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Robust sales boost SSI bottom line in Q2

EARNINGS of SSI Group, Inc. increased by 8% during the second quarter, fueled by a 13% growth in same-store sales.
In a regulatory filing, the listed specialty store retailer said its second quarter net income went up to P150.4 million year-on-year as strong sales growth and rationalized expenses helped offset the effects of a weaker peso.
This brought its first half net income 3% higher to P283.3 million.
Revenues increased by 14% to P4.67 billion during the April to June period, and by 11% to P9.3 billion for the first six months of 2018.
SSI said its same-store sales growth (SSSG) stood at 13.4% and 11.6% during the second quarter and the first half, respectively.
“SSI experienced robust growth in net sales during the first half of the year driven by strong consumer demand. This is reflected in the very strong performances of the Group’s brands under the luxury, bridge, and casual categories. This is despite the fact that the Group’s total selling space decreased by 7.4%,” the company said.
As of end-June, its store network stood at 616 covering 124,333 square meters, versus 665 stores covering 133,816 sq.m. a year ago. During the April to June period, SSI Group opened four stores and closed 14 stores.
Fast fashion accounted for the bulk of SSI’s first-half sales at P3.33 billion, up 5% year-on-year. This was followed by luxury & bridge lines at P2.23 billion, surging 24%.
SSI’s portfolio had 100 brands as of end-June, including Prada, Gucci, Zara, Gap, Old Navy, Burberry, Marks & Spencer, Lacoste, Muji and Payless.
Operating expenses rose 2% to P1.74 billion during the second quarter, bringing the first-half figure to P3.45 billion, up 0.7%.
“Operating expenses as a percentage of net sales significantly improved to 37.3% as compared to 40.9% in 2017. Operating expenses increased at a slower rate than sales as the Group continued to benefit from its store rationalization program and from its focus on maximizing scale and improving cost efficiencies,” SSI said.
SSI expects sales to peak during the fourth quarter, as consumers shop more ahead of the Christmas and New Year holidays.
“We saw double digit same store sales growth during the 2nd quarter of the year as our brand portfolio and store network continued to benefit from resilient mid and high end discretionary spending and we expect that margins will continue to firm up as the year progresses,” Anthony T. Huang, SSI Group president, was quoted as saying in a separate statement.
SSI is planning to open e-commerce sites for the brands Lush, Dune and Aeropostale as well as re-launch its marketplace ssilife.com.ph within the second half. — CRAG

DoubleDragon profit surges in 2nd quarter

DOUBLEDRAGON Properties Corp. on Tuesday said its second quarter consolidated net income more than doubled to P513.5 million, boosted by rental revenues from its community malls and offices.
In a statement, DoubleDragon said its consolidated net income jumped 144% to P513.5 million during the April to June period, from P210.7 million a year ago.
For the January to June period, the listed property developer reported its consolidated net income surged 234% to P1.26 billion.
Recurring revenues increased by 216% to P883.29 million for the three months ending June 30, fueled by the 358% surge in rental revenues to P749.95 million.
During the first half, consolidated revenues went up 123% to P3.63 billion, while recurring revenues rose 199% to P1.41 billion. Rental income also more than quadrupled to P1.16 billion.
“Recurring revenues now accounts for 39% for the first half of 2018 vs. only 29.0% during the same period last year as the Company becomes closer to its goal of becoming a 90% recurring revenue company by 2020,” DoubleDragon said.
DoubleDragon Chief Investment Officer Hannah M. Yulo said this is the first time the value of its investment properties exceeded the P50 billion mark, now at P51.2 billion as of end-June.
“Our financials are now clearly harvesting the hard work we have put into intricately building a valuable leasing portfolio. These are solid revenue contributions that are recurring in nature and will continue to grow organically as we increase our rental yields,” she was quoted as saying.
DoubleDragon targets to have a leasable portfolio of 1.2 million square meters (sq.m.) by 2020. This will include 700,000 sq.m. from 100 CityMalls, 300,000 sq.m. from Metro Manila office projects, and 100,000 sq.m. from 5,000 hotel rooms under the Hotel 101 and JinJiang Inn Philippines brands.
“The reason why we are so fixated in hitting our 1.2 million sq.m. leasable target by 2020 is because the math is simple. With 1.2 million sq.m. of leasable space, yielding say an average of P750 per square meter per month by that time, this should give the Company total annual recurring revenues of P10.8 billion,” DoubleDragon Chairman Edgar “Injap” J. Sia II was quoted as saying in the same statement.
“This rental income practically translates to about 90% EBITDA margin because in addition to rent, developers collect maintenance fees from tenants which covers operating expenses of each property,” he added. — CRAG

