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Stocks continue slide on lack of leads

Shares stayed on negative territory on Tuesday, May 22, as trading remained slim due to lack of fresh leads.
The 30-member Philippine Stock Exchange index (PSEi) fell 0.16% or 11.85 points to 7,646.20, remaining in the red for the third consecutive day.
The broader all-shares index also dropped 0.22% or 10.27 points to finish at 4,652.46.
“All important data have been released, and we are at the start of the lean trading months until August. Earnings are just so-so, so I think PSEi will be in a consolidation phase and possible downside over this lean season until ghost month. Investors are looking for catalyst to move forward and they can’t have any at the moment,” IB Gimenez Securities, Inc. Research Head Joylin F. Telagen said via text.
The positive sentiment from Wall Street’s close on Monday also failed to lift the market. The Dow Jones Industrial Average gained 1.21% or 298.20 points to 25,013.29. The S&P 500 index climbed 0.74% or 20.04 points to 2,733.01, while the Nasdaq Composite index firmed up 0.54% or 39.7 points to 7,394.04, as investors welcomed the easing of trade relations between the United States and China.
The US and China have reportedly put threats of tariffs on hold as they deliberate on trade issues.
Industrial was the lone sectoral counter that gained on Tuesday, rising 0.46% or 49.97 points to 10,946.98.
Mining and oil plunged 1.59% or 161.26 points to 9,986.28, while financials shed 0.8% or 15.24 points to 1,880.51. Property slipped 0.41% or 15.80 points to 3,804.78; services edged 0.21% or 3.25 points lower to 1,523.39; while holding firms ended relatively flat with a 0.01% or 0.94-point decline to 7,513.22.
Turnover was valued at P4.78 billion after some 1.07 billion issues switched hands, slightly up from Monday’s P4.19-billion. Decliners outpaced advancers, 110 to 78, while 45 issues were flat.
Foreign investors continued their selling mode, with net outflows amounting to P628.52 million, higher than the previous session’s P568.47 million.
Twelve of the 20 most actively traded stocks for the day went down, with Bloomberry Resorts Corp. losing 3.59% to P11.80 each and Melco Resorts and Entertainment Philippines Corp. dropping 3.11% to P6.23 each.
Among the day’s gainers were International Container Terminal Services, Inc. (Up 1.46% to P83.20), Jollibee Foods Corp. (Up 1.43% to P284), and Manila Electric Co. (Up 2.31% to P328.40). — Arra B. Francia

Peso rebounds on profit taking

The peso bounced back against the dollar on Tuesday, May 22, due to profit-taking following the local currency’s closing in its near 12-year low.
The local currency closed at P52.195 versus the greenback Tuesday, up 27 centavos from the P52.465-per-dollar finish on Monday.
The peso traded stronger the whole day, opening the trading session at P52.33 per greenback. It slipped to a P52.38 intraday, while its intraday high stood at its P52.195-per-dollar close.
Dollars traded climbed to $750.65 million from the $705.25 million that switched hands during the previous session.
Traders interviewed on Tuesday said the peso strengthened against the dollar due to profit taking after it dipped to its near 12-year low on Monday.
“The local currency appreciated as profit-taking ensued after the peso dropped to record lows,” a foreign exchange trader said through e-mail.
On Monday, the local currency closed at its near 12-year low since it ended the session at P52.745-per-greenback finish on July 19, 2006. — Karl Angelo N. Vidal

