UnionBank Q2 net profit falls over 17% as fee income drops

July 31, 2018 | 12:04 am

UNION BANK of the Philippines, Inc. said net profit fell in the second quarter following a decline in its “other” income.
In a regulatory filing Monday, the Aboitiz-controlled lender said net profit in the three months to June was P1.78 billion, down 17.2% year-on-year.
In the six months to June, UnionBank’s net profit was P4.72 billion, up 8% from a year earlier.
“Other” income came in at P1.6 billion, down 13% from a year earlier.
The main component of “other” income was service charges, fees and commissions, which fell 27.5% year-on-year to P818.85 million.
UnionBank’s financial assets posted a loss of P13.22 million, a reversal from the P67.16 million gain a year earlier.
Miscellaneous income meanwhile rose 25.5% to P801.62 million.
Meanwhile, net interest income rose 1.25% to P4.2 billion during the quarter.
Interest income on loans and other receivables grew 20.4% year-on-year to P4.84 billion.
In a separate statement, the bank said total loans amounted to P313 billion, up 18% year-on-year, with retail loans accounting for 33% of UnionBank’s total loan book.
Deposits on the other hand were at P452.9 billion in the second quarter.
Overall, UnionBank’s assets grew to P623.2 billion at the end of June, up 12.8% year-on-year.
The return on equity was 12.8%, while return on assets was 1.6%.
“We are ahead of our target for the year despite margin compression in the first half due to higher interest rates and regulatory compliance,” UnionBank Treasurer and Chief Financial Officer Jose Emmanuel U. Hilado was quoted as saying in the statement.
He added that the bank is expecting recurring income to drive profitability for the remainder of the year.
“We anticipate margins to improve as loan rates start to catch up against deposit costs.”
Meanwhile, Edwin R. Bautista, UnionBank president and chief executive officer, said that the bank is making progress on its digital transformation.
In May, UnionBank launched Project i2i, a blockchain-based platform connecting rural banks into a financial network.
“We look forward to launching more innovations in the industry as we aim to be among the pioneers in the field of blockchain technology and the token economy,” Mr. Bautista added.
UnionBank shares closed at P84.50, up 30 centavos or 0.36%. — Karl Angelo N. Vidal

Kristen Stewart to star in new Charlie’s Angels

July 31, 2018 | 12:04 am

LOS ANGELES — Charlie’s Angels are returning to the big screen next year for a third outing, this time with a female director and a multi-racial trio of women led by Kristen Stewart. Twilight star Stewart, along with rising British actresses Naomi Scott and Ella Balinska, will play the lead roles in the latest movie reboot of the 1970s crime caper, to be directed by Elizabeth Banks, Sony Pictures said on Thursday. “Charlie’s Angels, for me, is one of the original brands to celebrate the empowered woman since its debut in the ‘70s. This film honors the legacy of Charles Townsend and his agency while introducing a new era of modern and global Angels,” Banks said in a statement. Banks, who also directed Pitch Perfect 2, is also a co-producer and co-writer and she will play the role of the avuncular Bosley, which was played by a man on both the original TV series and in two movie versions. The new Charlie’s Angels marks a trend in Hollywood to entrust more women with directing big budget fare, and towards ethnic diversity. Scott is of Indian descent, while Balinska is mixed race. The new movie is expected to be released in September 2019 but the title and plot details were not announced. — Reuters

DICT expects to resolve Bayantel 3G dispute by end-Sept.

