Nation at a Glance — (04/16/18)
News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.
Peso expected to move sideways amid rising geopolitical tensions
THE PESO will likely move sideways against the dollar this week due to escalating geopolitical tensions abroad amid upbeat economic developments in the US.
Last Friday, the peso strengthened against the greenback, ending the session at P51.95 following US President Donald J. Trump’s tweet on retaliatory actions following the suspected chemical attack in Syria.
Week on week, the peso also strengthened from its P52.02-per-dollar finish last April 6.
Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines (LANDBANK) said the dollar might move sideways this week “as escalating geopolitical issues abroad could reduce the dollar’s appeal.”
On Friday (Manila time), American, British and French forces struck Syria with more than 100 missiles, targeting chemical weapons facilities in retaliation against a suspected gas poison attack.
Mr. Trump announced the military strike from the White House, saying that Washington, UK and France “marshalled their righteous power against barbarism and brutality.”
Russia promised to respond to any attack on its ally, adding that the Syrian military had intercepted 71 of the missiles fired.
Emilio S. Neri, Jr., lead economist at Bank of the Philippine Islands, said on the sidelines of the Economic Journalists’ Association of the Philippines’ media seminar in Tagaytay City that the developments in the Middle East “will elevate the price of oil.”
“This negative development could weigh down the greenback [today],” Mr. Dumalagan added, even as expectations of four interest rate hikes in the US escalated after Boston Federal Reserve President Eric S. Rosengren suggested that the monetary authority could end up hiking its rates more than three times this year in response to the robust economy.
For the rest of the week, Mr. Dumalagan noted that the dollar may regain strength due to upbeat US economic data and expected hawkish speeches from Fed officials in the coming days.
Fed officials such as Raphael Bostic, William Dudley and Charles Evans are expected to address the public this week.
Their remarks, along with likely strong US economic data, could bolster US rate hike expectations and sustain the hawkish takeaways from Mr. Rosengren’s speech last week.
LANDBANK’s market economist said the remarks, along with likely strong reports on retail sales, housing, and initial jobless claims, could bolster expectations of more Fed rate hikes.
Meanwhile, Mr. Neri added that remittances data to be released by the local central bank today could strengthen the peso.
“We’re looking at the remittances. If that outperforms the expectations, because usually it’s around $2-2.5 billion, that will be supportive of the peso,” he said.
For this week, LANDBANK’s Mr. Dumalagan sees the peso moving between P51.60 and P52.30 versus the dollar, while a trader said on Friday that it is still unclear where the next direction will be.
“We’re still looking for directions. If we break the P51.90 to P51.95 support level, we may see dollar-peso trade [stronger],” the trader noted. — Karl Angelo N. Vidal
US says air strikes have crippled Syria’s chemical weapons program
WASHINGTON/BEIRUT — Western powers said on Saturday their missile attacks struck at the heart of Syria’s chemical weapons program, but the restrained assault appeared unlikely to halt Syrian President Bashar al-Assad’s progress in the seven-year-old civil war.
The United States, France, and Britain launched 105 missiles overnight in retaliation for a suspected poison gas attack in Syria a week ago, targeting what the Pentagon said were three chemical weapons facilities, including a research and development center in Damascus’ Barzeh district and two installations near Homs.
The bombing was the biggest intervention by Western countries against Assad and his superpower ally Russia, but the three countries said the strikes were limited to Syria’s chemical weapons capabilities and not aimed at toppling Assad or intervening in the civil war.
The air attack, denounced by Damascus and its allies as an illegal act of aggression, was unlikely to alter the course of a multisided war that has killed at least half a million people.
US President Donald Trump called the operation a success.
He proclaimed on Twitter: “Mission accomplished,” echoing former President George W. Bush, whose use of the same phrase in 2003 to describe the US invasion of Iraq was widely ridiculed as violence there dragged on for years.
“We believe that by hitting Barzeh, in particular, we’ve attacked the heart of the Syrian chemicals weapon program,” US Lieutenant General Kenneth McKenzie said at the Pentagon.
However, McKenzie acknowledged elements of the program remain and he could not guarantee that Syria would be unable to conduct a chemical attack in the future.