House shelves bill on recoverable system loss

Lawmakers on Tuesday, May 22, shelved the draft bill on recoverable system loss for further review after noting its provisions are similar to a resolution already being implemented by the Energy Regulatory Commission (ERC).
AKO BIKOL party-list Rep. Rodel M. Batocabe suggested that the energy committee, chaired by Marinduque Rep. Lord Allan Jay Q. Velasco, provide instead “a bill promoting efficiency among distribution utilities (DUs) rather than have a negative bill… for reducing system loss.”
The consolidated House bills (HBs) 942, 2297, and 6341, prepared by the technical working group chaired by 1-CARE party-list Rep. Carlos Roman Uybarreta, sought the gradual reduction of system losses of electric cooperatives (ECs) and private distribution utilities (PDUs).
“Instead, we provide for a policy to promote ‘yung efficiency ng mga distribution utilities and incidental lang ‘yung pag-fix ng rate ng system losses,” Mr. Batocabe added.
The unnumbered draft substitute bill gradually reduces the distribution feeder loss cap for large PDUs from as much as 9.5% previously to 6.5% in 2019 to 5.5% in 2022 or 7% in 2019 to 6% in 2022, depending on which cluster they belong. Meanwhile, the loss cap for ECs will be lowered from 14% to 12% in 2019 to 10.25% or 8.5% in 2023.
Last May 7, the ERC has published Resolution No. 10 series of 2018 which also outlined the reduced distribution feeder loss cap, segregated per categories. Similarly, distribution feeder loss cap for PDUs will be decreased to 6.5% in 2018 to 5.5% in 2021 and ECs to 12% in 2018 to 10.25% or 8.25% in 2022 onwards. The resolution is currently in effect but new rates will apply in the next billing cycle (May 8 to June 8) this year.
PBA party-list Rep. Mark Aeron H. Sambar, for his part, said ERC should be allowed to do its job as the government body tasked to implement regulations involving the electricity industry.
“So if we allow the ERC to do [its] job… and see if the anybody’s complying, then we can also review the bill but if we see that there is no compliance, then we will push for this bill so that the DUs will comply based on the law,” Mr. Sambar said. — Minde Nyl R. Dela Cruz

Senate asks Duterte to certify as urgent its proposed Bangsamoro bill

The Senate on Tuesday, May 22, asked President Rodrigo R. Duterte to certify the Senate bill on the proposed Bangsamoro Basic Law (BBL) as an urgent measure.
The request was coursed through a letter dated May 21, which was signed by Senate President Vicente C. Sotto III and Senate Majority Leader Juan Miguel F. Zubiri.
“May we once again respectfully request that Senate Bill No. 1717 under Committee Report No. 255 entitled ‘An Act Providing for the Basic Law for the Bangsamoro and Abolishing the Autonomous Region in Muslim Mindanao…’ be certified as urgent by your Administration,” the letter stated.
The letter also indicated that the Senate aims to pass the proposed BBL on third and final reading before the Congress sine die adjournment on June 2.
The proposed BBL remained pending on second reading in the Senate while the status of its version in the House of Representatives remained in the committee level.
Last April, Mr. Duterte also directed Congress to pass the proposed BBL before it adjourns in June through separate letters sent by the Presidential Legislative Liaison Office (PLLO) to then Senate President Aquilino L. Pimentel III and House Speaker Pantaleon D. Alvarez. — Camille A. Aguinaldo

Revolution Precrafted bags deal to supply prefab villas in Puerto Rico

Revolution Precrafted Properties Philippines, Inc has been tapped by Puerto Rico’s Grupo Cacho, Inc. to deliver more than 2,000 residential villas on the island of Vieques and Boqueron Bay Cabo Rojo, bagging its fifth international deal in the last six months.
The company said in a statement that it has recently signed an agreement with the Puerto Rican real estate firm for the project.
Grupo Cacho has residential, resort, hotel, and commercial developments under its portfolio, known for its Martineau Bay Resort in Vieques which was later renamed to Caribbean W. Hotel.
The agreement will be executed in two phases, with the initial phase to cost $13.5 million. This includes 27 mid-range and luxury residential units standing on a 4.2-hectare property in Vieques. Each house will cover 200 to 250 square meters of floor area on 1,000-sq.m lots.
For the second phase, Revolution Precrafted will construct around 2,000 houses on a 212-hectare area near Boqueron Bay. The two- to three-bedroom villas are sized 150 sq.m., with a lot area of around 600 sq.m. — Arra B. Francia