July 31, 2018 | 12:04 am

THE Department of Information and Communications Technology (DICT) said the resolution of a dispute involving the third generation (3G) frequency held by Bayan Telecommunications, Inc. (Bayantel) is moving forward, with a decision now up to the Supreme Court.
“(National Telecommunications Office (NTC) Commissioner Gamaliel A. Cordoba) reported to me that the contenders for that frequency, of course Bayantel now owned by Globe Telecom, Inc., ABS-CBN Convergence, Inc. and NOW Corp. have agreed to withdraw their petition,” DICT Acting Secretary Eliseo M. Rio, Jr. told reporters in a chance interview last Wednesday, July 25.
However, on Monday night, July 30, Mr. Rio clarified through a phone interview with BusinessWorld that there was a mistake in an earlier NTC report submitted to his office, and that NOW Corp. is still fighting for its case.
“Ang information na binigay sa akin ng NTC, (they have all withdrawn). But it turns out yung NOW [Corp], mukhang hindi pa nagwiwithdraw. So kinukumbinsi pa siguro sila ng SolGen at ng NTC [The information given to me by NTC is that the three companies have withdrawn. But it turns out NOW Corp. has not withdrawn. So maybe the Solicitor General and the NTC are still convincing them],” Mr. Rio said.
The fifth and last 3G slot that the NTC is looking to take over is a disputed frequency awarded to Bayantel by an appellate court in 2010. However, the decision was questioned by the NTC and raised to the Supreme Court, until Mr. Rio said in May that the parties have agreed resolve it out of court.
A settlement is expected by the end of September or early October, around the time the DICT hopes to finalize the selection process for the new entrant to the telecommunications industry, the so-called “third player.”
But Mr. Rio said this does not necessarily mean the 10 Megahertz (MHz) in 3G spectrum of Bayantel will be awarded to the new entrant. He noted that Globe, the company with the most 3G subscribers, only has 10 MHz. Meanwhile, PLDT, Inc.’s Smart Communications, Inc. has 25 MHz, and the third player will be awarded 15 MHz.
“So once we obtain control of Bayantel’s 10 MHz, we have to decide if everything will be given to the third telco. If we do that, Globe will have only 10, the third telco will have 25, PLDT-Smart will have 25. So it’s unfair to (Globe), and we don’t want that to happen also. The distribution has to be equitable,” he said.
The government is currently working on the final draft of the terms of reference to be used for the selection of the third player. Once finalized, this will be issued as a memorandum circular that will guide the oversight committee in the process.
Mr. Rio said the bid documents and guidelines will be issued to the interested bidders by September, with selection to be based on a prospective company’s highest committed level of service. “The higher their commitments are, the more points they get. There’s no discretion on the part of the government,” he said.
He added, the government is looking to name the winning bidder by first week of December. After the awarding, the company will be given 90 days to finalize its organization.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

New Ayala Land resort brand

July 31, 2018 | 12:03 am

BEACHES ringed by emerald seas are among the top attractions of Huni, an Ayala Land resort brand that recently opened in Northern Iloilo’s Sicogon Island.
The 52-room bed and breakfast is part of an emerging Ayala Land tourism estate that is 45 minutes by boat from Estancia, the nearest port on the Panay mainland, and another 90 minutes from the Roxas City airport and two-and-a-half hours from Iloilo international airport. By the end of the year when the island’s airport will be ready to receive Air Swift flights.
Huni, named after the hum of the sea in Filipino, has been designed to allow guests to enjoy marine life and the flora and fauna of the 1,100 hectare area acquired by Ayala Land in 2013. The beachfront property has rooms ranging from the 33 sq.m. deluxe room to the 53 sq.m. family suite with views of the sea and the surroundings. The rooms that carry a contemporary theme are complemented by a naturally ventilated, all-day dining facility, a lounge, and a swimming pool a few steps from the sea.
In addition to Sicogon’s beaches and its 350 meter-high Mt. Opao for trekking, guests can go island hopping to the nearby Gigantes Group of Islands where one can find natural attractions like the Tangke Saltwater Lagoon. Before the end of the year, guests will also have the option to experience cliff diving, mountain biking and zip-lining from a nearby islet to the main beach.
In a few years time, these activities will be complemented by a range of dining, retail, and entertainment options from a planned resort town in the Sicogon Island Tourism Estate.

