Historic jersey retirement

December 20, 2017 | 12:01 am

Contrary to speculation, the Warriors did not help the Lakers celebrate the day of Kobe Bryant’s jersey retirement by showing up at the Staples Center extremely shorthanded. As hoops habitues know only too well, the absence of starters Steph Curry, Draymond Green, and Zaza Pachulia and vital cog Shaun Livingston weakens the cause of the defending champions, but not to the point where they’re no longer considered favorites to win; after all, they still have former Most Valuable Player Kevin Durant and three-time All-Star Klay Thompson on the marquee. In this regard, it bears noting that, heading into the set-to, they possessed a season-high eight-win steak, one that not coincidentally began against the Lakers on the very same floor late last month.

In any case, Bryant couldn’t have cared less about the outcome of the contest, and not just because the ceremony sending his two uniforms to the rafters occurred at halftime. If anything, the match was a distraction; fans lined up at entrances as early as seven hours before tip-off to see him and not the plodding Lakers. And the same went for the myriad celebrities courtside, who wound up with a RoboJam Special Edition Box for their efforts. Everybody who was anybody milled about even as, outside, Kobeland — complete with an appropriately themed ferris wheel — was packed.

Indeed, the Lakers pulled out all the stops for Bryant, who became the only player in National Basketball Association history to have two numbers retired by a single franchise. Fittingly, they were unveiled closest to the court, in the third row of the immortalized greats, on either side of play-by-play legend Chick Hearn’s microphone. And, fittingly, they represent the last vestiges of an era populated by no-conscience midrange gunners.

Bryant, to be sure, would have thrived under any circumstance. Were he plying his trade today, he would no doubt have developed a far more reliable three-point shot, perhaps even found reason to play with more efficiency. That said, he would still have done things the way no other contemporary could, or — to be more precise — could dare. Which, in a nutshell, is why he stands apart, even among his so-called peers.

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is the Senior Vice-President and General Manager of Basic Energy Corp.

Shares decline anew ahead of TRAIN enactment

December 20, 2017 | 12:01 am

THE MAIN INDEX yesterday failed to sustain the prior session’s gains, as investors awaited President Rodrigo R. Duterte’s signing of the ratified tax reform bill that came only minutes after the market’s close.

The 30-member Philippine Stock Exchange index (PSEi) lost 0.67% or 56.86 points to 8,365.96 on Tuesday. The all-shares index was also down by 0.15% or 7.65 points to 4,902.14.

“Investors were anxious awaiting developments brought about by the ratification of the TRAIN or Tax Reform for Acceleration and Inclusion (TRAIN), which is the Duterte administration’s tax reform package. President Duterte signed this officially by the end of trading so the full reaction may be felt during the next trading period,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said.

With the signing of the first package of the tax reform program, the country will see a new taxation scheme starting Jan. 1. Highlights of the new program include higher take home pay for those earning up to P250,000 per year, higher taxes on cars, fuel, tobacco, cosmetic surgery, and sweetened beverages.

The first of five tax reform packages will generate P130 billion in revenues for the government, which will partially finance the Duterte administration’s P8-trillion infrastructure program.

RCBC Securities, Inc. equity analyst Jeffrey Lucero meanwhile attributed the market’s decline to window dressing, which is typical toward the year’s end.

“I think the decline has something to do with window dressing. If you noticed, the top decliners today TEL (PLDT, Inc.), JGS (JG Summit Holdings, Inc.), URC (Universal Robina Corp.) under-performed the PSEi on a year-to-date basis. So funds are probably getting rid of these under-performing stocks ahead of year-end reports,” Mr. Lucero said in a text message on Tuesday.

The property sector was the lone sub-index that gained, adding 0.19% or 7.38 points to close at 3,900.11.

