also has other memorials and statues, among them the Nagasaki Korean Atomic Bomb Victims’ Memorial and the Statue of the Praying Child.
The Zone of Study is where you can find the Nagasaki Atomic Bomb Museum, the Nagasaki National Peace Memorial Hall, and a statue erected in memory of school children and teachers killed by the bomb.
The museum, which opened in April 1966 as part of the 50th-anniversary project of the Nagasaki bombing, has a number of artifacts on display, along with photographs that give viewers an idea of the extent of the devastation, the history of the development of nuclear arms, and the desire for peace.
We returned to Hakata in time for dinner. We decided to try yatai or open-air food stands that can seat about seven or eight people. Dishes such as grilled chicken skewers (yakitori), hot pot (oden), and Hakata ramen — a local noodle dish featuring thin noodles in a pork-bone based soup (tonkotsu ramen) — are favorites, and go well with alcoholic beverages.
DAY TWO: HIROSHIMA
The next day, we proceeded to Hiroshima in the region of Chugoku, also known as San’in-San’yo via the shinkansen or bullet train. The shinkansen, which runs at a maximum speed of 320 km/h, is known for its comfort and efficiency. It is usually expensive to ride bullet trains — without a JR Pass, a shinkansen ride from Hakata to Hiroshima costs ¥12,690.
Hiroshima is in the southwestern part of the Japanese islands. There are two World Heritage Sites in Hiroshima that we wanted to see: the Itsukushima Shrine on Miyajima island, and the Hiroshima Peace Memorial (also called the Atomic Bomb Dome).
Itsukushima Shrine is one of the most notable shrines in Japan and the only shrine in the world erected on top of water. It was recognized as a UNESCO World Heritage Site in 1996. The view has long been considered as one of the three finest views in Japan (along with Matsushima Bay and Amanohashidate). Itsukushima island, which has a number of temples, is also recognized for its upper hillside cherry blossoms and autumnal maple-leaf foliage.
Hiroshima was the first of two Japanese cities destroyed by an A-bomb — the world’s first deployed atomic bomb known as “Little Boy” — during World War II. Unlike Nagasaki, which is located in narrow valleys between mountains, Hiroshima is a vast plain. During the war, it was a manufacturing center with a population of around 350,000.
We paid a visit to the most symbolic infrastructure in Hiroshima City, the Atomic Bomb Dome that stands meters away from the hypocenter of the atomic bomb blast. Unfortunately, the Hiroshima Museum was under renovation during our visit.
Then, off to Okayama we went — 35 minutes away from Hiroshima by shinkansen (fare: ¥9,630). It is the largest city in the Chugoku Region after Hiroshima.
Okayama’s most well-known attraction is Korakuen Garden, ranked among the three best landscape gardens in Japan. The famous Okayama Castle is also located just across the garden.
Korakuen is a spacious garden that flaunts the typical features of a Japanese landscape garden, including a large pond, streams, walking paths and a hill that serves as a lookout point. It is quite unique from other Japanese gardens because of its spacious lawns. There are groves of plum, cherry and maple trees; tea and rice fields; an archery range; and a crane aviary.
Okayama Castle, also known as “crow castle” due to its black exterior, was built in 1597. The original castle was destroyed in the last year of World War II but was reconstructed in 1966. The main edifice of Okayama Castle is the six-story castle keep that houses an exhibition explaining the history and development of the castle. There are interactive activities, such calligraphy writing, and photography sessions with ceremonial clothing. (The castle has an entrance fee of ¥300. Pay ¥560 and you get to enter Korakuen Garden as well.)
From Okayama, we traveled to Sakaimoto which is home to manga artist Mizuki Shigeru. The train we rode had Shigeru-san’s yokai (spirit-monster) works painted all over it. The art was visible from every station we stopped at. The 800-meter stretch of Mizuki Shigeru Road with 100 bronze statues is dedicated to all the characters that appear in his work, the series GeGeGe no Kitarō included.
ROLLER COASTER BRIDGE
The highlight of our trip in Sakaimoto was experiencing the thrill of crossing one of the most spectacular bridges in the world, the Eshima Ohashi Bridge. The bridge is 1.44 km long and 144 feet high — even the most confident drivers quiver at the sight of it.
We hired a cab for ¥3,500 just to cross the bridge and vice versa. When the cab started to ascend the bridge, we held our breath — just like we do when we ride a real roller coaster —and waited for that feeling of being held up in the air… but it did not really make us feel anything even after we reached the other side of the bridge. At least now we know that the fear is just all in the pictures and videos. It’s been nicknamed the Roller Coaster Bridge because of its steep slope and appearance like a bridge to the sky.
We spent the night in Himeji, Hyogo prefecture which we reached via shinkansen for ¥7,240.
On our fourth day, Himeji Castle was the only thing in our itinerary. It is a hilltop castle complex with advanced defensive systems from the feudal period. The largest and most visited castle in Japan, it is also known as White Heron Castle because of its brilliant white exterior and resemblance to a bird taking flight. It was registered in 1993 as one of the first UNESCO World Heritage Sites in Japan. The entrance fee costs ¥1,300.
Afterwards, we were headed to Osaka but dropped by Kobe for lunch. When in Japan, one must have kobe beef, of course, renowned as it is for its superior flavor and tenderness. It is healthier than commercial beef because of its high concentration of monounsaturated fats and omega-3 fatty acids.
It is said that kobe beef owes its quality to three things: First, cows are given beer to induce appetite; second, they are massaged daily, sometimes with sake, as a proxy for exercise and to accentuate marbling; and third, that classical music is played to relax the cows and improve their appetite.
Kobe to Osaka cost us ¥6,350 by shinkansen. We reached Osaka in the afternoon and planned to go to Kyoto to visit Gion, known as Kyoto’s geisha district. We missed the train and while waiting for the next one to arrive, we noticed that there were awfully many people on the opposite platform while there were only the three of us on our side. Something was happening and we had no idea what is was. It turns out, there was a storm coming. People were advised to go home early before Typhoon Cimaron reached Osaka.
The room we booked was a tiny one inside an old house with three tatami mats laid on the floor. The storm made its presence known with heavy rains and strong winds.
On our last day in Japan, we made sure to visit Nara Park in Nara City, which is 30 minutes away from Osaka. The park’s vast green area is home to approximately 1,200 wild deer. The park is also included among the World Heritage Sites of UNESCO. The deer roam around freely and seem tame enough that people can actually approach them. They eat grass, bamboo leaves and buds but Shika Senbei (deer crackers) is their favorite food. Visitors can buy these crackers at several spots in the park.
A little precaution though, since deer are very much attracted to these crackers, they tend to approach visitors if they spot a person feeding any of them. Even if you’ve put away the crackers, the deer will follow you, perhaps bite your shirt and tug at you.
The last destination of the trip was in Dotonbori — a tourist destination in Osaka known for its bright neon lights, extravagant signage, and various restaurants and bars. This where Pablo, the famous cheesecake, is from.
This is our fourth visit to Japan and I think this trip was the most fulfilling. We learned from every place we visited and we saved a lot through the use of the JR Pass, which covered most our transportation. Sugu ni o ai shitai to kangaete imasu.

