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Main index declines anew ahead of BSP decision

STOCKS closed in negative territory again on Thursday, Feb. 8, as investors awaited the results of the local central bank’s first policy meeting for the year.

The bellwether Philippine Stock Exchange index (PSEi) dropped 0.25% or 22.48 points to finish at 8,645.08.

The broader all-shares index, meanwhile, posted a gain of 0.16% or 8.59 points to 5,094.67.

“I think investors opted to sell on strength after [Wednesday]’s rally. Considering that 8,550 was breached…, investors probably decided to cut losses for fear of another round of correction,” Garie G. Ouano, research director at Chinabank Securities Corp., said via text.

The market saw thinner trading as 1.03 billion issues valued at P7.11 billion switched hands. This is lower than the P9.08-billion turnover recorded on Wednesday.

“Value turnover was also below average so that could indicate that the market was on wait-and-see mode ahead of the BSP (Bangko Sentral ng Pilipinas)’s policy decision,” Mr. Ouano said.

“At their first meeting of the year, we expect the BSP to leave policy rates unchanged, keeping the overnight reverse [repurchase] rate at 3.00% and the overnight deposit rate at 2.50%. However, we see the risk that the BSP sounds meaningfully more hawkish than their meeting in December,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message ahead of the meeting’s close.

The BSP kept rates unchanged at Thursday’s meeting, it announced after the close of trading, on the back of robust economic prospects and expectations of a moderation in inflation.

Property was the lone sub-index that gained on Thursday, adding 0.20% or 7.92 points to 3,920.35.

The mining and oil counter led the day’s losers, giving up 0.98% or 115.06 points to 11,538.72, followed by industrials, which dropped 0.38% or 44.92 points to 11,712.34. Financials shed 0.31% or 7.02 points to 2,205.45; services dipped 0.16% or 2.74 points to 1,711.91; while holding firms moved 0.03% down or 2.83 points to 8,752.29.

Advancers trumped decliners, 107 to 92, while 60 issues remained unchanged.

Foreigners continued their selling spree on Thursday, with net outflows recorded at P556.30 million, slightly lower than the P598.98 million posted the day before.

Most Southeast Asian stock markets edged lower on Thursday, signaling caution, as Wall Street’s early gains overnight fizzled out, leaving investors wary of further volatility in the global markets.

US stocks ended lower on Wednesday as bond yields climbed higher, and the threat of rising inflation kept investors on edge over the prospect of more interest rate hikes.

In Asia trade, the S&P e-mini futures slid 0.30%, suggesting the likelihood of another uncertain session on Wall Street, while MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.10%. — Arra B. Francia with Reuters

Meralco power rates to increase this month

The cost of electricity in February will increase by P1.08 per kilowatt-hour (kWh), Manila Electric Co. (Meralco) said, pointing to higher pass-through generation charge.

Meralco said the increase “will not be implemented in full, in the interest of consumer welfare.” It made the statement in an online message ahead of its regular monthly issuance on power rates.

The increase follows two straight decreases in the overall electricity rates that amounted to a total P0.90 per kWh for a typical household.

Meralco told its consumers “to await the official announcement on the final rate adjustment for February, and how the remainder of the increase will be implemented.”

“Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 31 months, after these registered reductions in July 2015,” it said.

It reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corporation of the Philippines. It added that taxes and other public policy charges such the feed-in-tariff allowance are remitted to the government. — Victor V. Saulon

Faster price pickup seen till June

INFLATION RATE will likely keep rising until June as the second-round effects of tax reform creep in, an analyst at a global bank said yesterday, adding that this in turn could trigger three rate hikes from the central bank this year.

Jose Mario I. Cuyegkeng, senior economist at ING Bank N.V. Manila, said inflation will likely average “at least four percent or higher” for 2018, reeling from the impact of Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act (TRAIN), that was enacted in December and which took effect last month.

“I think within the first half of the year, we’ll probably see a peak. Once we get the second-round effects… we expect that to happen within the next three months,” Mr. Cuyegkeng said on the sidelines of ING Bank’s annual financial markets road show yesterday.

He added that monthly inflation could clock “closer to 4.5%” before easing.

January inflation surprised at four percent, the fastest in over three years to hit the ceiling of the 2-4% target range set by the Bangko Sentral ng Pilipinas (BSP), against a market expectation of 3.5%.

