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Metro Manila vacancy rates drop in Q1 — report

REAL ESTATE consultancy firm Colliers International Philippines allayed concerns of a property “bubble burst” in Metro Manila, citing a dip in vacancy rates in the residential market.
In its first quarter report, Colliers said vacancy rates in Metro Manila went down to 12.4% in the first quarter of 2018, slightly lower than the 12.6% seen in the last quarter of 2017. The Manila Bay Area showed the largest decline in vacancy to 15% from 19%, quarter-on-quarter.
This was attributed to the growing number of Chinese nationals that are choosing to reside in the Bay Area, due to the presence of Philippine Offshore Gaming Operators (POGOs), which employ a significant number of Chinese nationals.
Colliers Senior Researcher Randwil Dinbo U. Macaranas noted that property developers welcome the increased demand from Chinese buyers.
“They’re open to it, it’s additional sales for them. Customers are customers, depending on the types of tenants and buyers that they’d like to attract and suits their brand…From what we’ve seen, there are those that are staying, there are POGO employees, there are also those buying it and then renting it,” Mr. Macaranas said in a recent interview.
The Colliers report noted that only Fort Bonifacio in Taguig City showed an increase in vacancy, after the significant number of new supply completed in the market in 2017. Vacancy in the business district rose to 17.3% in the first quarter of 2018 from 15.7% in the fourth quarter of 2017.
From 2018 to 2021, Colliers expects 39,850 more residential units to be added in Metro Manila, for a total of 143,300 units in the residential condominium stock since 2017. This will lead to an overall vacancy of around 12-16% in the next two to three years.
“The upward pressure on vacancy will be tempered by increased demand from young professionals, expatriates, and Chinese nationals-workers,” Colliers said in its report.
Colliers said that real estate stakeholders have been cautious against a looming bubble burst given the steep increase in prices, record high supply, and stronger demand in recent years.
For instance, the most expensive condominium unit in the metro is priced at P400,000 per square meter, and this is expected to be breached with more upcoming high profile projects. The compounded annual growth rate in the past five years for units in major central business districts span from 5% to 14%, with Makati accelerating at the fastest pace.
In terms of lease rates, average monthly rents in prime three-bedroom units range from P800 to P900 per square meter. The Rockwell area in Makati City and Fort Bonifacio commanded the highest monthly rental rates for the first quarter, at P872 per square meter and P810 per square meter, respectively.
Amid the rising prices, Colliers argued that Metro Manila is not headed for a bubble burst. It noted that construction delays have actually caused a downward adjustment in 2018 supply from 27,000 units to just 12,700 units.
“(This) effectively softens fears of an oversupply. And even at 12,700 units, we expect more delays toward the latter part of the year,” Colliers said.
In addition, it said that vacancy rates in sub-markets of the Makati CBD and Bay Area show that there is real demand for property, rather than speculation.
“Overall, while it appears that a housing bubble burst has not yet occurred at this point, it must be stressed that it is still a very competitive condominium market. The key for developers is to ensure that their projects are meeting the expectations of buyers and tenants, especially amidst still sizeable new upcoming supply,” the company said.

