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'Hard' Brexit could see Philips quit British factory: CEO

Dutch electronics giant Philips warned Sunday it may shift production out of Britain in the event of a “hard” Brexit, saying it was “deeply concerned about competitiveness” of its operations there.
The Amsterdam-based group employs some 1,500 people in Britain, most notably at its baby care products-for-export factory at Glemsford in Suffolk.
“I am deeply concerned about the competitiveness of our operations in the UK, especially our manufacturing operations,” Philips chief executive Frans van Houten said.
“We estimate that the cost of the (Philips’) exported products will increase substantially under any scenario that is not maintaining the single customs union,” he said in a statement emailed to AFP.
Any changes in current free trade agreements, the single customs union and current EU product certifications “is a serious threat to the competitiveness of this factory,” Van Houten added, saying “we need to do worst case scenario planning.”
Philips is the latest company in a chorus of major industrial players — which also includes Jaguar Land Rover, BMW and Airbus — to warn about the negative impact of an acrimonious split between the UK and EU.
“At the moment we are considering all scenarios, including one in which there is a so-called ‘hard Brexit’,” Philips spokesman Steve Klink told AFP.
“In that case, it could include the departure of our manufacturing for export,” said Klink.
Van Houten however emphasised: “Philips remains absolutely committed to its current and prospective future customers in the country” including hospitals.
British Prime Minister Theresa May on Friday persuaded her eurosceptic ministers to back a plan for closer trade ties with the EU after Brexit.
After marathon talks at her country retreat, May’s divided cabinet agreed on a new “free trade area” where Britain would accept EU rules for goods.
But the British premier still has to sell the plan to Brussels, which could keep Britain tied to the bloc for years after Brexit, even if officials stress parliament would reserve the right to diverge.
May expressed hope the deal would end two years of public splits that sparked exasperation among European leaders and businesses seeking a clear path.
“We are faced with the continued unclarity and uncertainty of Brexit,” said Van Houten on Sunday.
“Europe is at risk of falling behind the US and China, as they move ahead focused on strengthening their geo-economic leadership,” he said. — AFP

Cebu Landmasters, Inc. reservation sales jump 61%

Reservation sales of Cebu Landmasters, Inc. (CLI) jumped by 61% in the first half of 2018, keeping the company on track to hitting its full-year targets.
In a statement issued Monday, the Cebu-based property developer said reservation sales—revenue generated from accommodations booking—reached P4.6 billion between January and June, putting the company at 65% of its P7-billion target for the year. This is also higher than the P4.58 billion it recorded over the same period in 2017.
The listed firm attributed the record performance to the strong demand for its projects, specifically the economic housing development in Cebu called Casa Mira South that accounted for 11.2% of its total reservation sales for the first half.
CLI engages in real estate development, sales and leasing, catering to high-end, mid-market, economic, and socialized housing segments. As of this year, the company has 13 completed developments, and two wholly-owned subsidiaries, CLI Premier Hotels International, Inc. and Cebu Landmasters Property Management, Inc. — Arra B. Francia

