Grab to ‘find roles’ for over 500 Uber employees
Grab said it will find roles for Uber employees in Southeast Asia following the upcoming integration of operations with the sale of Uber’s operations in the region to Grab.
“We understand it’s been an emotional and trying day for Uber’s employees in Southeast Asia. On the part of Grab, we are committed to try to find roles for over 500 Uber employees. In addition, we will find roles for their contract staff. We will be having conversations with all +500 employees on how they would fit into Grab. In the meantime, all Uber employees are on paid leave.
We have faith that many of Uber’s employees are as committed to improving the lives of people in Southeast Asia as we are. We look forward to welcoming them to the Grab family,” the company said in a statement.
On Monday, March 26, both firms announced that Uber has agreed to sell its Southeast Asian business to Grab. Uber will take a 27.5% stake in Grab and Uber CEO Dara Khosrowshahi will join Grab’s board. Grab was last valued at an estimated $6 billion. — Patrizia Paola C. Marcelo
MICC starts review of suspended mines
THE REVIEW of 26 erring mines has begun, the Mining Industry Coordinating Committee (MICC) said over a year since the Department of Environment and Natural Resources (DENR) ordered them to be closed or suspended.
In a statement, MICC co-chair Department of Finance (DoF) said the three-month “fact-finding and science-based” review has started following a meeting on March 7.
Finance Secretary Bayani H. Agabin said they tapped 25 experts clustered into five groups to conduct the first phase of the review, addressing the legal, technical and environmental concerns from mining operations.
“When we were looking at this, we set the period for review for three months. But when the teams were formed, the concern, especially on the economic study, is that they will need the inputs from the technical, the legal and the environment,” Mr. Agabin was quoted in the statement as saying. — Elijah Joseph C. Tubayan
DoF expects remaining tax reform packages approved this year
THE DEPARTMENT of Finance (DoF) is confident that Congress will stick to the planned 2018 approval of all of its succeeding tax reform proposals, following the filing of the corporate tax package last week.
“With the timely filing of the measure in the House, we are optimistic that this proposal, along with the remaining tax reform packages, would be approved by the Congress within the year,” Finance Secretary Carlos G. Dominguez III said in a statement on March 27.
House ways and means committee chairman Rep. Dakila Carlo E. Cua, along with Reps. Aurelio D. Gonzales, Jr., and Raneo E. Abu filed House Bill No. 7458 on March 21 before the session adjourned for a seven-week break.
The bill mainly proposed an annual 1% cut from 30% to 20% starting 2019, while removing tax incentives in areas not included in the Strategic Investment Priorities Plan (SIPP).
However, this was different from the conditional 1% cut per P26 billion collected from streamlining the tax perks that the DoF proposed to Congress last Jan. 16. — Elijah Joseph C. Tubayan
Palace: Classes, government work suspended tomorrow noon
Work in government offices including government-owned and controlled corporations (GOCC) and local government units (LGUs), as well as classes in all public schools, state universities and colleges will be suspended on Wednesday, March 28, starting at 12 o’clock noon.
The Palace made this announcement in Memorandum Circular no. 43 issued by the Office of the President and signed by Executive Secretary Salvador C. Medialdea on Tuesday, March 27.
The purpose of the said work suspension, according to the memorandum, is to “enable government workers to prepare for their observance of Holy Thursday and Good Friday.”
“However, those government agencies whose functions involve law enforcement, response actions to disasters and calamities and/or performance of other vital services shall make available standby services or arrangements to meet any contingencies.”
Mr. Medialdea said “the suspension of work in other branches of government and independent bodies, as well as in private companies and offices is left to the sound discretion of their respective administrators.” — Arjay L. Balinbin
Learn about Philippine architecture with iMake History Fortress
Brick on top of brick. It could describe the fortresses in Intramuros, or playing with LEGOs.
At the iMake History Fortress at Baluarte de Santa Barbara at Fort Santiago, you can enjoy both at the same time. Intramuros Administration, in collaboration with the Embassy of Denmark and Felta Multimedia, Inc., the exclusive partner of LEGO Education in the Philippines, turned what was once a dungeon for Filipino dissidents into a learning hub for architecture.