Energy unit boosts Lopez Holdings’ second-quarter earnings

LOPEZ Holdings Corp. reported a net income of P1.03 billion in the second quarter, higher by 43% compared with year ago’s P721-million profit attributable to the equity holders of the parent firm, with the stable showing of its energy unit boosting the quarterly results.
“The stable performance of the energy group under associate First Philippine Holdings Corporation (FPH) accounted for the results,” the company said in the statement.
In the first half, Lopez Holdings said net income reached P2.17 billion, up 23.3% from P1.76 billion in the same semester last year.
Lopez Holdings serves as the holding firm of the Lopez family for its investments in major development sectors.
FPH recorded a net income attributable to the parent firm’s equity holders of P1.95 billion, more than three times higher than the P607 million posted a year ago.
In the first six months, FPH registered a net income of P4.05 billion, up 60.7% from P2.52 billion a year ago.
“Unfavorable forex movement during the period partially offset the effect of growth in the recurring earnings of the FPH Group. ABS-CBN [Corp.] revenues declined by 2% while expenses increased by 4%,” Lopez Holdings said.
ABS-CBN recorded a 41% decrease in net income during the period, the holding firm added. As of mid-2018, Lopez Holdings owned 47% of FPH and 56% economic interest in ABS-CBN.
Energy unit First Gen Corp. posted a net income of $45.19 million, nearly three times more than $16.70 million in the same quarter last year. The company reports its figures in dollars, its functional currency.
In a statement, the company said its first half reported recurring net income attributable to the equity holders of the parent reached $115 million, up 35% from a year ago.
“The gas portfolio thrived during this period, especially San Gabriel and Avion that have been able to achieve remarkable turnarounds this year as they delivered much needed power to the grid,” said First Gen. President and Chief Operating Officer Francis Giles B. Puno in a statement.
“For the second half of 2018, San Gabriel shifts to being a contracted provider of electricity to Meralco (Manila Electric Co.) allowing it to achieve stable earnings. This contract proves the price competitiveness of natural gas-fired power versus coal-fired power even at baseload and more so at mid-merit levels of dispatch,” he added.
First Gen said the natural gas platform’s performance offset the soft showing of the other platforms. It said the period’s “strong numbers” were also boosted by lower interest expenses as a result of its deleveraging initiatives.
During the first half, the natural gas platform delivered recurring earnings of $88 million, up from $51 million previously.
On Tuesday, shares in Lopez Holdings fell 2.06% to close at P4.27 each, while those of FPH declined by 0.32% to P63.20 apiece. First Gen shares slipped by 0.38% to P15.90 each. — Victor V. Saulon

FDC doubles profit in Q2

FILINVEST Development Corp. doubled its net income attributable to equity holders of the parent company to P3.4 billion in the second quarter, from P1.74 billion during the same period a year ago, on strong real estate sales.
In a regulatory filing, the Gotianun-led holding company said its attributable net income rose 66% to P5.42 billion during the first six months of 2018, from P3.26 billion a year ago.
Second-quarter revenues stood at P19.2 billion, up 21%, bringing the six-month figure to P36.45 billion, up 12%.
The real estate business under Filinvest Land, Inc. accounted for the bulk of revenues. For the April to June period, real estate operations generated P7.65 billion in revenues, 56% higher than the same period a year ago.
For the first half, real estate revenues climbed 31% to P14.84 billion, “backed by a 30.9% growth in real estate sales and 29.9% growth in rental and related services.”
This brought net income from real estate operations 60% higher to P4.69 billion for the first semester, from P2.9 billion a year ago.
FDC’s banking and financial services business recorded a first-half net income of P2.03 billion, 14% lower than last year’s figure due to lower-than-expected results from East West’s rural bank unit.
Power generation operations, under FDC Utilities, Inc., saw a 234% surge in six-month net income to P765.7 million, as revenues from coal power plant and retail electricity operations grew by 29%.
Net income from FDC’s sugar business jumped 62% to P327.4 million for the first six months, as sugar sales improved.
Hotel operations posted a 26% rise in profit to P93.3 million as of end-June 30. Filinvest Hospitality Corp. has 1,591 rooms in four properties under the Crimson and Quest brands.
“We believe that our investments in power and infrastructure can yield returns that balance out our more cyclical business segments. Steady and stable revenues from the rental, power, sugar and infrastructure sectors will help to smooth out the waxing and waning of the business cycle. In addition, investing in airport infrastructure will complement our projects in hospitality and BPO rental properties,” FDC President and CEO Josephine Gotianun Yap was quoted as saying in a separate statement.

