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Asian markets rise after Fed chief boosts US confidence

Hong Kong — Asian markets rose on Wednesday, tracking a Wall Street rally after the head of the Federal Reserve expressed confidence in the US economy despite fears of a global trade war.
Federal Reserve chief Jerome Powell offered a positive outlook citing a strong job market and inflation figures in line with Fed targets, sending US stocks higher.
“Powell’s testimony was music to investor’s ears as the Dow gained for the 4th consecutive day while the Nasdaq hit a new high-water mark”, said Stephen Innes, head of Asia-Pacific trading at OANDA.
But Powell acknowledged uncertainty over the “outcome of current discussions over trade policy”, with US President Donald Trump hitting out at China and other economic partners as he adopts an aggressive “America First” policy.
Fears about an all-out China-US trade war continue to rattle investors, with both sides lodging counter-complaints at the World Trade Organization after recently imposing and threatening further tariffs on billions of dollars worth of goods.
Washington’s traditional allies Japan and the EU have also not been spared from hefty US tariffs.
In a move described by officials as a “clear message” against protectionism, the EU and Japan signed a sweeping free trade deal on Tuesday, eliminating tariffs for a wide range of products from Japanese cars to French cheese.
Japanese exporters advanced in early trading Wednesday with Toyota rising 1.55 percent to 7,489 yen, Honda climbing 0.96 percent to 3,355 yen and Panasonic up 1.10 percent at 1,459 yen.
Tokyo rose one percent on the back of a cheaper yen as the dollar strengthened following Powell’s upbeat view of the US economy.
Hong Kong and Singapore also edged up 0.4 percent while Sydney climbed 0.7 percent.
Oil falls
Oil made a modest recovery overnight after plunging on fears of a glut amid concerns that a looming US-China trade war would dampen demand.
But it steadied slightly after Libya’s state oil company announced a halt to exports at its Zawiya terminal citing a fall in production after an attack on workers.
“​​Oil has had some big falls. But every time it drops recently there seems to be some sort of supply disruption news that puts the bid back in the market,” said Greg McKenna, chief market strategist at AxiTrader.
“That’s what we saw again overnight with the news that more than half a million barrels a day of production were about to be shuttered for maintenance in Venezuela.
“We also heard another force majeure at a Libyan port to disrupt supplies. That helped crude bounce from the lows which were a continuation of the previous day’s weakness,” McKenna added.
But both main contracts fell again following a report late Tuesday by the American Petroleum Institute that US crude stockpiles had increased by more than 600,000 barrels last week.

Shake Shack’s plan to open in Philippines sends SSI stock soaring

Shake Shack Inc. is stirring up shares of SSI Group Inc. after the burger chain founded in New York selected the upscale Philippine retailer as its local partner.
News that the world famous ShackBurger will be served in Manila beginning in the spring of 2019 sent shares of licensee SSI rising as much as 18 percent, the most in more than two years. Volume surged more than 3,500 percent above the stock’s three-month daily average.
Shake Shack, in a statement, said it selected SSI Group as its Philippine partner because of its retail expertise and culture of hospitality. SSI is the largest retailer of luxury brands like Hermes, Prada and Gucci in the Southeast Asian nation and has also expanded into dining through TWG Tea and SaladStop!.
The New York burger chain is expanding in Asia as the U.S. market becomes saturated. Shake Shack last year said it plans to open 14 stores in Hong Kong and Macau through 2027. Singapore is also getting its first Shake Shack at Changi Airport’s newest terminal, The Straits Times reported.
“Manila is an incredible city; its heart beats with a distinct warmth and hospitality,” said Michael Kark, vice president of global licensing at Shake Shack, in a statement. “We are excited to begin the search for our first site in Metro Manila.” — Bloomberg

