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Treasury bill rates to edge lower

YIELDS on Treasury bills (T-bills) on offer today are likely to move sideways as investors are expected to park their funds in the fresh retail Treasury bonds (RTB) awarded last week amid additional liquidity.
The Bureau of the Treasury (BTr) is offering P15 billion worth of T-bills at its auction today. Broken down, the Treasury will raise P5 billion and P4 billion via three- and six-month papers, respectively, and another P6 billion from the one-year debt papers.
A trader said on Friday that yields on the securities on offer will likely “move sideways across tenors” by around five basis points.
“The yields will likely move sideways due to the latest issuance of retail Treasury bonds,” the first trader explained. “Other clients may possibly park their funds into the RTBs which relatively carry a higher rate.”
Meanwhile, another trader said the T-bills to be auctioned off today will “fetch lower yields by around 10 basis points, still due to demand.”
Last Monday, the BTr fully awarded the 91-, 182- and 364-day papers, with total tenders reaching P37.9 billion, more than double the P15 billion the government intended to raise.
The average rate on the 91-day T-bills declined by 13.7 basis points to 3.3% from the 3.437% logged in the previous auction, while the yield on the 182-day papers also dropped by 17.9 basis points to 3.7%. The 364-day securities also fetched a lower average rate of 4.198% versus the 4.297% in the previous auction.
At the secondary market on Friday, the three- and six-month bills were quoted at 3.7607% and 3.637% respectively, while the one-year debt papers fetched 4.1179%.
On the other hand, the Treasury also raised P66 billion in three-year retail bonds last Wednesday against total tenders of P92.8 billion from banks and other financial institutions, with a 4.875% coupon.
The RTBs are now being offered to the general investing public through banks for minimum denominations of P5,000 until June 8. The bonds, which will be issued on June 13, will mature in 2021.
Due to the RTB offering, the Treasury opted to cancel the scheduled Tuesday auction for the seven-year Treasury bonds.
The first trader said the additional money supply in the system may spell additional demand for the T-bills on offer today and result in an oversubscription by “1.5 times,” which would consequently drive yields downward.
The central bank’s reserve requirement ratio cut took effect last Friday, bringing down the rate imposed on universal and commercial banks by a percentage point to 18%.
The move is expected to unleash at least P90 billion worth of idle funds into the system.
The additional liquidity was also supported by the P130 billion worth of maturities of previously issued government bonds redeemed last May 23.
The Treasury is holding two auctions per week this quarter — one for T-bills and another for Treasury bonds — to reflect increased borrowing requirements.
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. — K.A.N. Vidal

Guimaras to set up ‘mango school’

By Louine Hope U. Conserva, Correspondent
GUIMARAS — This island province off the southern part of Iloilo has the reputation for growing the sweetest mangoes in the country, but its production level has remained low.
Gov. Samuel T. Gumarin said while the local government and stakeholders have been working to develop the industry, technical capability and financial capacity have been limited.
As such, Mr. Gumarin said the plan of Senator Cynthia A. Villar, chair of the Senate committee on agriculture and food, to set up a school on the island focusing on mango production is a most welcome development.
“It is an innovation that we would like to have because for years we have strived to improve the mango industry in the province,” he said during the opening of the 20th National Mango Congress on May 30, hosted by Guimaras Province.
Ms. Villar cited during the event that while Guimaras has 645,000 hectares of agricultural land, only about 10% is planted with about 300,000 mangoes trees.
“That means each hectare is not yet planted with one (mango) tree. So there are still a lot of opportunities here,” she said, noting further that the top mango-producing regions are all in Mindanao.
MANGO SCHOOL
The senator committed to set up a “mango school” on the island and bring in representatives from the Agricultural Training Institute to teach best practices.
“It will be the first mango school in the country,” she said, “We need to teach the ordinary residents of Guimaras on how to plant and grow the trees.”
The Technical Education and Skills Development Authority (TESDA) will be tapped to fund both instructors and students, she added.
Ms. Villar also urged the province to develop agri-tourism as well as agri-schools, for both farmers and fisherfolk.
“Based on statistics, a typical farmer earns P4,500 a month, which is below the poverty line. That is why we also encourage agri-farms to become a farm school and get the support of TESDA. Like if you have 25 students, TESDA will pay you P100,000 monthly,” she said.

