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Business leaders say economy ‘yet to run on all cylinders’

By Elijah Joseph C. Tubayan
Reporter

A STABLE ENVIRONMENT helped the economy rev up in 2017, and business groups now believe tax reform, further ease of doing business, lifting of foreign investment restrictions and increasing the pace of infrastructure development should help spur the country’s growth momentum further.

The Philippine economy has kept its growth pace above six percent since 2012 — with 2013 recording 7.1% — but business leaders said that it needs to expand by an even faster clip to keep up with competitors in the Association of Southeast Asian Nations (ASEAN). Gross domestic product grew by 6.7% in 2017’s first three quarters against the government’s 6.5-7.5% full-year target and 2016’s actual 6.9%.

“The Philippine economy maintained its high growth rate, low inflation, stable exchange rate environment in 2017 with domestic and foreign investment levels at record levels,” John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines, said in an e-mail.

“But the country’s economic engine has yet to run on all cylinders.”

Mr. Forbes said that foreign investors are anticipating the acceleration of infrastructure development as the government tries to put economic growth on a faster lane. “Investors are concerned by worsening airport and traffic congestion, so the privatization proposal for NAIA and early passage in Congress of the traffic crisis legislation would be welcome,” said Mr. Forbes, referring to Ninoy Aquino International Airport — the country’s premier air gateway.

The current government hopes to spur gross domestic product growth to 7-8% annually from 2018 until it ends its six-year term in 2022, and is banking on an P8.44-trillion infrastructure development drive — financed partly by increased revenues from the Tax Reform for Acceleration and Inclusion (TRAIN) program — to make this happen.

For European Chamber of Commerce of the Philippines President Guenter Taus, “We need to build a more solid employment/job creation basis, for this will be the backbone of sustained growth.”

“This past 2017, there have undoubtedly been reforms in helping improve the Philippine business climate. Much headway has been made, but still a lot can be done to improve the competitiveness of the Philippine in terms of FDIs (foreign direct investments). We need to keep moving faster in order to become and remain competitive versus our ASEAN neighbors.”

Easing restrictions to foreign ownership in local sectors, Mr. Taus said, “will surely have a substantial effect on the Philippine economy through opening up the market to foreign players and thus opening the floodgates to investors who see the high potential and wealth of opportunities in the Philippines.”

The administration of President Rodrigo R. Duterte is currently finalizing the next foreign investment “negative list” in its bid to lift restrictions on foreign ownership and participation in certain sectors. That list was supposed to have been released late last year.

After the just-enacted first TRAIN package — which cut personal income tax rates but raised levies on cars, fuel and other items and reduced value-added tax exemptions — foreign business groups said they are now looking forward to the next tranche that will reduce the corporate income tax rate to 25% from 30% currently and streamline fiscal incentives given to investors.

Finance Secretary Carlos G. Dominguez III has said his department hopes to submit the second TRAIN package to Congress on Jan. 15, when lawmakers return from their one-month Christmas and New Year break.

“The TRAIN 2 package will be watched carefully in two respects: (1) to see if it reduces the corporate income tax to a level close to large ASEAN economies and (2) whether competitive fiscal incentives are maintained for new and expansion FDI projects,” Mr. Forbes said.

“Despite reaching much higher levels, FDI in the country remains significantly lower than amounts flowing into Vietnam, for example.”

Mr. Taus, meanwhile, said: “Further challenge in line with the tax reform will be to keep the incentives scheme attractive enough to retain and actually grow the BPO (business process outsourcing) sector, a vital industry to continue the emerging middle class.”

Local business groups on the other hand are banking on further steps to develop micro, small and medium-scale enterprises (MSMEs).

The Philippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon said the government should complement further liberalization of the economy with steps to strengthen small local businesses.

“We welcome competition because it benefits the customers. But it has to be a level playing field. Foreign companies coming in will be using funds from abroad. MSMEs will find it difficult — the cost of financing is higher, it’s a disadvantage,” he said in a telephone interview.

He also cautioned against the government’s plan to further cut the paid-up capital threshold for foreign retailers’ entry, arguing that this could allow lower-quality businesses to come in.

“What we would like to see is the quality investments. We need to put some qualifiers, that if they come in, it’s going to help us in upgrading our know-how or management,” Mr. Barcelon said, noting US micro-level businesses’ $2-million minimum paid-up capital.

Socioeconomic Planning Secretary Ernesto M. Pernia earlier said that the government was looking to reduce the $2.5-million paid-up capital threshold under Republic Act No. 8762, or the Retail Trade Liberalization Act of 2000, to just $200,000.