NAIA consortium’s P102-B proposal gains ground

A CONSORTIUM composed of seven of the country’s biggest conglomerates has been given original proponent status (OPS) by the government for its P102-billion proposal to rehabilitate and expand the Ninoy Aquino International Airport (NAIA).
“We are very grateful to the DoTr (Department of Transportation) and MIAA (Manila International Airport Authority) for granting the consortium the OPS as it triggers a series of steps we need to work on to make this project happen. The NAIA Consortium looks forward to working closely with the DoTr and MIAA to progress this initiative,” the consortium’s spokesperson Jose Emmanuel P. Reverente was quoted as saying.
The NAIA consortium is composed of Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc. and Metro Pacific Investments Corp. Changi Airports International Private Ltd. is the technical partner.
The consortium is seeking to rehabilitate, upgrade, expand, operate and maintain NAIA over a 15-year period. It aims to boost NAIA’s capacity from the current 30.5 million annual passengers to 47 million in two years and 65 million in four years.
“Our fellow Filipinos can expect a better airport experience as early as the third year from the time we commence rehabilitation work,” Mr. Reverente said.
After securing OPS, the proposal will now be evaluated by the National Economic and Development Authority’s Investment Coordination Committee (NEDA-ICC). Then it will be endorsed to the NEDA Board, led by President Rodrigo R. Duterte, for final approval.
As an unsolicited proposal, the NAIA consortium’s project will have to undergo a Swiss challenge, where other companies can make competing offers, while giving the original proponent the right to match them.
“DoTr is working on submitting our proposal to the NEDA-ICC,” Mr. Reverente said.
In a statement on Thursday, the DoTr said it is finalizing the terms of reference and completing the documentation needed before submitting the consortium’s proposal to the NEDA-ICC.
“We are targeting to complete everything, including the Swiss challenge within the year,” DoTr Communications Director Goddes Hope O. Libiran said.
The NAIA consortium submitted to the government on Feb. 13 a P350-billion unsolicited proposal for the rehabilitation of NAIA to turn it into a regional hub, with a concession of 35 years.
After comments from the DoTr, the consortium revised its proposal by removing the additional runway and trimming the duration of the concession to 15 years.
Earlier this year, the tandem of Megawide Construction Corp. and Indian company GMR Infrastructure Ltd. also submitted a $3 billion, 18-year unsolicited proposal. US-based The MITRE Corp. is its technical partner. — Denise A. Valdez