Bank Mandiri in talks to enter Philippine market

By Melissa Luz T. Lopez, Senior Reporter

This photo taken on September 18, 2010 shows the office building of Indonesia’s state owned Bank Mandiri in Jakarta. — AFP

AN INDONESIAN BANK is currently in talks with the Philippine government as they look to open a branch here, which comes ahead of a bilateral deal between the central banks of these two countries.
Officials from the state-run PR Bank Mandiri Tbk have been in talks with the Department of Finance and the Bangko Sentral ng Pilipinas (BSP) as they explore the possibility of setting up shop in Manila, a senior official said.
However, no formal application has been filed with the BSP as of this writing.
Bank Mandiri is the largest bank in Indonesia in terms of assets. The Indonesian lender has been quoted in news reports to have said it is expanding its presence in Singapore, Malaysia and Hong Kong ahead of a long-term goal to be one of the largest banks in Asia by 2020.
If realized, this would be the first Indonesian lender to set up operations in the Philippines, which comes alongside discussions between the BSP and Indonesian regulator Otoritas Jasa Keuangan (OJK) that will facilitate a smoother system for foreign banks to enter the other country.
Formal discussions between these nations started early 2017, which come ahead of the ASEAN Banking Integration Framework (ABIF) eyed in full swing by 2020.
It also springs from Republic Act 10641 signed by then-President Benigno S.C. Aquino III, which lifted the limit that allowed only 10 foreign-owned banks to operate in the Philippines at any given time. So far, 12 foreign lenders have secured the central bank’s approval to set up their branches here since the law was passed in 2014.
The Industrial and Commercial Bank of China Ltd. is the newest player which won the BSP’s nod to do business in the Philippines, which happens to be the biggest lender in the mainland.
Malaysia’s CIMB Bank received regulatory approval to operate a full branch here late last year.
Five Taiwanese banks have also opened branches in the Philippines over the last three years: Cathay United Bank, Yuanta Commercial Bank Co. Ltd., First Commercial Bank, Hua Nan Commercial Bank Ltd., and the Chang Hwa Commercial Bank, Ltd.
South Korea’s Industrial Bank of Korea, Shinhan Bank, and Woori Bank also started their businesses here, as well as the Japan-based Sumitomo Mitsui Banking Corp. and the Singapore-based United Overseas Bank Ltd.
BSP Deputy Governor Chuchi G. Fonacier, who heads the Financial Supervision Sector, has said that other foreign banks have expressed their intent to open banking units in the country but have yet to submit requirements.
A strong middle class market and a young population make the Philippines more attractive to foreign players looking for new clients and for new sources of growth, Ms. Fonacier has said. She added that foreign banks are likely following their corporate clients to sites where they expect increased trade and investment volumes.