Robinsons Bank sees loan growth slowing

July 31, 2018 | 12:03 am

By Melissa Luz T. Lopez, Senior Reporter
ROBINSONS BANK expects lending growth to ease this year, and is now recalibrating loan margins for a higher interest-rate environment.
Bank President and Chief Executive Officer Elfren Antonio S. Sarte said it is reevaluating its growth targets this year at a time of rising borrowing costs and currency trading losses.
In an interview, Mr. Sarte said it “might be hard” to sustain the 40% loan growth which the bank posted in 2017 following rate hikes introduced by the Bangko Sentral ng Pilipinas (BSP).
“Actually, we are reassessing if we can still grow by that. The problem is of course, we’re also trying to calibrate the increase in interest rates for our clients, how much can they take,” Mr. Sarte said.
The BSP has raised benchmark borrowing rates by a total of 50 basis points in two consecutive actions in May and June, in a bid to rein in surging inflation. BSP Governor Nestor A. Espenilla, Jr. has signalled that another rate hike is on the table, as he noted that policy makers are considering a “strong follow-through” action for their Aug. 9 rate-setting meeting.
Rate hikes from the BSP have brought the benchmark rates to between 3-4%, which in turn will push market yields higher. Mr. Sarte said this appears “tricky” for banks to adjust for higher rates in a way that will not turn clients away from borrowing money altogether.
“So far, we can balance our portfolio and there’s still room for growth. We just have to make sure we grow the proper channels,” Mr. Sarte said.
In turn, the bank is targeting to expand its non-interest income to keep growing.
The bank is likewise gearing up for a foray into merchant acquisition, offering point-of-sale debit and credit card payment services to the retail network via its parent firm, which controls a number of retail assets.
Recently, Robinsons Bank also started issuing credit cards to boost its consumer segment.
“The nice thing is it’s fee income. The real strategy is to grow core income because there’s no trading (gains),” Mr. Sarte said, referring to the slim gains from foreign exchange trading due to a weak peso.
“You have to scale the bank so you are trying to really work on getting all these forms of income and make sure the bank is a player in all these various fields,” he added, noting that the bank is “uniquely positioned” given its sister companies like the Robinsons malls and budget carrier Cebu Pacific.
Looking ahead, Mr. Sarte said the bank is keen on scaling up as a universal bank and eventually going public. The bank has sought approval from regulators to increase its capital stock to P27 billion from the current P15 billion.
Mr. Sarte is confident that the bank’s biggest shareholders, JG Summit Holdings Inc. and Robinsons Retail Holdings Inc., can inject the additional funding to meet the P20-billion capital requirement set by the BSP for unibank status. Making it to the top tier would allow the bank to offer more sophisticated products and services to clients.
Currently, Robinsons Bank is licensed as a commercial lender and is the 19^th biggest in the industry with P102.829 billion assets at end-March, according to central bank data.

Prince heirs nix ‘Purple Rain’ tribute

July 31, 2018 | 12:03 am

NEW YORK — Prince was notorious for enforcing copyright to his songs, and now his heirs have made sure that litigiousness has extended beyond the grave, demanding the removal from social media of a video of a “Purple Rain” sing-along tribute. A photojournalist for the Star Tribune, the daily newspaper in Prince’s hometown of Minneapolis, posted on Twitter a video of a street crowd spontaneously singing the Purple One’s celebrated ballad on the day of his death in 2016. The video, which was retweeted more than 13,500 times, recently vanished. The photographer, Aaron Lavinsky, said that the Universal Music Publishing Group, which holds rights to Prince’s songs, had ordered it removed. The publisher, he said, was acting under the Digital Millennium Copyright Act, an often controversial 1998 US law that allows copyright holders to issue takedown notices to online material and exempts internet companies from liability. “DCMA takedowns are an important tool for artists who need to protect their intellectual property online, but a major corporation abusing system to remove a news video shot by a newspaper photographer is inappropriate,” Lavinsky tweeted. Representatives for Universal, the largest music label conglomerate and parent of the publisher, did not immediately return a request asking for comment. Prince’s estate has eased some of the singer’s directives since his death, including putting his music on major streaming services such as Spotify and signing new deals with record labels, with which Prince feuded so intensely that he briefly changed his name to an unpronounceable symbol in the 1990s to escape contractual conditions. — AFP

