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Innovation, technology mark both fashion and event

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YONG DAVALOS — MICHELLE ANNE P. SOLIMAN

INNOVATION in style and technology highlighted the eighth season of the recently concluded and rebranded Panasonic Manila Fashion Festival. Held on April 10 to 13 at the Marquee tent at the EDSA Shangri-La hotel in Mandaluyong City, the fashion shows included designs from veteran, emerging, and young Filipino designers from around the country.
With Panasonic as a naming sponsor, the fashion shows were viewed via livestreaming on Panasonic and Metro Manila Fashion Festival Facebook pages and YouTube accounts.
Art Personas CEO Ronnie Cruz said that the lineup of designers in the festival’s eighth season is classified into three — the veterans, emerging designers, and recent graduates of fashion schools. “We choose the designers that we know people would love and the collection that people would appreciate,” Mr. Cruz said told BusinessWorld.
“At the end of the day, we want to find the best talents in the Philippines,” he said.
FROM DANTE’S INFERNO TO BEACHWEAR
The second day of the fashion festival opened with KC Pusing’s collection inspired by the Dante Alighieri’s Inferno which included black and grey ensembles with red accents. It was followed by Wilbur Lang’s collection of black, white, and burgundy pieces of leather, lace, and ruffle details; Jinggay Serag’s cloud-inspired designs included silver, black, and blue gowns, dresses, and suits; Harvic Dominguez brought spring colors to the runaway with pink flowy skirts and pants for women and blue jumpsuits for men; and Rica Rico designs were made up of colorful geometric patterns.
The second half of the show showcased edgy pieces with pleated details by Naoki and sheer dresses in black, blue, and magenta by Dak Bonite. The edgy pieces were followed by Daryl Maat’s collection of black and white streetwear; Chris Diaz’s vintage designs of beachwear were adorned with stripes and bold colors; and Yong Davalos concluded the show with sophisticated jumpsuits, dresses, and coats accessorized with bags, scarves, and belts.
FUTURE PLANS
When asked about future plans for the festival, Mr. Cruz said: “[The] Manila fashion festival will get bigger, but it is a controlled growth. We [are] focusing more on quality in terms of the designers we choose and shows that we create.”
They plan to take it a step further by October or by early next year by taking designers from within the Asia-Pacific region, as they are now in negotiations with representatives from Laos, Korea, Australia, Indonesia, and Malaysia. “When we talk of putting Manila on the map, I think we’ve started doing that,” Mr. Cruz said in another interview.
Mr. Cruz noted that despite the Philippines having a huge fashion market, the country has a long way to go in terms of establishing the local fashion industry. Alongside the fashion festival’s goal to establish Manila as a fashion destination, Mr. Cruz hopes that the annual Manila Fashion Festival would “encourage investment” in the local fashion industry.
One of the goals of the Manila Fashion Festival, as he said several seasons ago, was creating a healthy ecosystem for designers to thrive not just creatively, but economically and financially. While he says that the fashion designers have reported more sales due to a concentration on wearability, he says that a chief frustration of his was not setting up a more sustainable retail platform. They had tried in past seasons to sell the clothes via online retailing partners, but “It didn’t yield much benefit for the designers in particular,” he noted. Still, the company plans to push through with another online platform to sell the designs on the runway by October this year. — Michelle Anne P. Soliman and Joseph L. Garcia