AUB’s Q1 consolidated net income grows 21%

Asia United Bank (AUB) reported its consolidated net income went up in the first quarter on the back of double-digit growth in its core lending businesses.
In a disclosure to the local bourse Tuesday, May 22, the Ng-led bank and its subsidiaries, namely Cavite United Rural Bank and Rural Bank of Angeles in Pampanga, logged a consolidated net income of P797.7 million in the January to March period, up 21.3% than a year ago.
AUB said its net income last quarter was boosted by growth in interest income from loans and receivables as well as growth in other operating income, which rose 29.4% and 42.6%, respectively, in a comparable year-ago period.
Loans and receivables grew to P129.6 billion by 29.2% as of end-March compared with the P100.3 billion logged in the same period last year.
According to AUB, this was supported by double-digit growth in commercial loans as well as other loan segments such as auto, housing and salary loans.
As a result, AUB’s net interest income rose 9.1% P1.681 billion in the first quarter from P1.542 billion last year. — Karl Angelo N. Vidal

How a government employee began to weave dreams

Akaba’s 24–year–old chief operating officer Daniel Lumain was immersed in implementing policies for government-run companies before the country changed leadership in 2016 and put an end to his two-year career.

But that backdrop gave him “not just the connections,” but also the fuel to continue being of service to his countrymen. He then returned to his undergraduate thesis at the Ateneo de Manila University and grew it into what Akaba is today: a social enterprise selling bags and accessories made of handwoven textiles by over 100 weavers from Ilocos Norte, Isabela, Abra, Oriental Mindoro, Zamboanga, Sulu, Basilan, Iloilo and South Cotabato.

“It’s our mission to help these weavers promote their artistry and craftsmanship, but at the same time create a sustainable business that is relevant to the supply chain,” he said. “When we went to Ilocos Norte, we found out that a lot of weavers create handwoven textiles for around a month or so, but only sell them for around P20 per yard, and when we went to the market we actually saw middle men selling them for P150 to P200.”

Unlike many handwoven crafts, however, Akaba didn’t target the so-called “tita market.” “We chose a younger market and lowered our price points. What we always say is if you buy a high-end product worth P10,000, sure you’ve helped a community, but when is the next time you’ll help them? We can sell a product for around P1,500, sell a hundred pieces, and basically continuously support the communities.”

Akaba currently sells its wares across major malls, but because it aims to become an established “Southeast Asian brand,” it is also expecting to enter e-commerce platform Amazon to tap the American market this year, on top of its plan to expand its ties with Cambio Market to further introduce the brand in Canada. Lumain added that the team is also considering to widen its Asian market by selling its products in Hong Kong and Japan.

“I always believe that poverty is not just an economic situation, it’s a mindset problem,” he said. “These people changing their views, believing that there’s a chance for them to have a better life, that in itself is the biggest achievement that we’ve had.”

INCIDENTAL INTELLIGENCE:
Shop at akaba.co.

PSBank plans to raise up to P15 billion through LTNCDs

Philippine Savings Bank (PSBank) is planning to raise up to P15 billion by selling peso-denominated long-term negotiable certificates of time deposits (LTNCD).
In a disclosure to the Philippine Stock Exchange Tuesday, May 22, the thrift banking arm of Ty-led Metropolitan Bank & Trust Co. said its board of directors approved to issue up to P15 billion in LTNCDs in two or more tranches.
The issuance program will be conducted over a one-year period and with a tenor of five-and-a-half years.
The offering will still require approval from the Bangko Sentral ng Pilipinas. Its final terms, including the offer period as well as the interest rate, will depend on market conditions.
“The issuance of LTNCTDs will give PSBank an opportunity to access long-term funding as the Bank further expands its consumer banking business,” PSBank said in the disclosure. — Karl Angelo N. Vidal

Carpio: Philippines must formally protest China militarization

In response to the sighting of Chinese long-range bombers in the Paracel Islands, Acting Chief Justice Antonio T. Carpio on Tuesday, May 22, insisted that, “the Philippine Government must formally protest the increasing militarization of the (West Philippine Sea) by China.”
Mr. Carpio, in a press statement released to media on Tuesday, said, “failure to formally protest means the Philippines is acquiescing or consenting to the militarization, and worse, to the claim of China that all the islands, waters, and resources within the nine-dashed line form part of Chinese territory.”
“A formal protest is necessary to preserve our sovereignty over Fiery Cross Reef… A formal protest is also necessary to preserve our sovereignty over Subi Reef… Moreover, a formal protest is also necessary to preserve our exclusive sovereign rights over Mischief Reef which the arbitral tribunal ruled forms part of the Exclusive Economic Zone of the Philippines,” read Mr. Carpio’s statement. — Dane Angelo M. Enerio

Coming up roses

At the height of the AlDub love team phenomenon, Diane Yap and Lauren Gavino, who had been running an online flower shop for only a month then, received an order for 49 stems of red Ecuadorian roses to be delivered at the Philippine Arena in Bulacan, where some concert with ticket sales reaching P14 million would be filled with 55,000 people.