The US ambassador to the United Nations, Nikki Haley, said at an emergency meeting of the UN Security Council that Trump told her that if Syria uses poisonous gas again, “The United States is locked and loaded.”
The Western countries said the strikes were aimed at preventing more Syrian chemical weapons attacks after a suspected poison gas attack in Douma on April 7 killed up to 75 people. They blame Assad’s government for the attack.
In Washington, a senior administration official said on Saturday that “while the available information is much greater on the chlorine use, we do have significant information that also points to sarin use” in the attack.
Speaking at a summit in Peru, US Vice-President Mike Pence seemed less sure of the use of sarin, saying that Washington may well determine that it was used along with chlorine.
ASSAD ‘RESILIENCE’
Ten hours after the missiles hit, smoke was still rising from the remains of five destroyed buildings of the Syrian Scientific Research Center in Barzeh, where a Syrian employee said medical components were developed.
There were no immediate reports of casualties.
Syria released video of the wreckage of a bombed-out research lab, but also of Assad arriving at work as usual, with the caption “Morning of resilience.”
Late on Saturday Syria time, a large explosion was heard in a Syrian government-controlled area in a rural region south of Aleppo, according to the Britain-based war monitor, the Syrian Observatory for Human Rights. The Observatory said the cause of the explosion was unknown, as well as its target.
Russian and Iranian military help over the past three years has allowed Assad to crush the rebel threat to topple him.
The United States, Britain and France have all participated in the Syrian conflict for years, arming rebels, bombing Islamic State fighters and deploying troops on the ground to fight that group. But they have refrained from targeting Assad’s government, apart from a volley of US missiles last year.
Although the Western countries have all said for seven years that Assad must leave power, they held back in the past from striking his government, lacking a wider strategy to defeat him.
Syria and its allies also made clear that they considered the attack a one-off, unlikely to do meaningful harm to Assad.
A senior official in a regional alliance that backs Damascus told Reuters the sites that were targeted had been evacuated days ago thanks to a warning from Russia.
Russian Foreign Minister Sergei Lavrov said the strikes were “unacceptable and lawless.”
Syrian state media called them a “flagrant violation of international law,” while Iranian Supreme Leader Ayatollah Ali Khamenei called it a crime and the Western leaders criminals.
Russia had promised to respond to any attack on its ally, but the Pentagon said no Russian air defense systems were used. Syria fired 40 unguided surface-to-air missiles — but only after the Western strikes had ended, the Pentagon said.
“We are confident that all of our missiles reached their targets,” McKenzie said.
British Prime Minister Theresa May described the strike as “limited and targeted,” with no intention of toppling Assad or intervening more widely in the war.
Washington described the strike targets as a center near Damascus for the research, development, production and testing of chemical and biological weapons; a chemical weapons storage site near the city of Homs; and another site near Homs that stored chemical weapons equipment and housed a command post.
The Pentagon said there had been chemical weapons agents at one of the targets, and that the strikes had significantly crippled Syria’s ability to produce such weapons.
Trump spoke to May and French President Emmanuel Macron to discuss results of the strikes, the leaders’ offices said.
UN Secretary-General Antonio Guterres urged all Security Council members to exercise restraint and avoid escalation in Syria, but said allegations of chemical weapons use demand an investigation.
In Sydney, Australian Prime Minister Malcolm Turnbull urged Russia to drop its “pretence” that Syria was not behind the chemical attack on Douma and use its influence to force the Assad government to destroy its chemical weapons.
“Russia has used its position as a member of the United Nations Security Council to veto resolutions designed to ensure that this chemical weapons crime is thoroughly investigated and cannot be repeated,” he told a news conference on Sunday.
“It should stop all the denial and the pretence that it wasn’t an action by the Syrian government and ensure that the chemical weapons are destroyed, that the ability of the regime to use chemical weapons is eliminated and that this type of criminal conduct does not occur again.”
WEAPONS INSPECTIONS
Inspectors from the global chemical weapons watchdog OPCW were due to try to visit Douma on Saturday to inspect the site of the suspected gas attack. Moscow condemned the Western states for refusing to wait for their findings.
Russia, whose relations with the West have deteriorated to levels of Cold War-era hostility, has denied any gas attack took place in Douma and even accused Britain of staging it to whip up anti-Russian hysteria.