Services led the day’s decline as it gave up 1.83% or 29.74 points to 1,594.36. This was followed by mining and oil, which lost 1.34% or 152.99 points to end at 11,202.22; financials ended 1.17% lower or 25.44 points to 2,143.77; industrials dropped 1.03% or 115.58 points to 11,089.73; while holding firms saw a 0.30% decrease or 25.81 points to 8,482.98.

A total of 1.56 billion issues valued at P6.87 billion changed hands, higher than Monday’s total value turnover of P5.66 billion.

Losers outpaced advancers yesterday, 116 to 89, while 47 names closed the trading session unchanged.

Net foreign selling on Tuesday stood at P186.94 million, slightly lower than Monday’s P196.2-million outflow.

Meanwhile, in Asia, Indonesian shares hit a record high on Tuesday with financials and consumer goods driving the gains, while Malaysian stocks were headed for a third straight session of decline. — Arra B. Francia with Reuters

Car market trends you can expect with the new taxation scheme

December 20, 2017 | 12:01 am

By the time you read this, chances are President Duterte will have already signed into law the newly minted Tax Reform for Acceleration and Inclusion (TRAIN) Act, which aims to enable government to collect more taxes to fund its ambitious infrastructure projects. Players in the automotive industry are particularly concerned because the proposed excise tax revision will affect car prices.

To wit, vehicles with a net selling price of P600,000 and below will now be taxed 4% (a maximum P24,000), compared to the previous 2% (a maximum P12,000). Vehicles with a net selling price of more than P600,000 up to P1 million will now be taxed a flat rate of 10%. Before, vehicles with a net price of more than P600,000 up to P1.1 million followed a graduated taxation formula of P12,000 (2% of P600,000) plus 20% of any amount exceeding P600,000.

Vehicles with a net selling price of more than P1 million up to P4 million will now be taxed a flat rate of 20%. Before, vehicles with a net price of more than P1.1 million up to P2.1 million were taxed P112,000 plus 40% of any amount exceeding P1.1 million.

Vehicles with a net selling price of more than P4 million will now be taxed a flat rate of 50%. Before, vehicles with a net price of more than P2.1 million were taxed P512,000 plus 60% of any amount exceeding P2.1 million.

Crucially, the new TRAIN Act will completely exempt (0%) fully electric vehicles and pickup trucks, and tax hybrid vehicles just 50% of the rates applicable to their regular counterparts with internal-combustion engines.

I expect three things to immediately happen if these changes are implemented. First, pickup sales will go through the roof, unless the much-awaited implementing rules and regulations somehow state that only single-cab, commercial-purpose pickup trucks are covered by the exemption. Pickups have enjoyed a more consumer-friendly reputation lately as lifestyle vehicles, and they are now being purchased by city dwellers who otherwise wouldn’t touch leaf-sprung trucks with a 10-foot pole. Imagine what tax exemption would do for their popularity.

Second, hybrid cars will now be much more widely accepted in our market as their prices get significantly lowered. Expect more brands to follow the lead of Toyota in bringing in their hybrid models. That’s more environment-friendly choices for Filipino car buyers.

Third, we will now see electric vehicles on the road. You might recall that Manuel V. Pangilinan made the news four years ago for complaining that he couldn’t have his electric Tesla Model S registered in the country. With EVs now included in the official vehicle taxation framework, clear and concrete mechanics on how to register them with the Land Transportation Office should follow.

As for the sales of conventionally powered vehicles, I see the following happening:

The robust sales of small cars will continue unabated. A maximum P12,000 price increase for these affordable vehicles won’t mean much to buyers, especially if they avail of a four- to five-year financing plan. That 2% bump in excise tax will hardly be felt in the final computation.

For the next two tiers, let’s do a couple of sample equations:

A car with a net selling price of P700,000 will now be taxed P70,000 (10%). Before, the same car would be taxed just P32,000 (P12,000 plus P20,000).

A car with a net selling price of P1.2 million will now be taxed P240,000 (20%). Before, the same car would be taxed just P152,000 (P112,000 plus P40,000).