Their response: “If you want, on top of the cost of the arrangement, pay for our gas and toll.”

On that day, October 24, 2015, that three-hour commercial-free episode registered a TV rating of 50.8%, the channel stated citing data from AGB Nielsen, compared to the 5.4% registered by the competitor. Tweets for the hashtag reached 39.5 million. And amid that number of viewers, actor Alden Richards was walking up the stage carrying that 49-rose boxed arrangement himself— the brand name “Petalier” in clear, full view.

Gavino found herself crying in front of the TV.

“Ang kapal ng mukha namin ‘di ba?,” the two now laugh, looking back at what they consider their store’s big break. “Sobrang fail namin. We didn’t know who AlDub was.”

But entrepreneurship isn’t a bed of roses, and getting flowers on screen took more than just luck or serendipity. At 11 p.m. the previous night—only a few hours before the concert—their supplier for the flowers backed out. Yet instead of giving up right then and there, they insisted on delivering.

Yap had a backup plan ready. The day before, she had begun contacting all the flower suppliers she could find on Google—pleading “Please po, magbabayad kami.”—all while going around public markets to do surveys for a senator she was then still working full-time for. After finding one, a certain “Dra. Anna” who remains their main supplier to this day, they finally got the flowers by 2 a.m., arranged all 49 stems, then had their personal driver to deliver it to Bulacan. The rest, as they say, is history.

“That’s the first time people saw pretty roses in a box,” Yap said.

Influencer marketing has since been Petalier’s main avenue to drive sales.

A “calculated gamble,” Yap describes. “Sometimes they’re effective, sometimes they won’t post you. So that’s money out the door.”

Still, it works, and the two have also launched a new baby: a luxury balloonery called Blloons.

“We thrive on Instagram. We’re typical millennial business people. Uber doesn’t own a single car. We thrive online,” she said. “You can go far with just online. We’re the perfect example.”

INCIDENTAL INTELLIGENCE
Petalier is an online business. Orders can be placed on petalier.com but queries can be sent to 0977- 841-7738 or mail@petalier.com.

Cesar Montano resigns from Tourism Promotions Board amid controversy

By Arjay L. Balinbin, Reporter
Actor Cesar D. Montano has stepped down as chief operating officer (COO) of the Tourism Promotions Board (TPB) amid the controversy over his P80-million Buhay Carinderia food-promotion project with marketing agency Marylindbert International Inc.
“Yes, of course,” newly appointed Tourism Secretary Bernadette Romulo-Puyat told BusinessWorld in a text message on Monday evening, May 21, when asked if she was aware of Mr. Montano’s resignation.
In a text message to Palace reporters, the tourism chief said that she “would like to consider the matter closed from [her] active involvement.”
She also said that she “trust(s)” that the Commission on Audit (CoA) “will get to the bottom of this episode.”
In his resignation letter, as shared by Special Assistant to the President (SAP) Christopher Lawrence T. Go, Mr. Montano said: “In faithful adherence to my duty as a public servant, I am respectfully tendering my courtesy resignation as Chief Operating Officer (COO) of the Tourism Promotions Board (TPB), effective immediately.”
He said he is “grateful for the trust and the opportunity” that President Rodrigo R. Duterte has bestowed upon him “to serve [the] country through the Tourism Promotions Board.”
Documents obtained by BusinessWorld last week showed that a total of 80,640,172.80 has been paid in tranches, as of April 4, to Marylindbert even before the project had started.
In a press conference on May 17, Ms. Romulo-Puyat announced that she had ordered the suspension of the implementation of Mr. Montano’s project.
She said she wrote a letter to CoA requesting it to review the projects under Mr. Montano’s watch.
In his press briefing at the Palace on Monday morning, Presidential Spokesperson Harry L. Roque, Jr. said the President is “very pleased” with Ms. Romulo-Puyat’s handling of the DoT.
“She was appointed with the expressed mandate to do good and to fight corruption and she is doing just that. The President is very pleased,” Mr. Roque said.
In an official statement on Tuesday, May 22, the TPB said its projects and programs “are expected to contribute significant returns on marketing investments that are beneficial in promoting Philippine tourism.”
“Amidst the current controversies, the TPB remains a professional organization that works relentlessly in promoting the Philippines domestically and internationally,” the TPB added.
The agency also extended its support to the direction of Ms. Romulo-Puyat in “guaranteeing transparency in all of its dealings.”
On May 8, Wanda T. Teo also resigned as tourism chief amid criticism over the P60-million DoT advertisement issue, involving her brothers, Bienvenido “Ben” T. Tulfo of media company Bitag Media and broadcaster Erwin T. Tulfo of PTV-4.