The Western countries took precautions to avoid unexpected conflict with Russia. French Defence Minister Florence Parly said Russians was warned beforehand to avert conflict.
Dmitry Belik, a Russian member of parliament who was in Damascus and witnessed the strikes, told Reuters: “The attack was more of a psychological nature rather than practical. Luckily there are no substantial losses or damages.” — Reuters
Skepticism as Myanmar announces repatriation of first Rohingya family
YANGON — Myanmar’s government said it has repatriated the first family of Rohingya refugees, among 700,000 who fled a brutal crackdown, but the move was slammed by rights groups as a publicity stunt which ignored warnings over the security of returnees.
The stateless Muslim minority has been massing in squalid refugee camps across the border in Bangladesh since the Myanmar army launched a ruthless campaign against the community in northern Rakhine state last August.
The UN says the operation amounts to ethnic cleansing, but Myanmar has denied the charge, saying its troops targeted Rohingya militants.
Bangladesh and Myanmar vowed to begin repatriation in January but the plan has been repeatedly delayed as both sides blame the other for a lack of preparation.
According to a Myanmar government statement posted late Saturday, one family of refugees became the first to be processed in newly built reception centres earlier in the day.
“The five members of a family… came back to Taungpyoletwei town repatriation camp in Rakhine state this morning,” said a statement posted on the official Facebook page of the government’s Information Committee.
Bangladesh’s refugee commissioner, Mohammad Abul Kalam, told AFP the family had been living in a camp erected on a patch of “no man’s land” between the two countries.
Several thousand Rohingya have been living in the zone since August, crammed into a cluster of tents beyond a barbed-wire fence which roughly demarcates the border zone between the two countries.
“They were not under our jurisdiction, therefore, we cannot confirm whether there would be more people waiting to go back (to Myanmar),” he told AFP.
A Rohingya community leader in the camp also confirmed the family’s return.
According to the Myanmar statement, immigration authorities provided the family with National Verification Cards, a form of ID that falls short of citizenship and has been rejected by Rohingya leaders who want full rights.
Photos posted alongside the statement showed one man, two women, a young girl and a boy receiving the ID cards and getting health checks.
It said that the family had been sent to stay “temporarily” with relatives in Maungdaw town after “finishing the repatriation process.”
Myanmar officials could not be reached for more details.
The post did not mention plans for further returnees expected in the near future. — AFP
Japan ‘rare earth’ haul sparks hopes of cutting China reliance
TOKYO — The discovery of potentially millions of tons of valuable “rare earth” elements in sea sludge off Japan has raised hopes that Asia’s number-two economy can reduce its dependence on Chinese supply. But experts warn that extracting the minerals — used in technology ranging from mobile phones to electric vehicles — is both costly and difficult, especially when buried miles deep in the ocean.
A Japanese study published last week revealed an estimated 16 million tons of rare earths, enough to feed global demand on a “semi-infinite” basis, with deposits to last hundreds of years.
The news made headlines internationally and in Japan, which is the world’s second-largest consumer of these minerals but relies heavily on imports from China, which controls 90% of the highly strategic market.
China extracted around 150,000 tons of rare earths in 2016, according to experts, but has in the past restricted the supply amid political tensions. For this reason, “Japan is looking for several ways of freeing itself from any dependence on Chinese supply,” said Gaetan Lefebvre, an expert at the French Geological Survey.
Japanese firms are working on recycling products containing rare earths to re-use the elements, developing technology without rare earths and investing in foreign mining projects in exchange for the minerals.
And Japan is not alone in trying to diversify away from risky China — there are currently 38 projects outside China at various stages of development, according to Adamas Intelligence, a metal and minerals research firm.
In addition to wanting to cut reliance on China, the price of rare earths is rising due to a Chinese crackdown on illegal mining and surging demand for electric vehicles.
‘RESOURCE SECURITY’
The study’s author, Yutaro Takaya from Tokyo’s Waseda University, says his team hopes to develop ways to extract the prized elements within five years. “We are not talking about some dream technology of the distant future. We are conducting studies to make this possible,” he told AFP.