“So if you put it too low, what are we attracting?” Mr. Barcelon said.

He added that institutionalization of efforts to ease the cost of doing business — embodied in Senate Bill No. 1311 and House Bill No. 6579 — will complement the reduction of the corporate income tax in spurring more business activity.

“We need to be more efficient,” Mr. Barcelon said, explaining that this would help businesses cope with high electricity and logistics costs that make them uncompetitive against regional peers.

“We still want hopefully the legislative side — both national and local government — to review the ease of doing business,” the PCCI chief said.

“Whether it be the benefit of the local business establishments or to attract foreign investments, we really need to streamline.”

Sergio R. Ortiz-Luis, Jr., president of Philippine Exporters Confederation, Inc. (Philexport), meanwhile hoped that the government would also provide new sources of financing for small businesses.

“We would like a portion of the CCT fund to be allocated to MSME financing,” Mr. Ortiz-Luis said of conditional cash transfers in a telephone interview, adding that the government should sustain the increase in infrastructure spending, arrest worsening traffic and give “more attention to the agriculture sector.”

PHL net liability position expands in third quarter

By Melissa Luz T. Lopez,
Senior Reporter

HIGHER INVESTMENT inflows drove the country’s net external liability position to widen further during the third quarter of 2017, the central bank said, amid sustained optimism among foreign investors on domestic economic prospects.

The country’s international investment position (IIP) widened to a net liability of $35.207 billion as of end-September from $33.514 billion logged during the first semester, the Bangko Sentral ng Pilipinas (BSP) said in a statement sent over the weekend. This also grew compared to the $28.436-billion net liability posted in September 2016.

The IIP takes stock of a country’s financial claims and liabilities. The wider liability came as the growth in foreign investments outpaced the increase in foreign assets accumulated by the government and local corporates from a year ago.

Foreign direct investments (FDI) and hot money inflows to the Philippines supported a 4.1% increase in liabilities to reach $201.782 billion, against a 0.7% pickup in foreign assets to $166.575 billion year on year.

“The expansion in liabilities reflected the higher outstanding debt instruments held by non-resident affiliates and increased holdings by non-residents of equity securities issued by residents,” the BSP said in a report.

For July-September, the central bank said FDIs posted a 4% rise compared to the second quarter, while flighty portfolio investments went up by 1.5%. The “significant” inflows and revaluations of these investments are supported by the country’s “sustained positive economic performance and growth prospects,” the BSP added.

This came despite a weaker peso-dollar exchange rate after the local unit traded above the P51 level during the quarter.

The peso depreciated by 1.2% to P51.073 against the US dollar as of end-September, which meant that outstanding foreign liabilities had a lower equivalent when expressed in the greenback.

On the other hand, foreign assets held by Filipino players posted a modest increase as local banks extended more loans to foreign borrowers, and with more residents investing abroad.

Dollar reserves maintained by the BSP kept the central bank at a net asset position, albeit at a lower level of $81 billion. This accounted for nearly half the country’s external claims.

Bank assets totalled $26.214 billion, up by a tenth from the previous year. Assets held by other sectors also grew by an annualized 8.5% to reach $59.335 billion, according to central bank data.  

By type of instrument, debt instruments to support intercompany lending between multinational firms and their local units accounted for 15.1% of the total liabilities, while placements on shares of stock of issued by Philippine companies took a 12.5% share.

Puregold to open 25 stores this year

By Arra B. Francia, Reporter

PUREGOLD Price Club, Inc. will continue the expansion of its supermarket business in 2018 as it plans to open 25 new stores.

“We plan to roll out 25 new Puregold stores in 2018,” Puregold Vice-President for Investor Relations John Marson T. Hao said in an e-mail.

This will be the same number of stores Puregold has targeted to open last year. By the end of September 2017, the company had a total of 352 stores nationwide — comprised of 291 Puregold stores, 13 S&R membership shopping warehouses, 31 S&R New York Style quick service restaurants, nine NE Bodega Supermarkets, and eight Budgetlane Supermarkets.

Aside from expanding the Puregold brand, tycoon Lucio L. Co’s company will also be opening two more S&R warehouses in 2018.

Mr. Hao, however, declined to disclose the locations of the new stores. Last year, Puregold focused on expanding its footprint outside Luzon, as it tried to accelerate growth by entering new geographic areas.