Second-round price pressures emerging

LAST WEEK’s increase in jeepney fares has added to inflation pressures, which state economic managers have expected to peak this quarter.
The Land Transportation Franchising and Regulatory Board on July 4 approved a P1 provisional fare hike for public utility jeepneys in Metro Manila, Central Luzon and the Cavite-Laguna-Batangas-Rizal-Quezon region.
Emmanuel A. Leyco, economics professor at the Asian Institute of Management, said the fare hike will have a domino effect on prices of other commodities.
“The P1 fare hike should be viewed only as part of an evolving story… Naturally, workers can be reasonably expected to demand a higher wage to deal with a higher transportation fare and more expensive food prices,” Mr. Leyco said when sought for comment.
Both economic managers and private economists have been watching out for “second-round” price pressures from public transport fare hikes and minimum wage increases in the regions that could drive headline inflation further beyond the central bank’s 2-4% target for 2018.
Labor Secretary Silvestre H. Bello told reporters on July 1 that eight of the country’s 17 regions had recommended a hike in the daily minimum wage rates of private sector workers at that time, citing Central Luzon and Zamboanga Peninsula among them, while the regional wage boards of Western and of Central Visayas had separately announced their decisions to increase such pay.
Headline inflation saw the sixth straight month of increase to a fresh five-year-high 5.2% in June, which also marked the fourth consecutive month that the pace has pierced the central bank’s 2-4% full-year target range for 2018. June inflation fueled the year-to-date pace to 4.3%, which is just below the central bank’s downgraded 4.5% forecast for 2018.
“With unaddressed supply-side bottlenecks, six percent may not be impossible,” said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines.
“The June inflation print, in my view, is largely due to structural bottlenecks, particularly on food items (rice, vegetables, etc). Aside from these, the economy’s vulnerability to global oil price volatility is another concern.”
Transport prices rose even faster at 7.1% year-on-year compared to the headline figure, according to the Philippine Statistics Authority.
Mr. Asuncion, however, said that these price developments are out of the control of the Bangko Sentral ng Pilipinas (BSP).
“I am a bit wary if further monetary policy tweaks will actually help rein in price levels,” the bank economist added.
“I am sure the economic managers are aware of these bottlenecks, and I understand that they see the need to have sound economic policies (not just monetary nor fiscal policies) in place to attain economic efficiency and steady economic growth.”
While the BSP will be “hard-pressed to intervene” by tweaking interest rates, Mr. Asuncion warned that such moves may be “distractive” as far as overall economic growth is concerned.
BSP Governor Nestor A. Espenilla, Jr. described June’s fresh peak as a “setback” for policy makers, saying the central bank will update forecasts and calibrate the “strength and timing” of its next move to rein in inflation expectations.
The central bank has acknowledged that inflation will pick up further to peak between this month and September, as it noted that uncertainties in the global oil market and unfavorable weather conditions continue to affect the prices of basic goods.
Reuters has reported that the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC crude producers agreed earlier this month on a slight output hike to dampen the oil price rally, which has hit a three-and-a-half year high. The supply hike reversed some of the cuts that OPEC and the other major producers put in place in early 2017 to end years of supply glut.
Several observers are noting that another policy interest rate hike may be on the table for the BSP at its Aug. 9 meeting which, if realized, will mark three consecutive tightening moves this year. Others have been pointing out that the BSP has been behind the curve as it kept interest rates low for far too long.
Other analysts have cautioned that inflation has been supply-driven — amid rising world crude rates and a shortage of rice supply — and had little to do with monetary policy.
In a joint statement issued on Thursday, economic managers acknowledged the need to tighten the watch against profiteering, implement the Pantawid Pasada fuel subsidy program for public utility vehicles, and for Congress to approve a bill that will shift to a regular tariff scheme for rice from the current import quota scheme that is expected to slash prices of the staple.
The central bank has conceded to missing its 2-4% inflation target this year, but is working to bring price increases back within range in 2019. — Melissa Luz T. Lopez