The recent find “should contribute to the ‘resource security’ of Japan,” he said. “It can also serve as a diplomatic card. Japan will be able to say, ‘if prices are made to go above this level, we can look to developing sea-bottom rare earths’,” added the researcher.
Ryan Castilloux, director of the Adamas Intelligence consultancy, acknowledged the find was “impressive” but recommended keeping the champagne on ice. “It takes up to 10 years or more to advance a rare earth project from discovery into a producing mine on land, so I do not imagine it will be faster in the sea,” he said. “The discovery in Japan is still in its very early stages and it will take several years to determine if mining will be feasible,” added Castilloux.
There is currently no profitable way of extracting rare earths from that sort of depth — more than five kilometers below the surface. “Pilot mining tests have been performed, but it remains to be seen who will be the first to produce ore at a cost that is less than the value of the commodity,” noted Mark Hannington from the Helmholtz Center for Ocean Research in the northern German city of Kiel. “Although 16 million tons is a large number, there is no evidence that this amount could be recovered economically or sustainably,” added the expert.
Analysts also point to the relatively weak concentration — less than one percent — of rare earths actually in the sea mud. “Producing just 1,000 tons of rare earth oxide from this source would require mining over one million tons of mud,” said Castilloux. — AFP
‘No appetite’ for major TPP changes to accommodate US
SYDNEY — There is “no appetite” among the Trans-Pacific Partnership signatories for major renegotiations to accommodate the US, Australia said Sunday after President Donald Trump indicated he was considering rejoining the pact.
Trump said Thursday the US could re-enter the TPP if it could get a “better” deal, a major U-turn after leaving the Pacific trade pact last year and calling it a jobs killer.
But Australia’s Trade Minister Steven Ciobo said he “can’t see any appetite for any kind of wholesale renegotiations of the TPP deal to accommodate the United States.”
“Now don’t get me wrong, that’s not saying we don’t want the Americans back in, we do,” Ciobo told Sky News Australia. “But what I am saying is I can’t see us unpicking all the stitching that brought this deal together to accommodate the US at this point.”
Eleven Asia-Pacific nations signed a slimmed-down version of the trade agreement, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in March. Apart from Australia, the pact also includes Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, representing together 13.5% of the global economy. The 11 states form a market of 500 million people.
The deal was signed just before Trump slapped steep tariffs on imported steel and aluminium, and also before tit-for-tat warnings between the US and China over imposing levies on each other’s goods. — AFP
Market to focus on data amid political tensions
AMID CONTINUED geopolitical tensions overseas, investors will look to several major economic data releases here and abroad for leads, but will remain cautious on developments in the military conflict in Syria and the trade spat between the United States and China.
After trading within 7,890 to 8,043 during the week, the bellwether Philippine Stock Exchange index (PSEi) closed 0.57% weaker week on week at 7,899.98 points, pulled down by holding firms, which fell 1.5%, and the mining and oil counter, which dropped 1.2%.
“Bulk of this weakness was largely driven by ‘political rhetoric,’ explaining volatility in funds flow movement, especially in markets overseas. Set against this backdrop, investors are awash with cash, and are poised to reinvest in securities that can deliver healthy returns,” online brokerage 2TradeAsia.com said in its weekly outlook.
Last week, turnover slowed 20% to P6 billion on average. Decliners trumped advancers at 86 to 116.
For this week’s trading session, Timson Securities, Inc. equity trader Jervin S. de Celis said in a mobile message over the weekend that China’s gross domestic product data for the first quarter, slated for release this week, “will be the focus of investors and may also provide a cushion for our market amidst the escalating tensions in the Middle East.”
For his part, Regina Capital Development Corp. Managing Director Luis A. Limlingan cited the remittances and the overall February balance of payments reports slated for release today and on Thursday, respectively, by the Bangko Sentral ng Pilipinas.
However, news overseas, particularly in relation to the conflict in Syria and Russia and the escalating trade tension between the US and China, “may still take center stage,” Mr. Limlingan said in a mobile message yesterday.
“For now, uncertainties will continue to prevail so long as this market has ‘non believers of a recovery phase,’” 2TradeAsia.com said.
Western powers said on Saturday their missile attacks struck at the heart of Syria’s chemical weapons program, but the restrained assault appeared unlikely to halt Syrian President Bashar al-Assad’s progress in the 7-year-old civil war.