Republic Cement expects profits to recover

By Krista A.M. Montealegre, National Correspondent
REPUBLIC Cement and Building Materials, Inc. expects profits to recover this year after higher input costs and intense competition put pressure on margins in 2017, as Aboitiz Equity Ventures, Inc. (AEV) pursues the expansion of its business units.
“The jaw of the tiger is going the other way around. That has to turn, which we think it will,” Sabin M. Aboitiz, president and chief executive officer of Aboitiz InfraCapital, Inc., said in a briefing in Makati City on Monday.
“I think it has hit the bottom (last year).”
The income contribution of Republic Cement to AEV fell by more than half to P671 million last year from P1.6 billion a year ago, dragged by lower prices and increased production costs that eroded margins.
Republic Cement set aside $300 million for increasing the capacity of all its integrated plants in Luzon and Mindanao, both milling and clinker production.
“As we invest in new plants, all of that improves our margins,” Mr. Aboitiz said.
Demand continues to grow, buoyed by the higher spending from the government and private sector.
Aboitiz InfraCapital is not participating in the public auction of the operation and maintenance of the Clark International Airport in Pampanga.
“We’re not ready for Clark. We’re focusing on the regional airports and (the Ninoy Aquino International Airport),” Mr. Aboitiz said. AEV is part of the “super consortium” of the country’s biggest conglomerates that filed a P350-billion proposal to rehabilitate the country’s main gateway.
Abotiz InfraCapital is also drafting a master plan for its national strategy on water investments. Apo Agua Infrastructura, Inc.’s Davao City Bulk Water Supply Project is in the final stages of its documentary requirements, with the Department of Agrarian Reform set to conduct site inspection soon.
Pilmico Foods Corp. plans to venture into the retail market through the firm’s egg and meat depot in Tarlac, which opened in the fourth quarter last year.
Two more depots are currently in the pipeline, with the aim of giving customers direct access to quality Pilmico Farms products, Mr. Aboitiz said.
Aboitiz Land, Inc. is continuing its expansion in Luzon and Mindanao. The Outlets at Lipa, a commercial retail development, aims to open in the first half, and plans are underway to develop a mid-market residential project in Mindanao, Aboitiz Land First Vice-President of Operations Rafa F. de Mesa said.
UnionBank aims to sustain its digital innovation initiatives, focusing on the transformation of existing branches. This year, the bank is studying the possibility of building 10 “lite” versions of The Ark, the lender’s fully digital concept branch.
“Our outlook remains positive as we remain committed to growing and expanding our businesses while keeping within our financial and risk parameters that are approved by the board and disclosed to shareholders,” AEV President and Chief Executive Officer Erramon I. Aboitiz said.
This year, AEV and its subsidiaries are budgeting P77.6 billion in capital expenditures, taking advantage of the vibrant growth opportunities at home and abroad.
Shares in AEV were unchanged at P62.45 each on Monday.

Iron Fist actors to attend 4th AsiaPop Comicon


ARGUABLY THE biggest pop culture convention in the country today, AsiaPop Comicon Manila (APCC Manila) 2018 has announced the first batch of celebrities expected to attend in the lead up to its fourth edition, which will be held July 27 to 29 at the SMX Convention Center in Pasay City.
Promising a “bigger and better” convention, Abdulla Mahmood, director of marketing and international business of the Al Ahli Holding Group (the organizers of the convention), said they are bringing over some of the best-known celebrities from the comic book, cosplay, and movies/TV worlds to offer convention-goers “a memorable experience filled with surprises that put Manila on the global pop-culture map,” during a press conference on May 17 at the SMX Convention Center.
Leading the Hollywood actors who will grace the event is Finn Jones, who plays the titular character in Marvel’s Iron Fist series produced by Netflix which started airing in 2017. He reprised the role in other Netflix-produced Marvel series including Luke Cage and The Defenders. Mr. Jones also played Loras Tyrell, the Knight of Flowers in HBO’s Game of Thrones.
Also in the celebrity lineup is Jessica Henwick who plays Colleen Wing, Iron Fist’s love interest in both Iron Fist and The Defenders. She too appeared in Game of Thrones as Nymeria Sand, and played Jessica Pava in Star Wars: The Force Awakens (2015).
Previous iterations of Comicon saw a number of celebrities participating including Nathalie Emmanuel (Game of Thrones), Paul Bettany (the Marvel Cinematic Universe including the most recent Avengers: Infinity War), and Millie Bobby Brown (Stranger Things).
Mr. Mahmood announced that Marvel and Netflix will be coming back to the convention with their respective halls, promising exclusive sneak peeks into unreleased content.
COMIC BOOK CONTINGENT
For comic book fans, APCC promises a lineup featuring some of the most talented creative artists including Lan Medina who has worked in Vertigo/DC Comics’ Fables which won 14 Will Eisner Comic Industry Awards (the comic industry’s equivalent to the Oscars) including Best Serialized Story.
Another iconic name in the lineup is Brian Ian Muir, a 48-year veteran sculptor who is known for creating the Darth Vader helmet and armor in the Star Wars series.
Mexican comic book colorist Alex Sinclair will also be joining the lineup. Mr. Sinclair is known for his collaborations with comic artists Jim Lee (Marvel’s The Punisher, among others) and Scott Williams (DC’s Justice League).
Mike McKone is a British comic book artist who has worked in Marvel’s Exiles series.
American painter and comic book artist Phil Noto also joins the creative pool. He is known for The Infinite Horizon (a modern re-telling of Homer’s The Odyssey) which earned him his first Eisner Award nomination for Best New Series.
Returning for a fourth year in a row are Simone Legno creative director and cofounder Simone Legno and Filipino-American comic book artist Whilce Portacio.
APCC Manila also revealed its initial judges lineup for the Cosplay Authority Global Challenge (The CAGE) — Canvas Cosplay (real name Philip Odango), an award-winning Filipino-American costume designer best known for cosplaying Maui from Disney’s Moana, and Leon Chiro, an award-winning Italian cosplayer who has played video game characters including Ardyn Izunia from Square Enix’s Final Fantasy XV and Dante from Capcom’s Devil May Cry.
Mr. Mahmood said The CAGE is “the biggest cosplay competition in the region” owing to its $18,000 prize pool.
He added that the lineup announcements are only the start as they are currently in talks with other artists and celebrities and will make announcements once deals have been inked.
AsiaPop Comicon Manila 2018 is scheduled to be held on July 27-29 at the SMX Convention Center in Pasay City. Tickets are priced at P650 for a one-day pass, P950 for a two-day pass, and P1,150 for a three-day pass.
Ticket holders will gain access to stage activities, performances and the main exhibition floor. The event is free for children aged five years and below for all days but they need a valid id before entering the show floor.
Tickets are available at smtickets.com.
For more information and event updates, visit asiapopcomicon.com/manila or follow its social media accounts. — Zsarlene B. Chua