Using LEGOs, artists and students made scale models of exemplary Filipino‑Spanish buildings, some which were not able to stand the ravages of time. There are also examples of LEGO robotics, like a spinning windmill and a life‑sized Philippine eagle that can extend its seven‑foot wingspan. There’s also a hub where you can create LEGO buildings of your own, with sample patterns like the National Museum and the Manila Central Post Office.
Architecture students from the University of Santo Tomas won first place and most innovative at the iMake History Fortress Architecture Scale Model Competition, with their scale model of the Lourdes Church. Also known as the National Shrine of Our Lady of Lourdes, the original church structure that once housed two sculptures of the Virgin Mary was not able to withstand the bombings of Intramuros during World War II. Using the blueprints provided to them by Felta, UST students were able to make a 1:100 scale model of the old church structure. Their model, along the other top ten entries, will be on permanent display at lower floor of the iMake History Fortress.
“LEGO is a good tool for learning history and architecture,” said Emman Estevan, part of the UST team that created the Lourdes Church model, during an interview with SparkUp at the iMake History Fortress preview last March 19. “In other countries they’re already use LEGOs to visualize structures. Here in the Philippines it’s not being fully integrated in the architecture curriculum probably because LEGOs are expensive here.”
It took Estevan and his team a week of planning and a combined 48 hours of work to build the scale model. Then they had to make a two minute video to go with their work to submit to the contest. He looks forward to using LEGO again in future projects. “At first it was hard, but as we progressed we understood the pattern and it made it easier for us to work.”
LEGOs can be an important tool in learning architecture and architecture, said LEGO Education regional manager for Southeast Asia Brian Dam. “LEGO is a very good way of letting your creativity go and building things that you’ve seen in real life,” Dam told SparkUp. “I think combining that with the teaching of history is a strong combination.”
For the LEGO executive, creativity can save the world. “I believe that creativity is key and not to sound apocalyptic, but if we are to survive as a species we need to think creatively,” said Dam. “We have limited oil, we have limited resources in general so we need to be creative and find solutions to maintain and develop, otherwise it will go in another way that we don’t like.”
Consumers less bullish as 2018 starts
By Melissa Luz T. Lopez
Senior Reporter
FILIPINO CONSUMERS turned less upbeat as the year opened due to expectations that prices of goods would keep rising, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.
The latest Consumer Expectations Survey (CES) yielded a 1.7% net confidence score for January-March, plunging from 9.5% during the fourth quarter of 2017 and the 8.7% recorded in last year’s first three months.
The first-quarter reading is likewise the lowest since a -6.4% net score in the second quarter of 2016.
The central bank conducted the survey among 5,569 households last Jan. 24-Feb. 3.
A positive reading means optimistic respondents still outnumbered pessimists.
Respondents were asked on local economic conditions and their family’s financial situation and income.
“For the first quarter of 2018, consumer confidence waned across all three indicators due to the anticipated increase in prices,” Rosabel B. Guerrero, senior director of BSP’s Department of Economic Statistics, said in a press briefing.
More consumers have remained optimists, as reflected by a positive confidence index, since the third quarter of 2016, when President Rodrigo R. Duterte assumed office. Prior to that, quarterly confidence scores were negative, showing that more residents were doubtful of local prospects.
Respondents grew less sanguine due to higher prices of goods, low income, and rising household expenses, the BSP said in a report. An increase in household debt, poor harvest and the occurrence of typhoons and other calamities are also sources of concern for consumers.
Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) law that took effect Jan. 1, reduced personal income tax rates but offset foregone revenues by removing some value-added tax breaks; raising fuel, automobile, mineral and coal excise tax rates, among other items; as well as imposing new levies on sugar-sweetened drinks and cosmetic surgery.
More low-income households said they were pessimistic, with the net score falling to -8.5% from -0.6% previously. Middle and high-income families remained upbeat, but less so when compared to a quarter ago.