This means vehicles in the P600,001 to P2.1 million price bracket will cost significantly more. And it will not be a stretch to project that many car shoppers in these segments might consider downgrading.

Now, for the last tier, let’s do a similar sample computation:

A car with a net selling price of P5 million will now be taxed P2.5 million (50%). Before, the same car would be taxed P2.252 million (P512,000 plus P1.740 million).

A car with a net selling price of P10 million will now be taxed P5 million (50%). Before, the same car would be taxed P5.252 million (P512,000 plus P4.740 million).

A car with a net selling price of P15 million will now be taxed P7.5 million (50%). Before, the same car would be taxed P8.252 million (P512,000 plus P7.740 million).

As you can see, in the luxury car segment, the new excise tax actually gets lower the higher the manufacturer’s selling price is. Which means sales of premium sedans, luxury SUVs and exotic supercars should hold steady, if not grow even further.

This is how I see the automobile excise tax revision impacting car sales in the coming years. As for the goal of collecting more taxes, the government just needs to make sure nobody is cheating (read: undervaluing or flat-out smuggling) on the part of vehicle importers and distributors. And that’s easier declared than done.

5-year real property tax exemption eyed for Davao City parking facility investors

December 20, 2017 | 12:01 am

THE DAVAO City council is now reviewing a proposal to give parking facility investors a five-year break from paying real estate taxes. Councilor Jimmy G. Dureza, chair of the council committee on trade, commerce and industry, said the incentive will be for those who will build a parking structure of at least two floors. The proposal, Mr. Dureza said, is intended to help address “the parking problem” in the city. Existing buildings with parking spaces as required under the National Building Code will also be granted the incentive, but only for half the tax value of the property. Earlier, Lemuel G. Ortonio, Davao City Investment Promotion Center head, said several companies have proposed to set up parking facilities after taking account of the worsening parking problem, especially in the downtown area. Mr. Ortonio said the incentive proposal, which his office proposed, is also intended to help in the implementation of the city government’s “no street parking” policy. “We want a longer incentive (for parking space investors) because setting up a parking facility is not only capital intensive, but the investor will have a longer return of investment,” he said. — Carmelito Q. Francisco

Building roads in Mindanao for peace and prosperity

December 20, 2017 | 12:01 am

EMIL SADAIN knows only too well how building a road can benefit remote communities.

“In Mindanao, where the good roads end, the problems begin,” he says. “There’s poverty, insurgency, and lack of basic services.”

Sadain, an undersecretary at the Department of Public Works and Highways (DPWH), served as regional Cabinet secretary for the Autonomous Region in Muslim Mindanao (ARMM) in the southern Philippines from 2012 to 2015.

An engineer by training and a native of Sulu province, where a decades-old insurgency has kept the entire southwestern ARMM region underdeveloped, Sadain says economic opportunities opened for fisherfolk and farmers after the government built arterial and provincial roads, bridges, and flood management systems.

“There was easier access from the main towns to the villages to offer basic services such as education, health, and sanitation,” Sadain says, referring to remote areas in the country’s poorest region.

FILLING INFRASTRUCTURE GAPS
Some of Mindanao’s northern and central regions have started to show stronger economic growth in recent years following investments in better infrastructure that have ushered in more private businesses and higher tourist arrivals.

But Mindanao’s western and southernmost provinces such as those in Zamboanga Peninsula and ARMM regions have lagged their neighbors.

The government and the Asian Development Bank (ADB) are seeking to address infrastructure gaps in these two regions through the Improving Growth Corridors in Mindanao Road Sector Project. ADB is supporting the project through a $380-million loan to complement $123 million of government financing.

The project will improve about 280 kilometers (km) of national roads and bridges in Mindanao. This will support the government’s goals to accelerate infrastructure investment, promote regional development, reduce people’s vulnerability, and advance human capital development under the 2017-2022 Philippine Development Plan.