NEDA seeks continuity in infrastructure development

By Elijah Joseph C. Tubayan
Reporter
THE GOVERNMENT is taking steps to persuade the succeeding administration to carry on stepped-up infrastructure development, even as a looming shift in form of government adds to uncertainties now hounding the economy, the state socioeconomic planner said on Monday.
“What we… want to accomplish in this administration is that, with… master plans, long-term projects… the next administrations would continue what have been started,” Socioeconomic Planning Secretary Ernesto M. Pernia said in discussions with BusinessWorld editors, reporters and researchers in Quezon City.
The administration of President Rodrigo R. Duterte, who marks the midpoint of his six-year term next year, plans to spend over P8 trillion on priority infrastructure until 2022, when such disbursements should be equivalent to 7.3% of gross domestic product from a programmed 5.4% in 2017 and 6.3% this year.
“We are… concerned with the question of what happens beyond 2022. People are saying ‘baka wala (stepped-up infrastructure development will end) after this administration wala na,’” Rolando G. Tungpalan, undersecretary for Investment Programming at the National Economic and Development Authority (NEDA) said in the same roundtable session.
“We prepare ourselves by ensuring that there are masterplans… that will guide future project investments,” he explained.
“We don’t want just projects that are stand-alone basis but in the context of a development plan… so basically we are guided by a longer term beyond 2022.”
‘THIS IS VERY IMPORTANT…’
Mr. Pernia explained further: “I think if it started already, it’s harder to completely demolish.”
“So there’s a chance that the next administration would continue. If they see that the previous admin[istration] did a good job, I think there would be pressure from the public that the succeeding administrations would also follow the examples set by the admin[istration].”
Mr. Tungpalan said, for instance, that the master plan for development of Metro Davao and Metro Cebu should be completed by October.
“Then we have the biggest master plan that is now under the auspices of NEDA that is the Manila Bay sustainable development plan, encompassing a region of 25 million (people) that would guide future development of not just the Manila Bay reclamation are but also the coastal part that would span from Cavite to Bataan,” the NEDA official said.
“This is very important because we want to make sure that there’s no sporadic, chaotic embedded development in… the Manila Bay (area). This is an exercise that we should be able to complete… in 25 months.”
Both NEDA officials said the Duterte administration itself has pushed major infrastructure projects that were conceptualized and even underwent procurement in the past administration, citing as examples the Metro Rail Transit (MRT) common station that will serve Metro Manila’s railway lines and the MRT-7 that will run between North Avenue in Quezon City and the City of San Jose del Monte, Bulacan.
“Many of the projects that are visible now will be completed already. I think kung walang (if there is no) disruption up to 2022, I think tangible na ‘yung improvements sa infrastructure natin,” Mr. Pernia said.
“We thought that this is a timely discussion to talk about regional projects because of the looming federal government. Whether or not the federal government will be helping push the projects, that is still an open question there,” he added.
“It’s a different ball game. Instead of basketball, it becomes football.”
Mr. Tungpalan said the National Government will provide about 62% of funds for over 4,900 planned infrastructure projects. Past NEDA briefings show public-private partnerships will account for about 17% and official development assistance, some 13%.
“So a change in government would mean some arrangement will be altered,” Mr. Pernia said.
“Some of the lenders will say: ‘To whom would we be dealing with this time?’ So there’s that transition that will disrupt,” he added, noting that investors “don’t like uncertainty.”
And with the envisioned federal system of government shifting more of the development burden to local authorities, Mr. Pernia said: “I think more preparation is needed for local capability.”
Public investment program breakdown by region

Public investment program breakdown by region

THE GOVERNMENT is taking steps to persuade the succeeding administration to carry on stepped-up infrastructure development, even as a looming shift in form of government adds to uncertainties now hounding the economy, the state socioeconomic planner said on Monday. Read the full story.
Public investment program breakdown by region