T-bills partially awarded

By Melissa Luz T. Lopez, Senior Reporter
THE GOVERNMENT opted for a partial award of the P15 billion worth of Treasury bills (T-bills) it offered yesterday, taking advantage of strong demand that drove yields lower for shorter-termed papers.
Offers received during Monday’s auction amounted to P38.856 billion, surging from the P28.724-billion bids seen a week ago and nearly double the figure which the Bureau of the Treasury planned to raise. This allowed the government to award P12.966 billion worth of T-bills.
All three tenors were oversubscribed, although bulk of the demand still went towards the shorter end.
The Treasury awarded P5 billion worth of 91-day T-bills as market players betted as much as P16.01 billion. This drove the average rate down to 3.437%, some 1.4 basis points (bps) lower from the 3.451% fetched a week ago.
Bids for the 182-day papers also received overwhelming tenders reaching P14.06 billion, which allowed the government to raise P4 billion for its weekly program. Rates saw an even bigger move as it dropped to 3.879%, 5.5 bps lower than the 3.934% average yield during last week’s auction.
Demand for the 364-day tenor also recovered this week to reach P8.786 billion, well above the P6 billion which the state wanted to raise. However, the Treasury rejected some bids due to high margins sought by banks and accepted only P3.966 billion.
Yields averaged 4.297%, slightly higher than the 4.226% fetched a week ago as rates were capped at 4.325%.
Three-month and six-month papers were quoted at 3.4405% and 3.9088% at the secondary market before the Treasury’s T-bills auction, while one-year notes fetched a 4.6536% yield.
At the close of trading, the 91-day and 182-day papers’ rate rose to 3.4565% and 3.911%, respectively, while the 364-day T-bills fetched 4.1441%
National Treasurer Rosalia V. de Leon said yesterday’s auction came out as expected, which she described as a “very healthy” turnout.
“We see that there is also liquidity now following after last week’s partial award also, we see the trading appetite also. There’s now a supply for the one-year (papers),” Ms. De Leon told reporters after the auction.
“I think the preference will continue to be on the shorter-dated tenors given that first, they still see the robust possibility for a Fed rate hike and also watching carefully what would be the next action of the BSP (Bangko Sentral ng Pilipinas) also — that continues to be factored in as well,” Ms. De Leon added.
Sought for comment, a trader said such a trend is likely to be sustained amid expectations of higher interest rates in the local and global markets.
“More traders are going into the short end of the market… Inflation and interest rate expectations are driving the local market yields higher,” the bond trader said in a phone interview.
The trader pointed out that players foresee two to three more rate actions from the United States Federal Reserve this year, with another hike expected by June.
“The BSP is also expected to hike one more time. To be safe, players prefer the T-bills,” the trader added.
Roughly P130 billion worth of government-issued bonds will also mature this week, which is expected to unleash fresh liquidity in the market.
Asked whether this will trigger plans to issue retail Treasury bonds, Ms. De Leon said: “We have to monitor how rates are moving.
“Then of course… we are looking after the pronouncements of the central bank and the reaction of the market on these pronouncements as well,” the National Treasurer added.
The national government borrows from local and foreign sources to fund the increased spending and boost economic activity.
The government plans to borrow a total of P888.23 billion this year to plug its budget deficit that is capped at three percent of the country’s gross domestic product.

