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Peso sinks ahead of February inflation figures

The peso weakened against the dollar on Monday, March 5, touching the P52 level anew, as market players reduced their position ahead of the February inflation data release on Tuesday, March 6.

The local currency finished at P52 against the greenback on Monday, losing 10 centavos from its P51.90-per-dollar close on Friday.

The peso opened the session up at P51.85 versus the dollar, while its best showing was at P51.83. Its intraday low, meanwhile, was at P52.04 to the greenback.

Traders interviewed over the phone on Monday said the peso moved sideways with a downward bias on the back of position reduction.

“We saw thin volume [today]. I think it’s more of position reduction ahead of the inflation data [today],” the trader said.

According to the BusinessWorld poll of 14 economists, inflation is seen to pick up to 4.2% in February, accelerating faster than the 2-4% full-year target set by the Bangko Sentral ng Pilipinas, as well as the 3.3% figure in February last year.

The economists said the implementation of the Tax Reform for Acceleration and Inclusion law will drive the inflation faster as older inventories are used up.

Although the first tranche of the tax reform reduced personal income taxes, it slapped excise taxes on commodities such as sweetened beverages, tobacco and fuel. This comes at a three-year highs for crude prices.

“But given the volume, it’s not like we’re trending [weaker]. It’s more of sideways movement,” the trader added.

For Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, President Donald J. Trump’s protectionist policies will likely drive the currency exchange.

“Inflation will not be the main driver but the continuing saga of Trump’s protectionist stance,” said Mr. Asuncion in a text message.

Last week, Mr. Trump announced he will slap a 25% tariff on steel imports and a 10% tariff on aluminum imports.

However, Mr. Asuncion noted that “tensions eased a bit due to China’s openness to more discussion about trade.” — Karl Angelo N. Vidal

On the streets, a culinary revolution

By Bjorn Biel M. Beltran
Special Features Writer

It’s surprising to think that a few years ago, the most foodies can expect for a unique and affordable meal would come from the restaurant franchises that populated the Philippines’ many malls. Food parks, as they are known now, weren’t a thing.

It was only with the rise of places like Banchetto in Ortigas and Mercato Centrale in Bonifacio Global City (BGC) did the food park craze began to dominate Filipino cuisine. It was nothing short of a culinary revolution; food parks started appearing all over the metro, from the northern fringes of Quezon City to as far south as Parañaque, finding success in offering innovative fare from a re-imagination of turo-turo to hybrid cuisine.

Suddenly, Filipinos’ craving for new and exciting food weren’t limited to the rote offerings of the local carinderia, nor do they have to shell out for fancy dinners at starred restaurants. The food park’s cheap, community-building nature allows it to attract crowds that food establishments like restaurants and shopping mall franchises wouldn’t.

The history of the food park began in the late 2000s. In 2007, Banchetto opened to cater to the growing number of workers in the business process outsourcing (BPO) industry in the Ortigas central business district. Claiming to be the first “overnight street food fiesta”, the park opened late at night every Friday and lasted until Saturday morning.

Mercato Centrale in BGC launched not long afterward in 2010. Inspired by the outdoor markets of Florence and the Boroughs Market in London, Mercato promised to bring an innovative weekend night markets with unique, great tasting food in a clean, open-air setting.

The concept only became more popular from then on. Establishments along the streets of Malingap and Maginhawa in Diliman, Quezon City garnered almost viral attention from students of the University of the Philippines nearby. Meanwhile, the country’s shopping malls were trying their hand at upscale food halls like the SM Mega Food Hall in SM Megamall. When 2016 rolled around, the food park craze was in full swing.

“Food parks surged in popularity in 2016,” global market research firm Euromonitor International wrote in a 2017 report on “Street Stalls/Kiosks in the Philippines”.

“The format replaced food trucks, as it offered a fun dining space for consumers to try new food concepts and bond with their friends and family. Similar to food courts, food parks feature a collection of food kiosks within an outdoor compound. They normally follow a central theme such as international street food in the case of Mercato, Instagram-able dining in regard to Crave Park and subway-inspired booths in the case of The Vibe,” the report said.

“Unlike food courts though, food parks are comprised wholly of independent consumer foodservice operators, normally start-up entrepreneurs, and serve as an ideal incubator for new businesses and novel concepts because of the low capital requirements and a targeted consumer base. Furthermore, food parks are located within neighborhoods and primarily target students, families and young professionals,” the report added.