BSP says in ‘firm’ control as prices spike

By Melissa Luz T. Lopez
Senior Reporter
The BANGKO SENTRAL ng Pilipinas (BSP) continues to have a firm hand on inflation, its chief said amid mounting calls for a more aggressive rate hike next month.
BSP Governor Nestor A. Espenilla, Jr. said monetary authorities have delivered “measured” responses to surging consumer prices through two successive interest rate hikes, coupled with the weekly term deposit auctions, contrary to criticisms that the central bank has been behind the curve in doing so.
Mr. Espenilla said the BSP continues to have “firm monetary control” despite fast-rising inflation, which hit a fresh five-year peak of 5.2% in June to bring the year-to-date average to 4.3%, beyond the central bank’s target.
“Our two successive rate hikes in May and June were measured and deliberate responses to the evolving economic environment and dynamic market conditions meant to help anchor inflation expectations and temper second-round effects, firmly signalling our commitment to ensuring price stability,” Mr. Espenilla said in a speech before the Institute of Corporate Directors on Tuesday.
“These were undertaken even as we await full implementation of appropriate policy response to supply shocks such as the National Government’s social safety net programs.”
The Monetary Board tightened rates through two 25 basis point (bp) increases in its May and June meetings, bringing benchmark rates to 3-4%.
Mr. Espenilla made his latest statement as more economists are seeing another rate hike from the Monetary Board’s Aug. 9 meeting.
Bernardo M. Villegas, economics professor at the University of Asia & the Pacific, said the BSP may raise rates by 50bp next month given the need for a “more aggressive” response to temper inflation pressures.
In a separate report, HSBC economist Noelan Arbis likewise noted that the central bank needs a stronger policy response given that inflation is unlikely to taper off soon. “We believe the ‘June shock’ has broad implications and, as stated above, calls for a more forceful response from the BSP. We expect a 50bp rate hike at its next policy meeting (presumably in August) in recognition that inflation is now significantly higher than initially expected and to show the central bank’s resolve to curtail it as soon as possible,” the global bank said in a note published yesterday.
Mr. Arbis noted that another 25bp hike is already expected by market players, but said taking rates a notch higher in one go would be “more preemptive” than reactive to inflation pressures.
HSBC sees inflation peaking at 5.5% and will remain above four percent monthly until the first quarter of 2019.
The bank economist also sees slim chances for another cut in banks’ reserve requirement until December as conditions turn “less favorable.”
Despite inflation concerns, Mr. Espenilla said the Philippine economy continues to be robust despite concerns both abroad and at home.
Capital outflows observed in recent months are likely temporary, the central bank chief said, noting that long-term prospects still point to sustained growth and solid fundamentals.
“We note that the country’s balance of payments (BoP) position has been posting deficits since 2016 on account of strong foreign currency outflows. This is a reversal from previous BoP surpluses accumulated from the large inflows due to quantitative easing since the global financial crisis,” Mr. Espenilla said.
“With the normalization of US monetary policy and rising global interest rates, we see significant corrections in capital flows that are affecting our BoP and exchange rate. This is compounded by uncertainties posed by the trade war and geopolitical risks,” he added.
“Nevertheless, we view these as short-term macro-stability challenges. Over the medium-term, our sound fundamentals should serve us in good stead.”
Mr. Espenilla also sees above-six-percent growth momentum sustained on the back of manufacturing, strong consumer and government spending, as well as a young, skilled workforce.
The Duterte administration targets to the economy to grow by 7-8% this year, faster than the 6.7% pace seen in 2017.