Sicogon Island to reopen in Q3

SICOGON island is poised to welcome tourists by the third quarter, with direct flights and new accommodations such as a bed and breakfast and a boutique hotel.
Ayala Land, Inc. (ALI) is transforming the 1,100-hectare island in Carles, northern Iloilo into “a thriving and inclusive resort community” that can serve as a jump off point to other beach destinations such as the Gigantes Group of Islands.
The island is set for a “grand opening” within the third quarter, according to an ALI press statement.
“By that time, Sicogon Island will have almost 100 rooms including affordable bed and breakfasts to boutique hotels, and more activities like cliff diving, mountain biking and zip-lining from a nearby islet to the main beach,” Joey Bernardino, Sicogon Island Hotels director of sales and marketing, was quoted as saying in the statement.
Sicogon island is a 45-minute boat ride from Estancia, the nearest port on the Panay mainland, and another 90 minutes from the Roxas City airport. It is also a two-and-a half hour ride from the Iloilo International airport. Air-Swift is also planning to mount flights from Manila to Sicogon island.
Sicogon Island Tourism Estate Corp. is completing the airport and jetty port terminal. Its town center will feature a public market, church, and commercial spaces on a five-hectare lagoon surrounded by a boardwalk.
Ryan Ybanez, general manager of Sicogon Island Tourism Estate Corporation, said they have tested the market for Sicogon with the launch of Balay Kogon. He noted the 26-room bed and breakfast has so far received positive reviews on its service.

Huni hotel
Huni hotel is set to open before the end of the year in Sicogon island. — AYALA LAND

BOUTIQUE HOTEL
On another part of the island, ALI is developing within the next few years a resort town with dining and retail options, as well as a range of accommodations, including a new boutique hotel.
“The first of its boutique hotels to open next quarter will be Huni, a homegrown Ayala Land brand named after ‘the hum of the sea (huni ng dagat)’ as captured by the conch shell,” the company said.
Huni will have 52 rooms — including the 28 square meter-standard room to a 41-square meter-family room. It will also have an all-day dining facility, a pool and other amenities.
“The (Huni) brand will be distinguished by the warm personable service of a bed and breakfast but with the reliable standards of an Ayala brand,” it added.
There are also plans to develop a beach resort and a hostel targeting budget travelers.
To preserve the island’s natural environment, Mr. Ybanez said all buildings along the beach will not be taller than surrounding coconut trees, and will be located at least 40 meters from the highest tide.
Sicogon island will also have “greenways” or landscaped walking paths, as well as centralized public transport to ensure it will be a pedestrian-friendly community.
“Its 282-hectares of protected forest, home to 350-meter high Mt. Opao, will likewise remain a sanctuary for the flora and fauna that now thrive there in line with the island estate’s vision of responsible tourism,” the company said. — Cathy Rose A. Garcia