Asked if the company would consider more acquisitions, the Puregold executive said they remain open should opportunities arise.

“We are always on the look out for possible M&A (mergers and acquisitions) of other supermarket chains,” Mr. Hao said.

The listed grocery operator has also given a positive outlook for 2018 given the implementation of the tax reform program.

“2018 will be exciting due to the tax reform by the government,” Mr. Hao said.

The first package of the Tax Reform for Acceleration and Inclusion program took effect on Jan. 1. The Department of Finance said the new law will allow employees to pocket higher take home pay, starting with those earning lower than P250,000 annually who will now be exempted from personal taxes.

Analysts said consumer stocks are to directly benefit from the tax reform program as Filipinos have more money to spend.

“Consumer-related sector is almost a given the increased disposable income of the Filipinos,” PCCI Securities Brokers Corp. Research Head Joseph James F. Lago said in a separate e-mail.

Incorporated in 1998, Puregold’s core business is in the trading of goods, particularly consumer products such as canned goods, housewares, toiletries, dry goods, food products, pharmaceutical and medical goods on a wholesale and retail basis.

The company’s stores operate in various formats, namely Puregold Price Club that caters to both retail customers and resellers; Puregold Junior, its neighborhood store format, and Puregold Extra, which are smaller stores that offer a more limited choice of goods.

Puregold realized a 6% increase in net income attributable to the parent in the first nine months of 2017 to P3.9 billion, following an 11% uptick in revenues to P90 billion during the same period.

Yields on gov’t securities go down at 2017’s close

YIELDS on government securities (GS) traded in the secondary market went down almost across the board last week as market players preferred to stay on the sidelines as the year came to an end.

On average, GS yields — which move opposite to prices — went down by 12.29 basis points (bps), data from the Philippine Dealing & Exchange Corp. as of Dec. 29 showed.

“It’s the market’s preparation for next year,” Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines (UnionBank), said.

“Demand, I think, was higher as the year ends. The general perception about the economy’s positive growth prospects was probably a factor as well,” Mr. Asuncion said.

Meanwhile, a bond trader said the yield curve saw a “steepening bias” with most dealers opting to stay at the short-end of the curve given a lack of fresh leads.

Volumes also thinned given the holiday season, according to a bond trader, with most investors staying on the sidelines.

Trading in local fixed-income securities last week was shortened in observance of Christmas day, with the government also extending the holiday for government offices nationwide last Dec. 26.

At the secondary market on Friday, in the short end of the curve, the 91-day Treasury bill (T-bill) lost 74.34 bps to yield 2.4316%. The 182- and 364-day T-bills also saw their yields decline by 6 bps and 4.62 bps to 3.3075% and 3.032%, respectively.

In the belly, yields on the three-, four-, five- and seven-year Treasury bonds (T-bonds) were down by 14.59 bps (4.2977%), 3.08 bps (4.9211%), 1.22 bps (4.7437%), and 11.06 bps (5.3279%), respectively.

On the other hand, the rate of the two-year security went up by 2.47 bps to yield 3.9864%.

In the long end, the 10- and 20-year T-bonds decreased by 12.83 bps and 3.01 bps to yield 5.6986% and 5.7038%, respectively.

For this week, UnionBank’s Mr. Asuncion said: “[This] week, as a new year begins, I see more of positive perception and I expect a further pick up on demand as the market prepares for a robust 2018.”

As the market resumes sessions, the bond trader noted that investors will take their cue from the inflation data set to be released by the Philippine Statistics Authority on Friday.

Inflation likely stood steady in December to match the previous month’s pace, analysts tapped in a BusinessWorld poll said last week.

A poll among 12 economists yielded a 3.3% median forecast for the month, which if realized will match November’s pace but will jump from the 2.6% reading in December 2016. — R.O.R. Reusora

WESM operator mulls possibility of shifting to ‘for profit’ operations

By Victor V. Saulon Sub-Editor

PHILIPPINE Electricity Market Corp. (PEMC), the governance arm of the country’s wholesale electricity spot market (WESM), is studying a proposal to allow market operations to become a “for-profit” entity to attract interest from the private sector.

Francis Saturnino C. Juan, PEMC spokesperson, said the company has not closed its doors to the possibility of an entity such as the Philippine Stock Exchange (PSE) to operate the electricity market.

“In the future, there is that possibility,” he said in a recent interview.

Mr. Juan said the proposal came from stakeholders when PEMC invited industry participants on how they wanted the entity to evolve after a transition period that is to end in February 2018.