OECD finds Philippines ‘largely compliant’ with standards vs tax fraud

THE PHILIPPINES is “largely compliant” with international frameworks against tax fraud, according to the latest review of the Organization for Economic Cooperation and Development (OECD), even as it cited areas of concern.
“This second-round report concludes that the Philippines is rated largely compliant overall,” which was the same rating in the 2013 first-round report, according to the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes: The Philippines 2018 (Second Round) report published on Tuesday.
During the April 2014-March 2017 review period, the Philippines received 78 exchange of information (EoI) requests from 14 treaty partners and sent 14 EoI requests to seven partners.
“Status updates were provided in 100% of cases not receiving a complete response in 90 days. The Philippines provided complete responses to EoI partner requests in only 53% of cases within 180 days of receipt, while 25% of cases took more than a year to receive a complete response.”
The Philippines was rated “largely compliant” in terms of availability of accounting information (from “partially compliant” in 2013), rights and safeguards in terms of access to information (from “compliant”), EoI on request (EOIR) mechanisms, as well as in quality and timeliness of responses.
It is also “compliant” in terms of availability of banking information, access to information by authorities, network of EOIR mechanisms, confidentiality, rights and safeguards in terms of exchanging information.
However, it was only “partially compliant” in the availability of ownership and identity information, down from being “largely compliant in 2013.
The multilateral framework on tax transparency and exchange of information has been adopted by over 145 jurisdictions that participate in the Global Forum through peer reviews.
Such reviews focus on availability of ownership, accounting and banking information; access to information by competent authority; and exchanging information mechanisms — whether they are in place and compliant, or otherwise.
The first-round review assessed legal and regulatory frameworks while the second round checked EOIR in practice.
The previous review in 2013 found that the Philippines had “issues” in availability of information for relevant legal persons and arrangements, ensuring all of the Philippines’ exchange of information (EoI) assessments were in line with international standards, as well as timeliness of responses to EoI requests.
“Since the last review, the Philippines has addressed several of these recommendations by requiring resident agents of foreign companies to obtain legal ownership information; extending the requirement for taxpayers to maintain accounting records to 10 years; working to renegotiate or add protocols to existing DTCs (double tax conventions) to bring them in line with the standard; and providing status updates to treaty partners on outstanding requests,” OECD said.
“Despite attempts to introduce operational efficiencies and increase resources to the EoI unit, the overall efficiency of the EoI practice during the period under review remained lagging. The time taken to provide substantive responses to requests remains slow and does not ensure effective EoI in all cases, as confirmed by peers,” it added.
The report also noted that although the scope of the attorney-client privilege of non-disclosure of tax information is “potentially broader,” the proper use of such of such privilege “remains uncertain and should be monitored.”
It also said that the Philippines should ensure that notification procedures with account holders are followed, as regulations allow a 60-day delay in notifying the depositor after the full information has been actually exchanged.
“Although the Philippines signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in 2014, the instrument still has not yet been ratified, preventing the Philippines from having EO relationships with a large number of jurisdictions party to the convention,” the report read.
The report recommended steps for the Philippines to improve compliance, including: ensuring the availability of beneficial ownership information; setting up of an effective monitoring program to ensure relevant designated non-financial businesses are adequately supervised regarding customer due diligence requirements under the anti-money laundering (AML) act; ensuring that AML-covered persons know how to properly apply identification and verification measures to obtain beneficial ownership information; monitoring suspended companies and implement supervision programs; ensuring accounting records are available for all relevant entities including suspended companies; monitoring the practical application of legal professional privilege; ensuring that there is an exception from time-specific, post-exchange notification that would allow it to not notify the account holder in cases where notification is unlikely to undermine the chance of success of the investigation on reasonable grounds; and working expeditiously to ratify the multilateral Convention on the Mutual Administrative Assistance in Tax Matters. — Elijah Joseph C. Tubayan