Cirtek nets $1.94 million in Q1

CIRTEK Holdings Philippines Corp. (CHPC) grew its net income by 14% in the first quarter of 2018, driven by a double-digit increase in revenues following the consolidation of its recently acquired firm alongside higher sales from its semiconductor unit.
In a regulatory filing, CHPC reported a net income of $1.94 million in the January to March period, higher than the $1.7 million it generated a year ago. This was supported by a 53% increase in revenues to $25.86 million.
“The increase was accounted for by the three-month contribution of Quintel, a United States-based product and research and development company acquired in August 2017, and growth in semiconductor sales,” the company said.
CHPC acquired Quintel for $77 million last year as part of efforts to expand its footprint in the antenna market that is seen to grow into a $14-billion industry by 2020.
Quintel’s contribution to CHPC’s revenues reached $14.7 million in the first quarter. At the same time, it recorded a net loss of $1.1 million. The listed firm noted that Quintel achieved break-even last March, and is due to become profitable by the start of the second quarter.
CHPC expects Quintel to increase its sales to US telecom firms, AT&T and Verizon, by at least 60% for the rest of the year.
“The company is also looking to complement its in-house product R&D with strategic acquisitions and technology collaboration with third parties,” CHPC said.
Meanwhile, the semiconductor business generated $9.4 million in revenues for the period, up 6% from a year ago.
CHPC noted the semiconductor industry is seen to grow by 5-7% in the next three years. The company expects its business to follow the higher end of the industry’s guidance this year, leveraging on its partnerships with over 70 international customers.
The company registered a 32% increase in cost of sales for the period to $18.1 million, following an increase in expenses for raw materials. The company attributed this to higher sales, higher salaries and wages, depreciation, utilities, and increase in inward freight and duties.
Gross margins improved to 30% during the quarter, higher by 11% than what it posted in the same period last year.
Shares in CHPC were unchanged at P51 each at the Philippine Stock Exchange on Monday. — Arra B. Francia

Social media giant Facebook leases entire tower in San Francisco expansion

FACEBOOK, INC. is constantly expanding in its Silicon Valley hometown of Menlo Park, California. Now it’s making a bigger push into San Francisco.
The social media giant reached a deal Friday to take all the office space at the newly constructed Park Tower at Transbay, according to the asset management arm of MetLife Inc., one of the building’s developers. It’s the second big step into the city for Facebook following an agreement last year at 181 Fremont, another new tower.
“We look forward to joining the San Francisco community as we gradually grow into MetLife Investment Management’s Park Tower,” John Tenanes, Facebook’s vice president of global facilities and real estate said in an e-mailed statement. “This new space will support our growing workforce as we continue to attract strong talent.”
Giant tech companies have been eager to lease offices in cities in recent years to recruit employees who want to live in urban areas, rather than requiring them to commute to a suburban campus. That’s fueled intense competition for large blocks of space in the new towers that are opening in cities such as San Francisco and Seattle.
Microsoft Corp.’s LinkedIn and Alphabet Inc.’s Google are among the firms that have taken space in San Francisco buildings, even though their headquarters are to the south in Silicon Valley. Facebook currently buses employees from all over the Bay Area to its Menlo Park campus, which is about 48 kilometers from San Francisco.
Smaller companies are increasingly finding it difficult to operate in the Bay Area, where Facebook and Google are snapping up office space, offering higher salaries to the best engineers and quickly jumping on the most lucrative product ideas.
TIGHT MARKET
San Francisco is one of the hardest office markets to find space, with a vacancy rate of just 7.6 percent at the end of the first quarter, Robert Sammons, head of Northern California research for broker Cushman & Wakefield, said in an interview earlier this week, after media reports of a possible deal.
“This tightens the market dramatically,” he said. “It’s the last big block of space that’ll be available until the early 2020s.”
The 43-floor Park Tower — developed by the John Buck Co., Golub Real Estate Corp. and MetLife — is located just blocks from the San Francisco Ferry Building in the heart of the city’s South of Market neighborhood. The building was leased by Jones Lang LaSalle Inc.
“Facebook has made remarkable strides in connecting and building communities all over the world,” said Joel Redmon, San Francisco-based managing director for MetLife Investment Management’s real-estate business. “We hope that Park Tower will help Facebook continue their mission and that their local presence will play an important role in building the local San Francisco community.” — Bloomberg

Childish Gambino: America’s new favorite Donald?