One positive effect of the rise of food parks in the Philippines is the stepping stone it gives to enterprising Filipinos. Anton Diaz of Our Awesome Planet (www.ourawesomeplanet.com), the popular food and lifestyle blog that played a significant role in the birth of the modern food park, said that the more business-minded individuals from the new generation are leading the trend.

“I think the millennial generation wants to be more enterprising than the previous generation,” he said in an interview with BusinessWorld. “They want more freedom with their time and they’re trying out businesses. These are the people who want to open a restaurant, but don’t have the capital or the confidence [to start their own]. They start small. [Food parks are] an entry point.”

Many millennials are traveling the world in search for new cuisines to sample, he noted. Some of these traveling foodies are bringing these new cuisines back home to offer them to those who don’t have the luxury of traveling.

“They are the equivalent of hawker centers,” Mr. Diaz said, likening them to the open-air complexes popular in Southeast Asian countries like Singapore and Hong Kong, where a variety of inexpensive, quality food is offered in stalls. “The only issue is that some food places offer food without any heritage to them; hybrid cuisines that only work for fads.”

Mr. Diaz explained that the highly-experimental nature of food park cuisine makes it susceptible to businesses looking to survive solely on the uniqueness and “virality” of their offerings. To survive, he noted, food parks need authenticity.

“If let’s say you have a family recipe for pandit or bulalo, and you’re putting it out there, selling it to people and people can appreciate it, that can work better. It would be good to see a food park that offer that kind of food,” he said.

Not that there aren’t any establishments offering that kind of food. Uncle Mario’s Bulaluhan, a family-run food stall at the Funland Food Park on Regalado Avenue in Quezon City, caters mostly to students at the university nearby, offering authentic Ilocano and other provincial dishes based from family recipes.

“It’s funny because these students have never seen or even know about food like this,” Christian Uy Bungubung, who manages the stall, told BusinessWorld. “For example, they don’t even know that Goto Batangas is mostly liver, not rice. We try to bring these kinds of food to a new market. We get all our ingredients from the provinces.”

Mr. Bungubung said that they hope to bring their food through a restaurant of their own someday, and food parks offer them the opportunity to test the waters if their brand of Filipino cuisine has any demand from a city market.

“Of course it’s been challenging. But we’re hopeful that we can reach our dream. If not this year, then the next,” he said.

The perils of overtourism

By Mark Louis F. Ferrolino
Special Features Writer

The Philippines, which boasts of a colorful history and culture, rich biodiversity and stunning attractions, has continued to become one of the top tourist destinations around the world, recording up to 6.6 million of foreign tourist arrivals in 2017, according to the Department of Tourism (DoT).

Although the flourishing tourism sector may be good for the economy — opening employment opportunities for many Filipinos — the massive influx of tourists, on the other hand, has been resulting to negative consequences. There are certain destinations in the country that have become a victim of overdevelopment and overcrowding that lead to the destruction of the environment and deterioration of local residents’ quality of life.

Boracay and Baguio, for a long time, have been the face of Philippine tourism. These two destinations have captured many tourists with its alluring beauty and exceptional culture. As the number of visitors increases, more establishments were put up, infrastructure projects were rolled out, and expansion of commercial spaces took place. These, in no doubt, encourage more tourists to visit these destinations, up to the point where these places became too crowded.

“I think it became an issue because of the failure of the local government units (LGUs) to enforce the prescribed environmental, ecological laws. A lot of the problems being experienced now in the overcrowding is due to the non-implementation of the law,” DoT Assistant Secretary Frederick M. Alegre told BusinessWorld in a phone interview.

Mr. Alegre noted that when tourists observe the existing laws are not properly implemented by the authority, there’s a tendency for it to be abused or overlooked by them.

Ten years ago, Baguio was a peaceful and slow-moving city. One of Baguio’s local residents, Janikka C. Tabbada, told BusinessWorld, in an online message, that back then, they could still go out [in their streets] during peak season without worrying about the traffic, safety and overcrowding.

“Parks were more beautiful back then… There were few cases of crimes, so residents rarely worry about getting their phones or any valuables being snatched. There were less businesses that catered to tourists, less cafes, restaurants and shops. There were less people of course, but Baguio people then were generally simple, courteous and calm,” Ms. Tabbada said when asked about how’s Baguio City 10 years ago.