The United States, France and Britain launched 105 missiles in retaliation for a suspected poison gas attack in Syria a week ago, targeting what the Pentagon said were three chemical weapons facilities, including a research and development center in Damascus’ Barzeh district and two installations near Homs.
The bombing was the biggest intervention by Western countries against Mr. Assad and his superpower ally Russia, but the three countries said the strikes were limited to Syria’s chemical weapons capabilities and not aimed at toppling Mr. Assad or intervening in the civil war.
The air attack, denounced by Damascus and its allies as an illegal act of aggression, was unlikely to alter the course of a multisided war that has killed at least half a million people.
Immediate support is seen at 7,800 points this week, while resistance is pegged at 8,000-8,070 points. — with Reuters
PHL privacy watchdog opens investigation on Facebook
By Krista Angela M. Montealegre, National Correspondent
THE National Privacy Commission (NPC) has opened a formal inquiry into Facebook, Inc. following the social media giant’s admission that the company had been negligent in preventing data abuse.
Facebook had confessed that data of some 1.2 million users in the Philippines may have been wrongly shared with British consultancy firm Cambridge Analytica, which allegedly used the harvested data to aid the campaign of political clients.
In a letter to Facebook Founder and Chief Executive Officer Mark Zuckerberg on April 11, the privacy watchdog said it has launched a formal investigation into the social media platform “to determine whether there is unauthorized processing of personal data of Filipinos and other possible violations of the Data Privacy Act of 2012 (Republic Act No. 10173).”
“We write with concern as regards your admission that Facebook has been remiss in its duty to protect its users’ personal data. The identification of 1.18 million Filipinos who may have been affected by the Cambridge Analytica incident is alarming and may be a symptom of a deeper problem that could pose risks to Filipino Facebook users,” the NPC letter read.
The letter, sent via the company’s regional office based in Singapore, was signed by NPC Commissioner Raymund E. Liboro and Deputy Commissioners Ivy D. Patdu and Leandro Angelo Y. Aguirre.
The Philippine data privacy authority ordered Facebook to submit “information relevant to the processing of Facebook data of affected Filipinos, and how personal data is generally shared with third parties using (the) platform.”
The investigation will look into “Facebook’s adherence to the data processing principles of transparency, legitimate purpose, and proportionality required of every personal information controller processing the personal data of Filipinos.”
The NPC will also examine whether Facebook upholds data subject rights.
Facebook was asked to submit its response and the required documents to the NPC within 15 days from receipt of the letter.
Reuters quoted a Facebook spokesperson as saying the company is committed to protecting people’s information and is engaged with the Philippines’ privacy watchdog.
“We’ve recently made significant updates to make our privacy tools easier to find, restrict data access on Facebook, and make our terms and data policy clearer,” Facebook said.
One of the most active social media users in the world, Filipinos have the second-highest data collected by Cambridge Analytica.
Cambridge Analytica is accused of harvesting personal information from 87 million Facebook users, mostly from the United States, to develop techniques that led to Donald J. Trump’s victory in the 2016 presidential election. This set the stage for legal investigation and changes to the social network’s privacy policies.
The South China Morning Post reported last week that Strategic Communications Laboratories, the parent company of Cambridge Analytica, had a hand in President Rodrigo R. Duterte’s landslide win in 2016 by rebranding him as a “strong, no-nonsense man of action.”
Presidential Spokesperson Harry L. Roque, Jr. had denied reports that Cambridge Analytica played a role in the campaign of Mr. Duterte, saying in a statement that the former mayor of Davao City received “an overwhelming mandate” from the Filipino people and “did not have to purchase information” from the consultancy firm.
Gov’t sees Clark as Philippines’ next big metropolis
By Elijah Joseph C. Tubayan, Reporter
CLARK, PAMPANGA — New Clark City is poised to be the showcase of the Duterte administration’s efforts to beef up infrastructure spending, Finance Secretary Carlos G. Dominguez III said on Friday.
“This will soon be the showcase of the Duterte administration’s economic strategy,” Mr. Dominguez said during the second leg of the Philippine Economic Briefing.
“We expect this area to be the growth driver of central Luzon, especially since it sits at the nexus of the network of expressways and soon a railway running from here to Manila and Los Baños,” he added.