Respondents also turned less bullish for the next three months, with the reading falling to 8.8% from 17.5% in 2017’s fourth quarter and a year-ago 16.5%.
The same held true for the year ahead, with the reading easing to 24% from 32% and 31.7%, respectively.
Respondents expect prices to keep rising in the months ahead, with the BSP noting that “Increased spending was expected on electricity, food, non-alcoholic and alcoholic beverages, fuel, water and transportation, indicating the inflationary pressures could come from these goods and services.”
Fewer families also expect to make big-ticket purchases. “There could be some moderation in household consumption… but it remains to be seen how consumers will act later on when they adjust to the prices that they see,” BSP Assistant Governor Francisco G. Dakila, Jr. said separately when asked about growth prospects for the quarter.
Households also grew bearish on the Philippine economy, with a net score of -0.1% reverting from the fourth quarter’s 10.9%.
Consumers expect inflation to pick up further to average 4.7% this year under 2006 prices, well above the 2-4% target range set by the BSP. Interest rates and unemployment are also seen to keep rising, while the peso is expected to weaken further versus the dollar.
Central bank rolls out new coin series design
THE BANGKO SENTRAL ng Pilipinas (BSP) has rolled out new designs for coins, with the latest currency series to come in silver but carry varying features for distinction.
BSP Deputy Governor Diwa C. Guinigundo unveiled the new generation currency (NGC) coins on Monday, saying that the central bank will “start releasing” the designs to the public via banks.
The coins are made of nickel-plated steel to be more durable, resulting in a metallic silver color for all denominations. This will likewise deter illegal hoarding for the extraction of metal content, which was a problem for the old set of coins.
The varied sizes and designs of the series should enable the public to distinguish one from the other, Mr. Guinigundo said, explaining that consumers should feel the coins and realize that “it is difficult actually to make a mistake” in setting each one apart.
The series varies in diameter from the 27-millimeter (mm) P10 coin to the 15-mm one centavo.
The new P10 coin will carry the head shot of hero Apolinario Mabini one one side and a stylized kapa-kapa plant on the reverse. The coin’s edge carries continuous lines with a stylized lettering of the words “Bangko Sentral.”
The new P1 coin under the new design carries the face of national hero Jose Rizal and the waling-waling flower at the back. Its edge bears intermittent reeds.
The 25-centavo, five-centavo and one-centavo coins will carry the iconic three stars and a sun design on a stylized rendition of the Philippine flag.
The 25-centavo will come with the katmon flower and a plain edge; the five-centavo will have the kapal-kapal baging plant and an edge with reeds; while the one-centavo coin will have the mangkono plant and a plain edge.
The P5 coin, circulated as early as December last year, carries the face of Andres Bonifacio — replacing former president Emilio Aguinaldo — and the tayabak plant on the reverse. The coin comes with a smooth edge.
The coins also carry enhanced security features, including micro-printed details using laser technology for the P5 and P10 denominations to deter counterfeiting.
At the same time, the BSP has decided to drop the 10-centavo coin in response to low use.
Initial production involved 139.567 million pieces of the new coin series, BSP officials said.
Coins currently in circulation have been in use since 1995.
Mr. Guinigundo said the BSP has not yet set a demonetization schedule for the old coins and that these will still be accepted for day-to-day transactions alongside the new coin series.
The BSP has the sole authority to issue money for general use.
Central banks regularly change the design of bills and coins to elevate security standards against counterfeiting.
The central bank prints bills and mints coins at its Security Plant Complex along East Avenue in Quezon City. The new coin series is expected to reduce minting expenses for the BSP, as nickel is a lot cheaper than metal alloy.
This follows the NGC bills released by the BSP starting 2010, which replaced the 1985 design series for paper money. The old bills have been rendered unusable for day-to-day transactions since 2016.
Under the New Central Bank Act, the BSP can replace money which have been in use for over five years. — Melissa Luz T. Lopez
Uber sells Southeast Asian business to Grab
SINGAPORE/SAN FRANCISCO — Ride-hailing firm Uber Technologies, Inc. has agreed to sell its Southeast Asian business to bigger regional rival Grab, the firms said on Monday, marking the US company’s second retreat from an Asian market.