Big banks hard-pressed to comply with new liquidity rule — BMI

BIG BANKS will have to boost deposit taking and may cut back on long-term loans to comply with a new liquidity measure imposed by the central bank, analysts at BMI Research said.
In a report released over the weekend, the Fitch unit said the Net Stable Funding Ratio (NSFR) which took effect this month would put some pressure on funding costs incurred by lenders.
The NSFR requires universal and commercial banks to hold enough “reliable” sources of funding to cover their “expected and unexpected cash flows and collateral needs” during day-to-day operations projected over a one-year period.
“In general, we believe that banks will likely be forced to cut back on short-term wholesale funding and raise deposit rates to attract more retail deposits, which could see funding costs increase over the coming quarter,” BMI said in its report.
The research firm said the new requirement is “positive for financial stability over the long-run,” but banks are likely to bear bigger costs as they make the transition in securing more permanent, reliable funding.
“The rationale is to limit structural maturity mismatches and to reform the asset and liability structures of banks to make them less prone to cyclical factors,” BMI said.
“Nevertheless, we expect Philippines banks to feel some pinch in the short term in the form of higher transition and funding costs as they adjust their balance sheets in order to comply with the new standard.”
The Bangko Sentral ng Pilipinas (BSP) has set July-December as the observation period to facilitate smooth transition and “allow prompt assessment and calibration” of the new prudential tool.
Banks that fall short of the standard must come up with funding plans or remedies to boost their pool of liquid assets.
By Jan. 1 next year banks unable to meet full coverage will face sanctions from the BSP.
Test runs conducted by the regulator showed that big banks are generally able to comply with the new rule, BSP Governor Nestor A. Espenilla, Jr. previously said.
BMI said banks will likely issue debt papers beyond a one-year maturity in order to meet the NSFR, which in turn could push market yields up.
Banks could also turn away from long-term loans which would require them to hold more buffers for an extended period.
“This may see banks cut back on long-term lending, undermining banks’ traditional role in liquidity and maturity transformation in the economy,” the research outfit said.
“This poses downside risks to economic growth in the Philippines given that the country has an underdeveloped capital markets and businesses rely more on banks for long-term financing.”
The NSFR augments the Liquidity Coverage Ratio, which requires big banks to hold high-quality, easily convertible assets to cover projected net cash outflows over a 30-day period. These form part of the tighter regulatory standards under the Basel 3 regime which seek to improve risk management and prevent a repeat of the 2008 Global Financial Crisis.
Moody’s Investors Service has said that the new tool will be “credit positive” for banks, as it will ensure resilience despite periods of financial stress. — Melissa Luz T. Lopez

Business booms for plastic giants as change beckons

PARIS — It’s the worst enemy of environmental campaigners, but people around the world use mountains of plastic every day and business is booming for manufacturers.
Much to the chagrin of activists, an increasingly restrictive regulatory environment appears to have put little dent in the industry’s power so far.
That is changing, however, and plastic giants are starting to adapt.
From 2006 to 2016, global plastic output rose from 245 million to 348 million tons, according to the PlasticsEurope trade association. Production rose by 3.9% in 2017. In 2016 the growth rate stood at 4.0%, and in 2015 at 3.5%.
Demand for thermoplastics alone — which includes the most common kinds of plastic, such as PET used in water bottles, polypropylene, polyethylene and PVC — has soared by 4.7% yearly from 1990 to 2017.
“Is this going to continue in the coming years? We can assume it will,” said Herve Millet, technical and regulatory affairs manager at PlasticsEurope.
“The reasons why plastic (production is) growing worldwide are not just going to go away all at once.”
The growth of the plastics industry goes hand-in-hand with economic development, Mr. Millet said.
The more an economy grows, the more plastic is used in construction, infrastructural development, electrical and electronic industries, and transport.
Single-use plastic packaging — the nemesis of environmental activists — is also in strong demand in developing countries.
Even in Europe, where anti-plastics campaigning has been especially vigorous, packaging accounts for 40% of consumption.
But the world’s leading producer of plastic is China. Today it holds a whopping 29% of the market share, up from 15% just a decade ago.
European, US and Japanese plastic manufacturers have meanwhile seen their market share shrink.
Where Western producers are doing especially well is in the development of so-called specialty plastics used in the construction, automobile, medical and other industries.
New polymers are also being used in the aviation and space industry, as well as in the creation of specialty athletic footwear.
Pierre Gadrat, who heads the chemicals and materials division of France-based consulting firm Alcimed, said this sector “is just as dynamic, if not more, than before”.
The growth of the plastic industry defies concerted efforts from activists around the world, as well as an increasingly hostile regulatory environment.
Under pressure from campaigners, the European Union, Britain, India and even fast food giants like McDonald’s have all made some headway towards bringing the use of disposable plastic straws to an end.
Plastic bags are also being phased out in countries around the world, while France is set to introduce a ban on plastic plates, cups and cutlery in 2020.
Emmanuel Guichard of French plastic packaging federation Elipso said the drive to end the use of single-use plastic “does not weigh massively on growth in the sector”.
However, “with all these regulatory measures coming into force, we can’t imagine that they won’t have an impact at some stage”, he added.
As public awareness grows about the terrible harm plastic pollution causes to the world’s oceans and seas, manufacturing giants are starting to worry about their image.
“Plastic as a whole is becoming stigmatized,” Mr. Millet of PlasticsEurope said.
In a bid to keep their names clean, plastic industry leaders are recycling more, following the lead of product manufacturers.
“Under regulatory pressure, plastic waste could potentially become… less seen as waste and more as a valuable raw material,” Mr. Gadrat said.
Producers of other raw materials such as metals, glass and cardboard have already fully integrated waste into their production cycles.
“This is the future of plastic: a scenario where the industry manages its raw materials and its recycled resources,” said Paris-based waste management company Citeo’s chief scientist Carlos de Los Llanos.
“It will probably take a few years,” he said, adding: “It takes learning how to do it.” — AFP