State economic managers attributed January’s price spike partly to effects of the tax reform law, as well as to rising oil and food prices. However, BSP Governor Nestor A. Espenilla, Jr. said TRAIN’s impact is likely temporary and that inflation rate would eventually “stabilize.”

Mr. Cuyegkeng said last month’s faster-than-expected inflation pace bolstered the case for a tightening move from the Monetary Board, as he now prices in three rate hikes for 2018.

He added that there is now a 50% chance for the BSP to adjust rates at its policy meeting today.

“Now, there is a case to be made that the central bank has limited choices to stave off any policy rate hikes,” Mr. Cuyegkeng said at the forum, noting that such tightening would help anchor inflation expectations over the next 12-18 months.

“A two-peso increase in minimum transport fares would eventually mean that inflation will still rise by another half percentage point or more,” he added, pointing out that petitions for higher daily minimum wages would likewise have an impact on overall inflation.

The bank economist has also bumped up his inflation forecast from 3.7% previously, which was already above the 3.4% full-year estimate announced by the central bank in December.

By 2019, Mr. Cuyegkeng sees inflation to remain elevated at 3.5-3.6%, coming from another wave of sin tax increases for alcohol and tobacco products.

Despite this, he still expects the Philippine economy to sustain robust growth at 6.7%, matching the pace logged in 2017 on the back of household, public and business spending, as well as growth of industry and services.

The government’s ambitious spending goals for infrastructure may be doable, as he cited “significant improvement” in 2017 budget disbursements.

Despite rising inflation rates, Mr. Cuyegkeng said overheating risks have somehow eased following a moderation in the growth in bank lending and money supply.

ING chief economist Robert Carnell noted in the same event the continued underperformance of the peso against other Asian currencies, which Mr. Cuyegkeng attributed to a widening trade deficit as businesses import more capital equipment and other requirements of expansion. — Melissa Luz T. Lopez

BSP chief faces first major test

BANGKO SENTRAL ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. faces his first major test on Thursday: striking a balance between curbing inflation and calming financial markets.

Inflation is at the highest in more than three years, the currency is under pressure and financial markets are experiencing wild moves this week.

Mr. Espenilla has to decide whether now is the right time to tighten monetary policy for the first time since 2014 to prevent one of Asia’s fastest-growing economies from overheating.

“Bangko Sentral ng Pilipinas may finally deliver on rate hikes after the spike in inflation to four percent,” said Eugene Leow, a fixed-income strategist at DBS Group Holdings Ltd. in Singapore.

“With sentiment already jittery, higher rates may actually instill confidence in peso assets.”

Twelve of the 17 economists surveyed by Bloomberg predict the benchmark rate would be held at three percent, with the rest forecasting a hike to 3.25%.

The Philippines is among the top inflation-targeting central banks in Asia and its credibility now rests on the governor, who took office in July last year.

Policy makers in Asia face pressure to follow the US in tightening monetary policy, with Malaysia raising rates in January.

Financial market volatility is complicating the job of central bankers who seek to preserve stability while anchoring inflation and growth expectations.

In India, the central bank is forecast to hold its key rate on Wednesday.

The Philippine peso has lost more than two percent this year, the worst-performing currency in emerging markets after the Argentine peso. The Philippine currency and benchmark stock index gained on Wednesday, following an Asia shares rally.

The BSP is among the most predictable in Asia on monetary policy.

Former Governor Amando M. Tetangco, Jr. communicated potential changes in advance and the last unexpected decision was in July 2012 when authorities cut interest rates.

The implementation last month of the tax law that raised levies on fuel, sugary drinks and cigarettes is boosting inflation.

The surge in January prices was driven by food, beverages and tobacco.

VIEW FROM THE GROUND
Walking around the cramped alleys of Mega Q-Mart, one of the largest wet markets in Manila, Nenita Villamor lamented that prices of goods like chicken have gone up.

The mother of six has stopped buying poultry as the cost has risen more than 10% in recent weeks.

“I cook vegetables for my family instead of chicken which has gotten more expensive,” she said.

“We miss it but we can’t afford it now. The vendors say the price increase is because of new taxes.”

Public transport groups and ride-sharing companies Uber Technologies Inc. and Grab are calling for fare hikes, while labor unions are also seeking an increase in minimum wages.

The central bank will be closely monitoring the situation and stands ready to take timely action, Mr. Espenilla said on Tuesday.