Ayala-led Merlin to produce solar panels in Laguna by end-2018

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By Anna Gabriela A. Mogato, Reporter
AYALA-LED Merlin Solar Technologies, Inc. will start producing lightweight solar panels this year, as it targets both the domestic and Asian market.
Merlin Solar Technologies, Inc. President Olaf Gresens told reporters on Friday that full production of the solar panel kits at its Laguna facility is expected to begin by end-2018.
“[The] facility is complete. However in terms of facility [equipment] and the line, we are still in the process of putting in and qualifying equipment for mass production,” he said.
”We can run in smaller volume quantities [right now] so we expect to be in full production mode at the end of the year.”
Mr. Gresens said they are currently looking for local companies to help them install and sell the solar panel systems.
Last February, AC Industrial Technology Holdings, Inc. purchased a controlling stake in Merlin Solar where the group made a minority investment in 2016.
Mr. Gresens said the company will work with sister company Integrated Micro-Electronics, Inc. (IMI) on projects related to mobility, Internet of Things (IoT) and energy in the Philippines.
Merlin Solar currently has three hubs producing solar panels — in California, India and the Philippines. Mr. Gresens said the Laguna facility will be its most automated facility. Merlin Solar has another facility in Thailand, which produces the wafers.
“We are not making a standard solar panel for ground mound or rooftop applications. We use a very flexible and light type of solar panels which are used for transportation applications, which will be used for IoT systems and so on,” Mr. Gresens said.
“These applications include, for example, buses, trucks, […] utility vehicles with cooling requirements. They can be used for specialty rooftop applications where you have weight restrictions in terms of putting heavy panels on there.”
The solar panels can also be used for household or commercial buildings with glass roofs.

Trend watch

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GIRD YOUR LOINS, Manila-based fashionistas, because we picked up a few tricks and trends from Cebu and Davao’s designers, who showed at last week’s Manila Fashion Festival.
Power in Pantsuits: Sure, Hillary did it first, but on the runway, we saw pantsuits that were executed in soft, trailing fabrics that clung to the body while not giving much away. The pantsuit becomes less political and becomes more ladies who lunch.
• Pretty in Pastels: Don’t shrug off your pinks and minty greens, because the weird weather in the Philippines is making it possible to wear these hues all-year-round.
Love Local: If you can, find a reputable source for fabrics like inabel and such, because taking pride in where you come from seems like the height of chic these days.
Test My Textures: While clothes may be a visual experience, it takes a clever designer to create clothes that make people want to touch you. Tulle, lace, velvet, and surprise, even dip-dyed canvas may create this effect.
Sexy but Soft: The world is hard enough as it is, and fashion is telling people to move and breathe easier in loosely draped fabrics, with softer lines in details from sleeve to lapel. — JLG

Style from the South

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JUDICIOUS editing, restraint, a respect for diversity, and a love for local brought impossible heights of chic at the regional fashion show of Panasonic Manila Fashion Festival last week, featuring designers from Cebu and Davao.
The show was opened by Aztec Barba, showing a collection of dresses featuring flowy silhouettes, making use of drab colors like gray and charcoal, spiced up with pops of color in jade and emerald green. Some of the outfits, such as a cape, featured interesting dye techniques that gave the fabric individual character. Next up was Bamba Limon, who showed a collection of dresses and menswear made of pastels, and trimmed with fabrics woven by indigenous people. The cleanliness of cut and silhouette provided a pastoral peacefulness to the clothes. Benjie Panizales, meanwhile, showed off a collection of black and white garments made with fabrics printed with a design from the Bagobo indigenous people. Dodjie Batu then showed a collection of neutral-toned menswear, with gray as a prevalent hue. It’s an exercise in experimentation with shirts for example, not buttoned, but draped and wrapped around a man a la Diane von Furstenburg, but still entirely clean and refreshingly masculine.
Emi Englis showed designs that bordered on the avant-garde, with clothes made with the repeated motif of ovals: not as a print, mind you, but an overall silhouette and pattern. Think of a top with a Mandarin collar for women that lands oh-so-softly on a woman’s waist, cut as an oval, or else a two-toned coat that appeared as an egg, until the models arms pop out of the sides of the sleeves, which were integrated with the rest of the garment, like a draped raglan sleeve — with the renewed use of her arms, she took her coat off to the oohs and aahs of the audience.