ASEAN artists come together in a 3-part show


ON AUG. 8, 1967, the founding members of the Association of Southeast Asian Nations (ASEAN) — the Philippines, Malaysia, Indonesia, Singapore, and Thailand — signed a document (later known as the ASEAN Declaration) describing the region as “bound together by ties of history and culture.”
To conclude the commemoration of ASEAN’s 50th anniversary, the Philippines marks the occasion by hosting a contemporary art exhibit. Presented by the National Commission for Culture and the Arts (NCCA) through the Dalubhasaan Para sa Edukasyon ng Sining at Kultura (DESK) and with the support of the Office of Senator Loren Legarda, the exhibit, titled Ties of History: Art in Southeast Asia, features artworks by 10 artists — one from each ASEAN member state.
The exhibit is a “survey of contemporary art,” and “a diligent study of a particular practice” which allows the audience to look into the artists’ interests. The works are mounted in three major art institutions — the Metropolitan Museum of Manila, the University of the Philippines’ Vargas Museum, and the Yuchengco Museum in Makati.
The participating artists are: Amanda Heng (Singapore), Roberto Feleo (Philippines), Anusapati (Indonesia), Do Hoang Tuong (Vietnam), Chris Chong Chan Fui (Malaysia), Yasmin Jaidin (Brunei), Min Thein Sung (Myanmar), Vuth Lyno (Cambodia), Jedsada Tangtrakulwong (Thailand), and Savanhdary Vongpoothorn (Laos).
According to the exhibit curator Patrick D. Flores, the project began when NCCA Chairman and National Artist for Literature Virgilio Almario “found it important to commemorate” the 50th anniversary of ASEAN and wanted the exhibition to be spread throughout the metropolis.
“I thought of a curatorial process to involve three museums. I chose 10 artists to represent each ASEAN nation state, and each artist will showcase three types of work for each museum,” Mr. Flores told BusinessWorld shortly after the exhibit opening at the Yuchengco Museum on Aug. 9.
“As a curator, I wanted [to mount the exhibit] in different types of museums,” Mr. Flores said, noting that the Yuchengco museum is a corporate museum — most of the artists’ early works are on display there — while UP Vargas is a university museum and the experimental works and videos are on view there. The Metropolitan Museum, as a contemporary art museum, is where the installations are mounted. “Exhibitions are always site specific and [the] site also creates a dimension for the work,” he said.
THE ARTWORKS
The various early works of the participating artists at the Yuchengco Museum present their attitude on colonialism, nature, and personal experiences.
Representing the Philippines is sculptor and painter Roberto Feleo with his early works are from the sapin-sapin series of the 1970s and ’80s. “When I started painting, I had a problem of knowing what makes the work unique and what makes the work a signature piece,” he told BusinessWorld. Mr. Feleo’s research on Philippine representations in art made him use the layering of plywood. His other featured works in the exhibit include paintings inspired by the 1807 Basi Revolt in Ilocos Norte when Ilocanos fought against the Spaniards for prohibiting them from selling basi (sugarcane wine).
Thai artist Jedsada Tangtrakulwong’s Deserted Buildings (2008) features 23 manga comics with their contents cut out, leaving only the borders of the comic panels. “I remove all the character because when we look at the manga we always read for the story or content,” Mr. Tangtrakulwong said. Copies of the original manga are free for guests to go through and appreciate the material per se.
Myanmar’s Min Thein Sung worked in a large coffee shop after graduating from university. At the coffee shop, he found himself stressed and the schedule monotonous. He found respite in his visits to the restroom which inspired his 2008 work.
“One day, I realized when used the toilet that it just solving the problem of the physical. I was thinking, ‘Why did they give the restroom its name?’” Mr. Sung told BusinessWorld.
For his work titled Restroom, Mr. Sung made a toilet bowl from paper mache and travelled with it to various countries. Aside from the physical relief of the toilet, Mr. Sung thought of vacation as the relief for the mind. He then travelled with the paper mache toilet bowl and took pictures of it in isolated places, from beachfronts to meadows.
Amanda Heng of Singapore explores gender identity and her relationship with her mother in her work. Dear Mother (2009) shows a text installation and photograph of a woman’s chest with hands covering her breasts and another of a hand touching a woman’s back. “I wanted to express the relationship between my mother and myself but also mother and daughter relationship in general,” Ms. Heng told BusinessWorld.
CONTEMPORARY ART IN SEA
“Contemporary art in Southeast Asia is active and dynamic,” said Mr. Flores. “Before, the impression of art from Southeast Asia was traditional but its not the only kind of art that the Southeast Asia produces. Contemporary art is always in dialogue with tradition. It is also in dialogue with nature, the urban condition, and the changing phase of the countryside,” he noted.
“The Philippines is ready to host these kinds of exhibitions. In the past, the Philippines was only represented, but now we are able to host and invite [others] over here and give our own perspective,” he said.
The exhibition will be on view at the three museums until Oct. 6. — Michelle Anne P. Soliman

