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Wilcon stores sales build up its earnings

EARNINGS of Wilcon Depot, Inc. went up by a fifth in the first six months of 2018, fueled by higher sales from existing stores alongside its expansion to new markets.
The listed firm said in a statement on Friday that net income jumped to P914 million in the first half, versus P763 million in the same period a year ago. Net sales logged an 18% increase to P10 billion.
The company attributed the increase to strong comparable sales, the development of new stores, and improving margins following its product mix strategy.
“Wilcon is looking at maintaining its 2018 net sales target growth rate of mid to high teens. While we have achieved our target for the first half, we have to continue to work hard in the second half to sustain our momentum,” Wilcon Chief Financial Officer Mark Andrew Belo was quoted as saying in a statement.
The performance of its depot-format stores accounted for 97% of Wilcon’s total sales at P9.7 billion, 18% higher year-on-year. The company opened three new depots in the second quarter alone, and saw better than expected growth from old depots.
The 3% balance of net sales came from Wilcon’s smaller format stores — called Home Essentials — provided P304 million from the period from January to June. While two new Home Essentials stores were put up in the first half, the segment’s 12% uptick can be attributed to old stores, which recorded same stores sales growth of 11.4%.
Wilcon is scheduled to open five more depots by the end of the year, in order to reach its 2018 target of 51 stores.
“As we are on track to achieve our sales growth target, we are likewise optimistic that we will achieve our mid-teens net income growth target,” Mr. Belo said.
Shares in Wilcon dropped two centavos or 0.17% to close at P11.54 each at the stock exchange on Friday. — Arra B. Francia

Rice stocks decline as of July 1

RICE STOCKS as of the start of July were estimated at 1.99 million metric tons (MT), down year-on-year and month-on-month, data from the Philippine Statistics Authority (PSA) showed.
PSA’s Rice and Corn Stocks Inventory report released on Friday showed stocks as of July 1 were 15.21% lower from 2.35 million MT a year ago and 15.68% down from the previous month’s 2.36 million MT inventory.
Household stocks made up 49.85% of the total inventories, followed by warehouses with a 47.47% share. The National Food Authority (NFA) cornered the remaining 2.68%, with 48.78% of its stocks from rice imports.
The rice stocks as of July 1 are considered sufficient for about 62 days, a drop from last June 1 when stocks were deemed sufficient for nearly 74 days.
However, unlike last month when NFA’s stocks could barely last a day, the agency’s latest inventory is estimated to last for about a day on the back of the ongoing unloading of imported rice, which has been hampered by poor weather.
The NFA is mandated to maintain at least 15 days’ worth of buffer stock at any given time and at least 30 days’ worth of buffer stock for lean months, which starts every July.
All three sectors posted year-on-year drops, with the NFA recording the sharpest at 65.60%. The commercial sector’s stocks dropped 21.12%, while household inventories slid 0.24%.
Likewise, corn stocks as of July 1 stood at 480,860 MT, lower by 29.66% year-on-year and 18.78% month-on-month.
Corn inventory declined year-on-year in all three sectors. Household stocks slid 7.03%, while commercial and NFA stocks dropped 31.42% and 100%, respectively.
Month-on-month, the PSA reported a 22.88% drop in commercial warehouse corn stocks which offset the 29.25% increase in household stocks. — A.G.A. Mogato

DENR, GTI to identify sustainable solutions for Boracay

THE DEPARTMENT of Environment and Natural Resources (DENR) and global initiative group Greening the Islands (GTI) signed a memorandum of understanding (MoU) for a project on sustainable use of island resources amid the government’s ongoing rehabilitation in Boracay.
In a statement on Friday, the DENR said the two parties will identify sustainable solutions and improve the dialogue between the government and the private sector to develop ideas on how to preserve the environment within three years.
Likewise, under the memorandum, the parties are expected to churn out suitable policies that can develop investments as well as implement bankable projects.
Both parties are also expected to simplify and accelerate regulations on permit processes as well as monitor energy transition and other environment-related situations.
The agreement is valid until 2023.
Environment Secretary Roy A. Cimatu said while the project will first be implemented in Boracay, it can also be done in other parts of the country.
“These efforts will be applied not only in Boracay but in other parts of the country, with the Philippines being an island-state comprising over 7,000 islands,” he added.
GTI country representative Theresa C. Capellan said the MoU is GTI’s next step in supporting the government’s efforts in rehabilitating Boracay, which is slated to open on Oct. 26.