Another designer who stood out was Edgar Buyan, who showed clothes printed wit the faces of different indigenous peoples from Mindanao, as well as articles about them, with experiments in shape such as a coat with loose butterfly sleeves and a bodice that appeared like a cocoon on the torso. For this collection, Mr. Buyan dedicated his show to the indigenous people from whom he had borrowed.
As for the question of cultural appropriation, most of the designers assured this reporter that they had taken seminars about proper appropriation from the National Commission on Culture and the Arts. For example, since the indigenous peoples’ culture and tradition had prevented them from cutting the actual fabric since it was sacred to them, they were at least allowed to replicate the patterns by printing them.
Another designer who caught the eye was Windell Mira, who created a series of clothes made with mesh, and if one observed the fabrics underneath them, were printed with designs of varicolored banig (woven mats), the pattern of which was borrowed from the Badjao people.
Philipp Tampus, meanwhile, showed a collection that could be summarized with the word “rich”: think richly patterned black lace, reminiscent of Spanish mantillas, paired with flame-colored skirts, especially in one inspired by flamenco which swished appealingly while it went down the runway on a model. Finally, Philip Rodriguez ended the show with a collection of Belle Epoque-inspired dresses made with tulle and embroidered with dainty flowers, lending a distinctly feminine touch. — Joseph L. Garcia

AirAsia Philippines to mount Cebu-Shenzen flights

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PHILIPPINES AirAsia, Inc. is set to launch direct Cebu-Shenzhen flights on May 9, marking the budget carrier’s first route between Cebu City and China.
The local unit of the AirAsia Group said in a statement over the weekend that it will be launching daily flights from Cebu to Shenzhen, China.
Philippines AirAsia CEO Dexter M. Comendador said the route is part of strengthening operations outside Metro Manila and connections from the Philippines to China.
“The addition of our first China route from Cebu hub enables us to further strengthen our network outside Metro Manila and open up new and exciting places to visit this summer. Cebuano travelers would be delighted to experience Shenzhen’s modern metropolis and marvel at how the southern city that links Hong Kong to mainland China built the world’s largest electric bus fleet, massive malls, contemporary buildings and amusement parks,” Mr. Comendador said in a statement.
Shenzhen in Guangdong Province is located in the Pearl River Delta metropolitan area. It is known as “China’s Silicon Valley,” home to some of the top global start-up and tech businesses from China including Huawei, BYD and ZTE.
AirAsia is eyeing to introduce Manila-Osaka flights in the second semester of the year, which will be the first Philippines AirAsia route to Japan.
Philippines AirAsia launched daily flights to the Indonesian cities of Bali and Jakarta in January this year.
The airline has also re-assigned Clark International Airport as its hub.
The airline expects to have 70 planes in its fleet in 10 to 15 years.
Mr. Comendador had said last month that the plan of Philippines AirAsia to launch an initial public offering within the second half of this year may be pushed back given the government’s plan to close Boracay island for six months due to environmental concerns. — Patrizia Paola C. Marcelo