SMC Global Power to raise P15B from bond offer

SMC Global Power Holdings Corp. intends to raise P15 billion from the issuance of fixed rate bonds to refinance debt.
In a statement over the weekend, Philippine Rating Services Corp. (PhilRatings) said it assigned SMC Global Power a PRS Aaa rating for its proposed bond offering, which represents the last tranche of its three-year shelf registration of up to P35 billion.
PRS Aaa is the highest credit rating under the local debt watcher’s long-term issue credit rating scale. This indicates that SMC Global Power has an “extremely strong” capacity to meet its financial obligations.
The proposed bonds were also given a stable outlook, which means that the rating is unlikely to change in the next 12 months.
The power generation arm of diversified conglomerate San Miguel Corp. (SMC) has so far issued P20 billion worth of bonds from its shelf registration program, with P15 billion issued in July 2016 and P20 billion last December. Both outstanding issuances retained their PRS Aaa rating.
In coming up with the ratings, PhilRatings took into account SMC Global Power’s market position, support from SMC, stable earnings and cash flows, as well as its capacity to expand.
“SMC Global Power benefits from the extensive network, keen understanding of the Philippine economy and management expertise of SMC. Furthermore, SMC provides management and support services to SMC Global Power, in areas such as human resources, corporate affairs, legal, finance, treasury and other functions,” the debt watcher said.
SMC Global Power currently has a combined capacity of 4,153 megawatts (MW), sourced from a diversified mix of fuel supply including natural gas, coal, and hydropower. Its existing portfolio includes the 218-MW Angat Hydroelectric Power Plant, the 450-MW greenfield power plant in Limay, Bataan, the 300-MW greenfield power plant in Malita, Davao, and the 640-MW Masinloc power plant in Zambales.
It also acts as the Independent Power Producer Administrator (IPPA) for the Sual, Ilijan, and San Roque power plants.
The company’s combined capacity comprises 19% of the power supply in the National Grid, 25% of the Luzon grid, and 9% of the Mindanao grid.
“SMC Global Power is well-positioned to take advantage of the robust electricity demand outlook, in line with the country’s continuing economic growth. SMC Global Power’s existing capacity is still below the power market share limitations set by the Energy Regulatory Commission, giving the company enough room for portfolio expansion,” according to PhilRatings.
The debt watcher also noted it will be monitoring the legal dispute between SMC Global Power’s subsidiary, South Premier Power Corp. and the Power Sector Assets and Liabilities Management Corp. on the Ilijan IPPA agreement. The two parties have differing interpretations on certain provisions on generation payments from the facility.
The case is now pending with the Court of Appeals.
“Amidst the ongoing dispute, SPPC continues to be the IPPA of the Ilijan power plant. PhilRatings shall continue to monitor developments in relation to this case and its subsequent resolution,” it said. — Arra B. Francia