Mr. Dominguez noted President Rodrigo R. Duterte has already approved three big-ticket infrastructure projects that will benefit Clark Freeport Zone. These are the P211.43-billion Philippine National Railways (PNR) North 2 project, the P12.55-billion New Terminal Building for the Clark International Airport, as well as the P4.37-billion Chico River Pump Irrigation Project.
The New Clark City, which Mr. Dominguez described as the “country’s next big metropolis,” is envisioned to be a hub for agro-industrial firms, including food processing and technology companies.
New Clark City will also house the planned 40-hectare National Government Administrative Center, which is designed to be a hub for administrative government offices that will ensure “continuous delivery of services in the country at the onset of a natural disaster.”
“This is where the future begins,” Mr. Dominguez said.
The Finance chief noted the increased inflow of official development assistance from Japan and China, as well as lenders World Bank and Asian Development Bank (ADB) will support the Philippines’ infrastructure program to stimulate rapid growth.
STRONG GROWTH
Socioeconomic Planning Secretary Ernesto M. Pernia meanwhile said he expects the Philippine economy to grow “better than 6.7% this year,” which would be driven by “public spending on infrastructure.”
He added the administration is making it a priority to link regions outside Metro Manila in order to broaden the country’s growth base.
Rolando U. Toledo, the Budget department’s Fiscal Planning and Reforms Bureau chief, said the government is banking on the speedy release of budget allotments as well as the one-year validity of appropriated funds through the Budget Reform Bill — which is currently up for plenary deliberations in the Senate.
“This will reflect actual goods and services that will be delivered in the fiscal year, not intentions or commitments,” Mr. Toledo said.
At the same time, Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla said the country’s economy has increasingly become broad-based, “creating more opportunities across more sectors in the society,” which he said is supported by “low and stable inflation,” and a robust external payments position that shields the economy from external headwinds.
However, Mr. Dominguez noted the Philippines may be affected by a possible trade war between the United States and China.
“We are growing our market locally so we are very robust. We don’t rely much on exports or imports as much as other economies, so we are sort of insulated. But still I’m not downplaying it. If there is a full-blown trade war, everybody is going to be affected… Walang nananalo. So if our two markets get hurt, China and the US, we will also get hurt. I’m really concerned,” he told reporters after the briefing.
The world’s two biggest economies have recently fanned fears of a trade war. China has warned it will hit back at any US protectionist moves after President Donald J. Trump’s threats to impose tariffs on hundreds of billions of dollars of Chinese imports.
Airline biz keeps JG Summit 2017 earnings flat
THE holding firm of tycoon John L. Gokongwei, Jr., the country’s second richest man, registered flat earnings last year on the back of the weakness of the airline business.
In a disclosure to the stock exchange on Friday, JG Summit Holdings, Inc. said core net income — excluding non-operating and non-recurring items — slipped to P29.56 billion last year compared to P29.97 billion in 2016.
The biggest drag to the conglomerate’s performance is the airline business, which suffered from higher fuel costs and the depreciation of the peso against the dollar. The double-digit growth in the petrochemical segment and higher equity earnings from associates tempered the decline.
Including extraordinary items, consolidated net income from equity holders of the parent reached P29.37 billion, surging 169% from P10.92 billion in 2016 when it booked P16.71 billion in impairment losses from the decline in market value of the group’s investment in PLDT, Inc.
Consolidated revenues rose 13.7% to P273.45 billion from P240.50 billion, buoyed by the stronger sales of most business units.
Universal Robina Corp. registered an 11% uptick in revenues to P125.01 billion from P112.61 billion, as international sales of the branded consumer food group and sales of the sugar division increased by a third.
Revenues of Cebu Air, Inc. went up by nearly a tenth to P68.03 billion from P61.9 billion due to the growth in passenger volume and average fares.
JG Petrochemicals Group chalked up a 42% expansion in revenues to P41.41 billion from P29.07 billion, driven by higher sales volume and average selling price of polymers and olefins.
Revenues of Robinsons Land Corp. declined to P22.45 billion from P22.75 billion as lower real estate sales weighed on the company, which was partially offset by the increase in rental revenues.