LOS ANGELES — Hollywood’s latest sensation Donald Glover, eyebrow arched with the detached insouciance of a rockstar but the poise of a chess grandmaster, is trying to guess which surname Google auto-suggests when his first name is typed.
“Trump? Glover? I mean, are we going in order? Trump, Duck, and then Glover,” he asks.
Whisper it in Alabama, Kentucky, or Oklahoma — shout it in his home state of Georgia — but the answer is Glover, not Trump, and entertainment’s latest Renaissance man looks pleasantly surprised.
An accomplished actor, Glover is better known to rapt teenagers the world over as US hip hop phenomenon Childish Gambino.
“Oh, wow. I did it,” he laughs, practicing the ear-to-ear grin he’ll need if he ever adds an Oscar or a Tony to a trophy cabinet already groaning under the weight of Emmys, Golden Globes, and a Grammy Award.
It has been quite a week for the 34-year-old actor, writer, producer, director, rapper, singer, DJ, and comedian as he sits down with AFP to discuss his role as a young Lando Calrissian in Solo: A Star Wars Story.
At the time of the interview, Glover’s latest graphic music video “This is America” had racked up 100 million views in a week on YouTube, with its powerful takes on gun violence, racism and police brutality.
Every entertainment publication worth its salt has contributed to the white noise on what the enigmatic Glover could possibly have meant and how to interpret his edgy imagery.
“I haven’t been on the Internet since last Thursday,” the normally prolific Twitterer laughs, adding that he prefers just to enjoy the moment and leave the navel-gazing to others.
GALAXY’S SEXIEST GAMBLER
As the awards roll in, Glover guards against reveling too much in past successes or daydreaming of possible future glories because a showbusiness career is “kind of like surfing.”
“You just take that wave and that pulse and you just let it carry you,” he says in his phlegmatic, not-quite-Southern drawl.
“Because it’s like freestyling in any art form: the second we start thinking, ‘Man, I’m really doing it,’ you’ll start to mess up.”
Glover has tried his hand at sketch and stand-up comedy, been a writer on 30 Rock, an actor on Community, and head writer, occasional director and star of acclaimed FX comedy Atlanta.
Previously just a promising actor with small but impactful parts in The Martian and Spider-Man: Homecoming, Glover’s turn as the galaxy’s sexiest gambler in Solo has elevated him to global superstardom.
Next up is another huge, iconic movie role, as Simba in Jon Favreau’s live-action version of The Lion King, not to mention a fourth and final Childish Gambino album.
He has been a fan favorite pretty much from the moment the first Solo trailer dropped, and Lucasfilm has said that a standalone Lando movie might happen one day — but not any time soon.
Glover — who divides his time between Atlanta, a couch at his studio in Los Angeles, and the Hawaiian island of Kauai — was at his brother’s house when he got the top secret news that he’d landed the part.
He celebrated by getting a pizza, going home and watching The Empire Strikes Back. But he couldn’t keep his excitement from his father, with whom he shares a first name and a deep love of all things Star Wars.
LIKE A ‘SPRINGSTEEN SONG’
“They were like, ‘You can’t tell anybody,’ but I had to tell my dad. I felt like I would be betraying him if I didn’t. I wouldn’t have the part without him,” Glover recalls.
The Solo script impressed, says Glover, because it featured not just rich, privileged, swashbuckling adventurers, but also the kind of unsung, everyday heroes who make society work.
“I love it because I think it’s an honest reflection of, like, in order for you to have this nice fancy party with all this food, all that stuff, somebody is slaving away somewhere else,” he says.
“They’re working hard. And I just love that, and I think that theme is also in Atlanta. There’s an outside world that we’re trying to get to. And right now, we’re on the bottom.”
For Glover, the most interesting aspect of the origin story of Han Solo and his childhood crush Qi’ra — played by Alden Ehrenreich and Emilia Clarke — is the extent to which people compromise their values to get a seat at the top table.
“It becomes ‘you or them’ at a certain point. And I think that’s why I like this movie so much, because Han learns that. He’s so naive and sweet at the beginning,” he says.
“He’s like… a Bruce Springsteen song: ‘I’m gonna get outta this town, take my girl and we’re going to fly into space.’ And it’s like, ‘Yeah, it’s not that simple.’ Things change and you grow up.”
Solo: A Star Wars Story hits Manila theaters on Wednesday. — AFP