Regulators start monitoring crypto assets, though no major risk for now

LONDON — Global regulators have published a framework for “vigilantly” monitoring risks from crypto assets like bitcoin and ether, even though they don’t pose a major risk to financial stability for now.
Wild swings in crypto asset prices have prompted central bankers worldwide to warn investors that they could lose every penny.
It is unclear at times which financial rules, if any, apply to the sector or if there is legal authority to regulate it.
Start ups have begun issuing new digital currencies via initial coin offerings (ICOs), raising concern among regulators over investor protection.
The aim of the new framework is to spot any financial stability risks early enough to take action.
The Financial Stability Board (FSB), which coordinates financial regulation for the Group of 20 Economies (G20), said the framework focuses on how risks from crypto asset markets could spread to other parts of the financial system.
“Monitoring the size and growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should valuations fall,” the FSB said in a statement on Monday. “The use of leverage, and financial institution exposures to crypto-asset markets are important metrics of transmission of crypto-asset risks to the broader financial system.”
The aim of the new framework is to spot any financial stability risks early enough to take action.
But the FSB cautioned that data is still patchy at times in a rapidly developing market that can be fragmented and opaque. It will assess whether the framework will need extra data at a later stage.
Moves to formally monitor the sector forms part of a compromise in March between G20 members like France, who wanted more radical action, and other countries who preferred treading lightly for now.
The FSB framework also includes trading volumes, pricing, clearing and margining for derivatives linked to crypto assets, such as the bitcoin futures launched by CME Group last December.
Crypto assets in general and crypto asset trading platforms do not pose global financial stability risks, but they raise other significant concerns, including consumer and investor protection, market integrity and money laundering/terrorism financing, the FSB said.
It said its affiliate, the Basel Committee, which writes bank capital standards, is conducting an “initial stocktake” of banks’ exposures to crypto assets. The committee is also looking at whether regulators are forcing lenders to set aside capital against holdings of crypto assets, and considering whether to rewrite its rules to explicitly require such holdings to be covered. — Reuters

Awit ng barkada

THE popularity of jukebox musicals featuring the songs of a well-known performer (think Mamma Mia! and Rock of Ages) shows no sign of waning, particularly in the Philippines. While PETA has Rak of Aegis and Resorts World Manila has Eraserhead’s Ang Huling El Bimbo, 9 Works Theatrical and Globe Live join in the musical fun with Eto na! Musikal nAPO!, which pays tribute to yet another local music icon, the APO Hiking Society.
“This is all Boboy [Garrovillo]’s fault,” said the musical’s writer and director Robbie Guevara during the media launch on June 26 when explaining why and how the idea of the musical came about.
Back in 2003, when the two worked together in the comedy Erectile Dysfunction, during breaks, Mr. Garrovillo would regale him with stories about how APO started as a band.
“And I knew that’s what I wanted the musical to be about,” said Mr. Guevara. Ten years later they met again and, as Mr. Guevara explained, “Boboy told me casually: ‘You know what, you should do a musical of our songs’.”
The rest, as they say, is history.
Going on stage at the Globe Auditorium, Maybank Performing Arts Theater in BGC from Aug. 3 to 26, Eto na! Musikal nAPO! is a romantic comedy and a coming of age story about the seven friends who originally composed the APO Hiking Society. The story is set in 1975 and details how they joined a songwriting and singing contest in college. It follows their school dilemmas, their personal problems (parents, girlfriends, heartaches), and how the political turmoil of Martial Law affects their journey.
The play has undergone many revisions — 21 versions as of this writing — through the years. The original version was 70% English while the latest version is 80% Filipino. Mr. Guevara said that he did not want to touch politics at first, but after many readings with the artistic team and consultations with the members of APO Hiking Society, he said it couldn’t be helped.
“Danny [Javier of APO] said it’s an un-ignorable circumstance at that time and suggested I include it in the story. I hope the people are reminded of what happened, and I hope they hate the Marcoses more after the show,” said Mr. Guevara.
The play features re-arrangements of iconic APO Hiking Society songs into more “theatricalized” versions done by musical director Daniel Bartolome.
“I personally wouldn’t want to touch the original arrangements. The songs are already perfect as they are,” said Mr. Bartolome in a statement. “But considering that it would be used in a musical, changes have to be made. Because it’s not going to be staged as a concert, but with a story. The music is part of the storytelling. I carefully chose which to omit, which to keep, and which to change to best serve the staging or the scene.”
Some of the hit songs included in the play are “Awit ng Barkada,” “Panalangin,” “Batang Bata Ka Pa,” “When I Met You,” “Mahirap Magmahal ng Syota ng Iba,” “Blue Jeans,” and “Bawat Bata,” among others.
The seven college friends are played by Mark Bautista, Jef Flores, Jon Philippe Go, Jobim Javier, Alfritz Blanche, Jon Abella, and Vyen Villanueva. Also in the cast are Rita Daniela, Marika Sasaki, Sab Jose, Raul Montesa, and Noemi Gonzales.
Eto na! Musikal nAPO! is written and directed by Robbie Guevara, with dramaturgy by Jonjon Martin, choreography by PJ Rebullida, lighting design by Shakira Villa Symes, set design by Joey Mendoza, costume design by Eric Pineda, technical direction by Dong Calingacion, sound design by Rards Corpus, and hair and makeup by Myrene Santos.
Apart from doing Broadway and English plays such as Disney’s Newsies and American Idiot, the executive producer of 9 Works Theatrical Santi Santamaria said it is part of the company’s advocacy to do original Filipino plays, which they started with Himala, Isang Musikal, done with its sister company Sandbox Collective, in February.
For tickets log on to Ticketworld, www.ticketworld.com.ph. — Nickky Faustine P. de Guzman