She added that the tourism of Baguio during that time started to boom, yet it did not affect the lifestyle of the residents. Today, she said it’s different — pollution and traffic in the city become worse, and residents are now worried about going to work and school as they may be caught in traffic.

Boracay has been facing the same fate. Decades ago, the island was a quiet, subdued and lovely paradise, accommodating number of tourists that is just ideal to its carrying capacity.

Recently, the world-renowned island made headlines when President Rodrigo R. Duterte threatened to shut down Boracay due to violation of environmental law. The problem has been a long time issue, according to Nenette A. Graf, owner of the Boracay Beach Resort and president of the island’s biggest business organization Boracay Foundation Incorporated (BFI). She shared that the island is facing the same problems on sewerage system and solid waste even before.

“We welcome our President Duterte’s order to DENR (Department of Environment and Natural Resources) of six months deadline to fix Boracay. We’ve been waiting for this attention from the government for more than 10 years now,” Ms. Graf said in an online message.

Ms. Graf said that currently, Boracay has “horrendous traffic, more vehicles, taller hotels, less coconuts and greens.” She added, “Forests are now converted into hotels to accommodate more visitors.”

Destruction in environment, culture and quality of life in Baguio and Boracay, caused by overcrowding and non-compliance of environmental laws are not just exclusive to these destinations. They are just a representation of other tourist destinations in the country being overused and abused.

The national government through the office of the DoT are looking for ways to resolve these issues. Mr. Alegre said they are working closely with the LGUs, local stakeholders and other government agencies to ensure the sustainability of tourist destinations in the country, especially in Baguio and Boracay.

While they are still on the process of resolving the issue, the LGUs, on the other hand, have to play their role, he said. “The LGU has to be able to react, has to be able to redirect traffic. It must be able to regulate hotels and facilities, it must be able to enforce the law that disallows construction in areas that are not prescribed. And this again is a concern the LGU must step up and help us achieve a balance between the tourist and development of areas like Baguio.”

“The Philippines has a long coastline, which is in Mindanao, in the Visayas and Luzon. If we are able to promote these aggressively — the other alternative destinations — then we’re also able to decongest the (overcrowded) destinations,” Mr. Alegre added.

New flavors and food trends for 2018

By Romsanne R. Ortiguero

The emergence of different food concepts every now and then as well as the Philippines’ hosting of international food events such as the World Street Food Congress and the prestigious Madrid Fusion Manila are a testament of how Filipinos are always on the lookout for new flavors and novel gustatory experience.

Players in the food and beverage (F&B) industry take up the challenge to feed the insatiable appetite of Filipinos for fresh offerings through keeping up with trends, which change constantly and quickly.

Adolf Aran, Jr., president and chief executive officer of Courage Asia, a management consulting firm focusing on food service; and Liza Hernandez-Morales, director for business development and public relations of the Center for Culinary Arts, Manila, shared their thoughts on the food trends for 2018 in an interview with BusinessWorld.

Mr. Aran and Ms. Morales said that there is a growing interest for heritage cuisine or traditional dishes like the pyanggang of the Tausugs, the kinalas from Bicol, pancit batil patong of the Ibanags. Along with this, according to Mr. Aran, is an ongoing rediscovery of local ingredients such as adlai (a type of grain often used as a substitute for rice) and batwan (local souring agent).

“We have this generation of really innovative chefs like JP Anglo and Jordy Navarra, among others. They do respect Filipino heritage cuisine but they innovate, they play with it; make it relevant, contemporary, and exciting without losing sight of the soul of the food,” she said.

As Filipinos continue to explore the world, there is also a demand for new flavors apart from cuisines such as Japanese and Italian that are already familiar to the local palate.

“I see Peruvian and even some African flavors that are coming out now. Traveling and appreciation for different cuisines go hand in hand. We continue to be more sophisticated as a people in terms of taste, flavor, and interest,” Ms. Morales shared.

Ms. Morales also noted that Filipinos are getting busier, thus, are eating out more often than before. Add the worsening traffic, the demand for on-the-go food or food delivery will further increase. While Filipinos will opt for quicker food options, they will also look for healthier options. Echoing the latter point, Mr. Aran said that healthier substitutes such as cauliflower rice will be a trend this year.

On the other hand, restaurants with unlimited rice and eat-all-you-can concepts will continue to cater to a market who wants the “busog” ( feeling full) factor. However, as Mr. Aran continued, there will also be a market segment willing to go beyond buffets and will look for more value in terms of add-ons instead of discounts, who will look for completeness of meals (with portions of carbohydrates, proteins, beverage, and desserts) and real alternatives to bigger portion sizes.

