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Lower RRR to boost banks’ profit

peso remittance
PHILIPPINE STAR/KRIZ-JOHN ROSALES

By Melissa Luz T. Lopez, Senior Reporter
REDUCED reserve requirements will help boost incomes of Philippine banks, Fitch Ratings said, even as it flagged that sustained rapid credit growth could lead to bigger problem loans incurred by players.
Six of the country’s major banks rated by Fitch would enjoy a bigger bottom lines thanks to robust economic growth and from the recent cut in bank reserves announced by the Bangko Sentral ng Pilipinas (BSP) and would support “buoyant” lending activities.
“We expect GDP (gross domestic product) and credit growth to stay strong in the near term. Banking system leverage has been rising steadily but remains moderate overall, and a healthy economy will support debt-servicing capacity,” the debt watcher said in a report published yesterday.
Buoyant domestic activity is seen to support further growth for its rated lenders, namely BDO Unibank, Inc., the Bank of the Philippine Islands, Metropolitan Bank & Trust Co., China Banking Corp., the Philippine National Bank, and the Rizal Commercial Banking Corp.
Fitch expects GDP growth at 6.8% for both 2018 and 2019, keeping the Philippines as one of the fastest-growing economies in the region.
“Healthy GDP growth and rising corporate and household incomes will continue to support the debt-servicing capacity of borrowers. However, sustained rapid credit growth warrants close monitoring as it can disguise the buildup of asset-quality risks,” the credit rater said.
“Fitch believes the current rate of credit growth in the Philippines raises banking-sector credit risks which may only become apparent towards the end of the current upswing.”
Fitch pointed out that credit growth has averaged 17% from 2012-2017, roughly twice the pace of GDP growth. Credit analysts flagged that the banks’ high borrower concentration and accelerated credit growth “could render them vulnerable to an economic correction.”
Bank lending grew by 18.3% in March, marking the slowest pace in over a year but still clocking in at double digits, according to central bank data.
The reduction of the reserve requirement ratio imposed on big banks to 19% provides another impetus for increased bank lending, the debt watcher said, but will also lift overall yields “as the mandatory reserves do not earn interest.”
Banks could also see a bigger share of non-performing loans as they hand out more credits to the consumer and small business segments, although Fitch Ratings said these risks will remain “manageable” over the near term as the financial firms enjoy favorable operating conditions and as banks observe risk management protocols.

Mark Zuckerberg unveils plans for Facebook dating service

SAN JOSÉ, UNITED STATES — Facebook chief Mark Zuckerberg announced Tuesday the world’s largest social network will soon include a new dating feature — while vowing to make privacy protection its top priority in the wake of the Cambridge Analytica scandal.
Zuckerberg unveiled the plans as he addressed Facebook’s annual F8 developers conference in San Jose, California — emphasizing that the focus would be on helping people find long-term partners.
“This is going to be for building real, long-term relationships, not just hookups,” Zuckerberg said in presenting the new feature, noting that one in three marriages in the United States start online — and that some 200 million Facebook users identify as being single.
Under the new feature, users will be able to create a separate “dating” profile not visible to their network of friends, with potential matches recommended based on dating preferences, points in common and mutual acquaintances.
It will be free of charge, in line with Facebook’s core offering. The announcement sent shares in the online dating giant Match.com tumbling, finishing the formal trading day down 22%.
The 33-year-old CEO also said the dating offer was built from the ground up with privacy and safety in mind, as he underscored the firm’s commitment to boosting privacy protections.
Facebook’s closely watched developer conference comes as the giant faces intense global scrutiny over the mass harvesting of personal data by Cambridge Analytica, a British political consultancy that worked for Donald Trump’s 2016 election campaign.
Facebook has admitted up to 87 million users may have had their data hijacked in the scandal, which saw Zuckerberg grilled at length by the US Congress last month.
“We need to make sure that never happens again,” Zuckerberg told the audience, lightening the talk by sharing that friends made on online streaming video watch party at the social network of his hours testifying before Congress.
‘CLEAR HISTORY’
In a related move, Facebook announced an upcoming feature called “Clear History” that will allow users to see which apps and websites send the network information, delete the data from their account, and prevent Facebook from storing it.
The social network has already moved to limit the amount of data it shares with third-party applications and plans further steps to prevent a repeat of the Cambridge Analytica debacle, Zuckerberg said.
Facebook is also reviewing applications overall as well as auditing those that accessed large amounts of data to make sure access isn’t abused, he said.
“Security isn’t a problem than you ever fully solve,” Zuckerberg said, outlining the slew of efforts by Facebook to battle election interference, misinformation, spam among other challenges.
“This is an arms race; we are going to be working to stay ahead of our adversaries forever.”
Zuckerberg’s blend of humor, humility, confidence and determination in a keynote presentation seemed to resonate with the gathering of developers, who credited Facebook with taking responsibility for problems and working on fixing them.
“I respect that they came out with it and didn’t do a cover-up,” said Malik Gillins of Movez, a start-up behind an app crafted to streamline social event planning.
CCS Insight analyst Geoff Blaber was among analysts who felt Zuckerberg struck a successful balance between addressing the data privacy scandal and keeping outside developers focused on building apps to enhance the social network.
“Defiant message from Zuckerberg at #F8,” Blaber wrote on Twitter. “Feels like the first time they’ve been on the front foot in this saga.”
MESSAGE TRANSLATION
Facebook separately announced that its popular Messenger app would soon be able to translate missives in real time, deploying artificial intelligence to enable text conversations between people using different languages.
The feature will launch in the United States with English and Spanish translations of conversations in the Marketplace section of Facebook, and will be extended to general Messenger use in coming weeks, the service said in a blog post.
Facebook joins Internet giants Amazon, Google and Microsoft in offering artificial-intelligence based translation features — most prominently Google’s Pixel ear buds which promise real-time translation across dozens of languages.
Plans were also revealed to simplify the Messenger app, which critics contend has gotten clunky, and add group voice and video calls to Facebook’s other messaging service WhatsApp.
The slew of announcements at the developer-centric “F8” conference also included the arrival of a stand-alone Oculus Go headset to widen support for virtual reality by supporting social experiences such as watch parties. — AFP