The industry’s first big consolidation in Southeast Asia, home to about 640 million people, puts pressure on Indonesia’s Go-Jek, which is backed by Alphabet, Inc.’s Google and China’s Tencent Holdings Ltd.
A shake-up in Asia’s fiercely competitive ride-hailing industry became likely earlier this year when Japan-based SoftBank Group Corp.’s Vision Fund made a multi-billion dollar investment in Uber.
“It was really a very independent decision by both companies,” Grab President Ming Maa told Reuters, adding that SoftBank Chief Executive Officer (CEO) Masayoshi Son was “highly supportive.”
Uber will take a 27.5% stake in Singapore-based Grab and Uber CEO Dara Khosrowshahi will join Grab’s board. Grab was last valued at an estimated $6 billion.
“It will help us double down on our plans for growth as we invest heavily in our products and technology,” Mr. Khosrowshahi said in a statement.
For Grab, the deal will help its meal-delivery service, which will now merge with Uber Eats, compete with Go-Jek, according to a person close to Grab.
Go-Jek is a dominant player in Indonesia, the region’s biggest economy, and has rapidly expanded beyond ride hailing to digital payments, food delivery, on-demand cleaning and massage. “Go-Jek is such a different app, with different behaviors; it is something I can’t see Grab competing with well in Indonesia for a long time, like at least a year,” said Vinnie Lauria, partner at Southeast Asia’s Golden Gate Ventures.
Ride-hailing companies throughout Asia have relied heavily on discounts and promotions, driving down profit margins and increasing pressure for consolidation.
Uber, which is preparing for a potential initial public offering in 2019, lost $4.5 billion last year and is facing fierce competition as well as a regulatory crackdown in Europe.
Uber invested $700 million in its Southeast Asia business, less than the $2 billion it burned through in China before ceding its operations there to Didi.
MORE CONSOLIDATION
Uber anticipated making more deals with rivals, but said it had no plans to do another sale in which it consolidates its operations in exchange for a minority stake in a rival.
“It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind… The answer is no,” Mr. Khosrowshahi said in a note to employees that was shared with Reuters.
“One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors.”
A source familiar with Uber’s strategy said that the company was going to step up its battle with Ola in India, another competitive and costly market where rivals have heavily subsidized rides in an effort to gain market share.
Uber has close to 60% of the market there, by some estimates.
India accounts for more than 10% of Uber’s trips globally, but the company is not making money there yet.
“Southeast Asia was really difficult for Uber. In India, that competition is not across so many different fronts,” Mr. Lauria said.
Uber previously retreated from China and Russia under former CEO Travis Kalanick.
The deal with Grab is the first operations sale by Mr. Khosrowshahi, who started in September.
Rajeev Misra, chief executive of SoftBank’s Vision Fund, had urged the company to focus less on Asia and more on profitable markets such as Latin America, according to a person familiar with the matter.
He saw opportunities for mergers and joint ventures between SoftBank-backed ride-hailing companies, particularly for collaborating on R&D, but the investor would never get actively involved with management decisions, the person said.
SoftBank is also one of the main investors in other ride-hailing firms including China’s Didi Chuxing and India’s Ola.
Uber includes the United States, Australia, New Zealand and Latin America among its core markets – regions where it has more than 50% market share and is profitable or sees a path to profitability.
A Grab spokeswoman said that all Uber employees in its Southeast Asia operations would be offered employment in Grab. — Reuters
Duterte plans to have dialogue with Moro leaders next week
President Rodrigo R. Duterte said on Monday, March 26, that he expects to sit down next week with Moro leaders to finally “find solutions” to the long-standing armed conflict in Mindanao.
“We have to talk and talk until we find a solution. I cannot give you a timeline now, simply because I am busy. But next week, I will expect you the whole day for us to talk. It will really have to be one whole day,” Mr. Duterte said in his speech during the handover ceremony of loose firearms and presentation of Abu Sayyaf surrenderees in Patikul, Sulu.
