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Pryce Corp. net income up 29% on higher LPG sales

Pryce Corp. (PPC) posted a 29% increase in net income in 2017 to P1.25 billion, driven by higher revenues from sales of liquefied petroleum gas (LPG), the company told the stock exchange on Wednesday, Feb. 21.

The listed firm, which imports and distributes LPG under the brand name PryceGas among its businesses, said last year’s profit was within its target.

Consolidated revenues rose 37% to P9.23 billion from P6.72 billion, with sales volume growing by double-digits after the increase in prices for the fuel product last year.

“Sales volume of LPG grew 11% to 210,000 metric tons (MT) from the previous year’s 189,000 MT. Despite this modest volume growth, revenues were up 37% because of the sharp increases in LPG contract prices (CP) during the year,” the company said.

In 2017, contract prices was at an average of $491 per MT, 42% or $145 higher than the previous year’s average of $346 per MT, the company said. — Victor V. Saulon

Golden Haven formalizes entry into mass housing

Golden Haven, Inc. (HVN) is formalizing its entry into the mass housing sector after issuing P3.01 billion worth of shares out of its unissued authorized capital stock to Cambridge Group, Inc.

In a disclosure to the stock exchange on Wednesday, the Villar-led firm said it has issued 150 million shares at P20.0935 apiece to CGI by way of private placement. Golden Haven initially secured shareholder approval to increase its issued and outstanding shares last October 2017 to make the transaction possible. — Arra B. Francia

Stocks snap five-day rally

Local stocks plunged on Wednesday, Feb. 21, snapping their five-day upward trajectory as the index continued to consolidate.

The 30-company Philippine Stock Exchange index dropped 1.25% or 109.05 points to close at 8,613.65, while the broader all-shares index also gave up 0.15% or 7.62 points on Wednesday.

“Mainly the red flags coming overseas continue to dampen most markets, including ours. We see more of the yields in the US bond market continue to trek higher, which could translate to immediate rate hikes in the Fed (United States Federal Reserve),” First Grade Finance, Inc. President and Managing Director Astrolito Romulo C. Del Castillo said in a phone interview on Wednesday.

Mr. Del Castillo added that oil prices, while dropping at the world market on Wednesday, seem to continue to inch higher.

“Again this is inflationary, not only in our own economy, but other economies as well,” he said.

On the domestic front, Mr. Del Castillo said no specific news is driving the market, which indicates that current movements remain to be a part of its consolidation.

Sought for comment, Eagle Equities, Inc. President Joseph Y. Roxas cited the market was still on consolidation, noting the lack of news that may have prompted the index’ sudden drop.

Ayala Land to raise up to P25 billion from debt notes, loan

Ayala Land, Inc. (ALI) plans to raise up to P25 billion of combined debts, bilateral term loans, and qualified buyer notes this year, to partially finance capital requirements and refinance existing debt.

In a disclosure to the stock exchange on Wednesday, Feb. 21, ALI said its board of directors has approved to conduct a fundraising activity worth up to P20 billion through a combination of debts and bilateral notes for 2018’s capital expenditures.

Debt notes will be issued from the P50-billion shelf registration program the company has with the Securities and Exchange Commission since March 2016.

In an earlier interview, ALI Chief Finance Office Augusto Cesar D. Bengzon said the company has P18 billion left in this debt securities program.

The remaining portion will be raised through bilateral term loans.

On the other hand, the listed property firm’s board has also approved the raising of P5 billion through qualified buyer notes to refinance its short term loans. — Arra B. Francia

Consumption growth could ease due to tax reform — ANZ

Consumer spending could ease in response to higher commodity prices due to tax reform, analysts at ANZ Research said.

“Domestic demand is strong and is likely to remain so. However, the risk of some moderation in consumption growth remains. The growth in car sales had eased significantly in January. While take-home pay is higher for taxpayers, non-tax payers are facing higher prices. In the past, for every 1% increase in headline prices there was a corresponding decrease in private consumption by 0.3%,” the global bank said in a report. — Melissa Luz T. Lopez

UnionBank raises P3 billion via LTNCD

UnionBank of the Philippines raised P3 billion from its long-term negotiable certificates of deposit (LTNCD) to improve its deposit maturity profile and help expand its business.