Banking revenue improved 31% to P4.48 billion from P3.41 billion, buoyed by higher interest income from finance receivables and trading gains.
Revenues from core investments dropped as dividend income received by the group fell 28.5% to P1.45 billion from P2.03 billion due to the lower dividend income declared by PLDT.
Equity in net earnings of associates, primarily from investments in United Industrial Corp. Ltd, Singapore Land, and Manila Electric Co., climbed 21.2% to P9.91 billion from P8.18 billion, which includes the full-year impact of Global Business Power Corp.
Shares in JG Summit fell P1.20 or 1.88% to close at P62.80 each. — Krista Angela M. Montealegre
SSI earnings up as it shuts stores
EARNINGS of SSI Group, Inc. rebounded last year on resilient customer demand and improved operating efficiencies even as the country’s largest specialty store retailer continued to shut down stores and reduce the brands in its stable.
In a disclosure to the stock exchange on Friday, the Tantoco-led firm said it generated a net income of P275 million last year, up 19% from P232 million a year ago.
This marked a reversal of the 71% drop in profits in 2016 from P810.70 million in 2015.
Core recurring income increased 12% to P652 million from P581 million, excluding write-offs related to the group’s store rationalization program, the FamilyMart and Wellworth businesses, and expiring net operating loss carry overs.
Revenues were flat at P18.6 billion from P18.44 billion though this topped expectations considering the highly competitive environment, weakening peso, and the ongoing rationalization program that focuses on improving the overall sales quality and operating efficiency of the group’s store network, SSI said.
At the close of 2017, SSI was operating 638 stores covering more than 129,486 square meters, down from 708 stores spanning 138,852 square meters.
The company maintains a portfolio 108 brands — compared to the 114 brands in 2016 — after adding Estée Lauder and Good Eats and dropping eight brands during the year.
SSI enjoyed “healthy” demand in the fourth quarter, a trend that continued into the first three months of 2018.
“Resilient consumer demand combined with the Group’s strengthened store network and increased operating efficiencies were the drivers of the Group’s turnaround in 2017. We expect that these same factors will continue to drive our growth in 2018,” SSI Group President Anthony T. Huang was quoted in a statement as saying.
SSI now operates six e-commerce websites to ride the e-commerce wave that has triggered the closure and bankruptcy of major retailers in the United States.
Shares in SSI went up by a centavo or 0.39% to settle at P2.59 per share. — Krista Angela M. Montealegre
PAL hopeful of signing deal with strategic investor this year
DAVAO CITY — Flag carrier Philippine Airlines Inc. (PAL) is finalizing talks with a group of investors that would also help develop markets, according to its top executive. This as the company continues to bleed in some of its domestic and international routes.
PAL President and Chief Operating Officer Jaime J. Bautista, at the sidelines of a press briefing here on Thursday, said they are currently working on the details of the agreement.
“They are strategic investors; they can be part of the board; they can help us develop certain markets,” Mr. Bautista told reporters, but he declined to name the group given a confidentiality agreement.
He said he is hoping that the agreement with the investors will be signed this year.
PAL has been in talks with potential investors over the last few years.
Mr. Bautista said that PAL is aiming to return to profitability this year after being in the red last year. Earlier this week, the company reported a P7.3 billion net loss in 2017, coming from a P4.13 billion profit in 2016, due to higher fuel prices and ballooning aircraft and passenger expenses.
Mr. Bautista said they are now reconfiguring routes to boost income.
Earlier this week, the airline announced that it would stop flying to Kuwait because, as Mr. Bautista explained, “The result was not that good.”
The plan to remove some routes, he said, would allow the company to assign some of its aircraft to more stable routes, like using an Airbus A330s for trips to New Zealand.
Mr. Bautista said domestic routes are generally profitable, with the Cebu hub bringing in most of the income. Still, some of the domestic services are considered missionary routes and are not expected to immediately make money, he said, “because these are developmental routes” and it takes at least a year or two for these to become profitable. “As we grow the market (for the developmental routes), it should allow us to offer rates that will make us profitable,” he said.
Mr. Bautista also said the airline is evaluating the possibility of launching international services to Japan, South Korea, China, Taiwan, and Palau from Davao. — Carmelito Q. Francisco