The woman behind the question ‘Masarap Ba?’


By Joseph L. Garcia, Reporter
I WISH I had 176,000 followers on Instagram, with the list brimming with food writers and Manila’s most famous chefs and restaurateurs. I wish they could hang on every word I said, and all it would take is to answer the question, “Masarap ba (Is it good)?” Someone lives this life, and it’s the founder of the Instagram and Facebook pages Masarap Ba.
Masarap Ba began as an Instagram page in 2015, in which the anonymous poster would visit restaurants, or buy fresh-off-the-shelves products, and post photos of them on social media, superimposed with the name of the product and the verdict, “Masarap (good)” or “Hindi Masarap (not good)” accompanied by a short caption. The short caption is usually written in Tagalog, in prose that’s easily understandable, sometimes hyperbolic (the poster sometimes writes about the gates of Heaven opening with a first bite), and definitely young, funny, and witty. The page’s intro says: “Simple lang ’yan: masarap o hindi. Ang pinakahonest na personal food account sa history of mankind (It’s simple. Is it good or not? The most honest personal food account in the history of mankind).”
It’s a young woman, by the way, who goes under the cloak of anonymity to test the latest offerings by fastfood brands, buffets, or chains.
In an e-mail interview with BusinessWorld, she still kept her anonymity and gave us a pseudonym: Katrina Abaan (read: katabaan, or fatness in Tagalog). Apparently, she does freelance work in the arts, and calls herself a kindergarten dropout but a college graduate. While she isn’t involved in the food industry at present, she says that she does have a background in the culinary arts.
Asked how and why she started her pages, she said in a mixture of English and Tagalog: “I liked eating out a lot, so I used to check out a lot of blogs. I’d always get disappointed because the dishes aren’t always that good. The pictures are nice, the write-ups were long, but waley, bola lang pala (it was all flattery),” she said.
Later on, she continued, a blogger friend told her that restaurants would invite them to write about them and realized that far too often, the food community would often write good things about these restaurants, because well, three-course meals were at stake. Thus, Ms. Abaan decided to go out on her own, using her own money, with no formal invitations and fanfare, and decided to go straight to the point: good or bad. As for the captions, she says that she writes the way she talks. “Kwela daw kasi ako ayon sa chismis (Rumor has it that I’m funny).”
“I want to describe things in a way that you could taste it just by thinking about it. Simple, funny, creative… and there are no limits, so this should be fun!” she said.
Her choice of restaurants is a mix of high and low, from dinners in hotels to launches of Jollibee’s new Chickenjoy flavor. She says that she visits restaurants based on her budget and mood. She always seems to have a nose for new restaurants, because, apparently, her followers (again, numbering to the hundred thousands) ask her to test new restaurants which they’re still reluctant to try — this then becomes a transaction based on trust. As for her mix of high and low, she says it’s because she doesn’t believe that only expensive dishes can be good. With this, she also says that “serious” food writers would rarely take the time off to notice small eateries or real hole-in-the-walls, which she says have become a bit of a hobby for her.
The difference as well between this anonymous woman and regular food writers is that when writers become a face, restaurants treat them far better, thus ensuring a good review. Her anonymity then gives her some power over these restaurants, where they would treat her the same way her 176,000 followers would be treated. “It must be awkward (for all of us) if they’re waiting how I’d react with every spoonful,” she said in a mixture of English and Tagalog. “I want to be snubbed by waiters, I want them to serve what they really make. No extra garnishes or bigger servings, just because a critic is around.
“People deserve the truth.”
She mostly works alone, though last year, she tapped one of her friends to serve as administrator, simply to keep track of reviews and organize e-mails. Another friend of hers has joined the team to go around tastings when she’s too busy, but insists that she answers each of her comments by herself, still.
“Influencers” are a dime a dozen these days, but Ms. Abaan has managed to literally influence someone’s dinner choices by remaining completely anonymous. “I’m a very private person, so I won’t get kidnapped,” she said in a mixture of English and Tagalog. “Maybe I’m just really effective in expressing myself in Tagalog, so I can connect easily with people without showing my face.”
So this woman doesn’t get paid, sponsored, or even gets a shred of recognition (but her writing does). Why does she do it? “Good karma, which is priceless. Immeasurable happiness. A sense of fulfillment because I know I affect people positively even if they don’t know me.” It’s all about spreading the good vibes, and her followers sometimes tell her how happy she makes them feel just by viewing her stories on Instagram. She says that she has used her influence to help a special cause of hers, which are animals and animal shelters, but that’s it. (One time, she struck a deal with a bank using a debit card they issued to pay for her meal at a restaurant she visited, so she could donate to an animal shelter, but she disclosed this information to her readers.)
We look at food as sustenance and nourishment, but sustenance and nourishment for the body is not enough. Surviving is one thing, and truly living is another.
Good food sustains and nourishes the mind and soul as well, and can remind us why we do this: why we continue to do what we do, why we get up in the morning to go around and conquer. Ms. Abaan then says why the question “Masarap Ba?” is important. “I believe we are emotionally connected with our food. Food has memories combined with feelings. If it’s satisfying, we feel happy. If not, we feel ‘lugi’ (shortchanged). It ain’t enough that just because you’re alive after tasting it, it will be good enough. Food is nourishment, and to be nourished means to be loved and cared for. We need to feel a certain level of happiness when we nourish ourselves.”
Follow Masarap Ba on Instagram at @masarapba, and on Facebook at facebook.com/Masarapba/.