Tam-Awan: Celebrating the Cordillera arts for 20 years

CORDILLERA IN MY MIND by Jojo Emelda, acrylic on canvas, 24 x 24, in 2018 — NICKKY FAUSTINE P. DE GUZMAN

BAGUIO’s Tam-Awan Village is celebrating its 20th anniversary with a travelling art exhibition featuring artists it has worked with through the years. Naturally, some of the subjects are about nature, the culture of the Cordillera, and the indigenous peoples and their artefacts like a native bag or bracelet.
The ongoing exhibition is called Tam-Awan @ 20: Celebrating Two Decades of Unwavering Passion for Culture and the Arts, and its last stop is at The Bellevue Manila in Alabang. It is on view at the hotel until Aug. 3.
Before settling at the hotel, the traveling exhibition made stops at the Ayala Museum’s AristSpace, SM City Baguio, and its home base, the Tam-Awan Village, a sanctuary in Baguio City that is made to resemble a traditional Cordillera village in order to preserve the Ifugao houses where art exhibits, workshops, and live cultural showcases happen.
The participating artists come from all over the country — what holds them together is that they have worked with Tam-Awan Village. Some of the artists are indigenous peoples from the north like the Kankanaey, Ibaloi, Bontoc, Ibalan, Ifugao, and Balangaw.
The Chanum Foundation Inc. came up with the idea of the Tam-Awan Village in 1998. Chanum — an Ibaloi word that means “water” — aims to promote and preserve the environment and cultural heritage of the Cordillera.
Now a popular tourist destination, Tam-Awan Village is also a hub for art enthusiasts where they can exchange skills and ideas, and understand indigenous customs. It also has a café and original Cordillera huts for lodging, which cater to tourists and workshop participants.
Currently, the Tam-Awan Village has 15 to 20 member artists with the youngest being 19 years old.
“The legacy of Tam-Awan Village really is the art wokshops, particularly those for the youth,” said Jordan Mang-osan, president of Tam-awan Artist Group and Chanum Foundation, in the vernacular. “We want to show and highlight the unique culture of the Cordillera through arts and to help the young generation of artists. At Tam-Awan, the arts converge and converse,” the artist told BusinessWorld at the exhibition’s launch on July 6.
Last year, Baguio became the first Philippine city to join the United Nations Educational, Scientific, and Cultural Organization (UNESCO) Creative Cities Network under the crafts and folk art category.
Besides Tam-Awan Village, Baguio has many art spots, museums, and galleries like the BenCab Museum, Pasa-Kalye Artists, and the Ili-likha Artists Village, among others.
Ten years before there was Tam-Awan Village, artists Kidlat Tahimik, Luisa Igloria, Tommy Hafalla, Santiago Bose, Roberto Villanueva, National Artist Benedicto “BenCab” Cabrera, David Baradas, and Willie Magtibay founded the Baguio Arts Guild, which made Baguio City an art hotspot. Mr. Cabrera pioneered the artists’ village in Tam-Awan and mentored the artists there.
Mr. Mang-osan said among the biggest setbacks the village has had in the past two decades were weather disturbances and landslides. “We felt like the Village will never be rebuilt, but we did it. It is not a hindrance for the Village,” he said. — Nickky Faustine P. de Guzman