Aboitiz-Ayala group to allot P15B for proposed ID system

By Arra B. Francia, Reporter
A CONSORTIUM led by the Ayala and Aboitiz groups will be shelling out P15 billion for its proposal to design and develop the infrastructure for the country’s national identification (ID) system.
The unsolicited proposal submitted to the Philippine Statistics Authority (PSA) by the group of Ayala Corp.’s AC Infrastructure Holdings Corp. and Aboitiz Infracapital, Inc. (AIC) in partnership with Unisys Philippines aims to provide a “national identity infrastructure solution.”
“(The project’s) worth about P15 billion. That split one-third between the three of us,” AIC President Sabin M. Aboitiz told reporters on the sidelines of the Aboitiz group’s annual media event in Makati late Wednesday.
The project would involve storing, maintaining, managing, and authenticating identity information of individuals, according to an earlier disclosure by AIC’s parent Aboitiz Equity Ventures, Inc. (AEV).
The proposed concession period is 17 years, at which time the consortium will “develop and implement an expedient and comprehensive solution that will provide a safe and secure identification and benefits payment mechanism for individuals transacting with government.”
Mr. Aboitiz said the government has received the proposal but yet to give a formal reply.
“I don’t know if the government is even going to accept it. But we find it so important to have a national ID. So whether we get it or somebody else will we just want it the national ID,” said Mr. Aboitiz, who also sits as the chief operating officer of AEV.
The consortium’s proposal followed President Rodrigo R. Duterte’s signing of Republic Act No. 11055, otherwise known as the Philippine Identification System Act (PhilSys), last month. The PSA has been tasked to implement the PhilSys, which Mr. Duterte earlier said aims to “curtail bureaucratic red tape, promote the ease of doing business, (and) also avert fraudulent transactions.”
Among the details the PhilSys will collect are the full name, sex, date and place of birth, blood type, and address. The system will also detail whether a person is a Filipino or resident alien, and include their front-facing photo, full set of fingerprints, and an iris scan.
Residents will get a 12-digit PhilSys number that will represent their digital identity across multiple platforms.
The government has allocated P2 billion under the 2018 national budget for the national ID system’s implementation under the PSA’s budget. This is part of an indicative P30-billion budget for the next five years.
The newly-formed PhilSys Policy and Coordination Council aims to come up with the implementing rules and regulations for the law by October, with a pilot run by December. It targets to distribute IDs to 25 million Filipinos per year until 2021.

Asia Inc. Q2 profits grow at slowest pace in nearly 2 years

ASIAN companies posted their lowest profit growth in nearly two years in the June quarter and earnings are likely to come under further pressure, weighed down by the escalating US-China trade war and high currency volatility, Reuters analyses showed.
An analysis of about 4,000 Asian companies excluding Japan showed their combined net profit rose 12.98 percent in the June quarter, easing for the third straight quarter and the slowest pace of expansion the September quarter of 2016.
More pressure is building, with analysts slashing their forecasts for the current fiscal year by 5 percent on average over the last 90 days, a separate analysis of more than 15,000 firms showed.
In the same period, analysts have cut down their third-quarter earnings forecasts by 4.9 percent. (See figure 1)

China, Inc., which has the biggest weighting with over 4,000 firms in the survey, saw profit forecasts slashed by 7.3 percent for the current fiscal year.
By sector, the technology industry is one of the biggest losers, as Washington is set to impose tariffs on $200 billion of Chinese goods that would make imported computer parts and intermediary products manufactured across Asia more expensive. (See figure 2)