Proudly home-grown concepts will also continue to be visible this year, according to Mr. Aran. “Because of food parks and a deluge of culinary arts graduates, we continue to see an influx of new concepts. The availability of locations from all over such as malls, high-traffic communities, and office buildings give rise to both new players and old players testing new concepts.”

Along with these, foreign players will actively be in the scene as well. Mr. Aran shared, “In the Japanese segment alone, there are more than 10 new concepts that opened in 2017, such as Kazunori, Hibana, Kyo-to, Ikomai, and Tsujiri. Popeye’s and Shake Shack from the U.S. found some local partners who will help them expand in the Philippine shores.”

Inspired by the continuing acquisitions being done by Jollibee and the Max’s Group, mergers and acquisitions as a strategy will continue to be a viable way to expand one’s food business, noted Mr. Aran.

Meanwhile, as a tip to those in the fast-paced Food and Beverage industry, Ms. Morales and Mr. Aran underscored that it is important to know your market well.

“Nowadays, good food, great service, and great ambience are already a given. Therefore, gone are the days when ‘It’s the sauce handed down from one generation to another’ that will make or break a food business. One needs to tap into a specific market segment. One needs to have a deeper understanding of the target market that it serves and immediately act on them. Demise and casualties happen because of the speed of its decisions, more often than not,” Mr. Aran said.

Treating your employees right can mean a lot on the food business, too. Mr. Aran pointed out that food entrepreneurs have to realize that the food business is still a “people business,” and establishing a basic code of conduct, healthy working environment, and a positive culture will allow employees to serve their guests better.

Lastly, Mr. Aran said a good food concept should be a breathing dynamic concept. “Once you have a good concept, continue to tweak it until it becomes your own concept, transformed after a period of character building and many months or even years of menu innovation, marketing strategy, and people empowerment.”

Travel agencies’ digital dilemma

IN an age when practically anyone with a smartphone, a stable Internet connection and a credit card can book a flight and hotel room on his own and personalize his itinerary, it seems that travel agencies are no longer useful. Indeed, stories revolving around their decline abound, and it’s not unusual to encounter headlines containing the words “death” and “dying.” But are they really on the verge of permanent obsolescence?

In western countries like the U.S., where technological advancements are embraced much more rapidly than in less developed nations, travel agencies are actually thriving. According to the online research company Statista, the American travel agency industry is predicted to generate $17.3 billion in revenue in 2020, up from $15.5 billion in 2015. And its profit-to-revenue ratio is estimated to have increased twofold from 6% roughly a decade ago to 12% by 2015.

It’s no different here. In the 2009 Survey of Tourism Establishments in the Philippines (STEP) for Transport Operators, Tour and Travel Agencies of the Philippine Statistics Authority (PSA), there were only 864 establishments engaged in activities of tour and travel agencies. In PSA’s 2014 STEP, the number shot up to 1,532. Revenue of the agencies also rose. The 2009 STEP showed that transport operators, tour and travel agencies made P164.5 billion. In the latest STEP, their revenue reached P229.6 billion.

The Philippine Travel Agencies Association (PTAA), a group established in 1979 to foster unity in the travel industry and promote the welfare of its members and the traveling public, has been seeing its membership grow every year, its president, Marlene Dado Jante, told BusinessWorld in an interview. There are currently 623 travel agencies that belong to PTAA. In January of this year alone, the association inducted 18 new members.

The increase is even more astonishing considering that PTAA has strict requirements like physical office in a commercial area. In addition, Ms. Jante said, “You need to show that you are actually paying government taxes.”

Online travel agencies

It’s no doubt an encouraging development, but travel agencies, particularly the brick-and-mortar ones, are still facing threat, not from their perceived uselessness by the public but from their digital brethren, online travel agencies (OTAs) like Expedia. “We admit that OTAs are really our competitors,” Ms. Jante said. “That’s why we have to do better.”

In a 2014 survey of 3,500 American leisure travelers (and 1,500 business travelers) conducted by Google, one in three chose to transact with OTAs for their superior site tools and options. The other reasons that they had for booking on OTAs: lower prices/better deals, past positive experience or recommendations for the site, existence of loyalty/rewards programs, and prominence in Google search results.