BCDA turns over Fort Bonifacio properties to Taguig City gov’t

THE BASES Conversion and Development Authority (BCDA) has formally turned over two Fort Bonifacio properties to the Taguig City government for socialized housing.
The BCDA and the Taguig City government signed the rules and policies to implement Executive Order (EO) 70 which hands over Lupang Katuparan and the Philippine Centennial Village to beneficiaries identified by the National Housing Authority (NHA).
In a statement on Friday, Taguig City Mayor Maria Laarni L. Cayetano said the signing of the Implementing Rules and Regulations (IRR) as well as the Code of Policies (COP) formalizes the transfer of titles and “elevate[s] the local government’s mandate to implement programs.”
“It will no longer be difficult for the local government to find justification in implementing basic projects such as improvement in the distribution of water and drainage systems, as well as road projects in Lupang Katuparan and in the Philippine Centennial Village,” she added.
Some 48 hectares (ha) of Lupang Katuparang and 13.08 ha of the Philippine Centennial Village will be included in the Bonifacio Housing and Information Technology Zone (BHIT) Property and will be given out to beneficaries.
Currently, only 35 ha of Lupang Katuparang has been used, housing 2,225 structures and 3,260 generated lots.
Some 7.8 ha of the Philippine Centennial Village, on the other hand, is currently housing 13 four-storey buildings and around 848 structures.
BCDA said the IRR of EO 70 guarantees the consideration of human rights while the COP provides security of tenure to the qualified occupants.
Both the IRR and COP were completed and ratified 16 years after the EO 70 was created. — AGAM

RCBC net income slips in first semester

RIZAL Commercial Banking Corp. (RCBC) posted a P2.2-billion net income as of end-June, fuelled by steady growth in its core businesses but dampened by lower trading gains.
Net profit of the Yuchengco-led lender slipped by 6.4% from the P2.35 billion net income it reported for the first six months of 2017.
In a disclosure, RCBC said core income posted a robust 47% growth year-on-year, with net interest income growing 12% to P9.7 billion as yields improved.
“Even with the intense pricing competition, the Bank still achieved an annualized net interest margin of 3.98% which remains one of the highest in the sector,” the bank told the Philippine Stock Exchange.
Total loans and receivables also surged by 14% to reach P372 billion. Credit lines extended to the small business segment rose 36%, while credit card debts picked up by a third. Both consumer and corporate loans also posted increases worth 17% and 11%, respectively.
Despite the pickup in lending, soured debts took a measly 1.18% share of total loans, improving from 1.35% in the same period last year.
RCBC’s subsidiary Rizal MicroBank also saw its loan lines grow by 27% for micro and small enterprises, while RCBC Bankard’s active card base expanded by 16% to 625,000 as of end-June. Income drawn from fees and commissions reached P1.8 billion.
Bank deposits also grew to reach P396.4 billion.
On the other hand, total operating expenses amounted to P9.6 billion as the bank spent on putting up new branches and spent more due to higher documentary stamp taxes.
The Tax Reform for Acceleration and Inclusion law which took effect Jan. 1 doubled the documentary stamp tax rates imposed on bank checks, certificates of deposit, and similar financial instruments.
Despite the income drop, RCBC President and Chief Executive Officer Gil A. Buenaventura said they are “above target” as of the first semester.
“With the new P15 billion capital raised in July, we will remain focused on growing our lending business especially the Consumer and SME, and Microfinance business throughout the Philippines.” Mr. Buenaventura added.
RCBC, the country’s tenth-biggest bank, currently runs 509 branches nationwide, adding 14 new offices from 495 in June last year. The bank’s network of automated teller machines also grew to 1,597 during the first semester.
In June, the listed lender announced a partnership with Japan’s Kansai Mirai Financial Group, Inc. to tap blockchain platforms and set up remittance services between the two countries.
RCBC shares closed the week at P30 apiece on Friday. — Melissa Luz T. Lopez