US President Donald Trump warned last week that he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on a further $267 billion of goods that include mobile phones, the biggest US import from China.
Profit estimates for electronic equipment and parts industry were slashed by 9.68 percent over the last 90 days, while forecasts for communications & networking segment were cut by 21.84 percent.(See figure 3)

“We are concerned by the impacts (of tariffs), either through the currency or through a more direct impact of lower level of exports. On the latter, the technology sector is more at risk,” said Frank Benzimra, head of Asia equity strategy at Societe Generale.
While a stellar earnings performance propelled Asian equities to a decade high last year, slowing profit growth and growing uncertainties over trade have undermined regional markets this year.
The MSCI Asia-ex-Japan index is down about 10 percent this year and hit a more than one-year low on Wednesday. The index’s forward price-to-earnings ratio fell to 12.04 at the end of August from a high of 13.6 in January. — Reuters

Rewarding online users with an offline concert

SPONSORED DATA platform Freenet celebrates its third anniversary with its first offline event—a “free” concert scheduled on Sept. 20 at the Mall of Asia (MOA) Arena in Pasay City.
While billed as a free concert, the Freeniversaya: A Freenet Concert requires concert-goers to be Freenet users who must have an adequate amount of points (earned through app registration and in-app missions that include downloading apps from partner sites/app) before scoring a ticket to the concert.
“We really wanted to have a free concert because we wanted to reward our [users] with something that’s not only online but something that is also live and offline. We wanted to make sure it’s a full rewarding experience,” Heidi Garayblas, associate director for marketing at Voyager Innovations, told BusinessWorld during their launch event on Sept. 4 at the Yes Please bar in Taguig City.
Among the performers set to hit the stage on the Sept. 20 concert are Bamboo, KZ Tandingan, Moira dela Torre, Shanti Dope, Gloc 9, Ben & Ben, and boy group Hashtags.
Tickets to the concert are tiered according to the number of accumulated points as follows: 100 freenet points gives the user access to the general admission area; 200 points, upper box tickets; 500 points, lower box tickets; 900 points, VIP2; 1,000 points VIP1; and 10,0000 points for a VVIP ticket that includes a backstage meet-and-greet.
Tickets are redeemed in-app and confirmed via SMS.
The SMS confirmation number must be shown at any SM Ticket outlet to get a print out of the ticket which should be shown together with the app to enter the venue.
The concert is Freenet’s first-ever offline event but it isn’t the last as Ms. Garayblas said that they are planning to have more offline, real-world rewards in the near future though she refused to share specific details.
Introduced in 2015, Freenet was created in order to “enable enterprises to open their websites and mobile applications to mobile data users for free,” according to the company website.
The free-to-download app offers free access to sites such as MyPal of Philippine Airlines, PayMaya, Zalora, SM Cinemas, among others. It also has a reward system where users can earn points by downloading a partner app, browsing a partner site or referring a friend. The points can be used to redeem rewards such as mobile load, game pins or enter a daily raffle.
Freenet also offers free daily access to sites such as Facebook and Twitter and to mobile games such as Mobile Legends during specific hours.
The app currently has eight million users and growing. “We’re very happy with the numbers we have,” Ms. Garayblas said.
Freeniversaya: A Freenet Concert will be held on Sept. 20, 6 p.m., at the SM Mall of Asia Arena in Pasay City. For more information, visit thefreenet.com. — Zsarlene B. Chua