DEVELOPING AGRICULTURAL AND FISHERY RESOURCES
The project is also aligned with the government’s “Build, Build, Build” infrastructure development program that aims to increase spending on much-needed roads, bridges, airports, and seaports to 7.4% of GDP in 2022 from 5.3% in 2017.

“This project will help less accessible areas in Mindanao to reach their potential as significant contributors to the region’s and the country’s economic development, especially with their abundant agricultural and fishery resources,” says Richard Bolt, ADB Country director for the Philippines. “The government can rely on ADB to assist in this crucial undertaking which will help promote peace in the region and ensure the country’s strong growth includes the poor and reaches the underserved,” he says.

A STRONG PARTNERSHIP FOR INFRASTRUCTURE INVESTMENT
The latest project builds on a strong partnership for infrastructure investments in Mindanao. Since the 1970s, ADB has been assisting the government in building major ports, roads, power, and irrigation projects across the region. This new project is ADB’s first Mindanao-specific loan in 16 years.

“One good trait of ADB that I appreciate is that it is a risk taker,” says Sadain. “ADB plays a very significant role in uplifting the socioeconomic conditions of communities. ADB’s approach really caters to this type of assistance — rural development, agricultural productivity, and projects targeting low-income groups.”

“It was ADB that was the first to develop areas in southern and western Mindanao,” he says.

BUILDING REGIONAL CONNECTIONS
Sadain said the latest project will cover all current gaps in the road network of Zamboanga Peninsula at a faster pace than if the project was pursued by the national or local government alone.

To ensure there will be no disruption in project implementation, the government will be hiring engineers with knowledge of the local language and culture and physical layout of the project areas.

As part of the project, DPWH staff will receive training on procurement, multi-year planning, and operation of a new online budget and fiscal monitoring system to ensure the agency is well-equipped to manage Mindanao’s transport sector. The project will finance the detailed design for improvement of additional highways in the future in the region.

“It is important to invest in critical infrastructure in Mindanao, an important gateway for trade and business in the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) Greater Sulu Sulawesi Corridor,” says Jeffrey Miller, a principal transport specialist at ADB.

“This project supports regional cooperation and integration, and will assist in developing key industries including agribusiness and eco-tourism and enhance the logistics potential of Mindanao,” he says.

This article is a contribution from the Asian Development Bank. It can also be accessed on its Web site by visiting this link http://bit.ly/adbonline or using a smartphone to scan the QR code.

Philab says CFO resigns from post

December 20, 2017 | 12:01 am

A TOP OFFICIAL of Philab Holdings Corp. resigned on Tuesday, citing personal reasons for exiting the company.

The listed firm disclosed to the stock exchange on Tuesday that its board of directors has accepted the resignation of Jennifer B. Bantang as its chief finance officer (CFO), as well as George Bocanegra as its investor relations officer.

In June this year, Philab Chairman Hector Thomas A. Navasero also resigned from his post due to health reasons, but soon returned to head the company in October after Darlene Berberabe who earlier replaced him resigned as well.

Incorporated in 1959, Philab supplies health and laboratory equipment to the Philippine health and education market.

Philab narrowed its net loss to P107 million in the first nine months of 2017 from P860 million in the same period a year ago.

Shares in Philab were up by nine centavos or 2.31% to P3.98 each at the stock exchange on Tuesday. — Arra B. Francia

Mining industry association signs sustainability pledges

December 20, 2017 | 12:01 am

THE Chamber of Mines of the Philippines (CoMP) said it signed the Baguio Declaration, with its members pledging to operate within the bounds of sustainable and responsible mining practices.

The industry signed the declaration after Department of Environment and Natural Resources (DENR) Secretary Roy A. Cimatu issued a challenge last month at the 64^th Annual National Mining Safety and Environment Conference in Baguio City.

CoMP Vice-Chairman Jose P. Leviste, Jr. said: “This is not a difficult commitment to make because most of us are already practicing these principles. In fact, as you have heard, two Filipino companies, Nickel Asia Corp. and [OceanaGold Corp.] won […] the highest mining awards in the region,” he added.