Gov’t makes full award of 5-year Treasury bonds

THE GOVERNMENT fully awarded P15 billion worth of reissued five-year Treasury bonds (T-bond) on Tuesday, accepting higher yields as the market priced in rate hikes by the Bangko Sentral ng Pilipinas (BSP).
The Bureau of the Treasury accepted P15 billion in bids as planned, with total tenders reaching P24.52 billion, more than filling the offer size.
The papers, which have a remaining life of four years and six months, fetched an average yield of 5.902%, up 31 basis points from 5.592% in the previous auction.
Prior to the awarding, rates for the five-year bonds at the secondary market were higher at 5.9625%.
At the close of trading yesterday, the bonds were quoted lower at 5.9431%.
Yesterday also marked the first awarding of T-bonds after the government rejected bids for four consecutive auctions. It was also the first fully-awarded long-term debt note since May 30.
National Treasurer Rosalia V. De Leon said bids by banks priced in the three rate hikes implemented by the Bangko Sentral ng Pilipinas (BSP).
“You saw the 31-basis point increase. First of all, the last time we accepted for this security was sometime May. So since May, there’s [an almost] 100-basis point increase in the policy rate. So it’s just catching up, they just repriced,” Ms. De Leon told reporters after the auction.
“It’s more or less aligned with the current rates where we are, given the policy actions of the central bank with the 100 basis points increase,” she added.
In a bid to anchor inflation expectations, the BSP raised its benchmark interest rates by 25 basis points each in May and June and 50 basis points hike last week.
Headline inflation stood at 5.7% in July, bringing the average to 4.5% for the first seven months of the year — exceeding the central bank’s 2-4% target.
Traders interviewed likewise said the increase in yields meant the market was catching up with rising inflation.
“At this point, the yields are catching up. Inflation is still high, although they are expecting that it is still manageable,” a trader said in a phone interview yesterday. “So they have to manage as much as possible — the BSP — to put equilibrium on yields and real interest rate. So far we are behind the curve as much as they deny it. We are behind. But at least they already hiked.”
Another trader meanwhile said yields may continue to rise, as it is still uncertain that inflation could already peak this quarter as estimated by the government and amid external developments, particularly between the US and Turkey.
“For now, we can’t tell if inflation had already peaked. So the yields also haven’t peaked. But once inflation subsides and the economy improves, the yields can settle,” the second trader said in a separate phone interview.
“Because we follow the US Treasuries and they have external problems like with the crisis in Turkey… We are also part of the emerging markets, so we are affected, as well as the yields. They’re risk-off,” the trader added.
Meanwhile, Ms. De Leon said yesterday that the Bureau of the Treasury has already secured necessary approvals for the planned retail Treasury bonds for the rehabilitation of Marawi city worth an indicative P50-60 billion, but the timing of the offering has yet to be determined.
“We’re also looking at how much would be in the budget. In 2019, there would be about P3.5 billion only in the budget for the rehabilitation. So for us, we would only be able to issue…how much would be included in the appropriations provided, netting some of the identified sources of financing coming from ODA (official development assistance),” said Ms. De Leon.
“But in the meantime, we…more or less have already done a lot of the legwork. We have secured the Agri-Agra eligibility of the bonds. We’re also looking at a possibility of doing online retail Treasury bonds. The systems are now being tweaked together with the other possible banks that would also be…doing the issuance and distribution of the bonds,” she added.
The Treasury is set to raise P300 billion from the domestic market this quarter through auctions of securities, offering P195 billion in Treasury bills and another P105 billion in T-bonds.
The government plans to borrow P888.23 billion this year from local and foreign sources to fund its budget deficit, which is capped at 3% of the country’s gross domestic product. — Elijah Joseph C. Tubayan

GMA Network income increases 13% in 2nd quarter

GMA Network, Inc. recorded a 13% increase in its attributable net income to P800.344 million for the second quarter, as revenues recovered slightly.
Despite a positive turnout for the April to June period, the media company’s six-month attributable net income is still 21% lower at P1.219 billion.
In a regulatory filing, GMA Network said net revenues inched up by 1.19% to P3.97 billion in the second quarter. However, the six-month revenue figure fell 6% to P7.24 billion.
“The first semester result was boosted by revenues during the second quarter which came up 22% better versus the recorded topline in the opening three months of this year. Nonetheless, the industry continued to be beset by the downsizing in television ad spend of major clients, consolidated revenues of the Company recorded a 6% decline from same period in 2017, albeit an improvement from the 13% shortfall posted by the end of the first quarter this year,” GMA said.
Consolidated airtime sales, which account for 88% of total revenues, slipped 7% to P6.4 billion in the first six months of the year.
“This year saw a notable contraction in television placements from advertisers, which was felt across the broadcasting industry. Mixed results were seen among airtime-revenue generating platforms, with Radio and Regional TV operations managing to pull ahead in their topline year-on-year, while Ch-7 and GNTV-11 had lukewarm sales in between periods,” GMA said.
GMA’s other revenue sources, which include international operations, subsidiaries and other businesses, went up by 3% to P855.9 million.
The company said its total operating expenses for the first half was flat at P5.573 billion, as the “escalation in general and administrative expenses was mitigated by the drop in production spending.”
Total production costs dropped 4% to P2.929 billion due to reduced spending for production supplies and transportation and communication expenses.
Shares in GMA ended flat on Tuesday to P5.42 each. — Denise A. Valdez