According to Ms. Jante, traditional travel agents have their own advantage: their superior knowledge of tourist destinations. “If you come to me and say you want to go hiking or mountain climbing, we know the place” to recommend, she said. Travel agents, like all members of PTAA, are constantly sharpening their touristic knowledge. “Travel agents continue to have and attend trainings and familiarization tours,” she said. “We go to a lot of places.”

Traditional travel agents have also started to focus more on corporate accounts. “We do group tours,” Ms. Jante said. “And I believe that OTAs cannot do that.” She went on to say that those tours include pre-departure briefing that includes information about which specific places are best to visit and warnings about which places are best to avoid.

At the end of the day, Ms. Jante emphasized, “Computers do not talk. We talk.” And having someone to talk to in case of an emergency while on a trip abroad can be life-saving. Ms. Jante, who runs her own travel agency, Queenspoint Travel & Tours Corp., always keeps her phone within reach in case someone needs her help. “I see to it that I’m ready to take calls anytime,” she said, even in the dead of the night.

Globe deactivates over 14,000 SIM cards found to be sources of text scams

Globe Telecom Inc said it has deactivated over 14,000 SIM cards found to be sources of spam and scam text messages.

The telco giant said in a press release on Monday, March 5 that it deactivated 14,013 SIM cards, which turned out to be sources of spam text messages. Using a filtering function and blocking mechanism, Globe said it also blocked over 400 million spam SMS messages in 2017.

“Text spamming is an industry-wide issue, and we acknowledge that Globe Telecom’s anti-spam campaign will not be as effective without the help of our customers. We encourage our customers to be vigilant and report any text scam they receive,” Anton Bonifacio, Globe Chief Information Security Officer, said in a statement.

Globe established its anti-spam solution and blocking mechanism in 2014, which consisted of a new hardware and software solution that can filter up to one billion SMS a day. Globe said this mechanism enabled the company to prevent the transmittal of spam/scam messages which have been sent through the Globe network. The following year, the mechanism was upgraded and expanded to effectively prevent spam-scam messages coming from other networks.

Globe added it has lowered the spam attempts, from 2.9 million daily spam traffic in 2016 to 182,000 in 2017. “This represents a 94% success rate. In addition, the number of spam call complaints has been reduced to 1,085, which is 65% lower from 3,073 total calls accumulated from 2014 to 2016.”

RCBC doubles medium-term note program to $2 billion

Rizal Commercial Banking Corp. (RCBC) doubled its medium-term note program to raise additional capital.

In a disclosure to the local bourse on Monday, March 5, the Yuchengco-led RCBC said it has undertaken an update of its $2 billion medium-term program, from the previous $1 billion, as approved by its board on Jan. 29.

“With the updated program, RCBC retains the flexibility to capitalize on favorable market conditions and tap the debt capital markets, while conforming to its term foreign currency borrowing strategy,” the bank said in the disclosure. — Karl Angelo N. Vidal

Philippines ‘best country to invest in’ — report

The Philippines was named the top investment destination by a global research firm, noting that its young population will attract more firms looking for a good labor force.

The US News & World Report named the Philippines as the “Best Country to Invest In” for its 2018 Best Countries report.

“In contrast to declining inflows of foreign direct investment, or FDI, to Southeast Asia as a whole, the Philippines continued to perform well, according to United Nations data. In years to come, the country is expected to receive more FDI from within the region from powerhouses like China that are looking to utilize available labor in developing nations,” the US-based firm said in a report published online.

The 2018 Best Countries report and rankings are based on how global perceptions define countries in terms of a number of qualitative characteristics, impressions that have the potential to drive trade, travel and investment and directly affect national economies. The report covers perceptions of 80 nations. — Melissa Luz T. Lopez

Solicitor general files quo warranto petition against Sereno

The Office of the Solicitor General (OSG) on Monday, March 5, filed before the Supreme Court (SC) a petition for quo warranto against Chief Justice Maria Lourdes P.A. Sereno.

Solicitor General Jose C. Calida in a press conference pointed out impeachment was not the proper legal process Ms. Sereno should pursue, but rather it should be quo warranto.

“This is the proper remedy to question the validity of Sereno’s appointment,” Mr. Calida said in a press statement.

He added: “Quo Warranto is recognized as an extraordinary legal remedy sanctioned not only by the Rules of Court, law and jurisprudence but by the constitution itself whereby the State challenges a person to show by what authority he holds a public office or exercises a public franchise.” — Dane Angelo M. Enerio

Misdeclared cigarettes, fireworks from China seized at Port of Manila

Two 40-foot container vans from China, which carried misdeclared cigarettes and fireworks said to be worth a total of P8.98 million were busted by the Bureau of Customs-Port of Manila (POM), the agency reported on Monday, March 5.