Simplicity wins in the Balik Saya design competition


AMIDST THE frou-frou, frills, and fancy reinterpretations of the traditional baro’t saya, including exaggerated sleeves, handpainted skirts, and elaborate bead work and cutouts, the most simple rendition won the first “Balik Saya” fashion design competition, which aims to modernize and re-introduce the Maria Clara dress as a classic but wearable garb.
The simple but stunning design created by young designer Mariah Marella Parayray won the hearts of the fashion designers who judged the contest, which was held at the National Museum of Natural History on May 28.
The grand prize winner paid respect to the classic baro’t saya while updating it successfully. Ms. Parayray’s dress falls right below the knee, has a simple silhouette, and a muted color scheme. But one thing it is not is blah.
Sometimes, when fashion designers are asked to reimagine and reinterpret traditional clothes, the tendency is to go all out — and over the top — to showcase their skills as designers. But in the end, their modernized interpretations become a totally different creation with little — if any — trace of the original.
“It might surprise a lot of people [because the winner was simple]. But we believe that when you create something contemporary, and at the same time catchy to get the attention, it has to be well executed. I guess in the sea of all the other clothes, it stands out because of the wearability, proper construction, proper color, which is so muted, and the use of indigenous fabric, which is properly utilized. It is a big factor why it won. Hindi siya pa-bonggahan (It wasn’t over a show-off). At the end of the day, it’s not all about the frou-frous,” couturier Randy Ortiz, one of the judges, told BusinessWorld.
The other judges were designers Inno Sotto, Rajo Laurel, Lulu Tan Gan, Criselda Lontok, top models Jo-ann Bitagcol and Tweetie de Leon-Gonzalez, Representative (4th district of Leyte) and actress Lucy Torres-Gomez, and architect Tobias Guggenheimer.
Fifteen creations were judged based on their design, workmanship, wearability, and originality. The finished design had to be made of at least 25% indigenous fabrics like piña (pineapple fiber cloth), jusi (a piña-silk blend), and inabel (handwoven cotton fabric from the Ilocano provinces).
The grand winner brought home P100,000, and also won an apprenticeship in Rustan’s, accommodation at The Bayleaf Hotel in Intramuros, and a workshop from SoFA Design Institute.
There were four finalists besides the grand winner. They were: Isabelle Leones, 2nd place, who won P60,000; Somera Rana, 3rd who won P40,000; Lou Galang, 4th place, who won P25,000; and Margaux Gustilo, 5th place, who won P20,000.
“Balik Saya” is a project of the Intramuros Administration and Manila’s 5th District Representative Cristal Bagatsing, cooperation with Department of Tourism, and in partnership with National Museum of the Philippines, Technical Education and Skills Development Authority, Destileria Limtuaco, Rustan’s, the SoFA Design Institute, The Bayleaf Hotels, and Ilustrado.
“It was initially only intended for the youth. But there were a lot of queries from seamstresses and out of school youth who were interested to join. So we widened the scope from just the youth to everyone residing in Manila’s 5th district. We now champion an advocacy for everyone in the district to further develop their appreciation for cultural heritage,” said Ms. Bagatsing in a statement.
Special awards were also given that night. The winners were: Christian Bulasag who received the F.A.B Choice award, a P100,000 scholarship, and was recognized by Fashion+Arts+Business Creatives to have the most potential to be among the best Filipino designers in the future; Vianka Lorraine Castro who received the SoFa Choice or the Fashion Visionary Award; and Rana Vashti Sacramento who received the Rustan’s Iconic Award for her potential in retail design. — Nickky Faustine P. de Guzman

PAL expects ‘modest’ profit this year amid rising oil prices

PAL Holdings, Inc., the listed operator of Philippine Airlines (PAL), is aiming to post a “modest profit” this year, as rising fuel prices are expected to weigh on the bottom line.
“It will be a modest profit. Actually we have reduced our projected profit because the price of fuel has gone up. Kaya lang pagka [But] if the price of fuel continue to go up, and we are not able to pass on the additional costs to the passengers, we may again report a loss,” PAL President and Chief Operating Officer Jaime J. Bautista told reporters on Thursday.
PAL reported a net loss of P7.3 billion in 2017, mainly attributed to higher fuel prices, and ballooning aircraft and passenger expenses.
In the first quarter, PAL saw its attributable net loss widen to P1.1 billion from the P954 million loss during the same period a year ago.
The airline’s expenses rose 14% to P36.9 billion. Jet fuel remained the biggest operating expense, increasing by P2.1 billion. PAL said the average fuel price per barrel went up to $88.24 in the first quarter versus $76.15 in 2017.
PAL announced last week it will be revising its application with the Civil Aeronautics Board (CAB) to impose a higher fuel surcharge. It initially submitted an application in December to impose a fuel surcharge of between P51 to P207, but the flag carrier said it needs to update this figure to take into account the increase in fuel costs from January to April.
Despite the challenges, Mr. Bautista said the company is hoping higher passenger load seen in the first quarter will continue for the rest of the year.
“Our experience now is that we are carrying more people onboard our airplane. Our load factor has gone up to almost 80%. From last year’s 71% lang ang average sa load factor namin [From last year’s average of only 71% in our load factor], now it’s 80%. (That’s) considering there are also routes where the loads are not that good yet, ’yung mga bagong routes [the new routes],” he said.
PAL introduced many flights out of Cebu this year, Mr. Bautista said. “Some of the flights have low load factor, but still the average is greater.”
He noted that a load factor of 80% means 60% of the flight is full. “There are flights where you are turning away passengers because the flights are full,” he said. — Denise A. Valdez