It takes two to dance ballet


By Nickky F. P. de Guzman, Reporter
IF EXPERIENCE is the best teacher, then prima ballerina Lisa Macuja-Elizalde is a straight A-student. For 32 years she danced lead in 350 full-length ballets and performed in 90 cities on five continents. Retired from dancing since 2017, the A-student took on the role of teacher early in her career, melding both theory and practice in her teaching style. Among her best students is Ballet Manila’s guest principal dancer, Katherine Elizabeth Barkman, who is the only ballet dancer to win back-to-back medals from two of the most prestigious ballet competitions in the world.
“When you have danced for as long as I have, you have this arsenal of tools, procedures, and tricks in analyzing and picking methods that might work for a dancer. I’ve been doing it so many times before and I was equipped with these trainings. And when needed, I would pick from this deep pocket of stuff that I have, and sometimes I don’t even know what’s inside,” Ms. Macuja-Elizalde said during a lunch with Ms. Barkman and a few writers.
Under Ms. Macuja-Elizalde’s tutelage, Ms. Barkman bagged the silver medal at the USA-Jackson Mississippi International Ballet Competition (IBC) in June, and just a month later she competed in the Varna IBC in Bulgaria and placed second in the senior women’s category, making her the only ballerina to win consecutive medals in international competitions during their current competition cycle. The Jackson IBC is held every four years while the Varna IBC happens biennially. Ms. Barkman was lucky to join both and win. The two IBCs, together with the Helsinki and Moscow IBCs, are like the Olympics for ballet dancers.
But just like any story of triumph, her journey was fraught with defeats. Last year, the 21-year-old ballerina competed in the Moscow IBC and was cut right after her performance in round 1. She was, naturally, devastated by her fall. “It was like a bad car accident and I wouldn’t want to drive again. It knocked me down big time, and it eliminated all my ounces of confidence in dancing,” she said.
She called her mentor, Ms. Macuja-Elizalde, to tell her the bad news. Ms. Macuja-Elizalde then told her that it was her “biggest plié,” which is a ballet movement where the knees are bent and is used before jumping and turning. “Think of it as your biggest plié and from here you can only go up,” Ms. Macuja-Elizalde told her.
MASTER AND STUDENT
Ms. Barkman, who had not danced professionally before meeting Ms. Macuja-Elizalde, lives in Bucks County, Pennsylvania, USA. She started dancing ballet as a little girl, and at 16 she took private lessons with US-based Russian teacher Nadia Pavlenko. She wanted to pursue ballet professionally and her Russian teacher gave her a list of dance companies around the world that she could enroll in — and the list included Ballet Manila, which Ms. Macuja-Elizalde founded in 1995.
The ballet world is small — Ms. Pavlenko used to attend Ms. Macuja-Elizalde’s recitals and practices when the Philippines’ prima ballerina studied in Russia for four years as the first non-Soviet to enter a Russian ballet school. “I remember her as a little girl watching my rehearsals in school,” said Ms. Macuja-Elizalde of the Russian dancer.
“I’ve been fortunate to have been trained and taught in Russia and I was able to dance and experience it. Now, I have the opportunity to hand it down to the next generation of dancers. It’s a cycle. But I am still learning,” said Ms. Macuja-Elizalde, who is the CEO and artistic director of Ballet Manila, the only dance company in the country that teaches the Vaganova technique, a classical Russian dance method and training system.
So, with the encouragement of her Russian mentor, the young American dancer sent a one-minute audition video to Ballet Manila, hoping to be mentored by the Filipina prima ballerina. And Ms. Barkman was in. The timing was right because Ms. Macuja-Elizalde was retiring and leaving behind a male dance partner, and she was looking for a short ballerina to dance with him.
Ms. Barkman stands at 5’2 inches. “But I always say I’m 5’3,” she said laughing.
“It factored in that she was short and it worked to her advantage, but most of the time it didn’t. Also, there was a need for a principal dancer. She was 18 that time, and with lots of potential. I gave her my honest e-mail saying that ‘If you want to learn ballet and if you’re serious, come to the Philippines.’ But I also told her that if she’s only doing it for high salary etc., I don’t pay high salary. She accepted and she arrived here,” Ms. Macuja-Elizalde said.
Ms. Barkman packed her bags and moved to the Philippines.
Under Ms. Macuja-Elizalde’s wing, she learned not only dancing, but acting in narrative ballet. “There’s not really nothing wrong with her technique, but more on what’s wrong with her way of thinking about dancing and approaching a role and breaking it all down. She was up to standard, and she knew what she was doing, but, at the same time, she did not know. There was unawareness on how she was doing it and why,” said Ms. Macuja-Elizalde, demonstrating how her mentee used to act.
“It’s about tackling ballet as a form of art and performance,” she said, adding that as a mentor, one doesn’t use only theory to teach but also practice as well.
“If you didn’t dance any of roles, you’re only going by what you see. It’s not what you feel. You’re only attacking the coaching in a cerebral [manner], whereas if you danced, it is how you feel the movements which gives you extra understanding of the movement.”
For a relationship of mentor and mentee to work out, of course, it takes two to tango — and dance ballet.
“It takes a student who’s willing to learn and will inspire you to dig deeper into your pocket of tricks and methods. If the student is reluctant or satisfied already, then you end up with a shallow performance and understanding of a piece,” said Ms. Macuja-Elizalde.