“By the end of the day, we should come up with something that’s very solid. And that’s the time that I would talk to Nur (Misuari) and Murad (Ebrahim),”the President added. Mr. Ebrahim is the chairman of the Moro Islamic Liberation Front (MILF) while Mr. Misuari is the founder of the Moro National Liberation Front (MNLF).
One of the issues that Mr. Duterte intends to discuss with the Moro leaders is whether it is possible for the Muslims of Sulu to be lumped with their brothers and sisters from mainland Mindanao.
“I am worried. Would it do well to mix [you] all in one pot? Meaning to say, you people of Jolo, are you ready to be led by a Maranao?” the President said.
“That is the problem now while the proposed Bangsamoro Basic Law (BBL) is being processed in Congress. Who heads what? Should the [Bangsamoro State be] divided [into two regions] or should they be put together under one governing authority? Who would it be? That’s why I need to talk to you, and I want to finish it this year.”
Mr. Duterte stressed that his government wants the issue “solved to the best way that is acceptable” to all parties concerned.
The President also reiterated his wish for Filipino rebels to stop their illegal activities, especially hijacking cargo vessels from Indonesia, Malaysia, and Vietnam.
He said leaders of those countries, like Indonesia’s Joko Widodo, “may lose confidence” in him.
“It will create uncertainty…I’d like to tell you now, if somebody is listening, stop it. Stop it!”
He explained: “Ultimately, if they ask: ‘What caused the fall of the Philippines economically and everything?’ ‘It’s because of the Abu Sayyaf and the NPA.’ ‘Who are they?’ ‘Moros and Christians—Filipinos.’”
“Come to me, I will listen. You also listen to me. Let us have a good dialogue, so that when the BBL comes, I know what to do,” Mr. Duterte added.
Whether he intends to extend his term, the President said: “Do not be afraid. I am old. I have no intention to extend my term. You just do not know how exhausting it is [to be president].”
He said his only interest is for his “grandchild to become mayor of Davao City.”
In his speech at the general assembly of the League of Municipalities of the Philippines (LMP) last week, Mr. Duterte mentioned that he supports the banning of political dynasties in the country.
“A few of the principled men, I would say, want this kind of thing about dynasty [being] abolished. I am for it. Ang problema, lulusot ba ‘yan? (The problem is, will it get approved?),” the President said. — Arjay L. Balinbin
Megaworld sets aside P60 billion for 2018 capex
MEGAWORLD Corp. is keeping its capital expenditures steady for 2018, after it booked a double-digit growth last year fueled by the strong sales from its residential, office, hotel, and commercial space leasing businesses.
In a statement issued Monday, the Andrew L. Tan-led firm said it will be allotting P60 billion for capital spending this year, the same amount it committed to spend in 2017.
About 80% of the 2018 capex will go to the development of residential, office, and commercial developments within Megaworld’s townships. The company will use the remaining 20% for land acquisition and other investment properties.
“The Megaworld Group is now present in more than 30 cities around the country. We will continue to be aggressive in developing more townships and integrated lifestyle communities across the country, most especially in the provinces,” Megaworld Senior Vice-President and Treasurer Francisco C. Canuto said in a statement.
The listed property developer’s continued spending followed the 12.7% increase in its attributable profit to P12.8 billion in 2017. Consolidated revenues of the company climbed 7.7% to P50.4 billion from 2016’s P46.8 billion.
The residential segment accounted from around 70% of the firm’s total revenues at P34.6 billion, up 4.5% year on year.
Megaworld’s rental business, covering office and commercial space leasing, saw the biggest improvement last year after jumping 18.2% to P11.8 billion.
“We are still way beyond our targets and we see this momentum to continue until we reach our P20-billion target in annual rental income by 2020, or even beyond that. There are still so much opportunities to tap in the property market and we are ready for that,” Mr. Canuto said.
Megaworld has earlier announced its target of generating P20 billion in annual rental income in the next two years. To achieve this, the company aims to have 28 shopping malls by 2020, from its current network of 15. Lifestyle malls will account for half of the P20-billion target, while offices will contribute the remaining half.