“One that we gathered in this consultation process… is later on allow for the market operation function to evolve as a for-profit activity,” he said, adding current WESM rules specifically stated that it be a nonprofit entity.

“But then if you would do that, who would be the interested parties to participate in any tender for the market operations function.”

The proposal has been presented to Energy Secretary Alfonso G. Cusi, who has yet to give his stand on the matter.

Mr. Juan became the spokesman for PEMC when Mr. Cusi in July last year ordered the creation of transition committee for the management of PEMC.

The committee is chaired by Oscar E. Ala, who exercises the function of PEMC president “until one is appointed by the PEMC board.”

Early last year, Mr. Cusi asked the previous members of the board to submit their courtesy resignation. No official reason was given for the move, which had surprised many in the industry.

WESM is the country’s centralized venue for buyers and sellers to trade electricity as a commodity where its prices are based on actual use, or demand, and availability, or supply.

The Department of Energy (DoE) said the transition panel is also mandated to assess PEMC’s existing structures, systems, and resources and propose a way forward for the WESM to meet the challenges ahead. The order gave the committee seven months from Aug. 1, 2017 to complete its tasks.

Mr. Cusi said the creation of the transition committee was in line with President Rodrigo R. Duterte’s thrust of ensuring the protection of the Filipino electricity consumers, who are affected by the operations of PEMC and the WESM.

He said PEMC “shall continue to effectively govern the operations of WESM for the benefit of all electricity stakeholders.”

Mr. Ala, as PEMC chairman, is joined in the committee by Jose Mari T. Bigornia, Jose M. Layug, Jr., Francis C. Saturnino Juan and Rauf A. Tan.

PEMC’s new board is composed of Mr. Cusi as chairman, and the following as members: Ronald Dylan P. Concepcion, Victor Emmanuel B. Santos, Emmanuel V. Rubio, Neeraj Bhat, Deon James, Rolando M. Cagampan, Octavius M. Mendoza, Allan L. Laniba, Noel V. Aboboto, Jesus L. Arranza and Peter L. Wallace as board members.

PEMC, a nonstock, nonprofit private corporation, was incorporated in November 2003 upon the initiative of the DoE. It has representatives from various sectors in the power industry and serves as the governance arm of WESM.

WESM started commercial operations in Luzon in June 2006 and in the Visayas in December 2010.

The electricity spot market was created by Republic Act 9136, the Electric Power Industry Reform Act of 2001 (EPIRA).

Mr. Juan said one of the mandates of the transition team is create an independent market operator (IMO).

“For the IMO, we envision it to be a small organization that is purely technical, dealing mostly with operations,” he said.

Davao firm generates P2.1-B sales from Matina

DAVAO CITY — Escandor Development Corporation (ESDEVCO) has generated P2.1 billion in sales from the expansion of its Matina Enclaves project.

“This year, we sold 30% more of what we have produced last year. We only made P1.6 billion in a span of three years in the industry,” Matina Enclaves project director Gerald Kent Garces said in an interview.

For the expansion of the Matina Enclaves, ESDEVCO is planning to build four condominium towers with 25 floors each on a 1.7-hectare property adjacent to the existing project.

Mr. Garces said the company saw strong sales of the two condominium towers, which were launched earlier this year. The first tower is already sold out, while the other tower has half of its inventory remaining.

He noted ESDEVCO President Glenn Y. Escandor wants the company to turn over the project on time. The company is targeting to complete a condominium tower every year starting 2020 through 2023.

“When G1 (Mr. Escandor) mentioned it delivering it on time, I supposed it entails a lot of commitment and hard work from our group to comply with this. This represents a true commitment of a local developer. In fact, when we started the project, we made it a point not to disappoint the locals, especially our buyers in terms of quality and deliverables,” Mr. Garces said.

The first five medium-rise buildings of Matina Enclaves have already been sold out. One building has been completed, while another one will be turned over in the first quarter of 2018. Construction of the third tower is on-going, and will likely be finished by end-2018. The fourth and fifth towers are targeted to be completed in 2019.

“What does it say about ESDEVCO as a developer? We are very aggressive in one sense because for this particular project, we didn’t only approach things very conservatively through development of the residential. But for this project, we have residential, and house-and-lots that we were able to develop. We turned over one condo building in mid-2016 and we will be able to turn over another one by next year,” Mr. Garces said.

