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AXA Philippines bullish on expansion

PHILIPPINE AXA Life Insurance Corp. (AXA Philippines) is bullish on its growth prospects despite the supposed turbulence in the market due to elevated inflation, it said as it launched its training academy for its financial advisors on Tuesday.
The insurance company said it continued to grow above the industry average of life insurance premiums in the first three months of the year.
“The first quarter was good for us. We grew by 67% in the first quarter 2018 over the first quarter of 2017. We were twice as fast as the industry in 2017, and you will expect that 2018 would be no different for us. We will be growing much be faster,” AXA Philippines President and Chief Executive Officer Rahul Hora said in a media roundtable yesterday.
He said demand is relatively inelastic for insurance products compared to other consumer goods amid high inflation in the first half of the year, which averaged 4.3% with the June print at 5.2%.
“On a short-term basis, inflation impacts the performance of the industry. But going back to the basics, insurance is more meant for long-term savings. So once the market has stabilized, sales will start to happen again.”
He said growth was also supported by consumers’ higher purchasing power on the back of the Tax Reform for Acceleration and Inclusion law (TRAIN), which lowered personal income taxes while raising taxes on some goods.
“We are happy that the TRAIN law has created more funds available for the customers, and if you look at all those factors. I think overall and when people are more affluent, they will want to ensure that they and their families get access to better health facilities,” Mr. Hora said.
Mr. Hora’s outlook came after the firm launched the AXA Academy in Makati yesterday, a new institution for training AXA’s financial advisors and employees.
“We are spending a lot of time on training on financial analysis. We are in a people’s business and financial advice is so important to us. We want our distributors to be enabled with the right quality of financial advice to customers.”
Mr. Hora said AXA currently has 4,000 financial advisors and aims to increase it to 5,000 by the end of the year.
He said its advisors will go through a certification program in the academy and will be briefed on emerging market trends and new products of AXA.
“The focus is in the areas of health and long-term investments like fore financial needs for retirement. In the months to come, you would see more products like that.”
The training of its financial advisors has been a requirement even before the new AXA Academy. — Elijah Joseph C. Tubayan

Grab to launch grocery delivery service in race for growth

SINGAPORE — Grab plans to launch a grocery delivery service, and is betting on its network of 7.1 million drivers, agents and merchants to steer its expansion beyond its core ride-hailing business across Southeast Asia, its chief executive officer (CEO) told Reuters.
The strategy to provide “everyday” offerings underscores Grab’s ambition to secure its dominant market share at a time when main rival Go-Jek is embarking on a $500-million expansion into markets including Thailand and Singapore.
Go-Jek, the main ride-hailing player in Indonesia that is backed by the likes of KKR and Warburg Pincus, has expanded into digital payments, food delivery and on-demand cleaning and massage services.
Grab, which is transforming itself into a consumer technology group, already offers loans, electronic money transfers, payments and food delivery services.
“We believe that as we offer more localized everyday services, there will be more users and higher engagement across the user base,” Anthony Tan, Grab’s 36-year-old cofounder and group CEO, told Reuters in an interview on Monday.
“When that happens, it attracts more partners and it’s a virtuous upwards cycle. Great for business,” said Mr. Tan, who scored a big win when Uber handed over its regional operations to Grab this year in return for a stake.
A grocery delivery service could pit Singapore-headquartered Grab against firms such as Amazon.com and RedMart, owned by Alibaba-backed Lazada, that offer online grocery shopping in the city-state.
Mr. Tan, however, said Grab was also open to partnering with existing players.
Grocery deliveries is part of Grab’s plan to offer a variety of services through a new open platform that will let partners access parts of its technology such as logistics and payments.
“Whether it’s food, whether it’s groceries, we need to make sure that all these are well funded, both technologically and financially,” Mr. Tan said at Grab’s spacious new downtown office in Singapore, where boxes of Apple Macbooks were piled up.
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Grab, which employs 5,000 people, counts firms such as Japan’s Softbank Group and Chinese ride-hailing firm Didi Chuxing among its investors.
Last month, Toyota Motor Corp agreed to pump in $1 billion in Grab, which a source familiar with the matter said valued the company at just over $10 billion.
Grab facilitates over 6 million rides per day across eight countries and more than 200 cities, up from 2.5 million rides just a year ago, making it one of the largest ride-hailing platforms in the world.
Mr. Tan said Grab was profitable in many markets but declined to give a target for the company’s overall profitability.
Grab says it had a revenue runrate, a bespoke metric closely watched by analysts, of $1 billion.
“The goal is not to be blindly shooting for a target. The way to think about is, how do we create a sustainable business.
To this end, Grab is revamping its app, that will have a new interface offering users quicker access to its services such as payments and food delivery. It will also introduce a newsfeed.
When asked about plans for an IPO, Mr. Tan said it was something the company “should think about, but not immediately for sure.” — Reuters