2 firms keen on bidding for Zamcelco contract

By Albert F. Arcilla, Correspondent
ZAMBOANGA CITY — Financially troubled Zamboanga City Electric Cooperative, Inc. (Zamcelco) is aiming to finally award an investment management contract (IMC) by Aug. 2 after two bidders submitted letters of intent.
“As of the moment, two bidders are interested to participate in the bidding, the Aboitiz Power Corp., and the Crown Investment Holding, Inc.,” Zamcelco President Omar A. Sahi said in an interview with the local media here last week.
Among the companies that earlier backed out of a potential IMC is Manila Electric Co.-Comstech Integration Alliance, Inc. (Meralco-Comstech), Zamcelco announced last week.
A dialogue held last week was attended by local officials and representatives of Zamcelco and its suppliers to discuss the cooperative’s “ailing financial condition,” according to a statement from the Zamboanga City government.
During the meeting, one of the suppliers, the Alsons Group’s Western Mindanao Power Corp. (WMPC), vowed not to cut supply as Zamcelco has started paying outstanding dues of more than P258 million.
WMPC supplies 50 megawatts to Zamcelco.
The electric cooperative’s other suppliers are the Power Sector Assets and Liabilities Management Corp., Enfinity Philippines, and San Miguel Power Corp. with total payables reaching P948.5 million.
Zamcelco officials said their projected monthly collection is P370 million, operating at a system loss rate of 22%.
Edgardo F. Ancheta, Zamcelco general manager, said while “the cooperative is intensifying anti-pilferage campaigns and pursuing restructuring schemes to meet its obligations,” the IMC “is the best move” to resolve its financial difficulties.
“Every month, Zamcelco is losing roughly P20 million due to system loss,” Rikki Lim, one of Zamcelco’s board members, said.
Zamboanga City Representative Celso L. Lobregat, meanwhile, said in a radio interview here that two important issues need to be included in Zamcelco’s new attempt for an IMC.
“The new ruling of the ERC (Energy Regulatory Commission) should be included in the terms of reference and the bidders should have the track record on running a power distribution,” Mr. Lobregat said.
In February this year, the ERC announced it has reduced the allowable percentage of system loss for electric cooperatives to a range of 8.25% to 12%.
The Zamboanga Chamber of Commerce and Industry Foundation, Inc. (ZCCIFI) has proposed that the National Electrification Administration (NEA) immediately take over Zamcelco to curb further problems.
ZCCIFI President Pedro Rufo N. Soliven said Section 31 of the Electric Power Industry Reform Act of 2001 authorized NEA to step in to provide institutional, financial, and technical assistance to cooperatives in trouble.
“To ensure the economic and financial viability and operation of all electric cooperatives: restructuring ailing electric with the end in view of making it economically and financially viable,” Mr. Soliven said.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.