“We’re not ruling out a rate hike,” said Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore, who forecast no change.

“The BSP is very sensitive to the inflation targets being breached. Given the tax law and oil, they probably would realize that the inflation outlook will only drift higher this year, so the target is more at risk.” — Bloomberg

Government mulls job fairs abroad to bring home workers for infrastructure development program

THE GOVERNMENT is thinking of holding job fairs abroad to bring home skills needed for its P8-trillion infrastructure development program till 2022, the Finance chief told reporters recently.

“I am told that getting skilled workers is getting a little bit tough. I am talking about technicians, finishing, welders. Probably its a good idea for our infra(structure) agencies together with the contractors to hold a job fair abroad where we have Filipinos,” Finance Secretary Carlos G. Dominguez III said.

“We should be prepared to conduct a job fair.”

Asked if the repatriation drive would dent growth of remittances, which have long fueled household spending that in turn have been an anchor of the country’s relatively fast economic growth, Mr. Dominguez replied: “I don’t think it will be that much.”

“I mean, you know that is P30 billion — that is a lot of money a year,” he explained, even as he acknowledged there will be “probably some [impact on remittances], but you know they (returning workers) will be contributing locally [so] it’s not a loss to us.”

Bangko Sentral ng Pilipinas (BSP) data show that cash remittances totaled $25.318 billion as of November last year, about four percent more than the $24.341 billion posted in 2016’s comparative 11 months, a pace that matches the central bank’s projection for 2017. The BSP expects overall remittances to have reach a fresh high of $28 billion that year.

Property consultants Santos Knight Frank, Colliers International Philippines and Pronove Tai have reported there is a labor shortage in the construction industry which has caused project delays.

Construction grew by a slower 5.7% last year compared to 2016’s 15.1%, Philippine Statistics Authority data show. The same comparative years saw growth of public construction ease to 13.5% from 28%, while that of private construction slowed to 3.3% from 11.5%.

Mr. Dominguez said that slowdown was due to the heightened demand for construction workers around the globe.

“You know, local companies have to understand that skilled workers are acceptable anywhere in the world and if you want to get skilled workers you have to compete. I think that’s just inevitable. Quite frankly a lot of other countries are also getting into infrastructure projects,” he said.

“We want to talk to TESDA (Technical Education and Skills Development Authority) and start reorienting their program to more jobs with high demand.”

The current administration plans to spend more than P8 trillion on infrastructure in a bid to boost overall economic growth to 7-8% from this year to 2022, when President Rodrigo R. Duterte ends his six-year term, from 6.7% last year, 6.9% in 2016 and a 6.2% average in 2010-2015.

Such sustained faster growth, in turn, is expected to cut unemployment rate to 3-5% from 5.5% in 2016 and slash poverty rate to 14% from 21.6% in 2015. — Elijah Joseph C. Tubayan

Asia bites tongue on soft dollar as Washington rattles its saber on trade

SEOUL/TOKYO — A year after US President Donald Trump took office, heightened rhetoric out of Washington about unfair trade has kept Asian policy makers reluctant to openly talk down their currencies despite the dollar’s slump to multi-year lows.

Instead, central banks are looking at subtler ways to rein in their currencies as sustained weakness in the dollar erodes the competitiveness of many exporting nations.

Thailand’s central bank, for example, said last week it was relaxing rules to allow retail investors to directly buy foreign securities. That seemed aimed at encouraging capital outflows to cap the baht, which is at four-year highs.

While firm demand for Asian exports is seen as creating legitimate support for regional currencies, something central banks tacitly accept, analysts say Mr. Trump’s aggressive posture on trade has redrawn the battle lines in foreign exchange markets.

“US President Donald Trump carries the bigger stick: the threat of protectionism,” writes Joachim Fels, global economic advisor at bond fund PIMCO. “And so Europe and Japan have acquiesced; neither has stemmed their currencies’ appreciation with words or actions.”

Recent trade barbs include the US administration’s proposals to impose tariffs on steel imports, Korean washing machines and Chinese solar panels.

They come alongside the dollar’s steady depreciation since the beginning of 2017, although it has ticked up since late last week after the fastest US employment growth in eight-and-a-half years fanned expectations of more aggressive policy tightening by the Federal Reserve and caused global equities to sell off.

A key moment in the dollar’s long run lower was US Treasury Secretary Steve Mnuchin’s comments in late January that America prefers a weak currency.