HSBC to roll out more digital services for firms

By Melissa Luz T. Lopez, Senior Reporter
THE HONG KONG and Shanghai Banking Corp. (HSBC) is looking to roll out more mobile services to corporate clients in the Philippines over the coming year, following a jump in its credit card business secured through digital platforms.
Michael Brennan, head of HSBC Wholesale Banking, said the bank is eyeing to level up interbank fund transfers offered to big businesses to get more firms into using digital financial services “within the next six to 12 months.”
“Close to a third of our clients’ financial services needs will be digital. Much of the work that we will be doing for clients will very soon be digital — it already has begun,” Mr. Brennan said in a media roundtable yesterday in Taguig City.
“In some cases, they will go through cultural changes to get used to non-paper based technologies, but we are already seeing corporates picking up these technologies. WE are also seeing local companies developing this.”
In particular, the Philippines has proven to be a “fast-growing” and “exciting” market for the multinational bank given its young and tech-savvy population.
Mr. Brennan said while most lenders are focusing on tapping new technology to capture the retail segment, the global bank is also making strides in terms of serving the corporate space via mobile.
The central bank has piloted interbank fund transfers in the country. Mr. Brennan said HSBC’s next goal is to offer virtual accounts for companies using this interbank transfers, which he said would allow firms to identify the payment sources and improve trade, record-keeping and fraud management.
This strategy forms part of HSBC’s aggressive push to go digital, as it has earmarked $15-17 billion globally over the next three years to develop new products, offer advanced but easy-to-use electronic channels, and capture good talents to pilot financial innovation. So far, the bank has seen good gains from going digital via the consumer segment.
Kris Werner, senior vice president and head of retail banking and wealth management, said they have seen substantial growth in their credit card client base over the past year secured through Internet-enabled platforms.
“It’s really a market-leading change… Our cards that we acquired using digital channels have risen from below five percent last year to around a quarter of the business this year,” Mr. Werner said.
“What we are seeing is because of the combination of this cash-centric mentality and demographics, we’re seeing customers move across the digital environment very, very quickly. We do see mobile really leading this change and bringing people into formalized banking sector.”
There is a huge market for digital transactions in the Philippines given its millennial market well attuned to e-commerce. Mr. Werner said roughly 65% of smartphone users make purchases through mobile, while 75% also use banking apps for their financial transactions.
However, about 80% of transactions are still being done using cash.
HSBC is also relying heavily on digital customer on-boarding and on social media to tap more customers, given the bank’s limited branch network in the country. Mr. Werner said bank resources are instead being poured into expanding the bank’s “digital footprint” to widen their reach.