Security Bank posts lower Q1 net income

SECURITY BANK Corp. posted a lower net income in the first quarter due to lower trading gains and higher provision for income tax.
In a disclosure yesterday, Security Bank said its net income stood at P2.35 billion in the January-March period, 16.6% lower than the P2.82 billion it booked in the same period last year.
The lender said it recorded lower profits last quarter as trading gains decreased to P416 million by half and as provision for income tax rose by P311 million in a comparable year-ago period.
Although it recorded a lower bottom line last quarter, Security Bank noted that its underlying customer business remained strong, with net interest income growing 13% to P5 billion. Specifically, net interest income from customer loans and deposits increased by 43% to P3.6 billion.
Service charges, fees and commissions rose 45% to P683 million led by bancassurance, credit card and loan fees.
However, interest income from financial investments declined “as the bank reduced its securities portfolio by 11% year-on-year through securities sale.”
Total loans grew 20% year-on-year to P367 billion. Security Bank’s consumer loans, which comprised 17% of the lender’s loan portfolio, accelerated 54% in the said period. Its corporate and middle market lending businesses, on the other hand, also grew 16% and 13%, respectively.
With the rollout of its small business and personal loans in early 2017, Security Bank now has a complete set of consumer loans, in addition to home, car as well as credit card loans. The lender said this help its net interest margin be sustained at 3.3% last quarter from the 3.1% margin logged in the first three months of 2017.
Deposits went up 11% to P420 billion, while low-cost deposits rose 20%. Core revenues, which are made up of net interest income, fee-based income, and trading gains attributable to customer flows, were up 15% or P797 million.
Overall, Security Bank’s total assets stood at P703 billion.
“Asset quality remained healthy, with gross non-performing loan (NPL) ratio at 0.7%, lower than the 0.9% a year ago and same level as quarter ago,” the lender told the Philippine Stock Exchange.
The bank’s net NPL ratio was 0.27%, while the NPL reserve cover increased to 269%.
Cost-to-income ratio was 53%. Excluding provisions for credit and impairment losses, the bank’s operating expense growth was at 14% last quarter.
In terms of capital, Security Bank said its position strengthened in the January-March period, with common equity Tier 1 ratio at 16.5%, and total capital adequacy ratio at 18.8%, an improvement from the 15.5% and 17.7% seen in the previous quarter, respectively.
Meanwhile, the lender announced that it raised P5.781 billion from the second tranche of its P20-billion long-term negotiable certificates of deposit program. It originally looked to raise P5 billion.
The principal offer of the long-term note program was conducted in November last year, which raised P8.6 billion.
Security Bank shares lost P1.40 or 0.67% to close Wednesday’s trading at P207.60 apiece. — K.A.N. Vidal