UnionBank to conduct P10-billion SRO next month

UNIONBANK of the Philippines will proceed with its planned stock rights offer next month, as it works to raise fresh capital to support expansion.
In a disclosure on Friday, the bank said it will offer up to 200 million common shares via a stock rights offering in September, two months later than its original plan.
Back in May, UnionBank Chief Financial Officer and Treasurer Jose Emmanuel U. Hilado said the lender plans to issue P10 billion worth of additional shares by July of this year, after securing approval from the bank’s board of directors.
The Aboitiz-led lender told the Philippine Stock Exchange this week that it will be offering the additional shares to all stockholders on record as of Sept. 3.
The offer period will start on Sept. 10 and end on Sept. 21. The offer price is yet to be determined.
The additional capital will boost the lender’s common equity Tier 1 and total capital adequacy ratio of the bank.
“The proceeds from the stock rights offer will be used to allow for continued growth of assets of the bank,” UnionBank told the local bourse.
Mr. Hilado has said that Citibank has been tapped as the arranger for this stock rights offer. Aside from this, the bank executive added that the bank can still tap other capital-raising instruments to shore up additional funding.
UnionBank can still raise an additional $500 million from its euro medium-term note program, as well as peso funding via additional tranches of long-term negotiable certificates of deposit. These debt papers are offered on a continuing basis until such a time when the ceiling amount is reached.
A number of banks have been tapping the capital markets as they boost their asset bases, in anticipation of the full implementation of tighter standards imposed by the central bank by 2019.
So far, UnionBank has raised P3 billion from long-term notes versus a P20-billion program. The bank has also secured $500 million from its offering of global notes in November last year.
UnionBank is the country’s ninth-largest player in asset terms. The bank made P4.7 billion during the first six months of 2018, 8% higher than the P4.4 billion profit booked during the same period last year.
Loans grew by 18% year-on-year to P313 billion, which boosted net revenues higher by nearly a tenth. Mr. Hilado said the bank is ahead of its income target for the year, and expects loan margins to improve at a time of rising interest rates.
UnionBank shares went down 10 centavos or 0.12% to close at P83.90 each on Friday. — Melissa Luz T. Lopez

Peso slips ahead of key US data

THE PESO slipped versus the dollar on Friday to its weakest in a week, as investors await the turnout of key economic data in the United States and further hints on its ongoing trade war with China.
The local unit closed at P53.135 against the greenback, 4.5 centavos down from Thursday’s P53.09 finish. This is the weakest showing of the peso since the P53.15-per-dollar close on Aug. 3.
The peso opened the session at P53.13, already weaker than the previous day’s rate. It touched P53.09 as its best showing during the day but also hit as high as P53.20 before trading ended.
This also marked the fourth straight day of peso depreciation, coming from Monday’s P52.85 close.
Sought for comment, two traders attributed the peso’s slip to gains favoring the dollar, even if the aggressive rate hike announced by the Bangko Sentral ng Pilipinas (BSP) should have provided support to the local currency.
“The peso depreciated [on Friday] as investors positioned ahead of firm US inflation readings tonight, with the 50-basis point rate hike from the BSP having already factored in by the local market during the week,” one trader said.
The central bank raised benchmark interest rates by 50 basis points (bp) on Thursday afternoon, signalling a more aggressive move to rein in price pressures given threats that inflation could remain elevated until 2019.
This is the BSP’s strongest policy response in a decade, but has been expected by market players following the higher-than-expected 5.7% inflation rate in July. BSP Governor Nestor A. Espenilla, Jr. said they see inflation “on the high side,” with policy makers now seeing signs that prices could exceed the 2-4% target next year.
On the other hand, the US government will report July inflation data Friday night, which will help determine the timing and pace of future rate hikes from the Federal Reserve.
Another trader noted that the dollar “grew stronger overnight,” capping any big moves for the peso. She said that looming trade tensions between Washington and Beijing continue to affect market sentiment, to the benefit of the greenback.
Dollars traded on Friday reached $664.3 million, slightly lower than the $682.1 million which exchanged hands the previous day.
Mr. Espenilla has said he hopes the 50bp move may lift the peso, although such adjustments are not necessarily the target of policy tweaks. — Melissa Luz T. Lopez