The Aboitiz-led UnionBank launched the offering of new LTNCD on Wednesday at the Philippine Dealing and Exchange Corp.

The notes will mature in 5.5 years and carry an interest rate of 4.375% to be paid quarterly until August 21, 2023. The issuance is the first tranche of UnionBank’s P20-billion LTNCD offering approved by the central bank.

Like regular time deposits offered by banks, LTNCDs offer higher interest rates. However, LTNCDs cannot be pre-terminated but can be sold on the secondary market, making them “negotiable.” — Karl Angelo N. Vidal

Peso firms up as BSP intervenes

The peso strengthened against the dollar anew on Wednesday, Feb. 21, as the local central bank was suspected to continue intervening amid the big selloff by the US Treasury.

The local currency closed today’s session at P52.10 against the greenback, 14 centavos stronger than its P52.24-per-dollar finish last Tuesday.

The peso traded stronger the whole day, opening the session at P52.165 per dollar. Its intraday low stood at P52.21, while its best showing was at P52.06 against the US currency.

Dollars traded Wednesday slipped to $965.95 million from the $977.8 million logged the previous session.

“The BSP (Bangko Sentral ng Pilipinas) was still intervening that’s why the dollar-peso [remained stronger] throughout the day,” a trader told BusinessWorld in a phone interview on Wednesday.— Karl Angelo N. Vidal

Text of revised Pacific trade deal released amid fresh push

WELLINGTON, NEW ZEALAND — Details of a revamped cross-Pacific pact aimed at slashing trade barriers were released Wednesday amid a renewed push for the US to rejoin the 11-nation deal.

New Zealand unveiled the official text of the Trans-Pacific Partnership, or TPP-11, which had to be redrawn after Donald J. Trump rejected it last year just days into his presidency.

The nation’s Trade Minister David Parker said making it public would allow better scrutiny before it is formally signed in Santiago on March 8.

“New Zealand has been working hard to see the text made public as quickly as possible,” Mr. Parker said, adding that changes to the original document included the suspension of 22 items relating to areas such as intellectual property and taxpayer subsidized medicine.

Australian Trade Minister Steve Ciobo said the landmark agreement would eliminate more than 98% of tariffs in a trade zone with a combined GDP of some $13 trillion.

“The (Malcolm) Turnbull government wants to see this landmark agreement enter into force as soon as possible so Australian farmers, businesses and manufactures can enjoy its benefits,” he said.

The 11 TPP countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Together they account for about 13.5% of the global economy.

However, that figure would be closer to 40% if the United States was included, an outcome some lawmakers in Mr. Trump’s own Republican party are reportedly pushing for.

The Washington Post said on Tuesday that 25 Republican senators had written to Mr. Trump urging a rethink.

“We encourage you to work aggressively to secure reforms that would allow the United States to join the agreement,” they wrote in a letter cited by the newspaper.

“Increased economic engagement with the 11 nations currently in TPP has the potential to substantially improve the competitiveness of US businesses, support millions of US jobs, increase US exports, increase wages, fully unleash America’s energy potential, and benefit consumers.”

Mr. Trump has not ruled out a U-turn, despite referring to the TPP as “a disaster” during his election campaign, believing the accord would punish US workers by allowing companies to hire cheaper labor abroad.

In an address to the World Economic Forum in Davos last month he said the US would consider negotiating with the TPP bloc but “only if is in the interests of all.”

His predecessor Barack Obama believed the deal would set a higher standard for trade, including on health and the environment, and eventually entice China to play by the same rules. — AFP

Secret Pence-N. Korea meeting planned, then scrapped by Pyongyang

WASHINGTON — Mike Pence and North Korean officials had planned to meet secretly during the 2018 Winter Olympic Games, but Pyongyang scrapped the talks after the US vice-president denounced abuses from the “murderous regime,” US officials said Tuesday.