Oil palm plantations, mills planned for Davao region

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DAVAO CITY — Several initiatives are underway for the development of oil palm plantations with milling facilities in Davao Region involving proponents from Malaysia, the world’s second biggest producer of palm oil.
Davao City Chamber of Commerce and Industry, Inc. President Arturo M. Milan said the chamber is preparing to sign an agreement with members of the Sarawak Chamber of Commerce with interests in the palm oil industry.
“Their president will be coming over and they will be bringing a delegation coming from Sarawak… in June. They are just waiting for our advice,” Mr. Milan told the media in a forum last week.
“I once met three groups of Malaysian businessmen who wanted to look at and explore business opportunities in palm oil. These are large plantations and they were looking at Paquibato and Marilog (both in Davao City) at that time,” he added.
This time, Mr. Milan said, the prospective investors are looking at potential sites in the entire region.
“(Palm oil) is the flagship product of Kota Kinabalu (capital of Sabah state) that has boosted the economy. You need to have a processing facility because it has to be processed within 24 hours after harvest. The plantation (here) should have a mill. We are really trying to push for processed products like for example even in our cacao, we are happy to see that many local producers are already producing chocolates and that’s a very good indication… that’s where the value added is, in processing,” he said.
In a separate media forum, a Davao Oriental official announced that the province is considering setting up an oil palm plantation and a mill in Cateel town.
Ednar Carlos G. Dayanghirang, chief of staff of Governor Nelson L. Dayanghirang, said the project will be financed by the Development Bank of the Philippines (DBP), which has expressed its readiness to provide P500 million worth of financing for the mill and P1.1 billion for the development and maintenance of a 5,000-hectare (ha) oil palm plantation.
The project proposal was made by Dr. Roy G. Ponce of the Davao Oriental State College and a Malaysian consultant.
The mill, with facilities for both crude palm oil and a refinery, will also be used to process the harvest from the existing oil palm plantation setup under former governor and now Representative Corazon N. Malanyaon after Typhoon Pablo (international name: Bopha) in 2012.
The planned new oil palm plantation is within the 45,000-ha. ancestral domain of the Mandaya indigenous group, who will be the legal owners of the plantation.
The provincial government, however, will be responsible for the loan payments to DBP.
“The province will run the mill and guarantee the payment,” Mr. Dayanghirang said.
Consultations with the local government of Cateel, as well as the towns of Banganga and Boston which are also expected to benefit from the project, are scheduled soon alongside the preparation of the final feasibility study.
“I hope (the mayors) will agree (to) the sharing with the province. By May, I will review the proposed feasibility study before we apply for the loan,” he said.
The province is seeking to supply the Mindanao market with palm oil. — Maya M. Padillo

Pebble-grain shoes are menswear’s latest subtle power move

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WHILE WOMEN’s fashion lives and dies by large swings of the pendulum — hems sweep floors, then barely graze knees; one season, stilettos are all the rage, and the next, it’s sandals — menswear is a much subtler affair. For proof, one may merely look at the finely drawn details that pass for a style revolution in the world of men’s shoe design.
Take, for example, the recent, barely perceptible trend that’s making big waves below the ankle: classic footwear silhouettes made from pebble-grain leathers, in which treated cow hides are embossed or pressed to give a raised, bumpy finish, either to camouflage imperfections in the material or purely for stylistic purposes. The subtle swap instantly imbues traditional lace-ups, slip-ons, and boots with a textured, slightly rustic look — somehow simultaneously casual and refined. Brands ranging from staunch traditionalists (Church’s and Salvatore Ferragamo) to swaggering trend-chasers (Gucci and Dries Van Noten) are standing behind the look.
“It boils down to their versatility,” says Jim Parker, store manager and buyer at the Armoury, a tony menswear boutique in Manhattan’s Tribeca that focuses on luxury suiting and accessories. “Because of the texture, pebble-grain shoes pair well with a wide range of casual and semi-formal clothing, from heavy denim to gray flannels.” He and the store’s owners believe in the understated appeal of pebble-grain shoes so much that they will start offering them as part of their own in-house label this fall, to sit alongside other brands they stock, such as those from the hand-crafted cobblers at Carmina.
“That same texture tends to show wear less than smooth calfskin — and definitely less than suede — making them a great choice for foul weather dress shoes,” Parker continues. “That’s why we usually stock them with rubber soles.”
Steve Taffel, owner of the West Village shoe boutique Leffot, started to noticed an uptick in interest in the style around two years ago and pegs it to an overall trend in relaxed dressing. “Using a pebbled or textured leather with a formal style shoe is a way of dressing down the look and adding versatility,” he says. “Men are increasingly looking for shoes that can be worn for work and casual wear.”
Pebble grain can also add a bit of European élan to more conservative-leaning designs. Take American designer Thom Browne, who’s made a name for himself by giving whimsical updates to menswear classics. Browne frequently uses pebble-grain leathers in his footwear designs, which lend his penny loafers and wingtip boots flair without breaking too much with tradition. In menswear, hair-splitting changes can have major reverberations, so this sort of update helps maintain a delicate balance of desire for certain shoppers of discerning taste.
“It’s a subtle way to create a unique-looking pair of shoes without standing out too much,” says Taffel.
In other words, pebble grain delivers the formality of a dress shoe without all that stuffiness. GQ magazine calls them “a great country look and make your tweeds look even tweedier, whether you’re on the East Coast or east of La Cienega,” while the popular menswear blog Put This On wholeheartedly endorses them in conservative black.
If this seems like obsessing over silly sartorial minutiae, consider this: Business Insider found that “research shows that 80% of hiring executives say shoes are ‘extremely important’ in creating the right impression in work environments, but only 51% of young men even wear appropriate shoes to an interview.”
Don’t be surprised, then, if the smooth, patinated leathers gently tucked away in your closet suddenly look dull and lifeless or — perhaps worst of all — flat-out boring. If your glossy, polished dress shoes need a little additional personality, you know what to do. — Max Berlinger, Bloomberg