Alsons swings to net loss in April-June

ALSONS Consolidated Resources, Inc. (ACR) swung to a P76-million net loss attributable to owners of the parent in the second quarter, a reversal of year ago’s net income of P50.47 million.
In a regulatory filing, the Alcantara-led holding firm reported a 6.2% decline in revenues to P1.81 billion in the April to June period from P1.93 billion a year ago.
Revenues from energy fees, which accounted for most of its topline numbers, dropped to P1.80 billion from P1.927 billion previously.
For the semester, ACR posted a net loss of P95.75 million attributable to the owners of the parent firm, reversing last year’s net income of P86.03 million.
Revenues slipped 2.5% to P3.48 billion in the first six months of the year.
ACR’s core businesses, conducted through its various subsidiaries and associates, are grouped into main categories consisting of energy and power, property development, and other investments.
On Tuesday, shares in the company fell by 2.48% to close at P1.18 apiece. — Victor V. Saulon

Passion and art: Balag at Angud

ONE OF the toughest choices people have to make is choosing between work they love despite that offers little compensation or a job they hate but which pays the big bucks. What would you pick?
While the question can apply to anyone, it is especially apt for the proverbial “starving” artists — painters, writers, photographers, theater actors, sculptors, etc. — who are essentially compelled to choose between love and money, and are often challenged with the question: “Can you eat your art?”
This dilemma is one of the issues highlighted in Tanghalang Pilipino’s Balag at Angud, an original Filipino musical about the life of revolutionary Filipino artist Luis Yee, Jr., better known as Junyee.
Written by Palanca Award-winner Layeta Bucoy, Balag at Angud tells the true story of Junyee’s life in Agusan del Norte and as an artist, and his art including the 2007 outdoor protest installation called Angud: A Forest Once shown at the Cultural Center of the Philippines’s front lawn.
The musical’s name comes from two of the artist’s works. Balag is a Visayan word for “trellis” or a framework made of bamboo. It was also the name of Junyee’s first open-air one-man show in the 1970s. Balag — installed in UP Diliman where he was studying Fine Arts — was firmly bound by ropes and strings on which protests, poems, and letters hung. At the time Junyee was studying sculpture under Napoleon Abueva, who was not yet a National Artist.
Meanwhile, angud is the term used for the part of a tree trunk where holes are drilled in order to haul the log from the mountains. That part where the hole is located is later chopped and discarded, considered junk because it no longer has no purpose and cannot be sold. A visual argument against illegal logging in the country, Junyee’s piece Angud: A Forest Once represents evidence of how we abuse Mother Earth.
Playwright Rody Vera takes on the title role in the musical, with actors Dune Michael Garcia and Paw Castillo playing Junyee’s child and teenage self.
“We live in a country that ignores the conditions of artists. My whole admiration for Junyee comes from how he was able to remain uncompromising in the face of daily doubts. ‘Bibigay ba ako?’ (Will I give in?) I often ask myself. Pero itong mga pinili niya ay klaro at singular (But what I have chosen is clear and singular),” Mr. Vera said in a statement.
Like many other parents who pressure their children to get a job that pays well, Junyee’s father, Luis (played by Jonathan Tadioan), did not approve of his son’s life choices. A Chinese immigrant, he wanted his son to take over the family business. Junyee tried, working at the Palace Hotel in Agusan which his father asked him to manage. Then 17 years old, he put up an original piece of art he had made at the hotel’s lobby — but the customers did not like it and called it trash. Luis got rid of it, leading to a heated argument between father and son which prompted Junyee to leave home and pursue his true passion: art.
While focusing on the life of an artist, the musical is meant for everyone who has had doubts about their life.
“This musical is not just about one artist’s journey of becoming, but a familiar story of countless others long before Michelangelo’s agony and ecstasy defined his life,” wrote Junyee once.
“I can imagine the feeling and struggle of the first caveman who drew on the cave wall for other cave dwellers to appreciate. ‘Look, look’ he must have said excitedly. ‘This is the deer that we killed yesterday!’ I can imagine his cavemates saying, yes that’s a deer alright! And for sure somebody will say, ‘so what? Can you eat that?!’ So this musical is a story of countless others who struggle to express themselves in their own peculiar ways before my time, and the many others of my time,” he said.
After Junyee left home, he landed a job as a makeup artist in a funeral parlor. One day, he received news from home that his father had died. He went home and applied the makeup on his father’s corpse. Then he enrolled at UP Fine Arts, which is where he met Napoleon Abueva, which led to Junyee’s first creation, Balag.
The musical’s playwright, Ms. Bucoy, said in a statement: “I am hoping that this story would both inspire and pose a challenge to the audience through following the life of an artist ahead of us who struggled for his beliefs in his art and triumphed.”
“Kung ang sining ay kalat, basura, walang silbi, walang kwenta sa paningin ng iba, tutuluyin mo pa ba? Iyan ang ng tanong ng dula (If art is scattered, garbage, useless, has no worth in the eyes of others, would you continue? That is the question posed by the play),” she added.
The cast includes musician Bayang Barrios as Musa or Junyee’s muse; Astarte Abraham, Mia Bolaños, and members of the Tanghalang Pilipino Actors’ Company in the ensemble.
The musical is directed by Audie Gemora, whose previous work with Tanghalang Pilipino includes Noli Me Tangere: The Musical and Pangarap Sa Isang Gabi Ng Gitnang Tag-Araw.
“What is so beautiful about Layeta Bucoy’s story is how she personified art: it is as if there were a love story between Junyee and his art which is personified in Musa. I want our spectators to know that if you go after what you were designed to do in this world at all cost, it will pay off. That’s exactly what happened to Junyee,” Mr. Gemora said in a mix of English and Filipino.
Patatag’s Dodjie Fernandez wrote the music, while Upeng Galang-Fernandez is in charge of the musical direction.
The musical’s set design is by artist Toym Imao who is assisted by Marco Viaña. “The set will take inspiration from Junyee’s actual installations, reinterpreting them using materials like bamboo, leaves, and seeds. It’s going to be an art environment where audiences can immerse themselves and get a glimpse into Junyee’s works, while also telling the story on stage,” said Mr. Imao in a statement.
Balag at Angud will run from Aug. 31 to Sept. 16 at the Cultural Center of the Philippines’ Tanghalang Aurelio Tolentino (Little Theater).
Tickets are P1,000 for VIP seating and P800 for Orchestra Side seats. For ticket reservations, group sales, sponsorships, and special performances, contact Juan Marco Lorenzo at 0999-884-3821 or 832-1125 local 1620/1621. Tickets are also available at TicketWorld and the CCP Box Office. Visit https://tanghalangpilipino.com/ or e-mail info@tanghalangpilipino.com for more information.— Nickky Faustine P. de Guzman