Mr. Pence did not interact with the North Koreans even though he was seated in the same box as them at the opening ceremony of the Games on Feb. 9 — nor did he shake hands with the North’s ceremonial head of state Kim Yong Nam during an earlier leaders’ reception.

The North Koreans, who had sent Kim Yong Nam and leader Kim Jong Un’s sister Kim Yo Jong to the Games, backed out of the planned meeting after Mr. Pence announced Washington would soon unveil its “toughest and most aggressive sanctions” against Pyongyang.

During his Asian tour, he also denounced the North’s nuclear drive and sought to shore up ties with regional allies — and longtime North Korean foes — Japan and South Korea.

Mr. Pence, who led the American delegation to the Games, said at the time he traveled with the father of late former prisoner Otto Warmbier to the South to “remind the world of the atrocities happening in North Korea.”

“North Korea would have strongly preferred the vice-president not use the world stage to call attention to those absolute facts or to display our strong alliance with those committed to the maximum pressure campaign,” Mr. Pence’s spokesman Nick Ayers said.

State Department spokeswoman Heather Nauert said only a “brief meeting” with leaders of the North Korean delegation had been on the table.

“The vice-president was ready to take this opportunity to drive home the necessity of North Korea abandoning its illicit ballistic missile and nuclear programs,” Ms. Nauert said in a statement.

“At the last minute, DPRK (Democratic People’s Republic of Korea) officials decided not to go forward with the meeting. We regret their failure to seize this opportunity.”

‘MURDEROUS REGIME’
Mr. Ayers characterized the offer as the North having “dangled a meeting in hopes of the vice-president softening his message, which would have ceded the world stage for their propaganda during the Olympics.”

“As we’ve said from day one about the trip: this administration will stand in the way of Kim’s desire to whitewash their murderous regime with nice photo ops at the Olympics,” Mr. Ayers said.

“Perhaps that’s why they walked away from a meeting or perhaps they were never sincere about sitting down.”

Analysts say the North’s Olympic diplomatic drive sought to loosen international sanctions against it and undermine the alliance between Seoul and Washington.

Even as the US warned against falling for Pyongyang’s Olympic charm offensive, North Korean leader Kim Jong Un issued an invitation via his sister Kim Yo Jong, who was attending the Games, for a summit with South Korean President Moon Jae-in.

But on his return trip from the Games, Mr. Pence said there was “no daylight” between the US, South Korea and Japan on efforts to isolate Pyongyang economically and diplomatically until it abandons its nuclear and ballistic missile program.

Washington calls it a campaign of “maximum pressure.”

Mintaro Oba, a former State Department diplomat specializing in the Koreas, tweeted that “it’s entirely possible that North Korea scheduled the reported secret meeting with VP Pence fully intending to cancel so that they could play the blame game.”

“Sudden cancellations/withdrawals are a well-established part of the North Korean playbook,” added Mr. Oba, now a speechwriter in Washington.

DENUCLEARIZATION FIRST
Global alarm at the rapid advance of nuclear-armed North Korea’s weapons technology rose further last year when the regime tested its Hwasong-15 ballistic missile — theoretically capable of hitting the mainland US — in a challenge to Washington, which has threatened to “utterly destroy” the regime in the event of an attack.

President Donald J. Trump and the North’s leader Kim Jong Un have engaged in a series of personal insults.

But as tensions rose between the North and Washington, the Games triggered a rapid reconciliation between the two Koreas, who are still technically at war.

“The president made a decision that if they wanted to talk, we would deliver our uncompromising message. If they asked for a meeting, we would meet,” Mr. Ayers said, referring to Trump.

“He also made clear that until they agreed to complete denuclearization we weren’t going to change any of our positions or negotiate.”

Woodrow Wilson Center vice-president Aaron David Miller, a former advisor to Republican and Democratic diplomatic chiefs, highlighted the Trump administration’s conflicting messages on whether to talk or not with the North Koreans.

“Has the locked and loaded fire and fury Trump administration come to conclusion that it’s time to stop talking about North Korea and to start talking to them?” he asked. — AFP

Raul Castro receives US lawmakers on visit to Cuba

HAVANA — Cuban President Raul Castro Tuesday received a bipartisan delegation of US lawmakers Tuesday, who are visiting the island with the alleged “acoustic attacks” against US diplomats on their agenda.

“During the meeting they discussed matters of interest to both countries,” the Cuban government said in a statement.

The delegation, led by Democratic Senator Patrick Leahy of Vermont, arrived in Cuba Sunday to address various issues including the mysterious supposed attacks in Havana.

The issue has hit US-Cuba relations, with Washington withdrawing half of its diplomats from Cuba and expelling 15 officials from the Cuban embassy in the US capital.

The Cuban foreign ministry’s US director, Carlos Fernandez de Cossio, met with the congressmen Monday assuring them that “no evidence that attacks occurred against US diplomats in Cuba exists,” according to his deputy Johana Tablada.

Accompanying Mr. Leahy on the visit are senators Ron Wyden of Oregon and Michigan’s Gary Peters, along with representatives Kathy Castor of Florida, Jim McGovern of Massachusetts and Susan Davis of California.

Mr. Leahy has been one of the most active politicians inside the Capitol in advocating the improvement of US-Cuba relations, which defrosted somewhat in 2014 under Barack Obama after half a century of tension.

The US delegation will end its stay in Cuba on Wednesday with a press conference.

At least 24 Americans, a mix of US embassy personnel and their dependents — suffered headaches, hearing loss, disorientation and some loss of cognitive ability between November 2016 and August 2017.

Some recovered from the most acute symptoms, but the severity, range and recovery time was mixed and it’s not yet clear whether any have suffered permanent injury.

US press reports suggest that FBI agents dispatched to Havana have been unable to find any evidence to support a theory that the staff were attacked with an acoustic or sonic weapon. — AFP

Trolls and mercenaries: How ‘Putin’s Cook’ fed US appetite for disinformation

MOSCOW — In November 2013, three Russian political operatives flew from Moscow to New York. Over the next few days, the men toured Manhattan, took side trips to Washington and Detroit, drank vodka at a Brighton Beach restaurant, and had a guitar sing-along with Russian emigres.

It was a whirlwind, but they had no time to waste. Their boss was Yevgeny Prigozhin. A lieutenant of President Vladimir Putin, he had ordered up a film depicting an impoverished and crime-ridden America. “We went to meet Russians who live in New York and find out what makes life painful there,” said Oleg Matveychev, a member of the group.

Mr. Prigozhin and three of his companies were named in the indictment announced last week in Washington by Special Counsel Robert Mueller. The prosecutors said he was one of 13 Russian citizens who defrauded the US government in a multimillion-dollar conspiracy aimed at criticizing Hillary R. Clinton and supporting Donald J. Trump and Senator Bernie Sanders.

The 37-page indictment describes how hundreds of Russians used social media, fake rallies, and secretive operatives in the US to create “political intensity” among radical groups, opposition social movements, and disaffected voters. In 2014, the indictment says, several Russians traveled to the US under false pretenses “to collect intelligence for their interference operations.”

The 2013 journey, first reported by the Moscow newspaper Novaya Gazeta and confirmed by Bloomberg, shows that those efforts were preceded by at least one other project. It also offers a glimpse of the multifaceted nature of a propaganda machine built by Mr. Prigozhin. Mr. Matveychev said the New York trip, aimed at shoring up domestic support for Mr. Putin, was initiated by Mr. Prigozhin with no Kremlin involvement.

Such an operation, though, would likely have been backed by Russian intelligence, according to John Sipher, a retired senior Central Intelligence Agency agent who oversaw operations in Russia. “They wouldn’t waste that opportunity,” Mr. Sipher said. “You don’t travel to the US like that without the support of the intelligence agencies.”

‘PUTIN’S COOK’
A short man with a stony stare, Mr. Prigozhin is known as “Putin’s Cook” because one of his companies, Concord Management, provides food services to the Kremlin. The Mueller indictment names that company’s parent, a related catering firm, and another Prigozhin group called the Internet Research Agency that ran a vast troll operation designed to sow discord in the 2016 US presidential election.

Mr. Prigozhin has known Mr. Putin since the 1990s, when both lived in St. Petersburg and Mr. Putin was the city’s deputy mayor. Mr. Prigozhin ran a network of hot dog stands, and then launched one of Russia’s first grocery chains, according to the Medusa Project Web site. In 1997 he opened a restaurant on a ship docked on the Neva River, which became the go-to spot for hosting dignitaries such as George W. Bush and Jacques Chirac.

These days, Mr. Prigozhin can be seen departing Mr. Putin’s residences in a black SUV with flashing lights, a perk reserved for top brass. He’s chummy with business leaders such as Gazprom Chief Executive Officer Alexey Miller, who once was seen dashing through a Kremlin corridor to hug Mr. Prigozhin. He guards his privacy fiercely. At an event with Mr. Putin, a reporter spotted Mr. Prigozhin and called out to him by name. “Who are you?” the man replied. “You must be addressing the wrong person.”

The “Cook’s” reach extends beyond the Kremlin’s kitchens and internet trolling. According to three people familiar with the matter, Mr. Prigozhin controls a shadowy private military contractor called Wagner that maintains a training camp at a commando base in southern Russia and deploys mercenaries to eastern Ukraine and Syria. In 2016, Mr. Prigozhin was sanctioned by the US Treasury, which said he has “extensive business dealings” with the Russian Defense Ministry.

“Prigozhin is one of those people who managed to convert his personal relationship with Putin into economic and political influence,” said Valery Solovei, a researcher at the Moscow State Institute for International Relations. “Putin needs people to deal with delicate issues, and Prigozhin could deliver trolls, mercenaries, and all kind of services.”

Mr. Prigozhin has denied wrongdoing and any links to the Wagner mercenary operation. “Americans are very impressionable people,” he told news agency RIA Novosti in response to queries about the Mueller indictment. “If they want to see the devil, let them see it.” Mr. Prigozhin did not respond to e-mails seeking comment.

Around 2011, Mr. Prigozhin set up a web trolling effort with Mr. Putin’s approval, according to a former Kremlin official. Mr. Prigozhin was the wizard behind the curtain, shaping the narrative as internet use surged and state media’s influence began to wane. His machine was key in helping quell antigovernment street protests after contested Parliamentary elections in 2012, which paved the way to an extended term for Mr. Putin.

DIRT DIGGING
“He reads newspapers every morning, Web sites, watches TV,” said Mr. Matveychev, who was part of the 2013 New York trip. “Then he gives his assignments: ‘Look what happened in Syria. Write comments saying everything in Syria is OK.’”

The trip to the US was aimed at kicking off a series of anti-American films, according to Mr. Matveychev. They shot footage across Manhattan, looking for “disadvantaged areas,” homeless people, and what Mr. Matveychev called “dirt” that would cast America in a bad light. According to Novaya Gazeta, the team purchased US SIM cards for their phones rather than using Russian numbers, and Concord employees back home were instructed not to directly contact the men while they were abroad.

Mr. Matveychev characterizes the American adventure as a one-time assignment that fizzled out when Mr. Prigozhin lost interest. The footage was ultimately used in a 16-minute documentary that has garnered about 35,000 views since Mr. Matveychev posted it on YouTube in 2015. He’s working on similar projects to promote Mr. Putin’s campaign for next month’s presidential election, both at the Kremlin’s behest and on his own initiative.

“Do you think I get money from the Kremlin for creating propaganda every day from dusk till dawn?” Mr. Matveychev said of the popular blog he has published since 2010. “I am an officer of the information war.” — Bloomberg

The benefits of a cashless world

Money as a concept is almost as old as human civilization. Out of all the items commonly found in any individual’s pocket, cash is easily the one thing that has been in use for thousands of years. For good reason: money is portable, easily transferable, and it does its job of acting as storage of value quite well.

But times are changing. The Bangko Sentral ng Pilipinas (BSP) recently signed a memorandum of agreement with the Philippine Payments Management, Inc. with the aim of establishing the required infrastructure for a new retail payment system that would promote the use of cashless transactions in the country.

The new national retail payment system framework could see financial transactions in the Philippines transition from cash and check-based payments to electronic fund transfers and e-wallet disbursements. Another goal is the broadening of financial inclusion through the coverage of more unbanked and underserved areas through alternative and cheaper avenues for settlements. Cash, it seems, is due for an update.

Cashless and electronic transactions, which are increasingly becoming the norm in the Western world, present a massive opportunity for the continued growth of the Philippine economy. Mainly, these opportunities lie in the reduction of costs and the improvement of security of the exchange of goods and services.

But as of the most recent estimates by the BSP, the volume and value of electronic payments in the country make up a ‘negligible’ one percent of all financial transfers. The BSP hopes to raise that number to as much as 20% by 2020 through the new system.

According to a 2017 study published by Visa titled “Cashless Cities: Realizing the Benefits of Digital Payments”, Manila could stand to gain as much as $8.6 billion through the adoption of a cashless payment system.

The report, which analyzes the use, acceptance and cost-benefit impact of physical versus digital money in 100 cities all over the world, estimated that increasing digital payments across the 100 cities could result in total direct net benefits of US$470 billion per year.

“Consumers across the 100 cities currently spend an average of 32 hours a year — nearly a full work week — on cash-related payment activities,” Visa wrote in the report.

“Greater adoption of digital payments is estimated to reduce this figure to 24 hours a year, saving consumers in the 100 cities an average of over $126 million per year. When other benefits of digital payments are taken into account, such as reduction in cash-related crime, these savings could increase to $278 million per city, equivalent to about $67 per adult per year.”

For Manila, these benefits translate into a further $2.5 billion in business revenues, $11.6 billion in savings due to less paper processes, and about $100 million in time saved for consumers.

“From handling invoices and receipts to counting and transporting cash, businesses spend a huge amount of time processing paper. Digital payments, such as contactless cards and e-documents, create significant savings by handling these tasks in far less time,” Visa wrote.

The government could also potentially gain an additional $300 million in increased revenues due to higher sales, as well as $900 million in savings due to cheaper digital payment systems.

Visa has previously revealed its interest in increasing its presence in the Philippines by offering new and more affordable means of cashless transactions tailored towards the country’s unbanked sectors.

“We think electronic payments is good for the economy. It’s good for people. If you bring it down for the people, it’s great because it’s convenient, it’s more secure and it’s a great way to manage your budget,” Visa Country Manager for the Philippines and Guam Stuart Tomlinson had told BusinessWorld. 

He noted that for this to happen, however, there needs to be a change in the perception of the mass market towards electronic payments and the financial technology industry.

“If we think about a country like the Philippines, we’ve got hundreds and millions of small businesses… so we’re sort of developing innovative ways to try and make cost of acceptance much lower for both the bank and the merchant. So basically, on our innovation front, we’re turning the cellphone into an acceptance device,” he said.

“When you get down to that sort of mass market, they want ease and convenience so we try to build innovative use cases around using the mobile phone for electronic payments… We’re working on this with the central bank, we’re working on this with our clients — which are the banks and the telcos — tempering new and innovative technologies to make them cheaper, easier and more convenient for the consumer, for the infra[structure] plans, which are the banks, and for us, Visa, because we’re the network so we can help sort of promote the thinking, innovation and technology,” Mr. Tomlinson said. — Bjorn Biel M. Beltran