Lazada teams up with GCash on payments

By Zsarlene B. Chua, Reporter
SOUTHEAST ASIAN e-commerce site Lazada is now allowing its customers to pay for their purchases using GCash, in hopes of encouraging consumers to shift to cashless payments.
“Previously, Lazada was more focused on perfecting our cash-on-delivery (COD) but more recently we wanted to more deliberately focus on the switch to non-COD. Because while the delivery experience for COD is great, it’s far from perfect,” Ray Alimurung, Lazada Philippines CEO told BusinessWorld shortly after the launch event in Taguig City on Wednesday.
The partnership was two years in the making. Aside from the technical aspects of the GCash integration into the Lazada site and mobile app, Mr. Alimurung said it was also due to the fact that they consider the checkout page as “very, very prime real estate.”
“So we don’t want to just open it up to just anyone and I think the partnership with GCash is much deeper because of the investment of [Ant Financial] into Mynt. I think cementing that partnership led to this [aside] from the technical aspects of it,” he said.
Ant Financial, an affiliate company of Chinese multinational Alibaba and operates Alipay, made an investment into fintech company Mynt, which operates GCash, in 2017.
Mynt is now a partnership between Globe Telecom, Ayala Corporation and Ant Financial.
Aside from GCash, Lazada customers can also pay via cash-on-delivery, Paypal, credit/debit cards and BDO credit card installment.
Mr. Alimurung noted in previous years, COD was the payment of choice for 85% of purchases made in Lazada but more recently, it is at 78% and continuing to drop as more people prefer e-payments.
“Today, a lot of commerce are offline. It’s important to position ourselves well for what is going to be the future,” Anthony Thomas, Mynt President and CEO, told BusinessWorld during the event.
“This is the right time because both of us are looking for explosive growth and there’s really a need for a convenient shopping experience: for it to be secure, for it to be accessible to everyone,” he added.
GCash offers peer-to-peer money transfers, mobile load, bills payment, retail purchases (a feature they added last year) and now, e-commerce purchases.
Globe expects GCash to have over 20 million users in the next five to seven years.
“We are on track, in fact, we have grown the active user base three times since we closed the investment with [Ant Financial] a year ago,” Mr. Thomas said. “We’re just getting started on introducing the innovations now. We feel that we are on track to get to that. In fact, the target keeps getting closer — it’s not even five to seven years, we’re looking at within three to five years.”
He noted the growth is in line with the Bangko Sentral ng Pilipinas’ projection that electronic payments in the country will exceed 20% of total payment transactions by 2020.

Familiar forms, new takes

By Kap Maceda Aguila
JUST AS ONE might match a pair of jeans with a blazer in a defiant interpretation of formal chic, Ethan Allen is proving that formal can be a relaxed proposition. The 85-year-old company known for its handcrafted furniture pieces is reimagining classic furniture forms swathed in “more modern fabric” or fashionable surfaces.
That’s exactly the ethos behind the Uptown Collection, a compendium that shakes up classic familiarity and comfort through more contemporary executions. Recently presented at the Ethan Allen Design Center, a considerable showpiece was curated by Cynthia Almario—an acknowledged name in Philippine interior design. Together with her sister Ivy, she runs Atelier Almario, which, according to a release, “creates and curates spaces for many of the country’s chicest homes, hotels, and restaurants.” Confessed Ms. Almario: “I was really amazed at the variety of selections and the complimentary interior design service that (Ethan Allen) offers. It is an added value for homeowners who want to decorate their homes but do not have the time or expertise, or the extra budget, for a designer. This way, they get good quality furniture along with advice from experts.”
One of the standout pieces is a three-drawer Bowen Chest (P168,320) with a textured veneer marked by tightly arranged nailheads—an Ethan Allen signature—fringing its edges and depicting interlocking semi-circles on the drawers’ midsection. The Powell Tall Dresser (P138,080) is rendered in dark wood and accented simply by hoop drawer pulls and a pair of traditional knobs on its six drawers. A little more glitzy is the Vivica Dresser (P280,000), covered with glass. A play on veneers is equally apparent in the Rhys Shagreen Console (P115,040), wrapped in faux stingray skin—an Art Deco favorite.
Homeowners wishing to showcase their collection of spirits and flutes can go for the Evansview Bar Cabinet (P214,880), another smartly assembled piece in dark wood. Its shelving is highlighted by a mirror back.
Meanwhile, Ethan Allen also proffers a wide selection of side or accent chairs. The snug Caden Wing Chair (P126,720), plus nailheads-highlighted Yves Side Chair (P74,240) and Harley Chair (P216,120) are conversation pieces—lending themselves most naturally for mixing and matching.
The collection draws heavy inspiration from jewelry, said design specialist Nina Mendoza. When matched with “muted fabrics and darker, richer wood,” accents such as hoop handles appear louder and more prominent. “Uptown pieces are more comfortable—more livable,” underscored Ms. Mendoza. Ethan Allen is also distinguished by highly customizable pieces. “Customers can decide on finishes and even hardware color,” she said.
Designer Joey Tay emphasized the stain- and odor-resistant qualities of Ethan Allen fabrics by spilling liquid on a swatch and compared it to a normal piece of fabric. The latter absorbed the colored fluid quickly which showed up as a stain. A simple and easy dab on the Ethan Allen swatch removed the offending liquid.
Ms. j declared that the brand is distinguished not just by superior craftsmanship but by the breadth of options available. Imagine 144 finishes—from weathered oak to walnut, to different kinds and shades of fabric, to different kinds of details such as studs that can be in nickel or chrome. “I like the fact that they can give clients what they want and what they value, and this makes everything bespoke and artisanal.”