Peso likely to weaken

THE PESO is expected to decline versus the dollar as investors turn bullish on the US’ prospects.

THE PESO will likely weaken against the dollar this week as investors are seen to shift their attention to the upbeat economic fundamentals of the United States amid easing geopolitical tensions abroad.
The local unit slipped on Friday to close at P52.55 against the greenback, moving sideways from its P52.52-per-dollar finish on Thursday.
However, the peso strengthened from its P52.70-per-dollar finish on May 25, which was its weakest in nearly 12 years.
Over the weekend, Land Bank of the Philippines (LANDBANK) market economist Guian Angelo S. Dumalagan said the dollar might strengthen this week on the back of better-than-expected US economic reports.
“US non-farm payrolls for May 2018 exceeded estimates by a huge margin, while unemployment rate for the same month improved further to 3.8%, the lowest level since April 2000,” Mr. Dumalagan said in an e-mail on Saturday.
The US economy continue to add more jobs last month, with non-farm payrolls reaching 223,000. The May figure was better than the 188,000 additional jobs expected by the market.
“These reports were accompanied by an acceleration in US average hourly earnings and manufacturing activity,” Mr. Dumalagan added.
The hawkish effects of the strong economic data in the US might be more pronounced as easing geopolitical tensions abroad eased after US President Donald J. Trump told reporters that the planned summit with North Korean leader Kim Jong-un will push through on June 12 in Singapore.
“I think it’s probably going to be a very successful, ultimately a successful process,” Mr. Trump said on the White House lawn, Reuters reported.
Meanwhile, Italians assembled a new government as Giuseppe Conte was sworn in on Friday as the prime minister of an anti-establishment government.
The relaxed political tensions abroad “may divert the spotlight to next week’s US monetary policy meeting, during which US policy makers are widely expected to hike rates again by another 25 basis points,” Mr. Dumalagan said.
After a strong start, the greenback may shed some of its gain on Tuesday, he added, as speculations of another rate hike from the Bangko Sentral ng Pilipinas could increase amid expectations of an uptick in inflation last month.
Inflation likely picked up to 4.9% in May from the 4.5% print the previous month as well as the 2.9% reading in May last year, according to a BusinessWorld poll of 10 economists.
“Towards the end of the week, the dollar may move sideways with an upward bias amid likely firm US non-manufacturing data and mixed [gross domestic product] reports from Japan and the Eurozone,” LANDBANK’s market economist noted.
For this week, Mr. Dumalagan sees the peso to move between P52.30 and P52.80 versus the dollar.
Likewise, a foreign exchange trader said the peso will trade within a “wide” range of P52.30-P52.70, due to the political concerns overseas.
“The trend is still for a higher dollar-peso, although we’re getting huge swings due to the volatility of the global market brought about by the political situations,” the trader said on Friday. — Karl Angelo N. Vidal

New Zealand to be tapped for farming-fishing technology and agricultural tourism

DAVAO CITY — Cacao farmers in Mindanao, particularly in the Davao Region, see New Zealand as a fresh market with the recent appointment of Mindanao Business Council (MBC) chair Vicente T. Lao as the country’s honorary consul for Mindanao.
“We look at New Zealand as a market… they prefer chocolates,” said Val D. Turtur, president of the Cacao Industry Development Association of Mindanao Inc. (Cidami), in an interview during the inauguration dinner for Mr. Lao last week.
Mr. Turtur said they will be joining the first trade mission that the MBC chair is organizing.
“We will try also to connect [with the cacao and chocolate market]. We can also promote there. Even if it is a small country, we can target the high-end market. It is also a good market because they also have milk products which can be combined, re-processed and made into chocolates,” he said in the vernacular.
At the same time, he added, New Zealand could serve as an access point to the Australian market. At present, Davao exports only semi-finished products such as cocoa liquor (tablea) in blocks to Australia.
TECHNOLOGY
Mr. Lao, meanwhile, said he will be focusing on developing links in the agriculture sector so that Mindanao farmers and fisherfolk can tap into New Zealand technology and expertise for increasing production.
“Basically, I accepted the position to help our farmers and fisherfolk here. New Zealand has very good technology when it comes to agriculture and fisheries,” Mr. Lao said in a separate interview during the same dinner hosted by the New Zealand Embassy.
Mr. Lao cited that New Zealand is very advanced in terms of mechanization given its limited human resources.
“New Zealand has very few people. For them to really be productive, they really have to rely on technology. In our [Mindanao’s] case, we really need that because our productivity is very low,” he said.
Mr. Lao said the planned trade mission would most likely be in December or next year in order to have enough time to assess potential business matching.
Apart from agriculture, the new consul said tourism is another sector that New Zealand and Mindanao can expand — with Filipinos going there to experience winter, and New Zealanders coming here to enjoy the summer weather.
“It’s very near. Why should we go all the way to US and Europe to experience a winter environment,” he said, adding that New Zealand is also a prime viewing location for the Southern Lights. New Zealanders, on the other hand, “can always come here and enjoy the sun.”
Mr. Turtur, who is also the president of the Davao Farm Tourism Association, said farm tourism could also get a boost from New Zealand as the cacao industry develops more sites. He said cacao farm tourism will be launched and promoted as a new attraction during the Davao Kadayawan Festival in August.
“In farm tourism, we will just try to do what we call value-adding activities aside from production. We can accept tourists and visitors and that will be additional income for the farmers,” he explained.
Mr. Turtur added that the Davao farming sector is optimistic about the appointment of former Agriculture undersecretary Bernadette Romulo-Puyat as Tourism Secretary. “We are happy,” he said. “I read in the reports that her heart belongs to agriculture — she will marry tourism and agriculture.” — Maya M. Padillo

Sequins, birds, and flowers


YOU CAN count the designers who participated in this season’s Philippine Fashion Week with the fingers two hands. The fashion extravaganza was once held in convention centers, but the Holiday 2018 shows now has to squeeze itself in a few rooms in Discovery Primea, during the weekend (as opposed to blocking off a whole week, as it sued to do). At least, with less people in the tussle, one could really take a good look at the clothes, which may encourage some to buy a few pieces for showing off during the holidays.
• Jeffrey Rogador — Mr. Rogador opened the shows this season with a wearable collection featuring stylized prints of faces with a touch of Matisse. Bomber jackets, sweatshirts, and hoodies in baggy fits were seen throughout the show, while the color scheme ranged from bland grays to lively yellows. Jackets in mesh might turn a few heads.
• ESAC by AudieAE — The brand by Fashion Week co-founder Audie Espina never fails to bring out the proper lady, except in this rendition, she’s a bit of a society villain. Think red and black dresses with large a-line skirts, perfect for a young Cruella de Vil on the make. This was combined with looks that can be vaguely Filipiniana, such as two dresses with bodices that can be likened to a baro’t saya, but more obvious references to local fashion were seen in oversized barongs that serve as dresses.
• Joel Rosales — The collection brings to mind the cleanliness one associates with resorts, and the clean collection executed in grays and whites can build a worthy vacation wardrobe. The neutral palette wes given life with a few elements in colors like red and blue in sleeves, collars and lapels. A short-suit for men, seen on a shirtless male model, looked a bit like a bathrobe, but if that’s your game, go ahead. A pantsuit with a blue train looked excellent for poolside parties, but then, a sheer black gown in a striped material will probably turn heads wherever you wear it.
• Jun-Jun Cambe — Riotous prints executed on a neutral background says polite fun with this collection by Mr. Cambe. Women were clad in a saturation of serious-looking flowers, or else loosely draped nude gowns with an overlay of sheer fabric. More interesting were the silhouettes used on menswear: outfits in windowpane print, checks, and a black-speckled white material were done in an ovoid silhouette, hiding more obvious masculine aspects of the anatomy, resulting in something androgynous — with a few adjustments, one can see a woman wearing these, though wouldn’t you want a more flattering fit?
• Amir Sali — Now we’re talking. Perhaps Mr. Sali’s vision isn’t quite as edited yet, but this designer is interesting. The show opens with a line of white dresses with a print reminiscent of the Art Nouveau movement, done with vibrant patterns of flowers and scrollwork, combined with faces or a realistic eye, thus veering a bit into the surreal. We’d pass on the low-waisted shirt printed with the names of strong women in the Bible (with the odd addition of Melchora Aquino, a.k.a. the nurturing heroine Filipina heroine Tandang Sora), and we’re still iffy on the giant scapulars with the word “God” emblazoned on them. Otherwise, the fresh and feminine collection with a variety of references from Filipiniana to frou-frou was a hit.
• Sidney Perez Sio — Well, there’s nothing much to say after a show opens with separates in sequinned fabric embroidered with birds. Trust me, you’ll like this: birds flying on an aquamarine sequinned background feels as if you’re wearing the air and sea around your thighs, and isn’t that a great feeling? The show slumped a bit with a collection of athleisure wear in neutrals, but at least the collars and necklines were cute. A bodysuit (or was it a swimsuit?), along with several shirts were patched with stylized figures reminiscent of what Gucci’s been doing. The matching sheer jackets looked sweet though. And the birds: they’re seen splashed across a few more outfits, but skirts printed with cocks (as in the fowl) looked whimsical and fun. — Joseph L. Garcia

ePLDT plans to launch cybersecurity academy

By Krista A. M. Montealegre, National Correspondent
THE EXPLOSION of digital threats has created an unprecedented demand for people with skills and experience in tackling cyberattacks. Unfortunately, talent is hard to come by in the Philippines.
Companies have been investing heavily in cybersecurity since 2010, but the lack of trained experts to make the investment work continue to make these systems vulnerable to attacks.
“To develop this responsive cybersecurity, it will be very expensive even for big companies. You need to hire people and there is none. The expertise do not exist,” Angel T. Redoble, chief information security officer of ePLDT, the digital enterprise enabler of PLDT, Inc., said in an interview.
The chairman and founding president of the Philippine Institute of Cyber Security Professionals, Mr. Redoble came out of retirement in 2016 to help PLDT build its own army of all-Filipino “cyber warriors” comprised of analysts, penetration testers, digital forensic investigators, threat hunters, responders and reverse engineers.
These skilled professionals were nonexistent before PLDT provided them with the rigorous training in assisting enterprises analyze and respond to more sophisticated cyber threats.
“Training and constant improvement of people are very expensive for companies. For us, it is our lifeline; it is our business,” Mr. Redoble said.
So glaring is the shortage that ePLDT plans to launch its own cybersecurity academy by the end of the year to help address the lack of talent, he added.
The trained individuals are the secret sauce behind ePLDT’s Security Operation Center, which provide the facilities, expertise, frameworks, and threat intelligence, giving visibility in advance into potential threats and real-time detection of attacks that could affect business-critical IT assets.
Most traditional cybersecurity solutions in the market are only preventive and detective in nature so ePLDT developed an approach that is also predictive and responsive.
“As a service, this is the answer to the problem of budget for all types of companies. They can do away with the capital expenditure part of the problem because they can outsource it to us. They don’t need to hire the people because we’re a one-stop shop,” he said.
One of the bigger problems for the private sector is the absence of a comprehensive law on cybersecurity.
The Philippines needs a law that will compel the government and private sector to adopt a cybersecurity practice that is more than sufficient to the kind of environment or businesses that they are into, while giving them the leeway to identify risks specific to their sectors, Mr. Redoble said, adding that the law should identify the roles and responsibilities of the government in protecting cyberspace.
“The Philippines only has the Cybercrime Prevention Law and the Data Privacy Law. These laws are reactive. When there is an incident, you can use the law. No incident, no use of the law. We need a law that is proactive. We need to be able to identify the risk before it occurs,” Mr. Redoble said.
Financial losses due to cyberattacks could cost businesses $6 trillion by 2021 despite increased investments in cybersecurity, he added.
ePLDT has barely scratched the surface in terms of coverage, monitoring close to 30,000 devices in early May, out of the 60 million devices in the country, so the potential for growth is exponential.
“We will not stop until we are able to monitor every connected device in this country,” Mr. Redoble said.

Megaworld eyes P1B from Upper West Side-inspired project

MEGAWORLD Corp. targets to book P1 billion in sales from its first residential project in its Pampanga township, banking on the province’s growth potential in the coming years.
In a statement issued over the weekend, the listed property developer said it has launched Chelsea Parkplace, a 12-storey residential tower offering 193 units.
Studio units are sized up to 31 square meters (sq.m.), while one-bedroom units are up to 45.5 sq.m., and two bedroom units are up to 88 sq.m.
The Andrew L. Tan-led company said the project will take inspiration from New York City’s Upper West Side. Each unit will also have a balcony similar to New York’s apartments, giving residents a view of the township.
Amenities will include an adult and kiddie pool with lounge, indoor and outdoor events halls, fitness center, and a daycare center.
The company expects to complete the project by 2022.
This will be Megaworld’s first residential project inside its 35.6-hectare Capital Town in San Fernando, Pampanga. The company initially launched retail spaces in the area called the Shophouse District last year. With a total of 98 lots up for sale, the firm said it has already sold around 70% as of end-May.
“After selling around 70% of our shophouse lots in Capital Town in just a little over six months, we have experienced a spike on inquiries on residential developments within the township. And so, we launched this project this year in response to the demand,” Megaworld Pampanga First Vice President for Sales and Marketing Eugene Em Lozano said in a statement.
Megaworld said last year that it will be investing around P30 billion over the next ten years to develop Capital Town. The township sits on the site of the former Pampanga Sugar Development Company located near the Pampanga Provincial Capitol.
The company is banking on the number of infrastructure projects to be developed to connect the region to the metro in the future, including the Manila-Clark Railway, a 106-kilometer railway from Manila to New Clark City worth over P300 billion. The government targets to complete the project by 2022.
“With the completion of the Manila-Clark railway where San Fernando will have its own station, it would only take around 30-40 minutes or even less to reach the City of San Fernando from Metro Manila, and less than 10 minutes to and from Clark,” Mr. Lozano said.
Megaworld generated P3.2 billion in net income attributable to equity holders of the parent during the first three months of 2018, 11% higher year on year, following the 10% jump in revenues during the period to P13.1 billion.
The company is the property arm of Mr. Tan’s Alliance Global Group, Inc., which also has interests in liquor through Emperador, Inc., gaming through Travelers International Hotel Group, Inc., and quick service restaurants through Golden Arches Development Corp. — Arra B. Francia

Maguindanao, North Cotabato new focus areas of partnership between New Zealand and FAO