Court of Appeals justice appointed to Supreme Court

The Palace announced on Friday, Aug. 10, that a Court of Appeals (CA) justice has been appointed as a new justice for the Supreme Court (SC).
In a Malacanang document dated August 9, it said that CA Associate Justice Jose Reyes Jr. has been “appointed associate justice, Supreme Court of the Philippines.”
Mr. Reyes will take the seat of Associate Justice Presbitero J. Velasco Jr, who retired last August 7 after reaching the age of 70. Magistrates of the judiciary are expected to retire once they reach 70 years old.
Mr. Reyes was born on September 18, 1950 and will turn 68 years old this year. He will hold his post as the High Court’s Associate Justice until 2020.
Prior to working in the CA, he worked for the Pasig City Metropolitan Trial Court and Rizal Regional Trial Court. He also took his law degree at San Beda College, which was also the alma matter of President Rodrigo R. Duterte.
Mr. Reyes is the fifth appointee of the president to the High Court since Mr. Duterte got into presidency in 2016.
Special Assistant to the President Christopher “Bong” T. Go said in a text message to reporters on Friday that Mr. Reyes will have his oath taking on Monday, August 13. — Gillian M. Cortez

New Zealand to ban single-use plastic bags

Wellington, New Zealand — New Zealand became the latest country Friday to outlaw single-use plastic shopping bags, with Prime Minister Jacinda Ardern saying they will be phased out over the next year as a “meaningful step” towards reducing pollution.
New Zealand uses “hundreds of millions” of single-use plastic bags each year, many of which end up harming marine life, Ardern said.
“We need to be far smarter in the way we manage waste and this is a good start,” she said.
“We’re phasing-out single-use plastic bags so we can better look after our environment and safeguard New Zealand’s clean, green reputation.”
Ardern said her coalition government, which includes the Green Party, was facing up to environmental challenges and “just like climate change, we’re taking meaningful steps to reduce plastics pollution so we don’t pass this problem to future generations.”
Single-use plastic bags are among the most common items found in coastal litter in New Zealand and the environmental group Greenpeace welcomed the decision to outlaw them.
“This could be a major leap forward in turning the tide on ocean plastic pollution and an important first step in protecting marine life such as sea turtles and whales, from the growing plastic waste epidemic,” Greenpeace Oceans Campaigner Emily Hunter said.
A United Nations report in June said up to five trillion grocery bags are used globally each year, which is nearly 10 million plastic bags per minute.
“If tied together, all these plastic bags could be wrapped around the world seven times every hour” and like most plastic garbage barely any is recycled, said Erik Solheim, head of UN Environment.
The UN said more than 60 countries had introduced bans and levies on single-use plastic items like bags.
But better waste management, financial incentives to change consumers’ buying habits and research into alternative materials were needed to make any real change, it added. — AFP