EastWest Bank profit drops

EAST WEST Banking Corp. booked a lower net income in the first semester.

EAST WEST Banking Corp. (EastWest Bank) saw its net income inch down in the first half of the year following the suspension of the public school teachers’ salary loan program.
In a regulatory filing on Tuesday, the Gotianun-led bank said it posted a net income of P2.2 billion in the six months ended June, down 11% from the P2.5 billion recorded in the same period last year.
EastWest Bank attributed the decline mainly to the “adverse development” regarding the loan program and its subsequent effect on its wholly owned subsidiary EastWest Rural Bank (EWRB).
EWRB is primarily focused on public school teachers’ salary loans under the Automatic Payroll Deduction System of the Department of Education (DepEd). However, this was suspended until June as DepEd worked on new guidelines.
The total impact of this development in the first half of the year is estimated at around P600 million.
Likewise, the lender’s net income declined by a percent to P1.28 billion in the second quarter from the P1.29 billion in a comparable year-ago period.
The bank’s net interest income climbed 7% to P9.6 billion in the January-June period from a year ago, mainly driven by consumer loans.
Consumer loans account for 72% of EastWest Bank’s total lending book of P162.8 billion.
Excluding EWRB, the bank’s consumer portfolio of car, home and personal loans were up 13%, allowing the bank to minimize margin compression. Business loans were flat at P61.8 billion, comprising 28% of the bank’s entire portfolio.
Fees and commissions stood at P2.1 billion, down 23% due to the lower contribution of its rural bank unit.
Trading income also ended the first half 10% lower due to increasing interest rates and tighter monetary conditions in both international and local markets, the bank said.
Operating expenses stood at P7.2 billion in the first semester, up 11% due to an increase in higher transaction taxes as the new and higher documentary stamp tax came into effect following the enactment of the Tax Reform for Acceleration and Inclusion Law this year.
On the other hand, EastWest Bank set aside P1.9 billion in provisions for impairment and credit losses, 4% lower from the previous year.
EastWest Bank’s profits translated to a return on assets of 1.4% and return on equity of 11.1%.
Capital adequacy ratio stood at 13.7% while common equity Tier 1 ratio was at 11.3%.
Overall, the bank’s total assets stood at P319.3 billion at end-June, up 3% year-on-year.
EastWest Bank President Jesus Roberto S. Reyes said significantly higher deposit costs in the first half of the year pushed the bank to be more circumspect on its rate-sensitive business borrowers.
“At any rate, we are guardedly optimistic that for the rest of the year, we will be able to resolve the remaining issues on the rural bank lending program to teachers,” Mr. Reyes was quoted as saying in the statement.
Antonio C. Moncupa, Jr., EastWest Bank vice chairman of the board, said the bank remains committed to public school teachers despite having some issues in the first semester.
“The bank will continue to strongly advocate not only access and lower rates but equally important, inclusive lending programs and equality among lenders. Our teachers deserve nothing less.”
In June, EastWest Bank raised P2.45 billion from the first tranche of its long-term negotiable certificates of deposit (LTNCD) program, which it wants to use to support its funding needs.
Shares in EastWest Bank gained 10 centavos or 0.70% to close at P14.42 each on Tuesday. — Karl Angelo N. Vidal

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