In time for summer next year, Mr. Garces said the company aims to complete the Arcadia, the sports facility of Matina Enclaves. — Maya M. Padillo

Goldman sees cryptocurrencies, credit shadowing robust 2018 US economy

FINANCIAL IMBALANCES including those in credit markets and cryptocurrencies will shadow an otherwise robust 2018 US economy, said Goldman Sachs Group, Inc. economist Jan Hatzius.

Hatzius has already made some predictions for the new year: four Federal Reserve rate hikes, real US gross-domestic product growth quickening to an average of 2.6%, the jobless rate dropping to about 3.5%, and the yield curve not inverting.

In a new report, Hatzius reiterated his expectation for overall economic strength, while flagging some concerns.

“Asset valuations in some areas — especially credit — have risen to high levels by historical standards,” Hatzius said in the “10 Questions for 2018” report issued late Friday. “While we have not seen the type of large credit expansions that would be most worrisome for Fed officials concerned about financial imbalances, there are now some signs of speculative behavior in financial markets, e.g. the cryptocurrency boom.”

Goldman isn’t the only firm to send up a warning flag about cryptocurrencies. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon labeled bitcoin a “ fraud.” Fed Chair Janet Yellen has said it is a “ highly speculative asset,” and Bank of Japan Governor Haruhiko Kuroda said it’s being used for speculation. (Note that Goldman is also reportedly building a cryptocurrency trading desk.)

On the positive side of the economic ledger, according to Hatzius: Single-family housing starts will rise further as the supply-demand imbalance continues to tighten, despite adverse changes from tax legislation signed into law by President Donald Trump.

US wage growth will resume acceleration as statistical distortions fade, and there’s “evidence that upper-income households have been trying to defer income in the hope of lower tax rates,” which could have held back some wage data until now, Hatzius said.

Core inflation will also accelerate from the current 1.5%, Hatzius said. Import prices weighing on the core personal consumption expenditures (PCE) could turn into a boost in the coming year, Also, “base effects” should help — such as when the weak March 2017 reading, which partially reflected mobile phone service-price measurements, drops out.

The Fed won’t adjust its balance-sheet normalization plan either way, and market pricing of the terminal funds rate will rise as the Fed increases rates by more than currently priced, if markets view the additional tightening as appropriate, Hatzius said.

Still, as solid a picture as Goldman’s economist paints of the economic situation, the asset-valuation issue is seen as one to watch. And though the firm doesn’t see continued easing of financial conditions in 2018, it does view that as something that could alter the picture significantly.

Fed officials are “likely to view further easing of financial conditions as increasingly undesirable,” Hatzius said, “and an argument in its own right to normalize policy.”

“The economy is already at or slightly beyond full employment, growth momentum is strong, and a further boost from fiscal policy is already in the offing,” Hatzius said. “Adding more fuel to the fire via yet easier financial conditions looks undesirable.” — Bloomberg

Anticipated fuel price hikes start off new year

OIL COMPANIES will be raising the prices of petroleum products this week at rates generally milder than what consumers feared in view of the implementation of the tax reform.

Retailers will be raising the cost of diesel products by P0.65 per liter and gasoline products by P0.20 per liter. They will also raise the price of kerosene by P0.75 a liter. Most will be increasing prices at 6 a.m. today, Jan. 2.

The increase comes as the Department of Energy (DoE) advised consumers a day before the new year about the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) on petroleum prices.

It reminded the public, in an advisory, that the new excise tax rates do not apply to the old stocks of petroleum products. Excise taxes are levied upon importation and not at the point of sale to the consumers, the DoE said.

The advisory by the DoE’s Oil Industry Management Bureau (OIMB) and the Department of Finance (DoF) came amid warnings in some quarters the start of the year will see a spike in prices of basic goods owing to the impending higher cost of petroleum products.

Under the TRAIN, an additional P3 per liter was to be added to the existing petroleum excise rate of P4.35.

The two agencies pointed out, however, that the retailers were still disposing of the old stocks at the start of the year, and these were acquired at the existing rate.

“The OIMB has issued an advisory to petroleum products stakeholders not to levy new excise tax rates on old stocks, considering that excise taxes are levied upon importation and not at the point of sale to the consumers,” officials said.

But for the value-added tax, new rates under TRAIN that are applicable to consumers become effective on Jan. 1, 2018.

With these rates factored in, the price increases for gasoline and diesel this week were higher than the DoE’s expectation, which it based on last week’s international oil trade, excluding Friday’s trading activities.

The DoE expected gasoline prices to increase by only around P0.15 per liter; diesel by around P0.60 per liter; and kerosene by around P0.55 per liter.

It also reminded retailers that upon a declaration of a state of calamity, the DoE is implementing a price freeze on kerosene and household liquefied petroleum gas in some areas of the country.

Provinces struck by recent disasters, however, remain under a price freeze for kerosene and household LPG for 15 days since these areas were declared under a state of calamity.

Parts of the Visayas and Mindanao were struck by back-to-back tropical storms Urduja and Vinta. — Victor V. Saulon with News5/interaksyon.com

PUV category eyed for ride-sharing companies

By Patrizia P. C. Marcelo
Reporter

THE LAND Transportation Franchising and Regulatory Board (LTFRB) is set to implement new regulations this year for ride-sharing companies, including the creation of a separate public utility vehicle (PUV) category for ride-sharing vehicles and a “transition scheme” for hatchback models and fleets.

LTFRB Chairman Martin B. Delgra III said that for 2018, the LTFRB will resolve two main issues regarding ride-sharing companies or transport network companies (TNCs) Grab Philippines (MyTAXI.PH, Inc.), Uber Philippines (Uber Systems, Inc.), and U-HOP. These are the creation of a “generic” PUV category or pool of vehicles for TNCs, and a transition scheme for what the agency deems as those not qualified to operate as transport network vehicle service (TNVS).

“There are two remaining issues LTFRB is about to resolve and implement at the start of the year 2018. One, creating a denomination of PUVs generic to TNVS from which all TNCs will get their supply,” Mr. Delgra said in a text message.

The agency will also be creating a transition scheme for those who are not considered as TNVS, and these include hatchback models and those which belong to a fleet or more than three vehicles under the same registration.

“Second, a transition scheme for those who are not qualified to be TNVS either because the vehicle is too small like the hatchback model and those whose numbers are more than three and therefore are considered fleet. Fleet management runs counter to the original business model of TNVS which is basically a ride-sharing concept wherein the owner is normally the driver who wants to earn extra income,” Mr. Delgra added.

The year 2017 has been a year of regulation issues between the LTFRB and TNCs.

In July, Uber and Grab were fined P5 million each by the LTFRB for allowing drivers to operate without permits, violating the terms of their accreditation.

In August, the regulator ordered TNCs to cease accepting and accrediting applications. It ordered the suspension of Uber for a month after the agency said the TNC violated the order. The LTFRB lifted the suspension after Uber paid the imposed P190-million fine and showed proof of compensation worth P299.24 million to affected drivers/operators.

In November, the agency said it will require TNVS operators to display stickers on the upper right portion of the windshield/s of their vehicle/s. TNVS drivers will be required to wear and display “in full view of the passenger” an identification card (ID) issued by their respective TNCs.

Drivers will also have a maximum number of seven passengers they can carry in a ride, “but not exceeding the designed seating capacity of the vehicle.”

The LTFRB in October also asked Uber to explain its surcharges. Uber includes a surcharge of P80 when drivers use the Skyway, Magallanes, and C-5 and exit points of Bicutan and Sucat; P100 for exit points of Alabang, Filinvest and Susana Heights; and P60 for areas east of Metro Manila like Antipolo, Rizal.

Uber said the surcharge is for the compensation of drivers for going to “low demand” areas. Mr. Delgra said at the time that the surcharge can be comparable with “contracting” done by taxi drivers, a practice criticized by taxi passengers and also disallowed under LTFRB franchising regulations.

Milan Melindo absorbs sour ending to the year

By Michael Angelo S. Murillo
Senior Reporter

WHAT WAS a solid year for Filipino world boxing champion Milan “El Metodico” Melindo did not have the corresponding ending he was looking for as he absorbed a unanimous decision loss on the final day of 2017, and in the process surrendered his International Boxing Federation (IBF) junior flyweight title.

Fighting in a unification bout against World Boxing Association (WBA) world junior flyweight champion Ryoichi Taguchi in Tokyo, Japan, on Sunday, Cagayan de Oro native Melindo found the going tough as the fight progressed and eventually saw his title slip from his hands as all three judges went with the hometown bet, 117-111, 117-111 and 116-112, when all was said and done.

The defeat was an about-face to how Mr. Melindo started 2017 also in Japan where he claimed the IBF junior flyweight belt by way of an impressive first-round technical knockout of Japanese Akira Yaegashi in May.

He then followed it up by successfully defending the crown here in the country against South African Hekkie Budler by split decision in September before setting forth to make his defense against Mr. Taguchi.

“The Year 2017 has been memorable so far for me as I was able to capture the IBF light flyweight belt and after that successfully defended it. Now my aim is to unify it with the WBA title currently held by Taguchi,” Mr. Melindo said in an online correspondence with BusinessWorld in the run-up to last Sunday’s fight.

Mr. Melindo as expected started out aggressively, taking the fight to his opponent to establish early control.

But Mr. Taguchi would prove himself up to the challenge and aggressiveness of the Filipino fighter, making full use of his length advantage, connecting with solid combinations that flustered Mr. Melindo.

Notwithstanding the cuts he sustained in the fight, Mr. Melindo continued to slug it out and make a go for the win but Mr. Taguchi was not to relent and hung tough in the championship rounds to secure the title unification in front of the hometown crowd.

The win improved Mr. Taguchi to 27 wins with two losses and two draws while Mr. Melindo dropped to 37-3.

NO BOWING OF HEAD
For local combat sports writer and observer Mike Miguel, Mr. Melindo has no reason to bow his head despite the loss as he gave all that he got and fought with so much pride.

“Milan’s camp had the right thing in mind going into the fight which was to utilize the jab against the taller opponent. Unfortunately, he wasn’t able to sustain it the entire fight. Making things worse were the cuts he sustained above his eye that bothered him as the fight progressed. Taguchi capitalized on those openings and took those rounds from Milan,” said Mr. Miguel of RealFight.ph when asked for his post-fight thoughts.

“I’m not surprised with how both fighters performed because they put up a very competitive fight. Both gave their all and they showed that neither of them would give in easily,” he added.

Mr. Miguel went to say that it was a disappointing loss for Mr. Melindo but was quick to point out that definitely it is not the end of his career and he can only be expected to rise up again.

“Is this a disappointing loss for Milan? Of course it is. But I expect him to come back better after this. He has been challenged all his career before becoming a world champion so I expect him to be hungrier than ever once he heals up,” Mr. Miguel said.

Filipino architects’ work recognized as being a sign of the times

SINCE 2008, the World Architecture Festival has inspired and recognized architects and interior design professionals through workshops, conferences, exhibitions, and awards held over three days. One of its programs include recognizing architecture projects from around the world.

In 2017, four projects by Philippine architectural groups — The Chapel of St. Benedict and St. Scholastica by WTA Architecture and Design Studio; The New Supreme Court design concept by Jorge Yulo Architects & Associates; One Ayala by Visionary Architecture; and Project Streetlight Tagpuro by Eriksson Furunes, Leandro V. Locsin Partners (LVLP), and Jago Boase — made the shortlisted out of 400 entries from 68 countries at the festival which was held at the Arena Berlin in Germany on Nov. 15-17, 2017.

The four short-listed projects were subsequently honored as the first batch of Grohe Zeitgeist Design Awardees during an exhibit launch at the Promo Garden of Central Square Mall, BGC in Dec. 18. The Grohe Zeitgeist Design Award is envisioned to give recognition to “Philippine architecture that brings glory to the country” according to a press release.

DESIGNS OF THE TIMES
The German term zeitgeist means “the defining spirit or mood of a particular period of history as shown by the ideas and beliefs of the time,” according to the Oxford Dictionary online.

Grohe, single-brand manufacturer and supplier of sanitary fittings and a founding partner of the World Architecture Festival, spearheaded the Grohe Zeitgeist Design Awards as its way recognizing exceptional works by Filipino architects and designers and their efforts to share it to the international community.

“We coined the term ‘zeitgeist design’ because design is more than just aesthetics. It is a quality feature that stands for the perfect synthesis of form and function as we aim to create design permanence wherein the products would look good as it is now in 10 years,” said Nikki Sevilla, LIXIL Water Technology Asia brand manager, of the award.

A MORE RESILIENT STUDY CENTER
One of the recipients of the Grohe Zeitgeist Design Awards, Project Streetlight Tagpuro, emerged as the winner in two categories: the Civic and Community — Completed Buildings and Small Project of the Year. BusinessWorld spoke to architect Sudar Khadka of LVLP on the sidelines of the exhibit launch about the team’s project, the construction process, and his take on the “spirit of the time” of architecture.

He said that it all started eight years ago when the firm was invited by Streetlight, an NGO providing health and educational support for children of informal settlers, to build a study center in Brgy. Tagpuro in Tacloban. However, the study center was destroyed along with much of the city when Typhoon Haiyan (locally known as Typhoon Yolanda) hit in November 2013.