If the shoe fits


By Joseph L. Garcia,Reporter
FOR A human to be in a state of nudity is to allow one’s self to be vulnerable. You are literally exposing yourself for another person, or the world, to notice your imperfections; the things you hide under layers and layers of clothing.
Rem D. Koolhaas, a nephew of esteemed architect Rem Koolhaas, created his first shoe in 1999 when he was an architectural student. He called the brand the shoe gave birth to United Nude — which meant “working together in total transparency,” he said during the launch of the first United Nude store in the Philippines, located in Resorts World Manila in Pasay City.
He created his first shoe after a heartbreak (though he has since found love, and is now happily married and with children). In a way, a heartbreak is like being in a state of embarrassed nudity — you’ve exposed your deepest self to a person, only for someone to reject what they’ve seen. When asked how heartbreak fuels creativity, he said, “It’s an emotional state of mind where you want to break out of something, and break through something. Therefore, you can end up finding yourself, or pushing yourself into doing something that maybe you haven’t done before,” Mr. Koolhaas told BusinessWorld.
During this period, he said, he scaled down to “the most vulnerable scale level of architecture, which is a woman’s foot.” When asked to define this vulnerability, he said it is something smaller than a human being; something that a human can easily crush. “A large building is not very vulnerable; it’s not very sensitive. Architecture is quite often about humans, but also about something bigger than a human being,” he said.
Asked about how shoe design is related to architecture, he said, “They’re both structural. They’re both functional; [they] accommodate human beings in their own way.”
It’s not mere coincidence that Mr. Koolhaas was studying architecture: as mentioned, he’s related to the great architect Rem Koolhaas, whom he refers to as “The Other Rem.” Their family is, apparently, chock full of designers and architects. “When you grow up looking at things by your parents being invested in looking at things, you already start your education in design.”
He also credits his avant- garde line of thinking to being Dutch, citing the country’s geopolitical positioning in history. The Netherlands was constantly fighting against the sea, which was why the nation built dikes. And in a land constantly fighting against the sea, it wasn’t too easy for much to grow and prosper, which was why the Dutch went out and sailed to build an empire based on trade and commerce. “You have to be innovative to survive,” he noted.
AVANT-GARDE
United Nude constantly teeters towards the avant-garde, which is its selling point. When he created his first shoe, the Mobius, no fashion designer would touch it as it was too unique and was not always in line with what they did. They did, however, encourage him to make his own brand, and market his own shoe.
If one takes a look at United Nude’s offerings, one notices optical illusions which make the shoe unique: there is, for example, a shoe made in collaboration with architect Zaha Hadid which follows the lines of a skyscraper. Mr. Koolhaas’ own creations, meanwhile, unite a shoe’s vamp with the heel in a seamless structure, implying the infinity symbol. A shoe’s heel, meanwhile, could be based on a chair, or else the entire shoe is made by simply folding one part of the material over the other.
“Shoes are the only independent structural garment piece. Clothing hangs on the human body, whereas shoes carry the human body,” he said. “What makes high heels so powerful is that it changes the very posture of a woman’s body, and makes it way more erotic, in a way. That’s what makes it so interesting.”
Not too many designers philosophize on the meaning of a shoe, so if a woman is looking out for a shoe that’s both smart and pretty, this is their brand.
“I would like to tick as many boxes as possible when we create anything,” he said when asked about creating shoes that were both, in a way, smart and pretty. “I want something to be comfortable, beautiful, smart, pretty, durable, inspiring — the more boxes it can tick, the more successful a shoe is for me.”

AlloyMTD plans gov’t center-business hub in Bataan

THE AlloyMTD Group is in talks with the local government to develop a P3.6-billion government center and business hub in Bataan.
Patrick Nicholas P. David, president for AlloyMTD Holdings Philippines, said the company has started negotiations with the local government of Bataan for the project.
“We have a bigger budget for Bataan. I think the total cost is P3.6 billion. The area we’re developing is 10 hectares,” Mr. David told reporters at the Philippine Economic Zone Authority (PEZA) headquarters in Taguig City on Friday.
The Bataan project is also envisioned to have a business hub where export-oriented industries can be established.
Mr. David said the company is looking to replicate the project in other provinces, citing Ilocos Norte, Ilocos Sur, Batangas and Surigao as viable areas.
“[I]t’s ease of doing business that we were lacking. With this, we hope it improves. We don’t have to spend time and money to go around cities, or from one city to the next or from one town to the next just to get documents. We are envisioning that when opening a business, you go to one building and everything is there,” Mr. David said.
AlloyMTD is currently developing the Palayan City Government Center and Central Business Hub in Nueva Ecija. The three-hectare property will feature government offices, as well as business process outsourcing companies. It has been declared as an information technology park and special economic zone.
The project will have a BPO center with two to three IT buildings that can accommodate between 5,000 to 6,000 seats.
Sutherland Global Services, a global business process outsourcing (BPO) company, is setting up shop at the Palayan City business hub. The firm will commence operations in September and is expected to create at least 1,000 jobs.
Palayan City Mayor Adrianne Mae J. Cuevas said more BPO firms have expressed their intent to locate in the business hub after it was declared a special economic zone. — JCL