Water companies spar over supply allocation

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MANILA WATER Co., Inc. has downplayed claims by Maynilad Water Services, Inc. that the amount of water that enters the La Mesa treatment plants remains below what the West Zone concessionaire is entitled to receive.
“Adjustments have been made since Friday and are being monitored,” said Jeric T. Sevilla, Manila Water corporate communications head, in a text message when asked about Maynilad’s statement.
Manila Water also said: “Continuous adjustments are being made on a daily basis and are being monitored.”
On Sunday, Maynilad said that despite its talks with state agency Metropolitan Waterworks and Sewerage System and Manila Water last Friday on appropriate raw water allocations, it still was not getting enough.
“Until Maynilad is given its appropriate raw water allocation, it will not be able to bring water supply for its customers to normal levels. Maynilad has been receiving less than its 60% share since April 1, causing its stored water to plunge,” it said.
Maynilad said given the limited supply that its treatment plants received on Saturday, stored water at its Bagbag reservoir would last only until 6 p.m. on Sunday.
Because of this, the same Maynilad customers who have been experiencing daily service interruptions since April 12 will again have low water pressure to no water supply on Sunday night at 7 p.m. until 4 a.m. the following day, Maynilad said.
Mr. Sevilla explained that an office called “common purpose facility,” which includes representatives MWSS and the water concessionaires, is responsible for the water allocation.
“Fluctuations in allocations are common that may favor Maynilad at times and Manila Water at some point,” he said. “It just takes time for Maynilad to fill up its reservoir and build pressure so there are areas in their concession with low pressure or water interruption in their concession area.”
Maynilad said it was reviewing existing protocols on the raw water sharing with Manila Water so it could propose changes that would prevent the same situation from recurring.
It appealed to MWSS to have Manila Water restore Maynilad’s 60% share. — Victor V. Saulon

Jimmy Choo goes urban for its pre-fall shoe collection

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JIMMY CHOO’s Pre-Fall 2018 collection takes on an urban aesthetic spiced up with the brand’s signature glamorous spirit.
The ’90s favorite D-ring now wraps around the ankle. Webbing is also tricked out in linear sky blue and red ticking for high summer pattern. This metropolis is anything but grey — graphic color flows through the threads of the collection with refreshing shades of lime, rose water, and red, and unique, painterly disrupted stripe leather.