Mr. Leviste was referring to the first Association of Southeast Asian Nations Minerals Award where Nickel Asia’s Rio Tuba Mining Corp. was found to have adopted best practices for mineral mining while OceanaGold took first place in the minerals processing category.

The declaration contains five elements, which require that mining operations be people-oriented, protect and enhance the environment, respect the rights and welfare of the Indigenous Peoples, contribute a fair share of revenue to the national economy and comply with international standards.

“The Baguio Declaration is the second giant step that the CoMP is taking today as a journey to institutionalize responsible and sustainable mineral development in the country,” he added.

Prior to signing the Baguio Declaration, CoMP also signed the Mining Association of Canada’s (MAC) Toward Sustainable Mining (TSM) initiative.

The TSM initiative is an agreement to follow certain standards, subject to evaluation by an external auditor every three years. It also requires mining companies to submit an annual report on the protocols implemented under the initiative.

The Philippines is the fourth country to sign the initiative, helping meet the fifth element of the Baguio Declaration.

CoMP Chairman Gerard H. Brimo told reporters that the first few steps of the TSM would include a two-day workshop with the president and vice-president of the MAC and the formation of a local “community of interest” made up of a panel of advisers to assist CoMP in the implementation of the protocols.

“Randomly every year, [they will also] interview selected mining companies and discuss their performance so it will take a couple of years to implement but today we’ve taken the first steps towards launching TSM towards sustainable mining so it’s a positive development for us,” Mr. Brimo said.

Mines and Geosciences Bureau officer-in-charge Wilfredo G. Moncano noted that while the first half of the 2017 was “unstable” for the mining industry, this year was still better with the revival of the relationship between the industry and the government in the last few months.

“There are agreements now that for example these bills that are pending in Congress, with the increase of the excise tax. The mining industry supports these bills,” he added.

“I think (the previous DENR leadership) served as a wakeup call… so they are now aware of their responsibilities.” — Anna Gabriela A. Mogato

Top business opportunities in Asia Pacific

December 20, 2017 | 12:00 am

BUSINESS OPTIMISM has hit a two-year high in Asia Pacific, reflecting a buoyant mood across the region that is largely driven by positive prospects for increased trade, P&A Grant Thornton said in a report. Read the full story.

Nation at a Glance — (12/20/17)

December 20, 2017 | 12:00 am

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

MICC to recommend tougher sanctions for mining violations

December 20, 2017 | 12:00 am

THE Mining Industry Coordinating Council (MICC) plans to submit a memorandum to Malacañang recommending stricter extraction regulations, amid some uncertainty over whether President Rodrigo R. Duterte has seen the body’s recommendation to lift the ban on open-pit mining.

The MICC met on Monday and decided to resubmit anew findings of the technical working group (TWG) on open-pit mining to the President, Finance department officials said.

MICC members said the memorandum is not intended to reverse the President’s decision, but would only serve as a basis for future policy decisions.

“What the MICC has decided is to provide the President the info provided by the TWG so it will be in the form of memorandum,” Finance Assistant Secretary Maria Teresa Habitan told reporters late Monday.

She said that the memorandum could be ready by January.

“The President has made a policy decision and we respect that, but since the report the findings of the TWG has not found its way to Malacañang yet, the decision was nevertheless submit it to the President for whatever purpose it may serve,” Finance Undersecretary Bayani H. Agabin said.

“He always will have the final say,” he added.

Former Environment Secretary Regina Paz L. Lopez signed on April 27 Department Administrative Order 2017-10, which prohibits the extraction of copper, gold, silver, among others, through the use of open-pit methods. The multiagency mining council however recommended that the ban be lifted on Oct. 24.

Mr. Duterte on the other hand told the media on Nov. 21 that the ban will remain, calling open-pit methods damaging to the environment.