The BoC said one container van, consigned to Paragon Platinum International Trading Corporation, was declared as brackets when the shipment arrived on Febr. 21. Customs authorities discovered boxes of cigarettes instead.

The agency disclosed the cigarettes are worth P8.2 million.

Another shipment consigned to Power Buster Marketing raised an alert at the Customs on February 27 for alleged misdeclaration.

“Upon inspection, we discovered boxes of fireworks instead of the declaration which is footwear,” Customs chief Isidro S. Lapena said in a statement.

The BoC said the fireworks will be turned over to Philippine National Police- Firearms and Explosives Office for proper disposition while the cigarettes are subject to destruction.

The shipments are now waiting for the issuance of warrant of seizure and detention while cases will be filed against the importers for violation of Section 1400 of RA 10863 or Customs Modernization and Tariff Act.

The Customs exceeded its revenue target for February by 5.3%. Initial reports from Financial Service showed a total collection of P43.9 billion against the P41.709 billion target; posting a surplus of P2.2 billion.

CAAP 10th anniversary: Excellence in the skies

Today, the Civil Aviation Authority of the Philippines (CAAP) celebrates 10 years of its commitment to ensuring a safe, secure and green Philippine sky. A decade ago, in 2008, Republic Act No. 9497 was enacted into law. And by its virtue, the CAAP was created.

Aviation had an early start in the Philippines, and the creation of CAAP in 2008 was not where it all began. Before it became the CAAP that we know today, the office governing Philippine aviation underwent numerous name changes; from the Office of Technical Assistant of Aviation Matters in 1931, it became the Aeronautics Division in 1933. In 1936, the passage of the Civil Aviation Law of the Philippines created the Bureau of Aeronautics. Only a bit more than a decade later, in 1947, the Bureau of Aeronautics was renamed Civil Aeronautics Administration (CAA). After 32 years, the CAA was placed under the Ministry of Transportation and Communications and was once again renamed the Bureau of Transportation (BAT). Then in 1987, it was renamed the Air Transportation Office (ATO), headed by the Assistant Secretary for Air Transportation. And then only two decades later, in 2008, the ATO was abolished to make way for the Civil Aviation Authority of the Philippines.

CAAP is now reaping the fruits of its years of hard work, but its journey has not always been smooth sailing. CAAP’s creation is the main component of an intensive civil aviation reform program launched by the government. Months before CAAP’s creation in March 2008, the Federal Aviation Administration (FAA) downgraded the Philippines to “Category 2” rating after finding out several deficiencies in the country’s air transport and aviation sector. Then in 2010, the European Union (EU) banned airlines from the Philippines from flying to Europe. Determined to get past these turbulent times and prove itself as a competent aviation regulator, CAAP has since worked toward improving its services and facilities. Its efforts showed to be paying off as just in April 2014, following a successful International Aviation Safety Assessment (IASA), the FAA determined that the Philippines has met the criteria for a “Category 1” rating. And in June 2010, the EU lifted its ban on Philippine commercial flights, allowing all of the country’s airlines to once again fly around in Europe’s skies.

As it marks its 10th anniversary this year, CAAP finds more reasons to celebrate its remarkable accomplishments that continue to bring pride to the country and give reasons to hope for a brighter future for the aviation industry. Though beset by all the pressure from international aviation authorities and other challenges in the industry, under its present team of leaders — spearheaded by Capt. Jim C. Sydiongco as director-general, Capt. Donaldo Mendoza as deputy director-general for operations, MGEN. Ricardo Banayat (Ret.) as deputy director-general for administration, and Capt. Manuel Antonio Tamayo as undersecretary for airport and aviation — the CAAP has braved many tests and is continuously streamlining itself and the entire aviation industry in the country.

Mr. Sydiongco and his team have made significant progress in setting new benchmarks for performance and safety advancements in the local aviation industry.

Before becoming the head of the country’s aviation regulator, Mr. Sydiongco flew all over the world as commercial pilot for Philippine Airlines and Taiwan’s Eva Air. Upon retirement, he then used his flying experience as safety consultant of then Manila International Airport (MIA) General Manager Alfonso Cusi, and Cebu Pacific’s flight safety head, before becoming Cebu Pacific’s vice-president for flight operations.