The collection also welcomes back the legacy logo: “I Want Choo” on sandal webbing, and emblazoned on trainers, signalling a new sophistication as the global street wear slipstream continues. Tonal jelly sandals have aquatic gloss and stylishly modelled with 3-D technology creating a getaway go-to style.
“We’re looking at everything urban and cosmopolitan. The technique and the technical. Because we’re all in transition, constantly evolving. The Jimmy Choo woman is unanchored and transient, constantly on the move which makes her so of the moment,” said the brand’s creative director Sandra Choi.
The message is confident and urban.
In the Philippines, Jimmy Choo is exclusively distributed by Stores Specialists, Inc., and is located at Shangri-La Plaza East Wing and Rustan’s Makati. Visit www.ssilife.com.ph for more information.

SFA Semicon Philippines net income plunges in 2017

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SFA SEMICON Philippines Corp. (SSPC) reported its net income plunged by 71% to $1.83 million in 2017, amid stiff competition and higher costs.
In a statement, the local arm of one of Samsung Electronics Co. Ltd.’s South Korean suppliers said its profit was hurt by a 29% jump in cost of sales to $201.07 million. Cost of sales include raw materials, depreciation, labor and other manufacturing costs.
“The increased direct costs and relatively low average selling prices resulted in the 54% decline in gross profit declined from $15.40 million to $6.70 million during the year in review,” SSPC said.
Gross revenues, on the other hand, jumped 21% to $207.77 million in 2017, from $171.82 million the previous year.
SSPC attributed the revenue growth to an 11% increase in production volumes with full-year output rising to 655 million memory devices from the 591 million output in 2016.
The company said another factor that boosted top-line growth was the “shift in product mix from the older DDR3 (double data rate type three) format to DDR4 DRAM (dynamic random-access memory) modules and new orders for the new-generation eMMC (Embedded Multimedia Card) line.”
“The memory segment in the outsourced semiconductor assembly and test (OSAT) industry was affected by increased cost of raw materials and price pressures due to intense competition among OSAT players,” SSPC President Byunggil Go was quoted as saying in a statement.
Mr. Go noted the DRAM and NAND memory OSATs had faced supply constraints in raw materials with the robust recovery in global demand in the semiconductor industry.
For 2017, the Semiconductor Industry Association reported worldwide sales of semiconductors surged 22% to a record-high $412.2 billion, amid double-digit growth in every regional market.
SSPC, which has manufacturing facilities in Clark Freeport Zone, produced 427 million DDR4 DRAM memory modules, 121 million DDR3 DRAM memory modules and 69 million IC memory component chips in 2017.
SSPC was the top exporter in the Clark Freeport Zone last year, with total shipment value at $3.06 billion, 90% higher than the $1.61-billion shipment value recorded in 2016.
Amid cost pressures, Mr. Go said SSPC streamlined its manufacturing processes, secured alternative supplies of raw materials and controlled operating expenses.
SSPC, a wholly owned subsidiary of Korea-based firm STS Semiconductor and Telecommunications Co. Ltd., has a business transaction agreement to supply its products to Samsung Electronics Co. Ltd. until May 2019.

Roxas Holdings pushing for mechanization amid aging sugar labor force

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INTEGRATED sugar and bioethanol producer Roxas Holdings, Inc. (RHI) said it is pushing for further mechanization on sugarcane farms amid fears of an aging and dwindling work force in agriculture.
RHI President and CEO Hubert D. Tubio said that while RHI currently does not have any problem with its work force, labor will need to be gradually displaced with machines to increase productivity and adapt to the changes in the industry.
“On the side of the farmers, nobody wants to remain on the farm. The farmers who used to work in the farms don’t want their children to work like them. That means, that the work force is aging,” he added.
“It’s high time, as far as the planters are concerned, [that] they need to mechanize. The farmers in our milling districts now have loaders and tractors for harvesting cane.”
Last month, Sugar Regulatory Administration Chief Hermenegildo R. Serafica told reporters that the regulator expects agricultural workers to shift to construction due to attractive wages, driven higher by the government’s aggressive building program.
Mr. Tubio said that RHI is currently trying to support greater mechanization, but only 20% of its sugarcane suppliers can afford to invest in loaders and tractors. As of 2017, the company has provided 24 loaders to suppliers.
The remaining 80% are not sufficiently equipped, with their small plots of land not justifying the investment in machinery.
“What we’re trying to do is to make arrangements with government agencies to address this. We try to make them receptive to the idea of supporting these [mechanization efforts],” he added.
“If we can push with the acceleration of the mechanization process, this can be helpful to us. we’re starting to reduce the farm workers, the catalyst to push us to that direction (mechanization) as we lack workers. We have no choice but to mechanize the farms,” Mr. Tubio said.
RHI Chairman Pedro E. Roxas said that around 20% of the harvest is automatically lost by the time it gets to the mill due to the inefficiencies of manual labor. — Anna Gabriela A. Mogato