DoTr recommends to MIAA award of OPS to NAIA rehab consortium

THE DoTr has recommended the approval of the NAIA consortium’s NAIA plan. — BW FILE PHOTO

By Denise A. Valdez
THE MANILA International Airport Authority (MIAA) has received a recommendation from the Department of Transportation (DoTr) to accept the unsolicited proposal of the consortium of seven conglomerates to rehabilitate the Ninoy Aquino International Airport (NAIA).
“Natanggap ho namin ang letter from DoTr giving us notice to adopt the proposal. Yan po ay dadaan sa Board. Ang Board ay magcoconvene sa Huwebes at yan ay tatalakayin namin sa Board (We have received a letter from the DoTr to adopt the proposal (of the NAIA consortium). That will have to go through the (MIAA) Board. The Board will convene on Thursday to discuss the letter),” MIAA General Manager Ed V. Monreal said in a briefing in Clark on Tuesday.
Transportation Secretary Arthur P. Tugade said in the same briefing they forwarded the decision drafted by the DoTr Planning Division to MIAA as the primary agency in charge of NAIA.
“Binigay namin sa MIAA yung recommendation to give an original proponent status on the project. Final na ba yun? Hindi po. Kasi kailangan aprubahan ng Board of Directors ng MIAA (We gave to MIAA the recommendation to give the original proponent status on the project. Is it final? No. Because the MIAA Board of Directors still has to approve it),” he said.
Mr. Monreal said if the board approves the proposal, it will again be forwarded to the DoTr which will then refer it to the National Economic and Development Authority’s Investment Coordination Committee.
The unsolicited proposal of the consortium is to rehabilitate the congested Manila gateway within a 15-year period for the cost of P105 billion to P106 billion.
The original version of its proposal was for a 35-year, P350-billion concession that covers the construction of a third runway. DoTr Undersecretary for Aviation Manuel Antonio L. Tamayo told reporters in May it was adjusted in accordance with government requests.
The NAIA consortium consists of seven of the country’s top conglomerates: Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc. and Metro Pacific Investments Corp.
Its technical partner for the project is Singapore’s Changi Airports International Private Ltd.
Also vying to be the government’s concessionaire for the NAIA rehabilitation is the tandem of Megawide Construction Corp. and Indian company GMR Infrastructure Ltd., which submitted a $3-billion, 18-year unsolicited proposal after the consortium.
But DoTr Undersecretary for Planning Ruben S. Reinoso, Jr. told reporters the Megawide proposal would have to remain on hold “until the proposal of the consortium is rejected, because that is what the law says.”
If the NAIA consortium is granted the original proponent status (OPS) for the rehabilitation project, its proposal will be subjected to a Swiss challenge, under which third party companies may try to match it. However, it will have the privilege to counter contending proposals as it holds the OPS.
The Manila airport recorded a total of 42 million passengers handled in 2017, which is way more than its capacity of handling only 30.5 million people a year.