Megaworld to invest P28B in first Bacolod township

July 31, 2018 | 12:03 am

MEGAWORLD CORP. is investing P28 billion over the next 10 years to develop its first integrated township in Bacolod City, which is being positioned as a new business district.
The property company, controlled by Andrew L. Tan, said it will start construction of the 34-hectare project, to be called The Upper East. The township located near the Bacolod City Government Center will feature a 30-meter, six-lane road, Upper East Avenue, as well as old-growth Acacia trees that have been preserved and incorporated into the project’s design.
“The Upper East will be the city’s first master planned mixed-use community that integrates the live-work-play components of an integrated urban township… Around 35% of the township will be dedicated to parks and open spaces. We are excited to build Bacolod’s new and modern central business and lifestyle district,” Megaworld Vice President for Sales and Marketing Rachelle Peñaflorida said in a statement.
The company initially launched the project in 2015, and will start construction of residential condominiums, malls, commercial centers, mixed-use buildings, office towers, hotels and other facilities such as a transport hub and open parks.
The project takes its inspiration from New York’s upscale neighborhood of the same name. Megaworld will build a lifestyle mall consisting of retail, entertainment, and leisure offerings, including a section patterned on Grand Central Station.
The first structure to rise within the development will be One Regis, a nine-storey residential condominium.
One Regis will offer studio units of up to 37 square meters (sq.m.), one-bedroom units of up to 58 sq.m., and two-bedroom units covering up to 73 sq.m.
Amenities in the mid-rise development will be located at the second floor, including a swimming pool, kiddie pool, pool lounge, seating areas, fitness center, events hall, shower rooms, and a walk park.
“One Regis will be located right across the township plaza and beside the iconic Casa de Emperador. It will also be just a short walk away from the future mall development. It will be a perfect sanctuary for those wanting to live the township lifestyle that only Megaworld can offer in Bacolod City,” Ms. Peñaflorida said.
Megaworld’s net profit attributable to equity holders of the parent rose 11% to P3.2 billion during the first quarter, driven by a 10% increase in revenue to P13.1 billion.
The company is one of the core units of Mr. Tan’s Alliance Global Group, Inc., which also has interests in liquor, gaming, and quick-service restaurants.
Megaworld closed flat at P4.70 on Monday. — Arra B. Francia

Malampaya fund could be tapped in power bill savings

July 31, 2018 | 12:02 am

MALAMPAYA natural gas project — *BW FILE PHOTO*

HOUSEHOLDS are set to save up to P2,033.76 a year on electricity payments if a plan to use the P204-billion Malampaya fund to reduce the universal charge materializes.
The Senate Committee on Energy has taken up Senate Bill No. 924, which proposes to allocate the net national government share from the Malampaya natural gas project for the payment of the stranded contract costs and stranded debt of the National Power Corp. The proposed legislation is authored by Senator Ralph G. Recto.
The stranded debt and stranded costs are components used in the computation of the universal charge that is imposed on consumers under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).
Data presented by the Power Sector Assets and Liabilities Management Corp. (PSALM) show that applying the remaining P204 billion of the Malampaya fund would result in avoiding an increase of P0.8474 per kilowatt hour (kWh) in retail power rates.
The move would result in annual savings of P2,033.76 for an average household consuming 200 kWh per month.
“These savings are enough for an underprivileged household to buy two additional sacks of rice every year,” said Senator Sherwin T. Gatchalian, the chairman of the Senate energy panel, in a statement.
He said he supports the measure in principle, subject to further study on “precisely how much of the remaining Malampaya funds should be applied for the purpose.”
Also on Tuesday, Mr. Gatchalian took to task once more the Energy Regulatory Commission (ERC) for delays in the approval of the stranded debt and contract cost and rate applications.
PSALM pointed out that the delays had resulted in an additional P34.78 billion of costs to be shouldered by consumers, equivalent to a power rate increase of P0.1973 per kWh.
Mr. Gatchalian said the additional costs are “absolutely unacceptable.” — Victor V. Saulon