T-bills, T-bonds to track US rates amid Fed bets

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YIELDS on government securities on offer this week will likely end mixed as investors track the movement of US bonds and wait for the Treasury’s bond swap.
The Bureau of the Treasury plans to raise a total of P25 billion from both Treasury bonds (T-bonds) and Treasury bills (T-bills) this week.
Broken down, for the T-bills, the government will auction off P5 billion in three-month, P4 billion in six-month, and P6 billion worth of one-year papers today.
The Treasury will also raise P10 billion via reissued-year 10-year T-bonds tomorrow with a remaining life of nine years and 11 months.
A bond trader told BusinessWorld on Friday that the yield on the three-month T-bills is expected to climb by around five basis points, while the rates of the six-month and one-year papers will likely move higher by 10 basis points.
“For the 10-year [bonds], possibly the coupon rate will land within the 6-6.1% range,” the trader added.
At the secondary market on Friday, the three-month T-bill fetched a yield of 3.3716%, while the six-month and one-year papers were quoted at 3.9196% and 4.1893%, respectively.
Meanwhile, the 10-year bonds were last offered on March 20 at a 6.25% coupon rate. The yield on the 10-year bonds closed 6.05% at the secondary market on Friday.
The bond trader said the movement of US Treasuries will be a “major factor” investors will consider.
On Friday, Reuters reported that the US Treasury yield curve hit its lowest level in more than a decade as short-dated yields rose faster than the longer tenors following the expectations of further interest rate hikes from the Federal Reserve this year.
The yield gap between the five-year and the 30-year securities flattened 1.1 basis points to 36.30 basis points after hitting 35.30 basis points, its flattest level since September 2007.
Expectations for the Fed to hike its interest rates this year heightened after Boston Fed President Eric S. Rosengen suggested that the Fed could end up hiking its benchmark rates more than three times this year on the back of the robust US economy.
Meanwhile, ANZ Research said in a report that the 10-year bonds on offer tomorrow, as well as the 20-year papers to be placed on the auction block next week, “will be challenging after a partial award again” during the seven-year bond auction last week.
Last Wednesday, the Treasury bureau only awarded P7.932 billion out of the planned borrowing of P10 billion as yields spiked amid concerns over rate hikes here and in the US.
“The smaller issue size of P10 billion next Tuesday will help but the market could be focusing on the bond switch where the auction will provide pricing guidance to the switch,” ANZ said, adding that the swap is “imminent.”
“Typically, a bond switch could raise P150-200 billion. As we expected, [the Treasury] is looking for a bond switch to help fund a bond redemption of P130.5 billion, due on May 23,” ANZ Research noted.
Last Wednesday, National Treasurer Rosalia V. De Leon told reporters that the government will have an opportunity to finance the redemption requirement if there is a good window.
This quarter, the government is holding two auctions per week — one for Treasury bonds and another for Treasury bills — to reflect increased borrowing requirements for the quarter.
The government is set to raise P325 billion via the domestic market this quarter through auctions of securities.
It plans to borrow P888.23 billion from local and foreign sources this year to fund its budget deficit, which is capped at 3% of the country’s gross domestic product. — Karl Angelo N. Vidal