DAVAO CITY — The United Nations’ (UN) Food and Agriculture Organization (FAO) and New Zealand government have sealed a new project focusing on the provinces of Maguindanao and North Cotabato.
FAO representative in the Philippines Joe Luis Fernandez said this new partnership will be an expansion of existing agricultural programs aimed at facilitating linkages with the value chain, ensuring market opportunities in growth areas, and improving the resiliency level of communities.
“It is our hope that our past successes will be sustained and scaled up,” said Mr. Fernandez in a speech during last week’s inauguration dinner for Vicente T. Lao as New Zealand’s newly appointed Honorary Consul for Mindanao.
FAO’s involvement in Mindanao started soon after the government and the Moro National Liberation Front (MNLF) signed a peace deal in 1997, initiating projects to address immediate needs of conflict-affected farmers and fisherfolks in the central Mindanao area.
The UN agency has implemented several New Zealand-funded projects in the Philippines between 2011 and 2017, including the restoration of agricultural livelihoods in areas affected by conflict, flooding and drought.
“I am quite excited for this (new) project as this will also contribute to expanding FAO partnerships with other stakeholders including the private sector,” he added.
The FAO-New Zealand joint initiative would be in line with the priorities and strategies set out in the Philippine government’s Mindanao 2020 program, Philippine Development Plan 2017-2022, and the New Zealand Aid Program Strategic Plan 2015-2019.
FAO recently completed a Mindanao Strategic Program for Agriculture and Agribusiness (MSPAA) and a Marawi Response Plan, which both provide a framework for the agency’s interventions. — Maya M. Padillo

Yields on gov’t debt rise

YIELDS on government securities (GS) traded in the secondary market rose slightly last week amid geopolitical concerns abroad.
On average, GS yields inched up by 1.1 basis points (bps) week on week, data from the Philippine Dealing & Exchange Corp. as of June 1 showed.
“GS yields just moved sideways [last Friday] amid geopolitical concerns abroad and mixed US economic data,” said Land Bank of the Philippines (LANDBANK) market economist Guian Angelo S. Dumalagan via an e-mail.
“The US and China are again imposing higher tariffs on each other, while Italy is navigating through a tough political situation, which could determine the future relationship of the country with the EU (European Union),” he said.
Last week, the Trump administration said it will proceed with plans to impose tariffs on $50 billion worth of Chinese goods and restrict Chinese investment in the United States after their announcement of a temporary truce a couple of weeks ago.
Meanwhile, political issues in Italy concerned investors as the populist party Five Star Movement showed their exit plan from the EU. As such, fears are growing that the new election would effectively constitute a referendum on whether the third-largest economy in the euro zone should stay within in the single-currency bloc.
On a positive note, the US Bureau of Labor Statistics reported late last week that non-farm payrolls increased by 223,000 in May, exceeding the 188,000 market expectation, while the unemployment rate edged down to 3.8%, the lowest in 18 years.
Back home, at the secondary market, the 91-day Treasury bills (T-bills) ended with the highest yields last week, climbing 37.2 bps to fetch 3.7607%. The 364-day T-bill also saw its rate rise by 7.1 bps to 4.1179%. Increases were also logged in yields on the two- and three-year papers, adding 16.9 bps to 4.4214% and 9.3 bps to 4.7008%, respectively.
On the other hand, the four-year Treasury bond (T-bond) rallied as its yield declined by 22.9 bps to 4.9596%. The 182-day T-bills also shed 13.4 bps to close at 3.637% last week.
The five-, seven-, 10-, and 20-year tenors also saw their rates go down by 5.3 bps (5.4539%), 7.1 bps (5.7733%), 3.2 bps (6.08%) and 8 bps (7.2125%), respectively.
For this week, LANDBANK’s Mr. Dumalagan said: “GS yields are still expected to trend with an upward bias amid expectations of stronger domestic inflation in May 2018.”
“While inflation is expected to fall back within the BSP’s (Bangko Sentral ng Pilipinas) 2% to 4% range next year, it will definitely remain elevated for the rest of 2018, with inflation likely hitting 5% last month,” he added.
The Philippine Statistics Authority will report official inflation data tomorrow.
Mr. Dumalagan added that yields might go up as the June 14 policy meeting of the US Federal Reserve draws closer.
“Predictive models suggest an above 90% chance of a US rate hike in June 2018,” Mr. Dumalagan said. — Ranier Olson R. Reusora

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