The company ended 2017 with a total of 23 integrated urban townships, containing more than 660 residential projects, 54 office towers, and 15 lifestyle malls. Among the company’s townships are the 35-hectare Maple Grove in General Trias, Cavite; McKinley Hill, McKinley West, Uptown Bonifacio, and Forbes Town in Taguig City, and Boracay Newcoast in Boracay Island.
Megaworld is the property arm of Alliance Global Group, Inc., which also has core interests in liquor, gaming, and quick service restaurants.
Shares in Megaworld lost 13 centavos or 2.79% to close at P4.53 each at the stock exchange on Monday, along with the main index that dropped by 0.48% to 7,932.38 due to lingering fears of a trade war. — Arra B. Francia
Cebu Air profit declines 19% on higher fuel prices
CEBU AIR, Inc. saw its net income fall 19% to P7.91 billion in 2017, as expenses rose on higher fuel prices and the peso’s depreciation against the US dollar.
In a regulatory filing, the listed operator of budget carrier Cebu Pacific said revenues went up 9.9% to P68.03 billion for the year ending Dec. 31, 2017, from P61.9 billion recorded in the previous year.
Cebu Air attributed the increase in revenues mainly on a 7.2% jump in passenger revenues to P49.93 billion last year. Passenger volume grew 3.2% to 19.7 million in 2017, as the Gokongwei-led company increased the number of flights by 3.6%.
Cargo revenues rose by 29.2% to P4.60 billion in 2017, after higher cargo volume and yield.
Ancillary revenues went up 14.9% to P13.49 billion, driven by a 3.2% increase in passenger traffic and 11.3% rise in ancillary revenue per passenger. Cebu Air attributed this to “improved online bookings, pricing adjustments and introduction of new ancillary revenue products and services.”
However, Cebu Air saw a 16.6% surge in operating expenses to P57.9 billion in 2017.
“The increase was primarily due to the rise in fuel prices in 2017 coupled with the weakening of the Philippine Peso against the US Dollar as referenced by the depreciation of the Philippine Peso to an average of P50.40 per US Dollar for the year ended Dec. 31, 2017 from an average of P47.50 per US Dollar last year based on the Philippine Dealing and Exchange Corp. (PDEx) weighted average rates,” the company said.
“The growth in the airline’s seat capacity from the acquisition of new aircraft also contributed to the increase in expenses,” it added.
The bulk of expenses came from flying expenses, which rose 21.2% to P23.86 billion in 2017. Cebu Air said this was due to a 24% surge in aviation fuel expenses to P19.6 billion, as jet fuel prices increased to $65.31 per barrel for the 2017, from $52.83 per barrel in 2016.
Aircraft and traffic servicing expenses jumped 17.2% to P7.706 billion, after Cebu Air added more domestic flights and increased frequencies on existing routes.
Among the domestic routes opened in 2017 were the Zamboanga-Cagayan de Oro, Zamboanga-Cotabato, Cebu-Masbate, Davao-Dumaguete, Davao-Tacloban, and Manila-Siargao routes. Cebu Pacific also increased frequencies in the Manila-Sydney route, as well as for flights to Nagoya and Narita in Japan and Hanoi in Vietnam.
“Higher expenses were also attributable to operating more flights using the bigger Airbus A330 aircraft for which airport and ground handling charges were generally higher compared to other aircraft types,” the company said.
Between this year and 2022, the budget carrier expects delivery of 47 brand new aircraft, composed of seven Airbus A321ceos, 32 Airbus A321neos, and eight ATR 72-600s.
Cebu Air recorded foreign exchange losses of P797.98 million in 2017, due to the weakening of the peso against the US dollar.
“The Group’s major exposure to foreign exchange rate fluctuations is in respect to US Dollar denominated long-term debt incurred in connection with aircraft acquisitions,” it said.
Shares for Cebu Air were down P3.90 or 4.15% to end at P90. — Patrizia Paola C. Marcelo