Want an Amorsolo but don’t have P46 million lying around? Then go to Rustan’s

WANT an Amorsolo for your home but don’t have the millions to spare for an original? How about an Amorsolo on a plate instead? Rustan’s in partnership with the Amorsolo family has launched a limited-edition home collection inspired by National Artist for Painting Fernardo Amorsolo’s works.
“Papa made thousands of paintings so we chose paintings that show the customs and traditions of the Philippines — something he’s well-known for — and those with his trademark lighting. There were so many so we chose the best,” Sylvia Amorsolo Lazo, Mr. Amorsolo’s daughter, told BusinessWorld during the launch of the home line on June 26 at Rustan’s Makati.
The home collection comes a year after Rustan’s re-launched Amorsolo: Love and Passion, a coffee table book in celebration of the artist’s 125th birthday, co-authored by Ms. Amorsolo Lazo.
“[P]eople still want to have his work. This is good because while most people can’t get an Amorsolo because of its value, some of his works are now in a form of merchandise everyone can get,” she said.
Fernardo Amorsolo was named the country’s first National Artist for Painting in 1972. Known for his illuminated landscapes and depictions of rural life, Mr. Amorsolo was also called the “Grand Old Man of Philippine Art.”
Some of his famous works include Rice Planting (1922) which became one of the most popular images in the Philippines. Most recently, his The Peracampos Amorsolo (Under the Mango Tree), created in 1939, fetched P46,720,000 (including buyer’s premium) at Leon Gallery’s Spectacular Midyear Auction 2018, a world record for the artist.
“It’s good for the young ones to see what Papa had done before and why he was called a National Artist,” Ms. Amorsolo Lazo said.
For this collaboration with Rustan’s, three of Amorsolo’s works are featured in the line which includes T-shirts, coasters, and limited edition 13-inch plates. These works are Harvesting (1951), Planting Rice (1954), and Under the Mango Tree (1939).
The plates come in limited editions of 300 pieces of each painting. The plates cost P8,950.
Aside from paintings, Mr. Amorsolo’s signature is emblazoned on merchandise such as canvas tote bags, cushions, and pouches.
“It’s a tribute to the legacy and culture of the Filipinos,” Dina Arroyo-Tantoco, marketing communications manager for Rustan’s Commercial Corp., told BusinessWorld shortly before the event.
This isn’t the first time Rustan’s has collaborated with an artist (or their family). Last year, the company partnered with Benedicto “BenCab” Cabrera, another National Artist for Painting, to introduce a line of home goods bearing his signature and works. — Zsarlene B. Chua

STI Holdings’ attributable profit drops 10% on interest expenses

STI Education Systems Holdings, Inc. (STI Holdings) saw its attributable profit drop by 10% in its fiscal year ending March 2018, weighed down by interest expenses due to its bond issuance.
In a regulatory filing, the listed firm reported a net income attributable to equity holders of the parent of P496 million for the year ending March, lower than the P550.2 million it booked in the same period a year ago.
STI Holdings’ fiscal year from April to March follows that of the academic cycle in the Philippines, since it derives majority of its income from education services.
The owner of among the country’s largest networks of private schools attributed the decline to the increase in interest expenses.
“Interest expenses on loans increased by 177% or P140.2 million year-on-year mainly due to interest incurred on the STI Education Services Group, Inc.’s (STI ESG) bond issue charged to expense,” the company said.
STI ESG raised P3 billion last March 2017 from the issuance of fixed rate bonds, consisting of seven-year bonds due 2024 with a coupon rate of 5.8085% per annum, and 10-year bonds due 2027 at 6.3756% annually. The bonds are listed at the Philippine Dealing and Exchange Corp.
The funds raised from the bond issuance were used to finance the expansion of STI ESG’s campuses, refinance short-term loans, and for other general corporate requirements.
STI ESG can issue up to P2 billion worth of bonds until 2019, as per its three-year shelf registration program with the Securities and Exchange Commission worth up to P5 billion.
In terms of revenues, the company was able to breach the P3-billion mark for the first time this year, inching up 5% to P3.08 billion, versus the P2.93 billion it generated in the same period last year.
The revenue growth was thanks to the continued increase in the number of enrollees in STI schools, both owned and franchised, alongside the performance of its subsidiary Information and Communications Technology, Inc. (iAcademy).
STI Holdings said a total of 105,031 students enrolled into its network of schools for school year 2017 to 2018, marking a 1.3% increase from the 103,727 enrollees last year. Senior high school students comprised 55% of the student population, while around 42% are college students under programs by the Commission on Higher Education.
The company continues to expand its school network with the construction of new sites for STI Lipa, STI Sta. Mesa, STI Pasay-EDSA, and a green field school in San Jose del Monte. The Lipa school is expected to be completed in November, in time for the second semester.
Shares in STI Holdings added a centavo or 0.89% to close at P1.13 apiece at the stock exchange on Tuesday. — Arra B. Francia

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