ISM board approves sale of treasury shares to unit

ISM Communications Corp. is selling treasury shares to give the holding firm some flexibility to finance possible investments and issue cash dividends.
In a disclosure to the stock exchange on Wednesday, ISM said its board of directors approved the sale of 560 million treasury shares to wholly owned subsidiary ISM Equities Corp. at a price of P1 per share.
“This transaction is meant to give ISM flexibility to restructure its capital position more easily to address potential investment opportunities,” the listed firm said.
After evaluating the company’s financial position, ISM also directed management to consider the declaration of cash dividends after factoring in the retained earnings position of the company following the restructuring of its capital position.
ISM has no operating business, but it has interests in various companies.
ISM holds a 32.5% stake in German technology firm Acentic Gmbh, a provider of Internet connectivity and in-room entertainment solutions for the hospitality industry.
The listed company also owns 4.8 million shares of Philippine Bank of Communications (PBCom), equivalent to 1% of the lender’s outstanding capital stock.
ISM also acquired in 2011 a 10% equity interest in Alpha Force Security Agency, Inc., according to a regulatory filing.
ISM widened its net loss to P269.80 million last year from P13.32 million in 2016 due to higher equity in net losses of an associate.
ISM was originally a mining company incorporated in 1925 under the name Itogon-Suyoc Mines, Inc. In the early 2000s, ISM was transformed to a company engaged in information technology, multimedia telecommunications, and other similar industries.
In 2016, the Securities and Exchange Commission approved the amendment of the articles of incorporation of ISM to reflect its primary purpose as a holding company.
In 2014, ISM raised P1.95 billion from the sale of 59.24 million common shares in PBCom at P33 per share to retail tycoon Lucio L. Co, the owner of the Puregold chain of grocery stores.
Shares in ISM added six centavos or 4.38% to end at P1.43 each on Wednesday. — Krista Angela M. Montealegre

Apple sold 52M iPhones, in line with expectations

APPLE, Inc. sold 52.2 million iPhones in its fiscal second quarter, in line with analysts’ expectations, showing demand remains strong for the company’s most-important product.
The Cupertino, California-based company reported a 2.9% increase in units sold from 50.1 million iPhones in the quarter a year earlier. Analysts had projected consumers would buy 52.3 million phones, on average, although some investors expected fewer units. While the iPhone numbers represent slight growth for Apple, they don’t match the performance some analysts and investors expected when the iPhone X launched last year.
The average selling price of the phones was $728, versus Wall Street forecasts of $740. It’s also well below the $796 average selling price reported in the holiday quarter. That suggests Apple’s flagship iPhone X didn’t sell as well as it did in the earlier quarter. Still, the price is considerably higher than the $655 average selling price in the quarter a year ago, which is due to the iPhone X’s $999 starting price.
The iPhone X includes groundbreaking new technology like 3-D facial recognition, but it’s expensive price likely deterred some would-be buyers. The iPhone 8 and iPhone 8 Plus looked similar to the iPhone 6 from 2014, leaving a hole in Apple’s iPhone sales strategy. The company intends to rectify that with a cheaper model with many of the iPhone X’s features later this year, Bloomberg News has reported.
Apple’s iPhone revenue increased 14% to $38 billion in the quarter. Earlier this year, Chief Financial Officer Luca Maestri said iPhone revenue would grow by at least 10% year over year in the fiscal second quarter.
For the fiscal third quarter, analysts are looking for unit sales of 39 million and an average selling price of $691. Apple didn’t provide guidance on iPhone sales for the period, but said it expects to total revenue from $51.5 billion to $53.5 billion. That was ahead of analysts’ projections.
The iPhone is Apple’s most important product, resulting in about two-thirds of sales for the company. It has also become a hub for Apple’s growing services business and is tied to newer Apple hardware like the HomePod speaker, AirPods headphones, and the Apple Watch. — Bloomberg

Wood you like a drink? Japan team invents ‘wood alcohol’

TOKYO — Discerning drinkers may soon be able to branch out after Japanese researchers said Tuesday that they have invented a way of producing an alcoholic drink made from wood.
The researchers at Japan’s Forestry and Forest Products Research Institute say the bark-based beverages have woody qualities similar to alcohol which is aged in wood barrels. They hope to have their “wood alcohol” on shelves within three years.
The method involves pulverizing wood into a creamy paste and then adding yeast and an enzyme to start the fermentation process.
By avoiding using heat, researchers say they are able to preserve the specific flavor of each tree’s wood.
So far, they have produced tipples from cedar, birch, and cherry.
Four kilos (8.8-pounds) of cedar wood gave them 3.8 liters (eight pints) of liquid, with an alcohol content of around 15%, similar to that of Japan’s much-loved saké.
Researchers experimented with both brewed and distilled versions of the new beverage, but “we think distilled alcohol appears better,” researcher Kengo Magara told AFP.
Wood fermentation is already used to produce biofuel but the product contains toxins and is flavorless, making it far from a suitable cocktail component.
“But our method can make it drinkable, and with a wood flavor, because it does not require high heat or sulfuric acid to decompose the wood,” Magara said.
The institute has a broad mandate for scientific study related to Japan’s extensive woods and forests, but Magara acknowledged “wood alcohol” might not be the most obvious application for their research resources.
“We thought it would be interesting to think that alcohol could be made from something around here like trees,” Magara said.
“It’s a dream-inspired project.”
The government institute aims to commercialize the venture with a private-sector partner and to have the lumber liquor on shelves within three years.
“Japan has plenty of trees across the nation and we hope people can enjoy wood alcohols that are specialized from each region,” Magara said. — AFP

Nigeria’s favorite cocktail packs a punch

LAGOS, NIGERIA — Nigerians may be fond of a glass of champagne but it’s another fizzy drink — and one that’s unashamedly nonalcoholic — that’s dearest to their hearts.
Garnet red and tooth-achingly sweet with a surprisingly tart kick, the Chapman is served with a slice of orange and cucumber in a pint glass with a plastic straw.
“This is our drink, not champagne,” said Toyedayo Osilaja, a patron of the Ikoyi Club, one of the oldest private clubs in Lagos, Nigeria’s thriving commercial capital. “The (champagne) fever is dying. You’ve had enough hiccups and heartburn,” he told AFP. “Chapman is just a popular drink we all love.”
Chapman’s universal appeal is undeniable in a religiously conservative country where temperance is widely seen as a virtue.
It’s a staple on restaurant menus and a favorite at weddings; President Muhammadu Buhari serves it at meetings; best-selling novelist Chimamanda Ngozi Adichie is on the record as a fan.
Enjoyed by both children and adults and eyed by beverage companies as a next big mass-produced hit, the Chapman is sometimes referred to as a “Nigerian sangria.”
But that’s a misnomer, as unlike in Spain and Portugal, it’s not made with wine but soft drinks, while the orange and cucumber is a garnish.
Other than getting the approximate color right, there’s no standard way to make a Chapman.
That’s partly because despite the drink’s ubiquity, its origins are shrouded in mystery.
Rumor has it there once was an expat by the name of Chapman who worked at a club in Lagos and made the drink. Others maintain it was a Nigerian.
No one knows for sure, though everyone agrees it was conceived in the country and is a made-in-Nigeria drink.
MYSTERIOUS ORIGINS
“It’s been (served) here for the longest,” said Osilaja, staking a claim on the Chapman for the Ikoyi Club, as a barman in a black waistcoat pours a Chapman from a drink dispenser on the bar.
In a sign of the drink’s importance, the first thing Osilaja did when he accepted a volunteer post as bar advisor was to standardize the drink’s recipe across the expansive club’s 15 bars.
He considered it was being “badly mixed” and for months he allowed only his most trusted bartender to prepare the drink. Members are thrilled with the result, he reports happily.
“There’s some story about a Chapman making it but we have no records,” said Osilaja, adding that he’s enjoyed Chapmans for all his 46 years at the club his parents first brought him to as a child to enjoy the pool, tennis courts, and other facilities.
A splash of Angostura bitters is considered the hallmark of a perfectly executed Chapman, giving it echoes of the cocktails enjoyed during the British colonial era.
“It looks like the earlier versions had ingredients that were a little more British than the current one — bitter lemon or lemonade and tonic water — instead of Sprite,” said David Wondrich, a cocktail historian based in New York.
“With those ingredients, its origins in a British club are more likely, although most British colonialists would have put alcohol in it.”
Like other colonial-era drinks, including the Singapore Sling, the Chapman is probably an African cousin of punch, said Wondrich.
“Punch, the great ancestor of all modern mixed drinks, is a British invention, as is the Pink Gin (gin and bitters) and the Collins,” he said.
MASS MARKET DREAMS
Beverage companies are hoping to cash in on the Chapman’s popularity, to sell it as a ready-to-go drink.
With Nigeria’s booming young population, analysts say there’s more than enough room for a Chapman to carve out a niche like Dr Pepper in the United States.
“There’s room for new innovations,” said Maurice Abuah, analyst at Euromonitor, a market research firm.
There are already two Chapman drinks in stores today but invariably are different from their freshly made counterparts.
The color isn’t a deep sunset red while there’s a lingering distinct aftertaste, which is especially noticeable when the drink begins to warm in the tropical heat.
“It’s significantly different from a drink that you can get at a bar,” admitted Nelson Nsitem, research analyst at Asoko Insight, a Lagos-based business intelligence firm.
“The thing about the Chapman drink is that it’s the way it’s prepared and consumers know it’s different,” he added.
“There’s something about it, especially when it’s made well,” he said. “There’s a bit of, I don’t know what. It feels totally different.” — AFP

Intel Corp. wants its new drones to find jobs far from the spotlight

INTEL Corp. drones played starring roles at the 2018 Winter Olympics, the music and arts festival Coachella and danced above the Bellagio Hotel’s fountains in Las Vegas.
But while those stunts, involving hundreds of Shooting Star drones that create a light show in a modern twist on fireworks, are great PR, what’s going on behind the scenes is much more valuable to Intel. New software the company is rolling out for more utilitarian unmanned aerial vehicles may play a more lasting role in its attempts to spread the reach of its chips.
Chief Executive Officer Brian Krzanich is fashioning Intel as a ‘data-centric’ company to stress its determination to rely less on a personal computer market that hasn’t grown for six years. Intel’s leader said he’s determined that Intel’s technology will be central to whatever new market emerges for data processing.
The latest effort is Intel’s Falcon 8+ aircraft, designed for less-glamorous roles at oil refineries, over farmers’ fields and on building sites. Software packaged with the drone can help businesses map out pre-planned flights using simple overlays on satellite imagery. That advantage can, for instance, allow a company to see how construction is developing or crops are faring over time. Intel will also soon unveil a new suite of software that would enable drone-gathered data to be stored, processed and used by a whole range of industries.
For Intel, that data is the key. The Falcon 8+ is armed with either a high-end digital camera or array of sensors, and generates a massive amount of information very quickly. A 15-minute flight taking high-resolution pictures — possibly combined with thermal-image information — can generate more than 10 gigabytes of data. Taking that and turning it into something useful, such as a three-dimensional map, can take a high-end computer a couple of days of work. That’s the kind of new industry that Intel — the world’s largest maker of computer processors with a growing sideline in memory chips — wants to see flourish.
The Falcon 8+ uses eight rotors mounted on a ‘Y-shaped carbon-fiber frame. Its unusual shape gives it the ability to do tricky work, like viewing the underside of bridges — a task Intel says other drones struggle to do. For $30,000 to $40,000, depending on options, purchasers also get hot-swappable batteries and a controller that looks like it was wrenched straight out of a light-aircraft’s cockpit.
Even if a pilot switches off one or more of the Falcon’s rotors or adds weight to its frame, the drone will show off its onboard smarts by immediately righting itself to fly level. Using its sensor package, Falcon can spot obstacles, record where they are in its memory and then stubbornly refuse to fly into them even when told to do so.
The data transformation that’s possible with the drone is the most intriguing aspect of the device, said Anil Nanduri, who heads up Intel’s drone efforts. “It’s done manually today with humans in the loop. If you really want to get cheaper, more efficient and faster you use automation and computing. The drone is a tool to capture this data.”
To support his goal, Nanduri’s group is introducing a new software and service package that will allow data generated by Intel’s drones to be rapidly processed into usable reports and three-dimensional models.
Drones are already big business. They’re used in industries from agriculture to architecture, construction and engineering as well as emergency services and even deliveries. Last year the industry totaled about $2.2 billion in sales worldwide. By 2025 total revenue will increase to $51 billion, according to ABI Research. Commercial-use drone shipments will top 1 million units by 2027, up from 67,000 last year.
Intel’s progress will be determined by how successful it is at luring away customers from market leader SZ DJI Technology Co., whose drones are increasingly being paired with custom software offered by a number of start-ups for commercial use, according to ABI researcher Rian Whitton. One of the few companies offering something similar to Intel — a custom drone, flight planning and data processing software — is Menlo Park, California-based Kespry, Inc.
For Intel to carve out a slice of that and provoke the kind of data generation that will create more work for the server and storage chips it sells, its software will have to deliver the kind of ease of use and practicality the company is promising.
The key will be in providing tangible results faster and cheaper than the work is done currently. Intel highlights oil refinery inspection as an example. Checking a flare stack, which is used to burn off unusable gases, requires a shut down so that it will cool enough for someone to climb up and look for cracks. A drone can be used without that expensive halt in production and can see more, via thermal imaging, than a human can.
Programming a precise flight path also makes drones capable of repeating the exact same data gathering trips to allow for comparisons later, to see how quickly a pipe on the roof of a building is rusting, for example, or how quickly crops are growing. — Bloomberg