T-bills to fetch higher rates due to thin demand

By Karl Angelo N. Vidal, Reporter
TREASURY BILLS (T-bills) on offer this week will likely fetch higher yields amid lower demand as the market expects the local central bank to raise its policy rates anew following the faster-than-expected June inflation print.
The Bureau of the Treasury (BTr) is offering P15 billion worth of T-bills at its auction today. Broken down, the Treasury will raise P4 billion and P5 billion via three- and six-month papers, respectively, and another P6 billion from the one-year debt papers.
Traders said over the weekend that yields on the shorter-termed papers will likely pick up, with one saying rates could rise by about 10 to 15 basis points across the board from the previous auction.
Last Monday, the government partially awarded the T-bills it placed on the auction block, raising just P11.9 billion out of the P15 billion it wanted to borrow.
Broken down, at that auction, the BTr accepted P4 billion as planned in the 91-day tenor, fetching an average rate of 3.404%, lower by eight basis points from the previous auction.
The Treasury however partially awarded the 182- and 364-day papers, borrowing just P3.04 billion and P4.029 billion, respectively. The rate of the six-month bills climbed 6.4 basis points to 3.937%, while the yield on one-year securities also rose to 4.566% by 13.7 basis points.
At the secondary market on Friday, the three- and six-month debt notes fetched 3.2639% and 3.8254%, respectively, while the one-year papers were quoted at 4.5625%.
The trader said the T-bills on auction today “will see weaker demand” from investors.
“I don’t think people are inclined to buy at this point,” the trader said in a text message on Saturday, noting the market is expecting the Bangko Sentral ng Pilipinas (BSP) to hike its interest rates again following higher inflation last month.
The government reported on Thursday that headline inflation accelerated to a fresh five-year high of 5.2% in June.
Last month’s inflation print surged from May’s 4.6% figure and was faster than the 4.7% median in a BusinessWorld poll.
The latest figure also exceeded the 4.3-5.1% estimate range by the Bangko Sentral ng Pilipinas and the 4.9% estimate of the Department of Finance.
Price increases in June were led by alcohol and tobacco (20.8%), transport (7.1%), as well as food (6.1%).
BSP Governor Nestor A. Espenilla, Jr. said the uptick in inflation was “a setback.”
“We will review and update our situational assessment and forecast inflation path,” Mr. Espenilla said last week. “This will shape the strength and timing of our next monetary policy response to firmly anchor inflation expectations.”
“The market may start pricing in another rate hike from BSP after the inflation data,” the bond trader added.
The BSP has already raised its rates twice this year, with borrowing costs now within a 3-4% range.
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 Treasury bonds.
Aside from this, plans for another dollar bond float as well as yen-denominated “samurai” papers are also being finalized.
The government plans to borrow P888.23 billion this year from local and foreign sources to fund its budget deficit, which is capped at 3% of the country’s gross domestic product.