What is a fiesta without a band? This one has 14.

THE MERRYMAKING in traditional Filipino fiestas is never complete without the presence of a brass band or groups of instrumentalists that parade through the streets with their cheerful music. And this fiesta will be brought to the stage of the Cultural Center of the Philippines (CCP) on July 20 to 22 thanks to the 14 bands and orchestra groups that will perform in Banda Rito, Banda Roon.
Now on its fifth year, the band and orchestra festival highlights the repertoires of Filipino musicians from all over the country. This is the first time that any of this year’s participants are taking part in the event.
Live music is deeply ingrained in the Filipino culture — despite the rise of Spotify, YouTube, and other free music streaming websites, they persist.
“Hindi lang pinagpapatuloy ng ating kultura, kundi pinagyayaman pa, ang ating mga banda. Ang lungkot naman kung walang banda, ’di ba? (Out bands do not just continue our culture, they enrich it. It would be so sad if there were not bands, right?) They are part of our rich culture, from funerals and festivals, to Simbang Gabi and Santacruzan,” said festival director Herminigido Ranera when asked about the significance of bands in today’s society.
The two-day festival will have three main events: a gala concert of orchestras, and two youth symphonic band concerts.
There will also be parallel events such as an open air brass exhibition and a music fair.
“The festival is on a grand scale since this is a national event. Beyond the scale and scope of the event, however, is the fellowship and camaraderie shared between and among young and veteran musicians. The festival is also a venue where they could exchange learning experiences from their own regions,” said CCP artistic director and vice-president, Chris Millado, in a statement.
The 14 participating groups are the Lasallian Youth Orchestra, the San Beda College Alabang Symphony Orchestra, the Seven Spirit Kids Orchestra, the Manila Symphony Junior Orchestra, the Taytay Youth Symphonic Band, Banda Sampaguita, the St. Scholastica’s College Wind Orchestra, Ang Musikerong Batangueño, the San Marcos Band ’92, the General Trias Youth Symphonic Band, Sasmuan Band 31, the Marilao Community Symphonic Band, PhilBanda, and the Philippine Baton Twirling Association.
Tickets are available at the CCP Box Office. — Nickky Faustine P. de Guzman

Rediscount loans up at end-June

BSP-bangko_sentral-080917
BANKS took out more loans from the rediscount window.

BANKS SECURED additional loans from the central bank’s rediscount window in June to support capital expenses and commercial lending despite rising borrowing costs.
Total availments amounted to P9.776 billion for the first semester, surging from the mere P15 million in loans secured during the comparable period in 2017, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. The amount rose from the P8.917 billion in credit secured as of May.
Through the rediscount window, the BSP lets banks get hold of additional money supply by posting their collectibles from clients as collateral. In turn, the banks may use the fresh cash — expressed in the peso, dollar or yen — to grant more loans for corporate or retail clients and service unexpected withdrawals.
Nearly half of the loans were secured to finance bigger commercial credits, which took a 47.57% share of the total. Lending for capital asset spending also took a 40.29% share, the BSP said.
The remainder of the loans went to fund services (7.15 %), permanent working capital (4.92%), housing (0.05%) and production (0.02%), the BSP said in a statement.
Banks continued to avail of rediscount loans even as margins climbed to mirror higher benchmark interest rates.
Since June 25, loans maturing in 90 days or lower are charged a 4.0625% rate while 180-day credit lines now carry a 4.125% spread. The rediscount rates are computed based on the BSP’s overnight lending rate — which is now at four percent — plus term premia.
These changes reflect a second 25-basis-point hike in key rates announced on June 20, which follows a hike of similar magnitude introduced during the Monetary Board’s May 10 meeting.
On the other hand, both the dollar and yen loan facilities stood untapped as of June, recording no availments since the previous year.
For July, rates for the dollar-denominated credit lines climbed from last month. Margins for dollar loans stand at 4.33575% for 90-day loans; 4.39825% for 91- to 180-day loans; and 4.46075% for 181- to 360-day loans, the BSP said yesterday.
Meanwhile, yields imposed on yen borrowings slid to 1.955% for one to 90-day loans, 2.0175% for 91- to 180-day loans, and 2.080% for 181- to 360-day loans for this month. — Melissa Luz T. Lopez