Manila Water wins right to operate Bulacan water district

MANILA WATER Co., Inc. has won the right to operate the Bulacan water district, which is the site of the international airport being proposed by San Miguel Corp.
In a disclosure to the stock exchange on Wednesday, Manila Water said the project is expected to require a capital expenditure of P400 million over a 25-year contract period.
“[The project] is estimated to deliver a billed volume of 16 million liters per day by year 25,” the company said.
Manila Water said its consortium with wholly owned unit Manila Water Philippine Ventures, Inc. had received the notice of award from the Bulacan Water District for the implementation of the joint venture project.
The project covers the design, construction, rehabilitation, maintenance, operation, financing, expansion and management of the water supply system and sanitation facilities of the water district in the municipality of Bulakan in Bulacan province.
Upon the completion of certain conditions, Manila Water said the consortium and the water district will form a joint venture company to implement the project.
“The joint venture company could serve the airport being proposed to be built by San Miguel Corp. in the Municipality of Bulakan,” the company said.
The National Economic and Development Authority Board last month approved SMC’s unsolicited proposal to build a new international airport in Bulacan, although “confirmation is subject to final review of the concession agreement.”
SMC’s proposed airport will be built on a 2,500-hectare property with up to six runways, and to be configured to handle about 100 million passengers a year.
As an unsolicited proposal, SMC’s project will have to undergo a Swiss challenge, which requires an invitation for other companies to make competing offers, while giving the original proponent the right to match them.
Last week, Manila Water said the consortium was also awarded a similar project in the municipality of Balagtas in Bulacan province. The Balagtas project requires a budget of P400 million over a 25-year contract. It is expected to deliver a billed volume of 22 million liters per day by year 25. — Victor V. Saulon

Treasury makes full award of reissued five-year bonds

THE TREASURY made a full award of its P10-billion offer of the five-year bonds.

THE GOVERNMENT fully awarded the reissued five-year Treasury bonds (T-bonds) on Wednesday as yields picked up slightly on the back of an upgraded credit rating outlook for the Philippines.
At yesterday’s auction, the Bureau of the Treasury raised P10 billion as planned from the reissued five-year bonds maturing on March 8, 2023.
Total tenders reached P18.924 billion, nearly double the amount the government wanted to raise.
The five-year bonds fetched an average rate of 5.592% with a coupon rate of 5.5%. This was higher than the 5.452% average rate fetched when the five-year bonds were last sold in March.
At the secondary market, before the auction, the five-year papers were quoted at 5.4372%. The tenor fetched 5.4544% at the close of the trading.
National Treasurer Rosalia V. De Leon told reporters shortly after the auction that Wednesday’s offer was met with strong demand since the five-year tenor is a “sweet spot” for the investors due to its closer maturity date.
“They like the five years — it’s a sweet spot. The three- and the five-year [tenors], that’s where the [investors] flock,” Ms. De Leon said.
“I think because of the slew of good news lately. S&P gave a positive outlook last week.”
Debt watcher S&P Global Ratings upgraded its credit outlook for the Philippines to “positive” from “stable” last week, hinting on better chances of a rating upgrade.
“Obviously, it also helps because it’s also signalling that 12 months down the road, we might be ready for another rating upgrade, since outlook is already positive,” Ms. De Leon added.
The national treasurer also noted that the government’s “good collection performance” was also factored in by investors.
“I think that has a calming effect because of the pronouncements coming from the BSP (Bangko Sentral ng Pilipinas) Governor [Nestor A. Espenilla, Jr.] that [a rate hike] is just a matter of time,” Ms. De Leon added.
“And given already the BSP inflation [forecast] of 3.9%, the market is seeing that this time, the BSP will move [its rates].”
Meanwhile, a bond trader said the auction result “is well within expectations.”
“The yield range is well within expectations, though I’m still surprised that [the stop-out level] reached 5.69%,” the trader said, even while noting that they were “kind of confused” with the auction result.
“[The Treasury] always says they can afford to reject, but they keep on issuing at higher rates,” the trader said.
The government seeks to raise P325 billion this quarter from local creditors through weekly auctions of securities. — K.A.N. Vidal