In an effort create a more resilient facility, Mr. Khadka’s team and architect Alexander Eriksson Furunes collaborated in rebuilding the study center. “Alex is also an architect who is based in Norway and he came to the Philippines. He is involved with the NGO Streetlight because its founder (Erlend Johannesen) is also Norwegian and they knew each other. They did the project (study center) before Yolanda. After Yolanda hit, the project was destroyed so they rebuilt a new facility. [And] we volunteered our services as local architects,” Mr. Khadka told BusinessWorld.

“We used the existing alignment of the trees as a primary circulation access and divided the side between public and private zones. The private zone consists of an orphanage, playground, and study center. The public [zone] consists of a sports ground, an office, and a vocational training center,” Mr. Khadka said of the design and construction during his presentation at the exhibit launch.

Members of Streetlight were involved in the process of building the new facility. Mr. Khadka told BusinessWorld that the biggest challenge of the project was the language barrier between the architects from Manila and the community in Tacloban. Since it was difficult to explain architecture concepts to the locals, Mr. Khadka’s team came up with basic language about building blocks and frames to help bridge the language barrier.

When asked about his idea of the “spirit of the time,” Mr. Khadka replied, “[I think] it’s about trying to rethink and understand what architecture is or what it could be — how it can serve society… [I think] the essential role of an architect is to help people understand what architecture is and how people give meaning to space.”

After three years of designing and construction, the study center was completed in 2016 and is currently operational. — Michelle Anne P. Soliman

Rockets end losing skid after outlasting Lakers

LOS ANGELES — The Houston Rockets take some good news — and perhaps some bad — into 2018 after snapping their five-game National Basketball Association losing streak with a 148-142 double-overtime victory over the Los Angeles Lakers on Sunday.

James Harden scored 40 points but departed in the final minute of regulation with a hamstring injury.

Point guard Chris Paul scored 15 of his 28 points in the two overtime periods to carry Houston to a much-needed win on its home floor.

Paul played a part in four straight baskets in the first extra period, but Lakers forward Brandon Ingram made two free throws with eight-tenths of a second remaining to force the second.

In the second extra session, Paul made six free throws in the final minute and Houston took the lead for good on a second-chance basket by reserve forward P.J. Tucker — his only points in the contest.

Moments later Tucker swatted away a three-point attempt by the Lakers Kyle Kuzma.

Trevor Ariza scored 26 points for Houston, who trailed by as many as 17 points.

The sight of Harden limping off must have tempered the Rockets’ pleasure in snapping their skid.

Houston coach Mike D’Antoni said it was too early to speculate about the severity of Harden’s injury.

“I don’t think we’ll know until (Monday),” D’Antoni said. “I don’t think they’ll be able to assess it until (Monday) morning.”

WILLIAMS FUELS CLIPPERS
In Los Angeles, Lou Williams came off the bench to score 40 points and propel the Clippers to a 106-98 victory over the Charlotte Hornets.

“He was just a nightmare tonight,” Charlotte forward Frank Kaminsky said of Williams. “He started hitting [three-pointers] early, so we start getting up on his screen.

“He starts driving to the rim, and then he’s getting fouled.”

Williams scored 16 points in the first quarter as the Clippers seized the lead. But the Hornets held them to just 13 points in the second period while fashioning a 28-7 scoring run that put Charlotte up by as many as 14.

Charlotte led by 10 at the interval, but Blake Griffin scored 14 of his 25 points in a third quarter dominated 33-14 by Los Angeles.

While the Hornets remained within striking distance in the fourth, they never got the deficit below four points.

The Boston Celtics held off the determined Brooklyn Nets, 108-105, to notch their 30th win of the season.

Trailing by 14 points with 5:59 remaining, the Nets trimmed the deficit to three and had the ball after a timeout with 14.5 seconds left.

Nets guard Spencer Dinwiddie unleashed a long-range effort that was wildly off-target. Boston guard Kyrie Irving seized the rebound and called a timeout.

On the inbounds play, Irving was fouled and made two free throws to seal the win.

Irving, who scored 28 points and grabbed eight rebounds for the Celtics, said the Eastern Conference leaders should have clamped down at the end.

“We’ve just got to close out better,” he said.

Also victorious on Sunday were the Dallas Mavericks who defeated the Thunder, 116-113, in Oklahoma City as well as the Washington Wizards who beat the visiting Chicago Bulls, 114-110, behind John Wall’s 21 points. — AFP

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