As a veteran in the aviation industry, Mr. Sydiongco’s experience as pilot is crucial to his position as CAAP chief. With his goals of fully automating and digitalizing the services of CAAP, upgrading the standards of flying schools through regulations, and supporting young aviation professionals, Mr. Sydiongco is bringing the country’s aviation sector to greater heights.

En route to excellence in the skies, the CAAP is steadily performing its duties of providing safe and convenient air travel experience. Just last year, Philippine airports were named and given recognition for their facilities and services. In a survey conducted by Sleepinginairports.net, four Philippine airports, namely the Iloilo International Airport, Mactan-Cebu International Airport, Clark International Airport, and Davao International Airport, joined the 2017 list of the top 25 best airports in Asia. Meanwhile, eight airports in the country were awarded a one-star rating for On-Time Performance (OTP) based on the results of a 2016-2017 survey conducted by the United Kingdom-based air travel intelligence company Official Aviation Guide (OAG). On top of the regional airport’s achievements, the country’s main international gateway, the Ninoy Aquino International Airport (NAIA), is no longer included in the top 20 worst airports in the world, and even in the list of the top 5 worst airports in Asia for 2017 by travel Web site The Guide to Sleeping in Airports.

In 2017, CAAP became one of the country’s biggest dividend contributors by contributing P5.83 billion to the treasury. That same year, the CAAP also passed the Universal Safety Oversight Audit Programme (USOAP) of the ICAO Coordinated Validation Mission, with an overall result of 69.68%, higher than the global average. And in May 2017, Puerto Princesa International Airport’s new terminal was opened.

The CAAP, meanwhile, opened 2018 with a milestone, the inauguration of the Communications Navigation Surveillance/Air Traffic Management or the CNS/ATM systems which will help minimize flight delays and enhance air traffic safety in the country.

With capacity expansion as one of its goals, CAAP has simultaneously commenced the expansion of Kalibo International Airport in Aklan and embarked on the processing of night rating regional airports which include the following: the Naga Airport in Naga City, Camarines Sur; Tuguegarao Airport in Tuguegarao, Cagayan; Cauayan Airport in Cauayan City, Isabela; Cotabato Airport in Awang, Maguindanao; Pagadian Airport in Pagadian, Zamboanga Del Sur; Ozamiz City Airport (Labo Airport) in Labo; Ozamis, Dipolog Airport in Dipolog, Zamboanga Del Norte; Dumaguete Airport (Dumaguete–Sibulan Airport, Sibulan Airport) in Sibulan, Negros Oriental; and Caticlan Airport (Godofredo P. Ramos Airport, Boracay Airport) in Malay, Aklan.

On top of these airport milestones, the CAAP is also working toward minimizing the negative effects of aviation and air transport on the environment. To this end, the CAAP is in the process of improving fuel efficiency by an average annual rate of at least 2%, reducing the total aviation CO2 emissions by an average of 2% per year until 2020, and enhancing awareness of and compliance to the program on carbon footprint reduction in the aviation sector.

To promote the green airport concept, all frequently used CAAP airports will now be installed with solar power systems to power up office lightings and small equipment as well as runways lights and lighted cones.

With the support of the CNS/ATM program implementation, the CAAP will soon establish the Performance-Based Navigation (PBN) System in all public aerodromes by the year 2020 to reach its goals of improving air traffic management and infrastructure and significantly reducing fuel burn and carbon emissions.

Engaging with our neighbors in aviation, the CAAP is now working toward fully adopting the Beijing Declaration’s visions in aviation safety, air navigation services, accident investigation, and human resource development that were discussed at the first Asia Pacific Ministerial Conference on Civil Aviation last Jan. 31 to Feb. 1.

Such projects as the opening of Bicol International Airport in 2022, completion and start of the commercial operations of New Bohol Airport’s (Panglao International Airport) by August 2018, Tacloban City’s Daniel Z. Romualdez Airport’s terminal extension soft opening on March 16, and the inaugural flight of Cagayan North International Airport in Lal-lo, Cagayan are just some of what the country can look forward to in terms of improvements in the country’s airports.

In line with these, the CAAP will commemorate its 10 years with a two-week-long celebration by its employees stakeholders, and friends. With the theme “Ten Years of Excellence in the Philippine Skies,” the agency is set to kick off celebrations with a thanksgiving mass on March 5 and launch its Gender Awareness Development (GAD) gender-neutral restrooms with a blessing ceremony. In the succeeding days, the aviation regulator is set to continue its celebrations with a clean-up drive, a bloodletting program, a sports fest, and a fun run. A fellowship night on March 16 will cap off the anniversary festivities.