Understanding saké

LET US face it — most of us are very enamored by Japanese food and cuisine, and why shouldn’t we be? Japanese dishes are, generally speaking, fresh, light, healthy, and delicious. Normally, for my Japanese meal beverage accompaniment, I will opt for Loire white wines, either a Sauvignon Blanc or Chenin Blanc, any of the Alsacian white varietals from Gewurztraminer, Pinot Gris to Riesling, or, as experienced lately, Japan’s own gem of a white wine, Koshu. But there is no denying that traditional Japanese saké (made from rice) may actually still be the best complementary drink for these dishes, even in the light of the marketing-created popularity of the whisky highball.
HOW DO THEY MAKE SAKÉ?
Saké comes from rice. Unlike regular grape wines that ferment using only natural grape sugars, to make saké, the sugar from rice needed to ferment into alcohol must first be converted from starch. The starch comes from polished rice. This is more like a brewing process similar to beer. But while beer brewing does convert starch to sugar and sugar to alcohol in two stages, with saké, this process is done simultaneously, known as parallel fermentation.
When saké is being brewed, the koji-kin (scientific name: Aspergillus oryzae) enzymes convert the starch into glucose and the saké yeast converts glucose into alcohol, with these two processes happening simultaneously. No malting is involved unlike beer. The key term here is koji-kin from the word koji. Koji refers to the steamed rice that has the mold spore, or koji-kin. This mold creates several enzymes as it spreads, and they break the starches found in rice into sugars that are fermented by the yeast cells into carbon dioxide and alcohol. Koji is cultivated in a special room in the kura (brewery) called the Koji Muro. For saké, only rice, water, yeast, koji, and distilled alcohol (on some classified saké) are used.
HOW EACH INGREDIENT AFFECTS SAKE QUALITY
Let us elaborate a bit on these ingredients. The main ingredient of course is the rice. Sakamai is the rice variety used, and while there are several to choose from, the undisputed king of saké rice is the Yamada Nishiki rice, primarily harvested in Hyogo, Okayama, and Fukuoka. The Yamada Nishiki is very fragrant with nice subtle flavors. Other sakamais used in popular sakés are Omachi rice, Miyama Nishiki rice, Gohyakumangoku rice, and Oseto rice to name a few. Like wine varietals, the sakamais vary in flavors, with some showing more earthiness, others more sweetness, etc. There is also the regional aspect depending on where the saké kuras are located.
Water is the second most important ingredient even if in fact it makes up around 80% of a final saké product. Water is used when the rice is washed, rinsed, soaked, and during the steaming and fermentation processes. And even when the finished saké is almost done, a little water is often added at the end to bring the alcohol down from the naturally occurring 19-20% or so, to industry standard 15-16%.
Yeast plays its role in fermentation but also, just like in wines, certain yeast strains can give rise to different chemical compounds and reactions, so choice of yeast is also crucial. We already discussed koji and its role in the brewing.
The final ingredient is the distilled alcohol that is occasionally added to saké. This is where techniques and styles come into the equation. There are many reasons for adding brewers’ distilled alcohol into the saké, but by law, the amount of alcohol you are allowed to add in the production of classified premium saké is strictly capped at 130 liters of alcohol per metric ton of rice used in brewing or 25% of the final alcohol content. The varying reasons for added distilled alcohol is to gain additional flavors and aromas, to make the drink crisper, to make it drier, and for extra structure.
SAKÉ QUALITY CLASSIFICATION BASE ON RICE POLISHING RATE
There are basically two broad classifications of saké: the mass produced Futsushu or Ordinary Saké and the Tokutei Meishoshu or Special Designate Sake. Futsushu is sort of like generic wine’s bottom status in the wine quality hierarchy. There are no rules on rice polishing ratio, and on added distilled alcohol to increase volume and make for more finished product sakés. Over 80% of sakés made are Futsushu.
The Tokutei Meishoshu on the other hand, is where the quality and distinguishable levels of saké from rice-polishing ratios, are determined. The reason being that the more rice is polished, the more refined and concentrated the flavors. For these premium classified sakés, polishing can be 70%, 60%, 50% to as low as 35% of the original weight of the rice. This means that for the most premium saké, only 35% of the original rice is brewed and fermented in its final product.
There are six different sub-classifications within the Tokutei Meishoshu. Here are the six in ascending order of premium ranking:
• Honjozo — rice-polishing ratio of 70% or less of original weight, with added distilled alcohol
• Junmai — pure rice saké, made from only rice, water, and koji; rice-polishing ratio of 70% or less
• Ginjo — rice-polishing ratio of 60% or less, with a small amount of added distilled alcohol
• Junmai Ginjo — pure rice saké, made from only rice, water, and koji; rice-polishing ratio of 60% or less
• Dai Ginjo — rice-polishing ratio of 50% or less, with a small amount of added distilled alcohol
• Junmai Dai Ginjo — pure rice saké, made from only rice, water, and koji; rice-polishing ratio of 50% or less
These are the basic saké classifications, but there is much more to discover, and in my next column, I will share my trip to a very traditional and craft saké maker near Tokyo, Katayama Shuzo Co., Ltd. Their award-winning sakés are their genshus — another saké term that means undiluted saké. More on this amazing Japanese drink soon.
The author has been a member of the Federation Internationale des Journalists et Ecrivains du Vin et des Spiritueux or FIJEV since 2010. For comments, inquiries, wine event coverage, and other wine-related concerns, e-mail the author at protegeinc@yahoo.com. He is also on Twitter at twitter.com/sherwinlao.

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