Why show art in a hotel?


AT ITS most basic, the task of a hotel is to give you a bed to stay in for a short period of time. The Conrad Manila elevates the experience of a hotel stay by displaying works by esteemed Filipino artists in its quarterly Art and Wine.
Late last month, the exhibit at the hotel’s Gallery C — done in collaboration with Galery Valentina — displayed the works of Olivia d’Aboville, Pardo de Leon, and Mac Valdezco. The exhibit is called Textures and Terrains, each artwork (numbering 13 in total) displaying virtuosity in expressing texture and tactility. All of the works are for sale, and are still on display.
Ms. D’Aboville’s works are culled from a series called “Moonlit Water,” and are made of abaca, polyester, metalic thread, and digital print, with an attempt to show the shape of water in a static form, as if she tried to capture the precise moment a ripple has formed.
Ms. Valdezco’s work, meanwhile, use plastic tubing, nylon, acrylic, and epoxy, and she borrows a bit from the aesthetic of art made from found objects (one of these works looks like an egg tray, after all).
Finally, Ms. De Leon’s work is a triptych displaying the phases of the sun at various times of the day, from dusk until dawn, in a vibrant spectrum of reds, yellows, oranges, and even hints of pink.
Laurent Boisdron, the Conrad’s General Manager, boasts that the hotel has over 700 artworks around the hotel, all made by Filipino artists.
As mentioned before, the primary purpose of a hotel is to provide a bed, maybe a meal; but Mr. Boisdron said about the artworks, “I think it’s enhancement; it’s part of the experience.”
One of the exhibit’s curators, Con Cabrera said, “The art is not just decorative.” She cites exhibits in other countries also held in hotels, where the art, again, is not just decorative, but current and contemporary, and creates a dialogue between the work and the hotel’s customers. “There is a captured public already. And that captured public should experience art the same way,”she added.
Artworks are usually expected to hang in polite museums and galleries, but it seems that changing times make it more important for art’s presence to be felt.
“We have to expand these art discussions or the viewership of art; whether that’s in a hotel of a park. We have to explore art venues for art to be seen and to be discussed.” — JLG

Sarmiento wants The Medical City ASM to push through

TMC Chairman Augusto P. Sarmiento — THEMEDICALCITY.COM

THE incumbent chairman of The Medical City (TMC) called on the Securities and Exchange Commission (SEC) and the company’s board of directors to take “swift action” to ensure the company push through with its annual stockholders’ meeting (ASM).
In a statement, TMC Chairman Augusto P. Sarmiento said the annual assembly will help the company address issues about its operations in Guam.
“This ASM is critical to address issues we face in Guam, where large cost overruns and operational mismanagement under Dr. Bengzon’s (TMC Chief Executive Officer Alfredo R.A. Bengzon) watch have placed TMC under financial pressure. It is important these issues are discussed at our ASM, and we are legally bound to hold it,” Mr. Sarmiento said.
Mr. Bengzon had filed for an indefinite postponement of the company’s ASM with the SEC, claiming that the company’s director and treasurer Jose Xavier B. Gonzales was planning a hostile takeover during the meeting.
The hostile takeover was allegedly set to be executed by Mr. Gonzales along with a Singapore-based equity partner which he brought in 2013.
Mr. Sarmiento, however, clarified that he was fully aware of the shareholders’ group organized by Mr. Gonzales, noting that the Corporation and Shareholders’ agreement (CSA) among TMC, Fountel and Clermont were actually made publicly available to the SEC in 2013.
“Claims that our Shareholders have not acted within the law and that Dr. Bengzon was unaware of the contents of the Corporation and Shareholders Agreement (CSA) between Fountel and Clermont Group, are unfounded. Like my fellow Board members, I was fully aware of the CSA,” Mr. Sarmiento said.
Mr. Sarmiento noted that attempts to postpone the ASM, as well as claims surrounding the disclosure of the CSA, were being made to avoid full disclosure of TMC’s actual performance in the past year.
“I believe these claims are intended to delay the company’s ASM, where Dr. Bengzon’s directorship is up for renewal, and to avoid full disclosure around TMC’s performance over the past 12 months,” Mr. Sarmiento said. — Arra B. Francia