Ortigas bags PANAta award for Estancia’s Imaginarium

July 31, 2018 | 12:02 am

PROPERTY DEVELOPER Ortigas & Co. was recognized by the Philippine Association of National Advertisers (PANA) with a Bronze Award for Excellence in Marketing Innovation for its Estancia Vast Imaginarium project during the recent PANAta Marketing Effectiveness Awards.
Launched during the Christmas season last year in upscale mall Estancia at Capitol Commons, the Vast Imaginarium was Ortigas & Co.’s unique take on Christmas displays, inspired by celebrated Japanese contemporary artist Yayoi Kusama’s Infinity Mirror Rooms, through four themed rooms — The Enchanted Room, The Lit Room, The Green Room, and The Abyss Room.
PANA lauded the company’s dynamism to provide Filipinos with a new and imaginative way to experience art.
“This was an ambitious project we took on and the outpouring of positive reaction from the public as seen in the social media posts was already an achievement for us. Receiving this distinction from PANA makes everything much more meaningful and drives us to create more memorable experiences for our customers in Ortigas & Co. developments in the future,” said Vice-President and General Manager for Ortigas Malls Renee Bacani.
Other Ortigas & Co. projects which were recognized were the Ortigas East Christmas Street Light Musical Tunnel, a finalist in the Excellence in Marketing Innovation category, and The Bike Playground at Circulo Verde, which received a certificate of recognition under the Excellence in Brand Building category.
PANAta is an annual recognition program for effective marketing communication materials, with the objective of recognizing brands and organizations that effectively utilize marketing communications to build business. The PANAta program aims to develop and advocate best practice models of efficient advertising and marketing communications that drive goals.

T-bill rates rise ahead of policy meeting; P15B fully awarded

July 31, 2018 | 12:02 am

THE government fully awarded the Treasury bills (T-bill) it offered Monday, with rates climbing across the board, with investors expecting another monetary policy tightening from the Philippine and US central banks.
The Bureau of the Treasury (BTr) borrowed P15 billion as planned at its T-bills auction yesterday. Bids totalled P35.8 billion, up from the P32.9 billion recorded at last week’s offering.
The government borrowed P4 billion as planned via 91-day bills yesterday as tenders amounted to P9.585 billion. The average rate rose 4.2 basis points from the previous auction to 3.261%.
The Treasury also made a full award of the 182-day paper, raising P5 billion after receiving offers amounting to P13.054 billion. The average yield climbed to 4.294% from last week’s 4.235%.
The BTr also borrowed P6 billion via the 364-day T-bills. Bids offered by institutions amounted to P13.177 billion, more than double the Treasury wanted to borrow. The average rate picked up by 9.1 basis points to 4.9%.
At the secondary market prior to the auction, three-month and six-month paper were quoted at 3.2713% and 4.475%, respectively, while one-year securities fetched a 5.072% yield.
National Treasurer Rosalia V. De Leon said the Treasury opted to make a full award amid healthy demand from investors.
“We [had] a very healthy auction in terms of demand. We saw one-and-a-half to two times oversubscription,” Ms. De Leon said following the auction.
She added that the “incremental” rise in rates was expected by the bureau.
“It’s expected that they will be asking for incremental [rise in] yields given the pronouncements of the [Bangko Sentral ng Pilipinas],” Ms. De Leon added
The central bank has been signalling another rate hike during its next monetary policy meeting in August to quell inflation expectations.
“In the face of rising threats to inflation, we hiked policy rates last May and June. We are ready to follow through to secure our inflation target,” BSP Governor Nestor A. Espenilla said in a speech at a reception for the banking community on Friday.
He added that the monetary authority remains firmly committed to its primary mandate of price stability.
Meanwhile, Ms. De Leon noted that investors also factored into their bids the recent economic growth data in the US.
The US economy grew 4.1% in the second quarter, the fastest in nearly four years due to increased consumer spending and rushed soybean shipments to China ahead of the imposition of tariffs.
“That is increasing the likelihood that the Fed (US Federal Reserve) will continue its tightening,” Ms. De Leon said.
The central banks have raised rates twice this year. BSP’s benchmark rates are now at 3-4%, while Federal funds rates are currently at 1.5-1.75%.
“I hope this is the start of the plateauing of rates given that they’re now offering five-to-10-basis-point increases in rates unlike the 30-basis-point hikes before.”
Meanwhile, a trader said the auction results were within expectations.
“The demand can be seen across all tenors. However, investors might find the rates of six-month and one-year paper more attractive that is why they decided to park their rates there,” the trader said in a phone interview.
The Treasury is set to raise P300 billion from the domestic market this quarter through auctions of securities, offering P195 billion in T-bills and another P105 billion in T-bonds.
The government plans to borrow P888.23 billion this year from domestic and foreign sources to fund its budget deficit, which is capped at 3% of the country’s gross domestic product. — Karl Angelo N. Vidal