Gaultier lights up Paris fashion week with provocative ode to smoking


PARIS — With sultry tuxedos and a gown that appeared to waft down the catwalk like cigarette smoke, French designer Jean Paul Gaultier celebrated smoking in all its forms on Wednesday in a fashion show filled with tongue-in-cheek digs at overly rigid attitudes.
Reinterpretations of “Le Smoking” — or tuxedos for women popularized by late French couturier Yves Saint Laurent in the 1960s — dominated the Haute Couture collection, with black and white combinations of jackets and ruffled dresses for instance.
The designer took smoke as his inspiration for a see-through dress decked out in swirling embellishments, or a wedding gown with a featherlight, waspy train that looked like it could vanish into thin air as it twirled on the runway.
Gaultier, the self-style “enfant terrible” of the fashion world, was also deliberately harking back to a period when smoking was more widely acceptable.
“I don’t smoke, but I was always surrounded by people that were smoking,” Gaultier said after the show in Paris.
“I don’t say ‘don’t smoke or smoke,’ it’s only that people should do what they want.”
Smoking was banned in public places in France in 2006, echoing clampdowns in many other countries by authorities for health reasons.
FREE THE NIPPLE
The flamboyant designer showed his support for a Florida teenager who was made to cover her nipples in bandages at her high school for not wearing a bra under her sweatshirt. Lizzy Martinez, 17, made headlines in April when she said teachers told her to wear a second shirt and put plasters on her nipples after they claimed other students had been distracted by her breasts.
Gaultier said it was a “scandalous” that a girl should be treated that way, and used his collection to support her.
He told AFP that if “men had the right to go bare-chested why not women?”
And to hammer home the point he had a barechested male and female model walk the catwalk, each wearing see-through police visors with the legend, “Free the nipple” in French and English.
“You can see the nipples and the jewelry but you can’t touch,” he said. “I don’t say that you must bare your breasts. I am very much for corsets and bras, clearly I like them,” said the designer who came up with Madonna’s famous conical bustiers. “But a woman should be allowed to not to wear a bra under her T-shirt,” he added.
Gaultier played with nipple visibility in four other looks in his autumn-winter collection that was a typically playful celebration of liberty and transgression.
“We are living in a quite policed world, and I was looking for a pretext to show freedom for all,” he said. “I wanted to show that you can walk around with bare breasts without be attacked or aggressed. It’s all about freedom to enjoy yourself and not take life too seriously.”
Gaultier’s couture brand is owned by private Spanish fashion and fragrance group Puig.
Paris Haute Couture Week — where a select club of fashion houses present their one-of-a-kind creations and showcase some of their most elaborate styles — ran until July 5. — Reuters/AFP

Growers seek to tap China demand for frozen durian

DAVAO CITY — Growers and exporters are meeting later this month at the 2nd Durian Summit, in a bid to find ways to meet Chinese demand for frozen durian.
Davao City Durian Industry Council (DCDIC) President Candelario B. Miculob said Chinese traders were in town in May and wanted more frozen durian than what was available.
“They did not set a limit for the quantity. The only problem is we have limited processing capacity. The Chinese want frozen durian… it is easier to export and it is also advantageous for us,” Mr. Miculob said during the Habi at Kape media forum last week.
He said that while the Philippines has a much smaller area planted to durian compared with three other southeast Asian countries, the August to October harvest period here coincides with the off season in these other exporting nations.
Thailand has the biggest durian farming area at more than 96,000 hectares (ha), followed by Malaysia with more than 70,000 ha, and Indonesia with around 50,000 ha. The Philippines, on the other hand, only has 16,000 ha, mainly in Mindanao.
“We have the opportunity to supply because in August, September and October, there is no production in other countries. These are the opportunities that we hope to take advantage of,” he said.
Apart from increasing production and expanding processing capacity, the industry also needs to address the declining area planted to durian due to rapid land conversion.
“We want to share the current developments of the durian industry and the market opportunities available today. We would like also to raise lots of issues during the summit,” Mr. Miculob said.
Among those expected to attend the summit on July 19-20 as speakers, resource persons and participants are representatives from China, the Department of Trade and Industry, Department of Science and Technology, farmers, and processors.
The industry is also preparing for the Durian Festival on Aug. 10 to Sept. 25, which forms part of Davao City’s annual Kadayawan Festival.
“We are expecting a lot of production this year, unlike last year the volume of fruits were limited (due to rains). Mangosteen is coming also as well as lanzones and rambutan. There’s a lot of fruits this year, luckily,” Mr. Miculob said.
Mr. Miculob said growers are expecting a harvest of around 48 metric tons of durian during the Kadayawan season.
“We have different (durian) varieties because almost all the varieties really bore fruit. We have a survey involving durian growers of the region and almost everybody said that all trees bore fruit,” he said.
In the Davao Region, which has four processing centers, up to 70% of the harvest usually goes to the export market.
“In 2015 there was so much durian, but in 2016 we were hit by drought and there was so much rainfall in 2017. We are recovering this year,” he added. — Maya M. Padillo

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