IC bares acquisition, merger plans in non-life sector

THE INSURANCE COMMISSION said Chinese firms are eyeing to support a non-life insurance company placed under conservatorship.
“[There’s one company that was placed] under conservatorship but there’s now an investor expressing interest to revive it, hopefully before the end of the third quarter,” Insurance Commissioner Dennis B. Funa told reporters yesterday on the sidelines of the launch of the Philippine AXA Life Insurance Corp. Academy.
“But I am not free to disclose the names but we will do that as soon as we are free to do so,” he added.
“One company that was placed under conservatorship will possibly be acquired by a foreign group. It’s a Chinese group… Ongoing yung acquisition,” added Mr. Funa.
He said there are also two non-life companies set to conduct a merger within the year.
“We are down to 54 non-life companies but two non-life companies will be eventually merging before the end of the year. They are actually part of a conglomerate, but I don’t want to preempt. We will be down to 53 by the end of the year,” he said.
“I think mas magiging efficient if magiging isa na lang yung non-life kasi para hindi doble,” said Mr. Funa.
Last week, the Insurance Commission announced that it has suspended the operations of pre-need company Paz Memorial Services, Inc. and placed it under conservatorship due to the failure of the company to comply with the P50 minimum capital requirement.
In March the commission also shut down five insurance firms, namely First Integrated Bonding & Insurance Co., Inc., Investors Assurance Corp., Metropolitan Insurance Company, Inc., Plaridel Surety & Insurance Co., and Premier Insurance & Surety Corp., and placed them under conservatorship after they failed to comply with the P550-million minimum net worth requirement set for this year.
February also saw seven insurers — Centennial Guarantee Assurance Corp., CAP Life Insurance Corp., FLT Prime Insurance Corp., Manila Surety and Fidelity Co., Inc., Meridian Assurance Corp., The Solid Guaranty, Inc., and United Insurance Co., Inc. — voluntarily surrender their licenses as they cannot comply with the said net worth threshold.
In 2016, there were about 66 non-life insurers.
Mr. Funa however said there “no issues” in compliance for the remaining 54 non-life insurers. “Compliant naman lahat,” he said.
The capitalization requirement will increase to P900 million in 2019 and P1.3 billion in 2022. — Elijah Joseph C. Tubayan