For its part, US Treasury says its semi-annual reports that identify what it sees as currency manipulating governments have been effective in boosting investment and stabilizing foreign exchange.

“The ultimate goal is for the world financial system to be stable and growth to accelerate. We’re pleased with the results that are underway,” US Treasury Undersecretary for International Affairs David Malpass told Reuters last week.

“We’ve seen a pickup both in the US and in global growth, in part because the financial system has been stable.”

While many Asian central banks have been intervening in currency markets as the dollar declined, they have also been quick to affirm their reasons were not based on trade-competitiveness.

Bank of Thailand Assistant Governor Chantavarn Sucharitakul told Reuters it was natural for the baht to appreciate, given the country’s massive current account surplus, but the movements should not be too abrupt and “the exchange rate of small open economies cannot be left to benign neglect.”

A senior Japanese government official told Reuters its “stance is to avoid competitive devaluation as agreed by G7 and G20. There’s no change to this.”

This contrasts with explicit threats from Japanese Finance Minister Taro Aso in May 2016 that the government would intervene if “one-sided” moves in the yen hurt the economy.

China’s central bank last month tweaked its currency policy to better align the yuan with exchange rates of its trading partners and reduce its correlation with the dollar. Its policy makers have publicly vowed not to get too much in the way of market forces.

But while the new trade landscape has made Asian policy makers more cautious in their words and actions, many of the region’s exporters have been more explicit about the pain of a stronger currency.

South Korean companies, including major auto and electronics manufactures, have lamented the won’s surge against both the dollar and the yen in 2017.

SK Hynix, the world’s second-largest memory chip maker, had record earnings in 2017 but foreign exchange-related losses comprised the bulk of its non-operating expenses. Apple supplier LG Display is bracing for exchange rates to be a negative factor for the company this year.

Car maker Hyundai Motor Co., already grappling with falling prices and stiff competition in the international market for sedans had its worst earnings in seven years in 2017. The won’s 12.8% rise against the dollar wiped out a substantial chunk of those meagre profits.

“Please let me know if there are good ways to minimise the currency impact,” a Hyundai Motor Group source said to Reuters. “We are having a tough time.” — Reuters

Deposits attract demand

By Melissa Luz T. Lopez,
Senior Reporter

BANKS swarmed yesterday’s auction of term deposits following the return of the month-long tenor, driving yields lower amid overwhelming demand.

The Bangko Sentral ng Pilipinas (BSP) received bids cumulatively worth P140.003 billion during Wednesday’s offering under the term deposit facility (TDF), more than double the P60 billion it placed on the auction block and surging from the P116.634 billion dangled the previous week.

The seven-day tenor saw tenders reach P88.573 billion, slipping from the previous week’s level but still well above the P40 billion which the central bank wanted to sell.

Still, the average yield dropped to 2.7278% from the 2.7785% fetched a week ago.

On the other hand, market players actively vied for the 28-day term deposits as the window was reopened after seven weeks. Demand reached P51.43 billion against a P20-billion offering, with banks asking for returns ranging from 2.75-3.125%.

This led to a 3.0183% yield, sliding from the 3.4954% average fetched when the month-long term was last offered on Dec. 13.

The TDF is currently the central bank’s main tool to capture excess liquidity in the financial system. The window allows banks to park the idle cash they hold under the BSP in exchange for a small margin, which in turn will prompt market rates to inch closer to the three percent benchmark set by the central bank.

Any excess cash that have not been deployed for loans, foreign exchange and debt payments are parked under the central bank window in order to make small gains, rather than leave these idle inside vaults.

Meanwhile, the central bank has eased rules to allow banks to place more funds under the TDF.

“[F]unds inwardly remitted by a foreign bank intended as capital of its branch or subsidiary in the Philippines shall be eligible for placement in the TDF and the ODF (overnight deposit facility) of the Bangko Sentral,” BSP Circular 995 read, as signed by Governor Nestor A. Espenilla, Jr.

As a rule, banks cannot park deposits and investments from foreigners under the central bank’s termed facilities, as these are primarily meant to manage domestic liquidity.

The exception has been made for capital infusions for a bank’s actual operations.

For next week, the BSP will again offer P60 billion worth of term deposits, split into P40 billion for the week-long tenor and P20 billion for a month-long term.