Clark airport O&M attracts interest

A CONTRACT to operate and maintain (O&M) for 25 years an expanded Clark International Airport — designed to decongest the premier gateway in Metro Manila — has attracted several groups that sent representatives to a pre-bid conference in Bonifacio Global City, Taguig City on Monday.
Eight companies bought bid documents as of Monday, the Bases Conversion and Development Authority (BCDA) said in a statement, identifying them as the Megawide-GMR Consortium which in December also won the deal to construct Clark airport’s new passenger terminal building and has done the same for Mactan Cebu International Airport; Metro Pacific Investments Corp.; Filinvest Development Corp.; San Miguel Holdings Corp.; Prime Asset Ventures, Inc.; Central Luzon Infrastructure Consultancy, Inc.; Consortium; GVK Airport Developers Ltd.; and Groupe ADP.
BCDA noted that representatives of about 30 groups attended Monday’s conference, including Zurich Airport AG; Sojitz Philippines Corp.; Udenna Corp.; Malaysia Airports Holdings Berhad; Clarkfield Aviation Services, Inc.; Mitsubishi Corp.; Macquarie Group Limited; JG Summit Holdings, Inc.; Halder & Associates; PAL Express; Samsung Electronics Co.; Aboitiz InfraCapital, Inc.; AirAsia Group; Evercon Builders and Equipment Corp.; and Miescor Logistics, Inc.
BCDA said interested parties may buy bid documents until June 18 for a non-refundable fee of P1 million.
Under a preliminary timetable, bid submission will take place on July 20, which will also see the opening of qualification documents; opening and evaluation of technical bids on July 26; opening of financial bids on Aug. 6; issuance of notice of award on Aug. 24; contract award and signing on Aug. 30.
O&M will start with the existing passenger terminal building this Dec. 1, while the new building should be up and running by July 2020.
The Philippines’ premier gateway, Ninoy Aquino International Airport (NAIA) in Metro Manila, is itself about to undergo modernization.
NAIA handled 42 million passengers last year, beyond its 30.5 million designed capacity. A Clark project brief noted that in 2016, “over 13%” of the 39.5 million passengers who passed through NAIA “were bound to or were coming from… northern and Central Luzon, CIA’s (Clark International Airport) catchment area.”
The National Economic and Development Authority Board, chaired by President Rodrigo R. Duterte, last month gave final green light for the P753.63-billion international airport project proposed by San Miguel Corp. to be built in Bulacan, also to help decongest NAIA.
A few technical requirements were questioned during Monday’s conference, including one that requires a bidder to have been in charge of O&M of an airport listed in Skytrax’s top 20 best airports. Skytrax is an airline rating organization based in United Kingdom. Some of those who attended the pre-bid conference said this requirement is too restrictive.
Another requirement is for bidders to have experience in O&M of an international airport for at least three consecutive calendar years with an annual passenger throughput of at least 8 million passengers, while still another says a “[p]rospective bidder must not have any stake in any facility operator within the main island of Luzon, or must not hold, whether direct or indirect, a majority equity interest in a concession holder of an international airport in the Philippines.” — Denise A. Valdez

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