Banksy’s subversive art draws tourists and locals in Paris

PARIS — British graffiti artist Banksy, known for his politically charged sketches on walls from London to New York to Gaza City, has descended on Paris, painting a series of murals that are sparking debate among residents and tourists.
The satirical images, tackling issues such as migration and poverty, began popping up late last month. The secretive artist has since posted photographs of them on his Instagram account and added comments, confirming his authorship.
One mural, on a street in northern Paris where migrants often sleep rough, shows a black girl spray-painting pink wallpaper over a swastika. The painting has since been defaced to make it look like she is drawing the swastika herself.
Others depict rats, a common Banksy motif, including one flying through the air on the back of a champagne cork, and a pair walking under a parasol near the Eiffel Tower.
One of the most provocative, painted near the Sorbonne, on the trendy Left Bank, shows a stern man with a hand-saw hidden behind his back offering a bone to a pleading dog that has had part of its front leg sawn off.
Vincent, the director of an art foundation in Paris, stopped to take a picture as he headed for lunch.
“This painting is of an unspeakable cruelty which is representative of the times in which we live, times of wantonness,” said the 49-year-old.
“The man’s stare is empty and cold, while the dog is weak and full of humanity. I think it is a clear representation of the European context and the migration crisis.”
This year marks the 50th anniversary of the May 1968 uprisings, when French students and unionists mounted violent protests across Paris and its surrounding area, bringing much of the country to a standstill for weeks.
Referencing the anniversary, Banksy painted a picture of a rat holding a stencil pen and wearing a bandana over its face on the side of a building near the Pompidou Center. Another showed a rat dressed as Mini Mouse perched on the numbers 1968.
While two of the nine murals have been defaced, most of the others have been covered by plexiglass to protect them.
Banksy concluded his series with a mural on an emergency escape door to the Bataclan, the music venue where 89 people were shot dead by Islamist militants in November 2015.
The image depicts a woman in mourning, wearing what looks like a hijab, the head scarf worn by Muslim women, although the picture also has echoes of Mother Theresa.
“This one is my favorite,” said an American tourist. “I can feel that her sadness is deep and palpable.” — Reuters

ACOM starts local lending operations

ACOM Consumer Finance Corp. has started its lending operations as it aims to reach out to 1.5 million Filipinos in Metro Manila.
In a press briefing Tuesday, ACOM President Masaomi Gido said the Japanese lending firm started its personal loans business here this month, targeting middle-class workers.
“ACOM is very much delighted to be entering the Philippine market at a time when our target market, the middle-class earners, is strengthening their economic status,” Mr. Gido was quoted in a statement.
Its parent company, ACOM Co., Ltd. (ACOM Japan), was prompted to enter the Philippine market as the country’s middle-class earners continue to earn more money and have stronger purchasing power.
ACOM Consumer Finance provides non-collateral personal loans from P5,000 to P500,000 which carry a monthly interest rate between 3.315% and 4.563%.
Loans can be processed within a day with complete basic requirements such government and company IDs as well as payslips.
Customers can get their loan disbursements via bank deposit or remittance companies.
“If a customer doesn’t make within the due date, we charge P500 late payment charge. However, we set a grace period of up to three days. When our customer made repayment [at most three days] after due date, we won’t charge anything.” Mr. Gido added.
Mr. Gido said ACOM Consumer Finance aims to capture 1.5 million borrowers in Metro Manila as it targets middle-class employees earning at least P10,000 monthly.
It also plans to to put up 30 branches in five years, eyeing to set up offices in other cities nationwide.
ACOM Consumer Finance currently has one sales office in Ortigas, Pasig City and will end the year with two branches with another office in Cubao, Quezon City to be opened by November.
“We believe we can help further elevate the financial capacity of many Filipinos as we don’t just aim to commercially empower individuals but also contribute to the local economy through job opportunities,” Mr. Gido added in the statement.
ACOM Consumer Finance is a joint venture between ACOM Japan, which owns 80% of the firm’s stake, and ITOCHU Corp., which owns the remaining share.
Aside from the Philippines, ACOM also operates in Thailand as well as in Indonesia. It is also applying for a license to operate in Vietnam, Mr. Gido noted. — Karl Angelo N. Vidal

DPWH says finalizing approval of CTBEx

By Denise A. Valdez
THE Department of Public Works and Highways (DPWH) is looking to grant “very soon” the original proponent status (OPS) to the Metro Pacific group for its proposal to build a Cavite-Tagaytay-Batangas Expressway (CTBEx).
Public Works Secretary Mark A. Villar told reporters last week the department is “finalizing” the project’s approval.
“I don’t want to preempt but soon…. Nakita ko naman, napag-aralan ko naman [I’ve seen it, I’ve studied it],” he said.
The proposal to construct a 49-kilometer toll road linking the Cavite-Laguna Expressway (CALAX) at Silang East Interchange to Tagaytay City and Nasugbu, Batangas was submitted by MPCALA Holdings, Inc. to the DPWH in July 2017.
MPCALA Holdings President Luigi L. Bautista told BusinessWorld in a text message on Tuesday that fund-raising for the P22.43-billion CTBEx project will begin when they receive the OPS.
“No fund-raising has yet been started until we secure the project and are ready to execute. At the moment, we are still waiting for the OPS,” he said.
Mr. Bautista said in late April they were expecting the approval by June, but up until last week he said they have yet to receive an update from the DPWH.
The DPWH earlier set a November 2017 deadline for its release of the project evaluation results.
The construction of CTBEx was originally set to begin on mid-2019 and completed by mid-2020.
Once MPCALA Holdings is granted OPS from the DPWH, the proposal would then be forwarded to the National Economic and Development Authority (NEDA) for approval. When approved by the NEDA Board, it will then be subjected to a Swiss challenge.
Under the Swiss challenge, other companies may submit counter-proposals which MPCALA Holdings may match.
MPCALA Holdings, which is part of Metro Pacific Investments Corp. (MPIC), bagged the contract for the P35.43 billion CALAX under the public-private partnership program in 2015.
MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. 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.