ING Bank N.V. Manila senior economist Jose Mario I. Cuyegkeng said yesterday that liquidity growth has returned to a non-inflationary pace at 11.9% in December, allaying concerns on overheating.

BSP Deputy Governor Diwa C. Guinigundo has said that there is renewed interest for the month-long instruments as money supply returns to the banks after the holiday season.

San Miguel to spend P700 billion in next 5-7 years

By Arra B. Francia, Reporter

DIVERSIFIED conglomerate San Miguel Corp. (SMC) is spending around P700 billion in the next five to seven years to further grow its infrastructure, fuel and oil, food and beverage, and power businesses.

“Roughly about P700 billion in the next five to seven years. That does not include the new airport project that is being evaluated by the government today along Manila Bay in Bulacan province,” SMC Chief Financial Officer and Senior Vice-President Fernando K. Constantino said during an institutional investors’ briefing for its P30-billion bond offering in Makati City late Tuesday.

This capex program has been in place since 2015, Mr. Constantino told reporters after the briefing.

Included in the capex program is an allocation of P56 billion to P60 billion for the food business in the next three years. The beer segment will also corner a large pie of the spending program as it builds two new breweries in the next two to three years.

The construction of big ticket projects such as Boracay airport, the Stage 3 connector road, C-6 expressway that will connect Taguig City to Quezon City, the Metro Rail Transit Line-7, and bulk water project in Bulacan, will be accounted for in the capital spending budget.

For its power business, Mr. Constantino said 300 megawatts (MW) is now on stream, while 700 MW will be completed in the following years.

SMC Senior Vice-President and Head of Treasury Sergio G. Edeza cited various strategies when asked how the company looks to raise funds for the capex.

“It can be in different forms, it can be bonds, it can be notes. All the avenues available to us,” Mr. Edeza said, with Mr. Constantino adding it can be internally generated, given SMC’s healthy cash flow.

In a presentation to investors, Mr. Constantino said the company will grow the food business so that it will account for 21% of revenues by 2020, from a 16% contribution in 2016.

Petron Corp. is expected to continue to contribute bulk of revenues at 44%, although lower than the 49% recorded in 2016.

The beverage segment will remain at a level of 17%, same as power with 11%. The infrastructure business will contribute 4% by 2020 from 3% in 2016, while packaging will account for 3%, against its previous level of 4%.

Meanwhile, the company is currently raising P20 billion in a fixed rate bond offering this March, with an overallotment option of up to P10 billion to repay its existing obligations. The company has tapped seven large banks to manage the offer, namely Standard Chartered Bank, BDO Capital and Investment Corp., BPI Capital Corp., China Bank Capital Corp., First Metro Investments Corp., ING Bank, and SB Capital Investment Corp.

The conglomerate recorded a net income attributable to the parent of P20.9 billion in the January to September 2017 period, 19% lower than the same period in 2016, amid a 19% uptick in revenues to P596.9 billion.

Shares in SMC picked up 2.72% or P3.90 to finish at P147.40 apiece at the Philippine Stock Exchange on Wednesday.

AC Energy to invest $300M in Vietnam venture

By Victor V. Saulon, Sub-Editor

AC Energy Holdings, Inc. expects the investments for its solar power venture in Vietnam to reach around $300 million as the Ayala-led company ramps up spending for power generation projects this year.

“[In] Vietnam, we’re hopeful that we’ll break ground on much more than 30 megawatts (MW) this year,” Eric T. Francia, who is also chief executive officer of AC Energy, told reporters on the sidelines of the Asia CEO Forum on energy issues at Manila Marriott Hotel in Pasay City on Wednesday.

Mr. Francia said the industry rule-of-thumb is a capital expenditure of around $1 million to build 1 MW of solar capacity. AC Energy had said the target capacity in Vietnam could increase by 300-MW more.

Ayala Corp.’s business arm in the energy sector previously disclosed an investment of 800 billion Vietnamese dong, or $35.21 million, for the initial 30 MW it plants to build this year. It has partnered with the Bim Group of Vietnam to jointly develop the solar power projects in Vietnam’s Ninh Thuan province.

“As long as we’re [breaking ground] in the first half, we’re okay,” he said about meeting its target 2018 commercial operation date for the initial phase.

The investment in Vietnam is part of the company’s capital expenditure budget this year, which will largely fund two big power projects in the Philippines — one in Luzon and another in Mindanao.