Fintech to improve rural lenders’ reach

FINANCIAL TECHNOLOGY will improve credit access. — BW FILE PHOTO

TAPPING digital solutions will help rural banks to extend more loans to farmers, as it would eliminate logistical woes that limit access to formal credit, the country’s central bank chief said.
Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said the adoption of financial technology (fintech) will allow small lenders to broaden their reach and expand services in the countryside, particularly to the agriculture sector.
“We believe that with an increasing recognition of the necessity for innovation, coupled with proximity to and intimate knowledge of the market, rural banks can now, more than ever, reinvigorate and blaze new trails for agriculture financing in the country,” Mr. Espenilla said in a speech before the Rural Bankers Association of the Philippines general membership meeting in Davao City yesterday.
“Innovations enabled by digital technology and value chain approach can not only make agri-financing more viable but also unlock new opportunities for rural banks to deliver a whole range of financial services catering to the unique needs of farmers and their communities.”
Cloud-based banking systems as well as getting aboard the online Lendr platform are also seen to facilitate wider access to credit, leveraging on Internet connectivity at an era of wide smartphone usage.
The BSP chief cited rural banks as a “catalyst” for broader financial inclusion given their strong presence in far-flung towns which are not served by universal and commercial lenders. A third of municipalities in the country remained unbanked in 2017, leaving a sizeable gap in the number of Filipinos with access to the banking system.
In particular, lending to the farm sector remained tepid despite a 2010 law requiring all banks to set aside a portion of their loanable funds for agriculture.
Republic Act 10000 or the Agri-Agra Reform Credit Act mandates banks to allot at least 10% of its total loanable funds to agrarian reform beneficiaries, and 15% for farmers and fisherfolk.
Compliance remains poor as banks only extended a total of P573.7 billion of agri-agra loans in 2017, just half the P1.034 trillion which they should have lent to the sector, according to BSP data.
Relaxed rules on banking requirements are also expected to help lenders get more customers tap formal financial services. Mr. Espenilla said rural banks can set up branch-lite units and offer basic deposit accounts to make banking more accessible.
Finance Secretary Carlos G. Dominguez III said in a separate speech that the Financial Inclusion Bill being pushed by his agency has been identified as a priority measure, which will improve access to credit among small-scale firms.
“We are rushing the completion of the digital backbone for processing payments in real time. It will alter the work of all our financial institutions dramatically over the near term. I urge all of you to familiarize yourselves with recent advances in fintech,” Mr. Dominguez said.
Studies showed that gross domestic product could increase by more than 14% if the financial inclusion gap was closed in the Philippines. — Melissa Luz T. Lopez

Emperador aims to grow sales volume by 30-35% this year

EMPERADOR, Inc.’s net income rose 11% to P1.66 billion in the first quarter of 2018. — AFP

By Arra B. Francia, Reporter
EMPERADOR, Inc. targets a 30-35% growth in sales volume for its Fundador brand this year, amid its efforts to encourage consumers to switch to its more premium offerings.
“We’re looking at 30-35% growth for Fundador business this year, that’s in volume,” Emperador President and Chief Executive Officer Winston S. Co told reporters in a briefing after the company’s annual shareholders’ meeting in Eastwood City on Monday.
The Fundador brand is part of the listed firm’s brandy business, which accounted for 71% of the company’s total revenues for the first quarter of 2018 at P7 billion. Aside from Fundador, its portfolio also includes Scotch whisky brands The Dalmore and Jura single malts.
“What we’re trying to do now is to promote brandy more aggressively internationally,” Mr. Co said.
Alongside efforts to grow the brandy business, Emperador is also offering the more premium Fundador Supremo. Mr. Co noted that the price of Fundador Supremo is at par with its single malt products, which range from P3,500 to P13,000.
“That product is already in the travel retail sector in Asia, China. So when you go to Beijing, Shanghai, Korea, at the airport, the product is already there. And soon, it will be available in Hong Kong and Singapore. We are trying to bring the Fundador brand more global, and more premium,” Mr. Co said.
For now, around 30% of Emperador’s revenues come from the international business, while the Philippine business accounts for around 70%.
“Overall, what we are saying here is that the significant part of our revenue and significant part of our margin moving forward will be coming from the international. And the international business coming from the whisky and from the brandy side are doing quite well,” Mr. Co said.
The Emperador executive said the five-year plan is expected to be finalized by the third quarter of 2018.
Meanwhile, Emperador is focusing its efforts to attract a bigger slice of the growing middle class segment in the Philippines.
“We are excited about the Philippines. Because when you look at the Philippines, you have a horizon of the next three to five years, and we believe that the Philippine economy at the rate that we’re growing, will be good for the consumers. There’s a consumption story because of the improving economy,” Mr. Co said.
Emperador is planning to develop two to three Fundador Cafes in the next couple of years.
The company’s first Fundador Cafe, which offers cocktails, spiked coffee and cupcakes, is located in the McKinley Venice Grand Canal Mall in Taguig City.
The liquor unit of tycoon Andrew L. Tan’s Alliance Global, Inc. reported its net income improved by 11% to P1.66 billion in the first three months of 2018. This was supported by an 8.5% growth in revenues to P9.7 billion, driven by its international operations.
Shares in Emperador rose two centavos or 0.28% to close at P7.18 each at the stock exchange on Monday.