Samsung unveils newest smartphone hoping for sales boost

New York — South Korean electronics giant Samsung unveiled the new Galaxy Note 9 smartphone Thursday, its latest effort to address flagging sales of the high-functioning gadgets.
Boosting the power and the price, Samsung hopes to win back customers in the competitive market. The consistent leader in the global smartphone market, the company nonetheless suffered a 22 percent drop in mobile technology sales in the second quarter.
The company blamed the drop in part to disappointing demand for the Galaxy S9, but it also has been pressured by growth in Chinese competitor Huawei.
At a glitzy the launch event in Brooklyn, Samsung unveiled a suite of high tech products, including a smart speaker and watch, and then showed off the new Galaxy Note 9, which will be available for purchase on August 24.
The phone contains a series of improvements but was described by analysts as having no radical new innovations. The latest model boosts memory capacity, and allows customers to play video games such as the popular Fortnite.
Customers will have the option of 128 or 512 gigabytes of memory, and also can insert a micro card to boost capacity beyond a terabyte, a record for a smartphone.
Samsung also enhanced the gadget’s batteries so it can now be used for an entire day without needing to be recharged — a common headache for cell phone users.
Other improvements include tweaks to the device’s “S Pen” feature, which can be used as a remote control for taking pictures or selfies using Bluetooth technology.
And the new model has enough capacity for video games. Samsung has set up a promotion with the popular Fortnite game that lets users download a special mobile version.
According to some trade media sources, the Galaxy Note 9 version with 512 gigabytes will be the most expensive smartphone geared towards the general public.
Pricey, not radically new
The price for that model will be $1,250 in the United States, while the 128 gigabyte version will go for $1,000. Apple’s iPhone X in a 256 gigabyte version sells for about $1,150.
Global smartphone sales fell 1.8 percent in the second quarter to 342 million amid market saturation and rising prices, according to tech-industry trackers International Data Corporation.
Avi Greengart, analyst at GlobalData, described the upgrades in the latest Samsung as “iterative,” adding “there is nothing radically new here.”
“It’s a really expensive phone and for people who are looking for a premium Android phone, they may well find it quite appealing,” he said. “But it isn’t likely to get people to consider the Note for the very first time.”
By contrast, Apple’s more dramatic overhaul of the iPhone X design and user interface showed there is a “large group of people who are willing to spend whatever it takes” to upgrade, Greengart said.
Samsung also introduced the Galaxy Watch and the Galaxy Home speaker device, a first for the South Korean company in a market that already contains Amazon’s Echo and Alphabet’s Google Home program.
The company also announced a partnership with streaming music service Spotify to allow “streamless listening” across all Samsung devices, including phones, tablets and smart TVs, as well as the Galaxy Home.
The smart speaker may have a better shot outside the United States, said Patrick Moorhead, analyst at Moor Insights & Strategy.
“In the US, Alexa is very entrenched and so is Google Assistant, so it might be a challenge, but not so much in other parts of the world,” Moorhead said. — AFP

JG Summit’s second-quarter profit down, revenues up

JG Summit Holdings, Inc.’s attributable profit dropped by a third in the second quarter of 2018, as the weaker peso, higher fuel prices, as well as rising prices of raw materials for its food, airline, and chemical units tempered the double-digit increase in revenues.
In a regulatory filing, the listed conglomerate said net income attributable to equity holders of the parent went down to P5.02 billion in the April to June period, against the P7.13 billion it generated in the same period a year ago.
In contrast, revenues climbed 11.4% to P74.6 billion, thanks to the performance of Universal Robina Corp. (URC)’s branded consumer foods and agro-industrial units, the growth in Robinsons Land Corp. (RLC), and higher average selling prices of products under JG Petrochemcial Group.
“While we continue to face the challenges arising from inflation and the weaker currency further exacerbated by tougher competitive dynamics, we are delighted to see improvements in our 2Q18 results,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei was quoted as saying in a statement.
“We believe that we can navigate this environment with the fundamentals of each of our businesses intact and issues are more cyclical than structural,” Mr. Gokongwei added. — Arra B. Francia

Gatchalian files resolution on evaluating federalism’s economic implications

Senator Sherwin T. Gatchalian has filed a resolution urging his colleagues to look into the economic implications of the proposed shift to a federal system of government.
Filed on Aug. 7, the Senate Resolution No. 823 directs the appropriate Senate committee to conduct an inquiry, in aid of legislation, to evaluate the economic implications of a shift to a federal system of government including, but not limited to, the attendant economic risks and opportunities, the implications to regional economic growth, the additional fiscal costs of the shift to federalism, and the effects on investments due to emerging issues on the imposition of additional taxes.
Mr. Gatchalian’s resolution also seeks to evaluate the administration of incentives in a federal system and its repercussions on the ease of doing business.
In his resolution, Mr. Gatchalian noted that Socio Economic Planning Secretary Ernesto M. Pernia has warned that “the regions in the country are not ready for the system, that the momentum of infrastructure improvement in the regions is going to be disrupted, and that the shift to federalism will entail immense expenditures, which may increase the fiscal deficit to GDP (gross domestic product) ratio….”
In a text message to reporters on Friday, Mr. Gatchalian explained that “the shift to federalism will radically alter the structure of national and local governments.”
He added that it will “create uncertainties in economy and doing business.” — Arjay L. Balinbin

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