Adult joblessness rate drops to 19.7% in 2nd quarter — SWS

ADULT joblessness in the second quarter dropped to 19.7% from 23.9% a quarter earlier, Social Weather Stations (SWS) said Thursday, citing the results of a survey.
The polling organization also found that the labor force participation rate fell, as did optimism in the job market.
SWS said that the joblessness rate for adults in its June 2018 Survey “is 4.2 points below the 23.9% (est. 10.9 million adults) in March 2018, but 4 points above the December 2017 rate of 15.7%.”
Adult joblessness rate (June 2018)
SWS defines adult joblessness as “(a) those who voluntarily left their old jobs, (b) those who lost their jobs due to economic circumstances beyond their control, termed as the retrenched, and (c) those seeking jobs for the first time.”
The second quarter adult jobless rate breaks down into 9.5 percentage points for adults voluntarily leaving their old jobs; 6.8 percentage points for involuntary job losses; and 3.4% for first-time job hunters.
Adult joblessness fell in Balance Luzon (to 19.3% from 28.1% ) and the Visayas (to 19.0% from 21.6% ). Adult joblessness rose to 19.4% from 19.0% in Metro Manila and to 21.2% from 20.8% in Mindanao.
SWS reported that adult joblessness “hardly moved in overall urban areas,” rising 0.4 points quarter-on-quarter to 23.2% in June. SWS added in rural areas, adult joblessness fell 8.5 points quarter-on-quarter to 16.2%.
SWS also found in its June Survey “found the adult labor force participation rate at 68.3%, or an estimated 43.8 million adults.”
The labor force participation rate is the percentage of people deemed of working age who are at work. The Philippine Statistics Authority defines the labor force as those 15 years and over, both employed and unemployed.
SWS said the participation rate fell from 71.4% — an estimated 45.8 million adults — from three months earlier.
Survey participants who said they were optimistic about the job market fell by 2 percentage points quarter-on-quarter to 47%. Those who marked themselves as pessimists rose 3 percentage points to 15% in June 2018.
Net optimism on job availability at +32 was deemed “very high,” SWS said. “Very high” is the second-highest of seven tiers after “excellent” (+40 and above). The lowest tier is “very low” at -10.
The non-commissioned survey was conducted between June 27 and 30 via face-to-face interviews with 1,200 participants nationwide. — Gillian M. Cortez

Renowned pianist returns to the CCP

INTERNATIONAL pianist Monique Duphil returns to Manila to open the 36th season of the Philippine Philharmonic Orchestra (PPO) tonight, 8 p.m., at the Main Theater of the Cultural Center of the Philippines.
Hailed by critics for her “flawless technique, power, and a sound, lively musical imagination,” Ms. Duphil is the featured soloist of the PPO season opener under the baton of PPO music director Yoshikazu Fukumura.
Ms. Duphil will perform Maurice Ravel’s Concerto in G Major, a piece that was written by the composer for one of Ms. Duphil’s very own teachers, the celebrated Marguerite Long. Ravel dedicated this concerto to Long and on the first page of the score are the words “A Marguerite Long.”
Ms. Duphil considers Long as one of her most important teachers for many years. She was nine years old when she started studying with Long.
Long, who is regarded as France’s foremost woman pianist during the first half of the 20th century, premiered Ravel’s Concerto in G Major in 1932 to great acclaim. Her debut of the piece has been regaled as “legendary” by music historians.
Ravel’s Concerto in G Major is described by Zoran Minderovic in allmusic.com as a “splendid orchestration, which tempts the listener to experience this work as a brilliant, and almost self-sufficient, demonstration of sheer musical color, reflects the composer’s interest in jazz, evidenced by trombone glissando and similar effects.”
Ms. Duphil’s forthcoming performance will be her second at the CCP. She performed with the PPO and conducted piano master classes in 2017.
The PPO’s 2018–2019 season, its 36th, also marks the Orchestra’s 45th founding anniversary. For more information, call the CCP Box Office (832-3704), TicketWorld (891-9999) or visit culturalcenter.gov.ph.

1...11,96511,96611,967...14,238Page 11,966 of 14,238
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube