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Robinsons Land to develop more IT parks

ROBINSONS LAND Corp. (RLC) is aiming to develop up to two information technology (IT) parks within the next two to three years, a top official said.

“We hope to put up one or two more within the next two, three years,” RLC General Manager for the Office Buildings Division Faraday D. Go told reporters after the topping off ceremony for one of the company’s office buildings in Quezon City last week.

The Gokongwei-led firm currently has three IT parks, namely Bridgetown in Quezon City, Robinsons CyberGate in Mandaluyong, and Robinsons CyberGate in Davao. Office buildings in these IT parks typically host business process outsourcing (BPO) firms.

“It speeds up the PEZA process,” Mr. Go said, referring to the accreditation from the Philippine Economic Zone Authority (PEZA) that grants tax perks to locators. Other fiscal incentives include income tax holiday, tax and duty-free importation of raw materials, capital equipment, machineries and spare parts, among others.

Aside from office buildings, RLC’s IT parks also have residential, retail, and hospitality components. The 30-hectare Bridgetown, for instance, will have a Robinsons Mall and a hotel in the next 15 to 20 years of the estate’s development.

This year, the company is ramping up its office space portfolio with the opening of three buildings, aiming to end the year with 20 office buildings. With a gross leasable area of around 113,000 square meters (sq.m.), this will bring RLC’s inventory to 518,000 sq.m. by the end of the year, 28% higher than its 2017 figure of 405,000 sq.m.

RLC is banking on the BPO sector to continue driving demand in the coming years.

In its 2018 property forecast, real estate consulting services firm Colliers Philippines said BPO firms are expected to take up at least 450,000 sq.m. of office space in 2018. This is half of the 900,000-sq.m. office space inventory expected to be added to the Metro Manila stock for the year.

The office segment contributed P2.14 billion to RLC’s total revenues for the first three quarters of 2017, or a share of 14%.

RLC posted a net income attributable to the parent of P4.57 billion in the first nine months of 2017, slightly higher than the P4.5 billion it generated in the same period in 2016, amid a 2% dip in revenues to P16.6 billion during the period. — Arra B. Francia

Rates of 20-year bonds to go up

TREASURY BONDS (T-bonds) on offer tomorrow are seen to fetch higher yields to track the rates of US Treasuries and after the Bangko Sentral ng Pilipinas (BSP) adjusted its inflation forecast.

The Bureau of the Treasury (BTr) plans to raise as much as P20 billion at Tuesday’s auction of fresh 20-year T-bonds set to mature on Feb. 22, 2038.

A bond trader said in a phone interview that banks will likely request for higher returns from the government amid higher US Treasury rates.

“I expect yields to go higher because US Treasuries moved higher as well. It will be 20 basis points higher, 6.6-6.8%,” the trader said.

During Friday’s morning session, US benchmark 10-year Treasury notes jumped to 2.884% from 2.8804% following upbeat US housing and import prices data.

Housing starts, or new homes to be constructed, rose by 9.7% to a seasonally adjusted annual rate of 1.326 million units last month. The January figure was the highest level since October 2016.

US import prices also grew 1% in January, boosting expectations of a rate hike from the Federal Reserve.

Meanwhile, another trader said through text message: “I’m hearing from 6.5-6.75% range. I doubt BTr will issue at those levels. They will look desperate if they do,” adding that the Treasury may consider awarding at a coupon rate of 6.25% should there be enough volume.

At the secondary market on Friday, the 20-year Treasury bonds fetched a rate of 6.4568%.

Meanwhile, at the government’s last auction of 20-year papers last July 25, 2017, it rejected all bids for the reissued bonds with a remaining life of 19 years and 10 months.

Had the government accepted the bids at that auction, it would have accepted an average rate of 5.244%, 20.9 basis points higher from the 5.0356% rate seen in the previous auction. The T-bonds on offer then were also undersubscribed, attracting only P11.202 billion in tenders versus the government’s P15-billion offer.

On the demand side, the trader expects that there will be less demand for the T-bonds auction tomorrow after the BSP revised its inflation forecast for the next two years.

“I guess there’s not much demand for long-end bonds [at the moment, especially] with the recent re-evaluation of inflation expectations,” the trader added.

The Bangko Sentral ng Pilipinas raised its inflation outlook for 2018 to 4.3% from 3.4% — above the 2-4% target. It likewise hiked the 2019 forecast to 3.5% from 3.2%.

The trader said the revised inflation outlook “points to possible more rate hikes than initially thought.”

The Treasury said it plans to auction off P120 billion worth of Treasury bills and another P120 billion worth of Treasury bonds in the January to March period.

The total amount the government intends to borrow from the local market is higher than the P200 billion it offered in the last quarter of 2017.

The government borrows from local and foreign sources to fund its budget deficit, which for this year is capped at 3% of the country’s gross domestic product.

The government targets a P888.23 billion gross borrowing plan this year. — K.A.N. Vidal

SMPF to open Laguna facility in 2019

SAN MIGUEL Pure Foods Company, Inc. (SMPF) is on track to complete a new manufacturing facility that will produce ready-to-eat products in Laguna by the first quarter of 2019.

In a statement issued over the weekend, SMPF said the Sta. Rosa, Laguna facility will produce products that  address the demand for convenience as well as capture a larger chunk of the consumer market.

“Once operational, it will produce fully cooked viands and heat-and-serve meals that will serve growing consumer demand for convenient, nutritious meals differentiated by home-cooked taste, rich quality, and the highest levels of food safety,” the company said.

The new facility also looks to serve the operational needs of food service clients, alongside the export of products that will be ready for consumption.

SMPF has already secured incentives from the Board of Investments for the 20,000-square meter facility. The company will be employing local businesses, farmers, and animal growers, in line with the Department of Trade and Industry’s inclusive business program, that will create an integrated supply chain.

Last year, the company said it is setting aside P56 billion in capital expenditures over the next three years for the construction of six feed mills, grain terminals, poultry processing plants, processed meat plant, and chicken processing facilities, among others.

The company is merging with beverage businesses of its parent, San Miguel Corp. (SMC).

In November 2017, SMC announced it will consolidate its traditional businesses under one unit through a P336.35-billion share swap deal. The resulting entity would be called San Miguel Food and Beverage, Inc. (SMFBI), which will then have a market capitalization of $12 billion.

The company was able to secure shareholder approval for the merger in January.

SMFBI is slated to conduct a $1.5-billion follow-on offering later this year in order to increase its public float to the minimum requirement of 15%. After the merger of SMPF with San Miguel Brewery, Inc. and Ginebra San Miguel, Inc., SMFBI will have a public float of only 4.3%, the company said. 

SMC 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, despite a 19% uptick in revenues to P596.9 billion.

On the other hand, SMPF’s attributable profit rose 25% to P4.5 billion in the first three quarters of 2017, after a 4% increase in revenues to P84.5 billion for the period. — Arra B. Francia

Yields on gov’t debt climb on US Treasuries, Fed bets

YIELDS on government securities (GS) climbed last week to track movements in US Treasuries, as well as increased expectations of a Federal Reserve rate hike due to the upbeat US January inflation print.

On average, GS yields — which move opposite to prices — were up by 13.76 basis points (bps) week on week, data from the Philippine Dealing & Exchange Corp. as of Feb. 15 showed.

“GS yields rose [last] week still because of US rate hike expectations, which were further bolstered by January’s better-than-expected US inflation report,” Land Bank of the Philippines (Landbank) market economist Guian Angelo S. Dumalagan said via e-mail.

Security Bank Corp. Head of Institutional Sales Carlyn Therese X. Dulay shared the same sentiment, saying “global yields continued to head north on better US CPI (Consumer Price Index) [last] week,” while on the local front, Ms. Dulay said “yields caught up on fair pricing due to the unexpected January CPI print at 4%.”

Late last week, the US Bureau of Labor Statistics (BLS) reported that CPI came in at 0.5% in January, higher than market expectations.

Meanwhile, a local bond trader interviewed last Thursday said “bonds tracked the move of US Treasuries with global interest rates rising on inflation concerns.”

“Higher [US Treasury bonds] also put market participants on the defensive though bids may firm up [this] week after the surprise Reserve Requirement Cut on Thursday,” Ms. Dulay said.

The Bangko Sentral ng Pilipinas (BSP) on Thursday announced an “operational” adjustment in the reserve requirement ratio, which was reduced by one percentage point. This, according to BSP, will support the central bank’s shift toward a more market-based implementation of monetary policy as well as its broad financial market reform agenda.

At the secondary market on Thursday, in the short end of the curve, the yield on the 91-day Treasury bills (T-bills) increased by 7.42 bps to 2.7847%. The 182- and 364-day T-bills also increased by 13.57 bps and 35.31 bps to yield 3.0068% and 3.2796%, respectively.

In the belly, the yield on the seven-year Treasury bonds (T-bonds) increased the most, rising 27.67 bps to 6.4571%. Meanwhile, the rates of the two- and five-year T-bonds increased by 19.57 bps (4.1109%) and 5.70 bps (4.9763%), respectively. On the other hand, the three- and four-year debt papers saw their yields decline by 9.06% (4.2793%) and 25.75 bps (4.7489%), respectively.

In the long end, the 10-, and 20-year bonds saw their rates increase by 17.57 bps and 45.55 bps to 6.7089% and 6.4568%, respectively.

For this week, Landbank’s Mr. Dumalagan said: “There might be sideways movement in yields next week due likely mixed US economic reports and amid scarcity of economic data releases in the Philippines and in other countries outside of the US.”

“Producer prices in the US are expected to rise at a faster pace, tracking [last] week’s strong headline inflation data and lending support to views of another US interest rate hike in March 2018. The rise in yields, however, might be tempered by likely softer US reports on manufacturing, services, and housing,” Mr. Dumalagan added.

For her part, Security Bank’s Ms. Dulay, said: “Expect yields to continue to range as UST (US Treasury) levels remain choppy and ahead of the 20-year auction scheduled [this] week.”

The Bureau of the Treasury plans to raise as much as P20 billion at Tuesday’s auction of fresh 20-year T-bonds. — Ranier Olson R. Reusora

At new BGC office, PSE to finally open unified trading floor

By Arra B. Francia, Reporter

THE Philippine Stock Exchange, Inc. (PSE) will finally have a unified trading floor today, as it moves its operations to Bonifacio Global City, Taguig.

The PSE’s new office building, called One Bonifacio High Street, stands 26-storeys high with a gross leasable area of 30,000 square meters. The tower forms part of the Ayala Land Premier’s mixed-use estate along 5th Avenue corner 28th Street.

Plans to transfer to BGC to establish a single headquarters for the PSE started back in 2012, when the exchange inked a deal with Ayala Land, Inc. for the purchase of new office spaces in the rising financial district.

“As we move to our new office at the Bonifacio Global City, we shall embark on recording new history for the stock market and for our country,” PSE Chairman Jose T. Pardo said during the last closing bell at the Ayala Tower One trading floor.

Prior to moving to One Bonifacio High Street, the PSE had two separate trading floors located in the PSE Tektite Building in Ortigas Center, and Ayala Tower One in Makati City. 

The PSE Tektite Building was occupied by traders of what was formerly the Manila Stock Exchange. Founded in 1927, the first equities market in the country originally held office in Insular Life Building on Plaza Cervantes, Binondo, Manila. 

On the other hand, traders at the PSE Ayala were from the Makati Stock Exchange, which was established much later in 1963. These traders conducted their business at the Insular Life Building in Makati, before moving to the Ayala Tower in 1971.

While both exchanges traded the same stocks of the same companies, there were discrepancies in their prices, prompting then President Fidel V. Ramos to intervene and launch efforts to unite the two exchanges. 

With this, the PSE was established on July 14, 1992. Five months later on Dec. 23, the Manila and Makati Stock Exchanges were merged as one. It is only today, however, that the two trading floors would be physically united under one roof.

“A united exchange has always been a goal and finally we have achieved it. Hopefully it will be more cost efficient,” Regina Capital Development Corp. President Marita Limlingan said.

Ms. Limlingan, however, noted that the two exchanges were already unified prior to the transfer through technology.

“Unification to me is more symbolic because are actually united through technology,” she said.

In preparation for the transfer of its offices to BGC, the PSE last week held the final ceremonial ringing of the closing bell at the Tektite and Ayala towers. The Ortigas offices were sold back to its developer, Philippine Realty and Holdings, Corp., while the PSE has yet to decide what to do with the Ayala offices.

“The move is symbolic of a move towards a united capital market. After the unification of the trading floors, the next step would be for PSE to complete its acquisition of the PDS group which would result in a one-stop market for various financial assets,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said. 

Aside from transferring to a new headquarters, the PSE is also working on its merger with the Philippine Dealing Systems Holding Corp. The move is seen to further strengthen the country’s capital markets as it achieves synergies in operations.

NLEX clinches QF berth in win over Blackwater

THE NLEX Road Warriors are now through to the quarterfinals of the ongoing PBA Philippine Cup after defeating the Blackwater Elite, 93-90, in a key ball game yesterday at the Philippine Arena in Bulacan.

Led by guard Kevin Alas’ solid game and explosion in the fourth period, the Road Warriors edged the Elite and won their fourth straight game to secure a spot in the next round of the season-opening Philippine Basketball Association (PBA) tournament while dealing Blackwater’s playoff push a huge blow.

The key match got off to a competitive start with the two teams angling to establish early control.

NLEX would hold a 23-20 lead at the end of the first canto but Mac Belo and the rest of the Elite found their groove to take the driver’s seat by the halftime break, 46-41.

In the third quarter, the squads jostled to kick off things, fighting to a 49-all standoff with three minutes into the frame.

Blackwater would outscore NLEX, 12-7, in the next four minutes to gain some distance, 61-56.

NLEX tried to inch its way back but the Elite stood their ground and continued to hold sway, 74-65, by the end of the first 36 minutes of the match.

Mr. Alas and Kiefer Ravena combined for nine quick points to open things for the Road Warriors in the payoff quarter and tied the count at 74-all with 10:37 to go.

The Elite answered with four straight points to extend their lead anew but Mr. Alas connected on back-to-back triples and a deuce to help the Road Warriors to an 82-78 advantage with less than nine minutes remaining on the clock.

With momentum on their side, the Elite built on the swing, taking an 86-81 cushion with 5:48 left.

Allein Maliksi kept Blackwater within striking distance, down by just two points, 88-86, at the 2:47 mark of the game.

NLEX big man Rabeh Al-Hussaini then tallied four straight points to hand his team a six-point lead, 92-86, inside the last two minutes.

A three-pointer by Michael DiGregrorio with 1:07 left on the clock pushed Blackwater within three points, 92-89.

The Elite were in a position to tie the contest with seven seconds remaining and NLEX just ahead by three points but the three-point heave of Mr. Belo as time wound up failed to hit the mark, handing the win to the Road Warriors.

Mr. Alas had all-around numbers of 25 points, eight rebounds and five assists with Mr. Ravena adding 23 points for NLEX, now at joint fourth place with a 6-4 record with one game left in its schedule in the classification phase.

Blackwater, meanwhile, was led by Mr. DiGregorio’s 16 points. The Elite (4-6) now must win their last game to at least have a shot at making into the quarterfinals.

“Based on our calculations, six wins are enough to book a playoff spot. But there are still a lot of games to be played and we’ll just try to avoid the seventh or eighth spot. Five or six is fine with us. We just want to compete on even terms in the next round,” said winning coach Yeng Guiao, referring to the format in the quarterfinals where the middle teams battle in a best-of-three series as opposed to having a twice-to-win disadvantage against the top two teams if one ends up at seventh or eighth place at the end of the eliminations.

NLEX plays next on Feb. 28 against the TNT KaTropa while Blackwater returns to the court on Wednesday against the Phoenix Fuel Masters. — Michael Angelo S. Murillo

Arellano Lady Chiefs go for title-clincher today

By Michael Angelo S. Murillo
Senior Reporter

HOLDING a one-game lead, the defending National Collegiate Athletic Association (NCAA) women’s volleyball champions Arellano Lady Chiefs go for the clincher today in Game Two of their best-of-three finals with the San Beda Lady Red Spikers.

Still to be played at the FilOil Flying V Centre in San Juan City, the Lady Chiefs try to build on their 25-15, 25-16, 15-25, 22-25 and 15-6 victory in the series opener to be crowned NCAA champions anew.

Arellano was seemingly on its way to an easy victory in Game One before San Beda, making its first appearance in the finals, made a game out of it, winning sets three and four to force a deciding fifth set.

It would regain its footing in the fifth set, however, racking up nine straight points to break a 6-all count en route to winning the opener and moving one win away from a repeat.

Regine Arocha led the Arellano attack with 14 points, 10 off spikes, while Jovelyn Prado had 13 points.

Andrea Marzan finished with 11 and Necole Ebuen and Mary Anne Esguerra adding 10 points apiece for the Lady Chiefs.

Cesca Racraquin, meanwhile, top-scored for San Beda with 21 points followed by Maria Nieza Viray with 14 markers

Trisha Paras also was in double-digits with 11 for the Lady Red Spikers, who are now out to win today’s game and extend what has been a groundbreaking season for them.

“San Beda made a game out of it but our players showed they have the heart of a champion, which as a coach I really am looking for. Hopefully we get to sustain it in the next game,” said Arellano coach Obet Javier after their Game One victory.

Game Two of the finals between Arellano and San Beda is set for 4 p.m. It will be broadcast live over ABS-CBN S+A.

Thailand held up as model for domestic-focused agriculture

THAILAND has been held up as a model for the government’s new domestic-demand focus for agriculture, with its competitive tourist industry helping boost local consumption and lessening dependence on exports, where prices are volatile and delivery requirements are demanding, the head of a university agriculture department said.

University of Asia and the Pacific Center for Food and Agribusiness Executive Director Rolando T. Dy told BusinessWorld in a text message on Friday that the Philippines has to tackle a number of other issues to develop the agriculture sector, among them a mismatch between export policy and the needs of a domestic market.

“The basic problem is [the] supply of competitive raw materials and cost of doing business. Our agriculture is not only less productive, it is also less diversified compared to Thailand, Indonesia and Vietnam,” he added.

While the departments of Trade and Industry and Agriculture have targeted the development of high-value crops, data from the Philippine Statistics Authority showed that the top agricultural export is still coconut oil, which is derived from a low-value crop.

The road map for agribusiness covers the development of bananas, cacao, carrageenan, coconut, coffee, mangoes, palm oil, rubber, and other processed goods such as fruits, meat and shrimp.

The second phase of the road map, which covers 2018 to 2021, is seeking to strengthen the supply chain, commodity clusters and the link between production and manufacturing.

By 2025, the government is expecting to deepen the country’s participation in the global value chain.

Despite enjoying tariff perks for selected fruit exports bound for the European Union and other countries expressing interest in sourcing agricultural products, the Philippines itself needs to import items like palm oil and large garlic bulbs to satisfy domestic demand.

Mr. Dy said that the strategy the government must ensure that “domestic production should be cost, quality and scale competitive” in order to succeed in substitution for imports.

“Coffee and cacao have import-substitution and export markets. The country imports coffee and cacao paste. But we export quality artisan chocolates from Davao. We can export barako coffee but the country is short [on] supply,” he added.

On Feb. 14, Agriculture Undersecretary for policy and planning Segfredo R. Serrano said that the department has been given a directive to focus more on local demand instead of exports as the country continues to achieve food security.

Mr. Serrano also pointed to Thailand as an example to follow, because tourists consume much of its agricultural output.

“The Thais have been doing that for a long time. They’re set on that because they know that the export market is very volatile,” he added.

“If the product that you export is fresh produce, then it’s [more] volatile.” — Anna Gabriela A. Mogato

UFC Fight Night 126 has headliners Donald ‘Cowboy’ Cerrone and Yancy Medeiros

“FIGHT Night 126” takes center stage today in the Ultimate Fighting Championship (UFC) which will feature the headlining fight between welterweights Donald “Cowboy” Cerrone and Yancy Medeiros.

Happening at the Frank Erwin Center in Austin, Texas, the event also has as co-main event heavyweight Derrick “The Black Beast” Lewis (#7) versus Marcin “Tybur” Tybura (#9).

Number 11 welterweight contender Cerrone enters the bout out to overturn a three-fight losing streak, all coming in last year.

His last victory came in December 2016 over Matt Brown where he won by knockout (head kick) in the third round.

Mr. Cerrone (32-10) said he is in an “unfamiliar territory” by having lost three straight but he remains undeterred by it and is determined to bounce back come fight night. On the other end, Mr. Medeiros (15-4-1) is currently on a roll, having won three straight contests all by stoppage.

His last victory came last December over Alex Oliveira by way of technical knockout (punches) in the third round.

Prior to that, he defeated Erick Silva by TKO (punches) in the second round and Sean Spencer by submission (rear-naked choke) also in the second round.

Other scheduled fights in the main card of UFC Fight Night 126: Cowboy vs. Medeiros are lightweight James “The Texecutioner” Vick (#12) versus Francisco “Massaranduba” Trinaldo (#14), welterweight Thiago “Pitbull” Alves against Curtis “Curtious” Millender, featherweight Steven “Ocho” Peterson vs. Brandon “Killer B” Davis, and lightweight Sage “Super” Northcutt against Thibault “GT” Gouti.

UFC Fight Night 126: Cowboy vs. Medeiros will be shown live today, beginning at 10 a.m. over Hyper Ch. 91 in SD or 261 in HD on Cignal TV. Encore telecast is at 6 p.m. on the same day.

In the Philippines, Cignal TV, the country’s foremost direct-to-home (DTH) company, is the home of the UFC after the two groups agreed to an extensive deal that will see the UFC beamed on various platforms. — Michael Angelo S. Murillo

NU outlasts DLSU in thriller between unbeaten teams

By Michael Angelo S. Murillo
Senior Reporter

THE National University (NU) Lady Bulldogs fortified their standing as bona fide title contenders in Season 80 of the University Athletic Association of the Philippines (UAAP) yesterday, outlasting defending champions De La Salle Lady Spikers in their battle of unbeaten teams in five sets, 26-24, 19-25, 22-25, 25-17 and 16-14, at a jam-packed FilOil Flying V Centre in San Juan City.

Pushed to the limit by La Salle, the Lady Bulldogs (4-0) stuck with their bite as the match progressed and just struck when needed in the end to stay unbeaten in women’s play of Season 80 while dealing the Lady Spikers (3-1) their first defeat.

Led by skipper Jaja Santiago, NU had it solid to start the game, taking the technical knockouts, 8-6 and 16-12, before holding their own to hack out a tight first-set win.

In the second frame, the Lady Bulldogs started strong anew only to see the tables turned on them down the stretch.

NU held a 16-15 lead by the second technical break but was outscored, 10-4, the rest of the way to see the count leveled at one set apiece.

The nip-and-tuck affair between the two teams spilled over into the third frame.

The Lady Bulldogs established a 16-13 advantage midway but the defending champs would creep their way back as their auxiliaries came in to give added energy.

When the battle smoke cleared, it was La Salle on top and holding a two sets to one lead.

Sensing that it had surrendered more than enough ground for comfort, NU played with more sense of urgency to start the fourth set.

It was once again first at the second technical knockout, 16-12, but unlike in the previous set the Lady Bulldogs would not relent in their charge to send the match to a deciding set.

Kim Keanna Dy and Majoy Baron led La Salle to an early 5-3 advantage in the fifth set, which the team used to build an 8-5 cushion halfway into the frame.

NU racked up two quick points to come within a point, 8-7, but a service error by setter Jasmine Nabor and a service ace by Michelle Cobb gave La Salle further breathing space, 10-7.

Two more points extended the Lady Spikers’ lead to 12-8.

The Lady Bulldogs tied the score at 12-all as they stepped up their defense.

Dy gave La Salle back the lead, 13-12, but Santiago and the rest of the Lady Bulldogs overtook them, 14-13.

The Lady Spikers pulled even at 14-all but Santiago (attack) and Aiko Urdas (service ace) conspired to score the next two points for NU and gave the Lady Bulldogs the win.

Santiago led the way for NU with 27 points, 20 off attacks, four from blocks and three service aces.

“Credit to the players. They practically willed themselves to the win. Our leaders (Nabor and Santiago) really stepped up and I commend them for showing the way. We’re just happy with this win,” NU coach Babes Castillo after the win.

NU collides with the University of Santo Tomas Golden Tigresses on Sunday, Feb. 25. while La Salle next plays on Wednesday against the University of the East Lady Warriors.

Deere raises sales forecast amid signs of farm recovery

DEERE & CO., the world’s largest farm machine maker, raised its full-year sales forecast, and there’s reason to believe that good news will keep coming.

After a prolonged slump for crop prices that slashed farmer income, fundamentals are starting to rebound, according to Farha Aslam, an analyst at Stephens, Inc. There’s a chorus echoing that view. Bunge Ltd. Chief Executive Officer Soren Schroder said this week that there are early signs of a recovery for the markets. An index measuring sentiment in rural agricultural communities rose to the highest since 2014 in February, while a Federal Reserve Bank of Kansas City report showed farmland prices are starting to stabilize.

Green shoots for the farm economy can only help Deere, which is already on an upswing as corporate farmers begin to replace older equipment. Cuts to inventory and output during the downturn are now adding to the company’s positive outlook as it produces more of its iconic green-and-yellow machines to meet demand.

A turnaround in the farm economy “would kick-start demand to an even greater extent,” said Matt Arnold, an analyst with Edward Jones & Co. in St. Louis. Sentiment in agriculture “can change on a dime. A weather event could prompt an upswing in grain prices and income, and it’s been a long time since we’ve seen one of those.”

Deere said Friday in a statement that equipment sales are projected to increase by about 29% in the financial year that lasts through October, and by as much as 40% in its fiscal second quarter.

It also said net revenues will increase by about 25% in fiscal 2018, up from a prior view of about 22%. It forecast full-year net income, excluding the impact of tax-related adjustments, of $2.85 billion. That exceeds the average estimate of 18 analysts surveyed by Bloomberg for $2.7 billion.

The company reported a surprise first-quarter loss of $535 million, which included the write-down of net deferred tax assets following US taxation reform.

“Although net income for the quarter and full year are being affected by the upfront costs of US tax reform legislation, we believe the changes will reduce the company’s overall tax rate and be beneficial in the future,” said Deere CEO Sam Allen said in the statement.

Outside of agriculture, Deere expanded its construction equipment unit last year with the acquisition of Wirtgen Group, a roadbuilding company, amid a global boom in building. Deere’s construction and forestry segment saw a 57% increase in sales in first quarter.

“The construction business is low-margin for Deere, so wasn’t meaningful to earnings in the past,” said Karen Ubelhart, an analyst for Bloomberg Intelligence. “But now it is,” given the Wirtgen acquisition.

Deere shares were 0.4% lower at $166.07 at 9:54 a.m. in New York.

Worldwide sales of agriculture equipment are forecast to increase by about 15% for the 2018 fiscal year. Industry-wide, agricultural equipment sales in the US and Canada will rise 10%, and gain about 5% in the European Union due to improving conditions in the dairy and livestock sectors. South American sales of tractors and combines across the industry will increase as much as 5%, driven by Argentina. Deere’s financial services arm is expected to bring in net income of $840 million for the year, of which $320 million is attributable to changes brought on by tax reform. — Bloomberg

Curtain falls on Filipino bets in Winter Games

THE Olympic Winter Games campaign of the Philippines finished at the weekend with the country bowing out sans a medal.

Figure skater Michael Martinez and Alpine skier Asa Miller competed in their respective events on Friday and yesterday but both fell short in their quest for gold.

Mr. Martinez, now a two-time Olympian, did not go past the preliminary round of the men’s single skating event held at the Gangneung Ice Arena, finishing at 28th place out of 30 competitors in the qualifying short program, four rungs outside of the top 24 who went on to the next round.

Competing in just two weeks’ notice after getting a late call-up for the PyeongChang Games, Mr. Martinez still delivered a solid performance, which merited 55.56 points.

It was, however, not enough to push him to the next round of men’s single skating, which was eventually won Japan’s Yuzuru Hanyu.

Finishing with silver was Shoma Uno of Japan with Spain’s Javier Fernandez bringing home bronze.

“It was still a good performance. I was able to do everything, you know, not the best, not the same as before,” Mr. Martinez was quoted as saying after the competition even as he underscored that a longer preparation would have made a difference for him.

Mr. Martinez, 21, got into the PyeongChang Games by way of a late call-up following the pullout of Sweden’s Alexander Majorov for the quadrennial games. His name was inserted in on the strength of finishing eighth in the final Olympic qualifier in September last year at the Nebelhorn Trophy Competition. The finish was just a spot away from advancing as the top seven in the tournament earned Olympic berths.

It remains to be seen if PyeongChang is the last Olympics for Mr. Martinez, who was reported to have contemplated retiring after missing the cut for the Games last year.

Mr. Martinez made history in 2014 in Sochi, Russia, by becoming the first skater from Southeast Asia to compete in the Winter Games.

ALPINE SKIING
In Alpine skiing, 17-year-old Miller completed his two runs without crashing to make it a good debut in the Winter Games.

Portland, Oregon, resident Miller, who traces his Filipino roots to Manila, finished his first and second run in the giant slalom event with a combined time of 2:49.95.

The finish placed him at 70th overall from a field of 110 competitors.

Filipino-American Miller struggled early in his first run, held at the Yongpyong Alpine Centre, to finish with a time of 1:27.52.

He improved on it in his second run, clocking in with a time 1:22.43.

Marcel Hirscher of Austria took the gold in the giant slalom with Henrik Kristoffersen of Norway coming in at second and Alexis Pinturault of France at third.

Competed in last year’s Junior World Championships in Sweden teen Miller used the Olympic Games to further carve his niche as an Alpine skier. — Michael Angelo S. Murillo

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