BPI eyes increased use of electronic channels

BANK of the Philippine Islands (BPI) wants to double the number of clients using electronic channels in the next five years as it ramps up its digitalization push.
In a statement Tuesday, the Ayala-led bank said it aims to raise the number of clients who access the lender through digital means to 72% of its customers in the next five years from the current 36%.
“Electronic banking is fast becoming a standard in the Philippines, as it is globally. We want our clients to experience the same level of service through our electronic channels,” Joseph Albert L. Gotuaco, BPI retail client segment group head, was quoted as saying in the statement.
The lender’s electronic platforms include its Web site, mobile application as well as over 3,000 electronic teller machines and cash accept machines.
“They are just as safe and reliable as our traditional branches,” Mr. Gotuaco said.
BPI added that many of its banking transactions can now be done through electronic means.
“While our branches are still very much accessible, electronic channels are 24/7 in nature and are key drivers in helping people bank from the comfort of their homes, offices, or cars,” Mr. Gotuaco added.
Amid its push to digitize banking, BPI previously said it is still keen on growing its branch network, particularly in provincial areas, to provide financial products to the grassroots level and spur growth.
The lender said it will open 10 BPI branches and one BPI Family Savings Bank branch in the second half of the year. It will also open 70 BPI Direct BanKo offices.
BPI, the third-largest bank in the country in asset terms, booked a net income of P6.25 billion in the first quarter, flat from the profit posted in the same period last year, due to lower trading gains.
On Tuesday, BPI shares rose by 2.25% or P2 to P91 apiece. — K.A.N. Vidal

NEA, DICT work to expand broadband access to rural areas

AFP

THE National Electrification Administration (NEA) and the Department of Information and Communications Technology (DICT) have started exploring arrangements to bring broadband connectivity into the countryside by tapping the existing infrastructure of the electric cooperatives.
In a statement, NEA Administrator Edgardo R. Masongsong said he had met with officials of DICT headed by Acting Secretary Eliseo M. Rio, Jr. and Undersecretary Denis F. Villorente to discuss the expansion of broadband access to households in rural areas.
Mr. Rio was quoted as saying that the discussion “is very important because NEA has already access to 95% of households, especially in rural areas.”
He added that the electric cooperatives (ECs) supervised by the NEA could be Internet service providers (ISPs) in their respective coverage areas.
“We’ll give you the Internet access and you can bring it to your client. Then, they can now enjoy their electricity and they have Internet access. This is also an added income,” Mr. Rio said.
Mr. Masongsong said some electric cooperatives, particularly those in Mindanao, already have fiber-optic infrastructure in place.
During their meeting, NEA and DICT agreed to form a technical working group that will draft the framework agreement, which will include the financial arrangement with the ECs with existing fiber-optic cables in their distribution lines and possible funding for power utilities that do not have fiber on their grid.
The meeting follows the signing on June 8, 2018 of a tripartite agreement among the DICT, power grid system operator National Grid Corp. of the Philippines (NGCP) and power transmission owner National Transmission Corp. (TransCo) for the use of spare optical fiber to accelerate the implementation of the government’s broadband plan.
Under the agreement, the DICT is given the right to use or access certain spare fiber-optic cores, vacant lots, tower spaces and related facilities of the NGCP, the concessionaire of TransCo-owned transmission assets.

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