As the Philippines’ aviation safety oversight mechanism, the CAAP is responsible for providing safe and efficient air transport and regulatory services in the country. Headed by Mr. Sydiongco as the director-general, CAAP is stationed at the Old MIA Road in Pasay City and in 12 area centers around the Philippines, and employs approximately 6,000 people.

Poll puts Feb. inflation beyond target

By Melissa Luz T. Lopez
Senior Reporter

INFLATION likely picked up further in February as prices of food, fuel and electricity rose faster on higher taxes, analysts said in a BusinessWorld poll that also bared mounting bets on a central bank rate hike.

A poll of 14 economists yielded a 4.2% median forecast for the month, with 10 analysts saying that the overall pace of price increases went faster than the four percent rate seen in January. If realized, this would also surge from February 2017’s 3.3% and would pierce the 2-4% target set by the Bangko Sentral ng Pilipinas (BSP).

The estimate falls within the 4-4.8% estimate range given by the BSP’s Department of Economic Research and will be the fastest since the 4.3% pace clocked in October 2014.

The Philippine Statistics Authority (PSA) will report official inflation data on Tuesday.

Inflation Poll

“As older inventories are used up, the full impact of higher taxes under first package of tax reform may have already been largely reflected in terms of upward adjustments on the prices of fuel, sweetened beverages, tobacco, coal/mining, and vehicles,” said Michael L. Ricafort, economist at the Rizal Commercial Banking Corp.

Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Act that took effect Jan. 1, imposed additional taxes on fuel, cars, coal, sugar-sweetened drinks and a host of other items. Among others, TRAIN imposed an additional P2.50 excise tax per liter of diesel and P3/liter for kerosene, which came at a time of three-year highs for world crude prices. The new law also introduced an excise rate of P6/liter on drinks containing caloric or non-caloric sweetener and P12/liter on drinks containing high-fructose corn syrup.

Aside from TRAIN-related price movements, the economists also cited the higher cost of food items like fruits, beef, pork and rice. Among others, dwindling buffer stocks of the National Food Authority have driven rice prices up for seven straight weeks, according to PSA data.

The peso’s depreciation against the dollar also likely put pressure on import prices last month, as the currency touched fresh 12-year-lows versus the dollar, added Guian Angelo S. Dumalagan, market economist at the Land Bank of the Philippines.

Most economists in the poll said that inflation will keep picking up over the next few months, owing to base effects and as other producers and suppliers introduce staggered price adjustments.

“The full effect of TRAIN will be felt over around half a year or more,” said Victor A. Abola, economics professor at the University of Asia & the Pacific.

“Raising prices in a competitive environment may not happen too fast, as players would observe what others are doing.”

Six economists expect the BSP to raise benchmark rates during its March 22 review with inflation in an upward path, as February would mark the second straight month of an increase.

The BSP has kept its monetary policy stance unchanged since September 2014, although procedural cuts were introduced in June 2016 for the shift to an interest rate corridor. Rates currently range from 2.5-3.5%.

However, the central bank reduced the reserve requirement ratio (RRR) on big banks by a percentage point to 19%, effective last Friday – a move that is expected to unleash some P90 billion into the financial system. Some observers said this was tantamount to an easing of monetary policy, in turn bolstering the case for higher benchmark rates.

“I’m keeping my forecast of a 25bp policy rate hike by BSP on 22 March, mainly as a response to rising inflation risks,” said Nomura economist Euben Paracuelles. “The BSP’s on-going communication challenge as a result of the surprise RRR cut only adds to the impetus to hike the policy rate sooner rather later, if BSP were to cement its inflation-fighting credentials.”

Keeping prices stable is the central bank’s main mandate.

Trinh D. Nguyen, senior economist at Natixis, said the BSP would be among the first central banks in Asia to raise rates following an expected US rate hike at the March 20-21 meeting of the Federal Reserve.

On the flipside, Ruben Carlo O. Asuncion of the Union Bank of the Philippines believes that the BSP will not tweak rates anytime soon, saying that the recent cut in bank reserves “signals their confidence in long-run inflation.”

The central bank expects full-year inflation to average 4.3%, settling above target and soaring from last year’s 3.2%.

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