Construction Materials Retail Price Index

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NPC plans privacy compliance ‘sweep’

By Patrizia Paola C. Marcelo, Reporter
THE National Privacy Commission (NPC) is set to conduct a privacy compliance “sweep” as it intensifies monitoring of organizations.
“We will be issuing a compliance sweep advisory, but the compliant sweep [this time], we think we can cover more companies. We came up with more ways to look for, check for compliance, not just through one method,” NPC Commissioner Raymund E. Liboro told reporters on Monday, but did not specify a timeline.
The NPC is will check the compliance of businesses with Republic Act 10173 or the Data Privacy Act or 2012, as well as international standards for data protection.
The review will cover company websites, applications, and mobile services.
The NPC said the privacy compliance sweep will be a random, quick and partial scan of an organization’s public units and channels. The results will be used as the basis for further investigations and full-scale compliance checks.
Among the punishable offenses under Data Privacy Act are: unauthorized processing of personal information and sensitive personal information; accessing personal information and sensitive personal information due to negligence; improper disposal of personal information and sensitive personal information; and processing of personal information and sensitive personal information for unauthorized purposes.
Other offenses include: unauthorized access or intentional breach; concealment of security breaches involving sensitive personal information; malicious disclosure; and unauthorized disclosure.
Penalties for violation of the Data Privacy Act range from six months to three years’ imprisonment, plus anywhere from P100,000 to P5 million in fines.
MORE CASES
Statistics from the NPC show that as of end-April, there have been 208 data privacy cases filed with the NPC, nearly at par with the 221 cases filed for the entire 2017.
As of April 30, the NPC said there were 57 breach notifications, 21 complaints, 126 inquiries, and four investigations. Out of the 208 filed cases, 102 are pending action by the NPC.
Mr. Liboro noted the growing number of cases is due to the greater awareness of data privacy laws and consumers’ rights.
He added that companies should know that more consumers are becoming more aware of their privacy rights, citing a Social Weather Stations (SWS) survey last year which showed that 94% of Filipinos wanted to know more about how their personal data provided during transactions were used.
“We tell companies, ‘if you think people are not interested in how their personal data are used, you’re wrong,’” Mr. Liboro said.
Earlier this month, NPC had ordered Wenphil Corp., operator of Wendy’s Philippines, to notify persons affected in the breach and wholesale leak of its database on April 23. The NPC said that around 82,150 records were exposed in the incident, wherein unknown individuals published online the database from the Wendy’s website.
The NPC had also ordered Jollibee Foods Corp. (JFC) to indefinitely suspend the operations of its delivery website and other online processing operations with the public due to identified vulnerabilities in the restaurant chain’s website. NPC said that vulnerabilities in JFC’s website indicated a “very high risk” that approximately 18 million persons currently on the database will be exposed to harm.
The NPC will be holding its first Privacy Awareness Week from May 28 to May 31. During the week, the NPC will launch the Philippine Data Privacy Council, where sectors primarily involved in persons’ data will be included, such as the business process outsourcing (BPO) sector, government, banks, telcos, hotels and nonbank financial institutions.

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