CBS weighs Moonves suspension over assault claims

July 31, 2018 | 12:02 am

SAN FRANCISCO — CBS directors are weighing whether chairman and chief executive Leslie Moonves should step aside as the US television network investigates claims he sexually harassed women, The Wall Street Journal reported Sunday. The CBS board is expected to choose a special committee that would oversee the probe, which will include an examination of the company’s workplace culture, people familiar with the matter told the Journal. Board members meet via conference call on Monday. The special committee is set to choose a law firm to lead the probe by mid-week, and determine whether Moonves should be suspended during the investigation, according to the Journal. “I think the board realizes as a whole that this is a very, very, very serious situation,” a person familiar with the matter told the newspaper. “While there is an important Les piece to this, really, more important to the company as a whole is that this raises serious issues with regard to culture and harassment throughout the company.” A New Yorker article published Friday recounted accounts by six women who had professional dealings with Moonves and said he sexually harassed them between the 1980s and late 2000s. Four described forcible touching or kissing during business meetings, and two said Moonves physically intimidated them or threatened to derail their careers, The New Yorker’s Ronan Farrow reported. Moonves expressed regret for any behavior that may have made women “uncomfortable,” but insisted he had not retaliated to “harm or hinder anyone’s career.” — AFP

Malampaya gas reserve disposal options mulled

July 31, 2018 | 12:01 am

THE Philippine National Oil Company (PNOC) has been urged to step up its efforts in disposing of its reserve of banked gas from Malampaya by 2024.
The banked gas held by the PNOC was equivalent to 108.6 petajoules (Pj) in 2009. Of this total, 4.61 Pj was sold to the Power Sector Assets and Liabilities Management (PSALM) in 2013 and 6.33 Pj was awarded to Pilipinas Shell Petroleum Corp. (PSPC) in 2015.
Currently, the PNOC has 97.67 Pj, which it needs to monetize by the end of the Malampaya gas field contract in 2024.
“We can find a balance. We’re not telling you to sell it at a low price nor do we want you to wait for the perfect contract. Find a competitive price that will in the meantime benefit the government and allay the economic troubles that we have right now,” Rep. Mark Aeron H. Sambar (PBA Partylist) told PNOC in a hearing at the House Committee on Energy on Monday.
The committee was acting on House Resolution 1737, authored by Mr. Sambar, which calls on the PNOC and the Department of Energy (DoE) to disclose their plans for disposing of the banked gas.
The HR noted that the PNOC has only managed to sell a small portion of the banked gas since 2009 and that the PNOC and the DoE have not considered other alternatives except for a proposal to utilize the reserve for the Liquefied Natural Gas (LNG) terminal, which may be operational by 2020.
According to the PNOC, the reserve is “the volume of natural gas which was not utilized but required to be paid for under the Take-or-Pay Clause of the Ilijan Gas Sale Purchase Agreement.”
The PNOC said it has over the years tried to monetize the banked gas. “The PNOC Board has already approved a two-pronged strategy for the banked gas, namely, offer for public sale and bundled with the LNG project,” the PNOC said in comments submitted to the Committee. — Charmaine A. Tadalan