“I can’t give you an exact number but a lot of our capex [will go] to fund our ongoing coal plant construction — Mindanao and Dinginin. So it’s in the hundreds of millions of dollars range,” Mr. Francia said.

He was referring to the 668-MW GNPower Dinginin Ltd. Co., in which the company has a 50% stake; and the 552-MW GNPower Kauswagan Ltd. Co., which it controls with an 85% stake.

Mr. Francia said AC Energy closed 2017 with a total of 1,600 MW in attributable capacity or the megawatt-equivalent of its economic stake in various completed power projects.

AC Energy is one of the fastest growing regional energy platforms with development, operations and retail supply capabilities. Its parent firm has previously committed an investment of $1 billion to meet or even exceed its 2,000-MW target by 2020. It expects at least 1,000 MW of the projected capacity to come from renewable energy sources.

“We have identified sources of funding already for our next wave of growth,” Mr. Francia said.

Based on what is “visible” at present, the AC Energy official said the company would not exceed the 2,000-MW target this year.

“Maybe we can get to around 1,800 [MW] attributable [capacity by yearend]. Whether we can reach or exceed 2,000 [MW], that is still a question mark. We’re trying certainly, but we’re very close. We could be one or two years ahead,” Mr. Francia said. “Hopefully by next year, we’ll hit the 2,000.”

FINTQ microinsurance platform set for rollout

FINTQNOLOGIES Corp. (FINTQ), the financial technology (fintech) arm of Voyager Innovations, Inc., is set to launch a microinsurance platform to tap the uninsured.

FINTQ managing director Angelito M. Villanueva told BusinessWorld in an interview that the firm will launch KasamaKA Microinsurance “in the last week of February.”

The second Inclusive Digital Finance Report released last month said KasamaKA Microinsurance will link FINTQ’s partner insurers to the uninsured and unbanked sectors using mobile phones.

“Insurance companies and brokers are given the digital platform through FINTQ’s KasamaKA Microinsurance. They are linked to a nationwide network of third-party providers that can facilitate insurance services on their behalf,” the report read.

It added that customers can access insurance products for as low as P10 through the said platform.

KasamaKA Microinsurance will target majority of household heads “who are self-employed, work for private households, and other informal occupations” that are uninsured.

Aside from microinsurance, Mr. Villanueva said in a mobile phone message that they will also launch microsavings and microinvestment “this year.”

Introduced in September, KasamaKA is a grassroots-based platform which aims to offer access to formal financial services.

The program is geared to veer Filipinos away from predatory and informal financial services such as “5-6” and include 30 million Filipinos into the mainstream financial system by 2020 in line with the government’s National Strategy for Financial Inclusion.

Currently, Mr. Villanueva said FINTQ only offers lending through Lendr and KasamaKA Lendr.

“We are the first fintech company in the Philippines or in the world that [will have] a complete suite of digital financial innovations. We have lending, savings, investment and insurance under one roof.”

For Lendr, meanwhile, Mr. Villanueva said they will add more features to the platform such as credit scoring to “fast-track the approval process” of loans.

Lendr will also soon have a digital collection system, prompting a third-party collector agency.

Voyager Innovations is PLDT, Inc.’s digital innovations unit. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — K.A.N. Vidal

Ayala bidding for Kia distributorship in PHL

THE AYALA GROUP plans to expand its automotive dealership business after making a bid to secure the rights to distribute South Korean car brand Kia in the Philippines.

In a disclosure to the stock exchange on Wednesday, the conglomerate said the group emerged as the “preferred bidder” to begin negotiations for the Kia distributorship in the Philippines, but no definitive deal has been reached.

A wholly owned subsidiary of Ayala, AC Industrial Technology Holdings, Inc., through one of its group companies, received the notice from the regional headquarters of Kia Motors Asia.

Kia has a stable of brands comprised of Picanto, Rio 5-door, Soul, Sportage and Sorento and Grand Carnival.

The Ayala group consolidated its automotive and manufacturing assets under AC Industrials last year after transferring its ownership of Integrated Micro-Electronics, Inc. (IMI) to its wholly owned subsidiary.

AC Industrials holds the group’s interests in automotive dealerships and distributorships for Honda and Isuzu as well as a 100% stake in Automobile Central Enterprise, Inc. (ACEI) and a 100% interest in Adventure Cycle Philippines, Inc. (ACPI).