Asked what would the memorandum contain, Mr. Agabin said: “The conclusion was that as a mining method (open-pit) can be safely done but the recommendation was of course we have to tighten enforcement.”

The memorandum will recommend upgrading the sanctions and penalties for violations involving all modes of extraction. “And the penalties have to hurt,” Ms. Habitan said.

She said that the implementation of these measures is within the power of the Department of Environment and Natural Resources, a co-chair of the MICC.

“The MICC, as the usual practice, will draft the memorandum signed by the co-chairs and then it will be submitted to Malacañang, and at an appropriate time if the Cabinet sees it worthy to be presented to the Cabinet meeting, Secretary (Roy A.) Cimatu will present the findings.” — Elijah Joseph C. Tubayan

How PSEi member stocks performed — December 19, 2017

December 20, 2017 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Tuesday, December 19, 2017.

A partner in gift-giving

December 19, 2017 | 10:00 am

By Mark Louis Ferrolino

Special Features Writer

Some words are hard to tell, some thoughts are difficult to express, and some feelings are challenging to show. But one great way to convey one’s intention is to give gifts that are not just lovely and surprising but also exude a personal touch.

Showing what you truly feel and making a person feel special and important can be made convenient with the help of C’est Ça Giftworks, a creative gift shop that offers and delivers personalized and creatively arranged gifts — balloons, flowers, toys, food items or anything anyone wants to give. It’s a reliable partner in coming up with creative and memorable gift ideas, depending on one’s budget, for any occasion.

C’est Ça is a French phrase meaning “This is it” or “That’s it,” and roughly equivalent to the interjection “Eureka!”. C’est Ça Giftworks tries to live up to this sense of astonishment by keeping each customer and recipient satisfied with the products and services it offers.

“It’s a nice feeling that you are able to help people express their feelings. It’s something new, it’s something different. We come up with something that is very personal since you can custom-make it. So, you as a recipient, ang feeling mo pinag-isipan (you will feel that it is well thought-out),” C’est Ça Giftworks owner and founder Ma. Lirio C. Canoy told BusinessWorld in an interview.

It was in 1987 that C’est Ça Giftworks started as a small, home-based business, whose customers were only family friends and relatives. Still with excitement and enthusiasm, Ms. Canoy reminisced how happy she was when a customer, who was not related to their family, placed an ordered for the first time, five years after C’est Ça began operating. As she slowly mastered the craft of creating gift arrangements, the business also grew and started to cater more unique and repeat clients.

Today, the 30-year-old venture operates a physical store in Libis, Quezon City, where customers can sift through sets of creative gift ideas, and buy some in-store items. Ms. Canoy’s eldest son, Jose Alfonso C. Canoy, has joined her in managing the business as the store’s general manager.

Mr. Canoy shared that they keep the business successful by handling every gift arrangement with care and attention. “We always try to put ourselves in the position of our customers, of our clients… We put ourselves in their shoes,” he said.

Apart from keeping the trust of their customers and the reputation they have built over the years intact, they also keep up with the current trends to adapt to the changing behaviors of the customers. From relying solely on the traditional strategy of producing brochures that are distributed in public, they are now reaching their market by maintaining a strong presence online through their Web site, Facebook page, Instagram and Twitter accounts. They even hired a social media manager to handle these accounts.

During special occasions like Valentine’s Day and Mother’s Day, when a bunch of orders come in, Mr. Canoy shared that they hire extra staff to accommodate all the orders, and rent extra delivery vans to deliver all the orders on the special days. This is to make sure that despite the large number of orders, they are still able to attend to the needs of their customers and maintain the quality of service and products they are known for.

“I think it will continue to grow because people want convenience more than anything, especially with the traffic,” Mr. Canoy said of his their venture. “I think we will be able to make [it] bigger because of the convenience that we offer.”

To aspiring entrepreneurs who want to start their own business, Ms. Canoy advice is to think of a business concept that is something new. “Start small so that you don’t get eaten up by the pressure. Relax, and take your time,” she added.