ACEI is the official importer and distributor of Volkswagen vehicles in the Philippines, while AC Industrials also manufactures KTM motorcycles and, through ACPI, is the official distributor of KTM motorcycles in the Philippines.

The Ayala group has a five-year target to hit a net income of P50 billion by 2020, banking on the growth of its core and relatively newer businesses.

The conglomerate’s attributable profit stood at P23.2 billion in the first nine months of 2017, 18% higher year on year, following a 21% increase in revenues to P170 billion during the period.

Ayala Corp. has diversified business interests that include real estate, financial services, telecommunications, water infrastructure development and electronics manufacturing. It has recently entered new sectors with investments in power generation, transport infrastructure development, health care, education and e-commerce.

Shares in Ayala climbed P29 or 2.89% to settle at P1,034 apiece on Wednesday. — Krista Angela M. Montealegre

Resilient Fuel Masters edge KaTropa, 74-72

By Michael Angelo S. Murillo
Senior Reporter

THE Phoenix Fuel Masters gave their PBA Philippine Cup campaign a big boost after fashioning out a “dig-deep” victory yesterday over the TNT KaTropa, 74-72, at the Mall of Asia Arena.

Still middling halfway into the elimination round of the season-opening Philippine Basketball Association (PBA) tournament, Phoenix (4-4) earned a much-needed win over TNT (4-4), banking on collective resilience and big plays from sophomore Matthew Wright down the stretch.

The KaTropa had the Fuel Masters under control in the opening half as they dictated the tempo on both ends of the court.

They held a 24-20 lead at the end of the first canto before making it further difficult for the Fuel Masters to stay ahead, 40-30, by the halftime break.

Phoenix came out aggressive to start the third period, outgunning TNT, 11-5, in the first four minutes to narrow the gap, 45-41.

But the KaTropa would string up five straight points after to give themselves more breathing space, 50-41, midway into the frame.

The Fuel Masters kept angling to get back in the game with Jeff Chan and Gelo Alolino leading the charge.

TNT, however, was able to find ways to keep their opponents at bay as auxiliaries Harvey Carey and Francis Tamsi provided quality contributions.

The KaTropa maintained the upper hand, 61-56, after the first 36 minutes of the contest.

The start of the fourth period was held momentarily after TNT forward Troy Rosario fell hard on the floor and hit his chin following an inadvertent push from Phoenix rookie Jason Perkins, who tripped on the foot of veteran Kelly Williams of the KaTropa, in the opening seconds.

Mr. Rosario was stretchered off the court moments later to be brought to the hospital and be checked.

Phoenix capitalized on the lull and moved to within one point, 61-60, at the 10:17 mark of the quarter.

The two teams kept each other in check in the next three minutes, with TNT holding a narrow one-point cushion, 63-62, with 7:26 to go in the game.

Back-to-back baskets by Mr. Williams and Mo Tautuaa extended TNT’s lead to five points but a three-pointer by Mr. Alolino with five minutes remaining pulled Phoenix to within two points, 67-65.

Mr. Chan tied the count at 67-all a minute later.

The protagonist jockeyed hard to position themselves in the race down the wire.

TNT held a 70-69 lead with two minutes remaining before RR Pogoy added to it with a deuce, 72-69, with 1:44 to go.

Mr. Wright levelled the score anew at 72-all, with 44 ticks on the clock.

The KaTropa had the chance to take the lead back but Jayson Castro’s heave off a drive failed to connect.

Phoenix collared the rebound and sued for time to set up a game-winning play.

Milking the clock as much as they can, the Fuel Masters got the go-ahead basket they were looking for as Mr. Wright found an open Doug Kramer who buried a drop shot from the side with three seconds left.

TNT set up one last play to salvage its bid but Mr. Williams’s shot in the paint as time expired did not go in, giving the win to Phoenix.

Mr. Wright top-scored for Phoenix with 16 points while Mr. Chan added 11 markers.

Mr. Perkins had eight points to go along with 10 boards.

Anthony Semerad finished with 12 points for TNT, with Mr. Pogoy adding 10.

“We’re happy with this win because we put ourselves in the mix for a spot in the top half of the standings. But we have a tendency to taper off every after victory and hopefully we don’t fall into that again in our succeeding games to help our cause,” said winning coach Louie Alas after their victory.

Phoenix battles the Meralco Bolts in its next game on Feb. 14 while TNT plays Barangay Ginebra San Miguel Kings on Sunday, Feb. 11.

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