When big businesses meet small start ups

December 13, 2017 | 11:34 am

Start‑ups. Disruption. Innovation. With small tech‑driven businesses having the potential to turn into hugely profitable enterprises like in the example of transport network vehicle service apps Grab and Uber, how are old businesses dealing with these new developments?

For Aboitiz Equity Ventures, Inc. Chief Executive Officer Erramon I. Aboitiz, the internet is a game changer. “Your generation intuitively understands technology as it has always been a part of your life, growing up in an electronics‑filled environment that enables online and social media communication with anyone, anywhere in the globe, 24/7,” the CEO of his family’s multifaceted conglomerate said in his key speech at the 12th Aboitiz Future Leaders Business Summit (AFLBS) last November.

AFLBS is Aboitiz’s yearly summit for students from all over the Philippines and from different fields like Accountancy, Engineering, Economics and Psychology, to show them what opportunities they might have in their company.

“The vast information on the Internet also fundamentally changes the way you learn things about our world,” Mr. Aboitiz said. “You millennials are also acknowledged as being able to present far more creative and innovative solutions to problems than any other generation before you. You are the most ethnically diverse generation and therefore tend to be tolerant of difference.”

Ana Aboitiz‑Delgado, a fifth‑generation Aboitiz and chief user experience officer of Union Bank, said the company is trying to develop an environment that better suits the millennial work force. Millennials, after all, make up approximately a third of the Philippines’ total population.

“The old way of working is that you’re stuck to a desk, and you have to show up in this particular office,” Delgado told SparkUp. “Now we’re experimenting with agile workspaces where you don’t have a fixed desk, and you can work from different places.”

“And I think more and more we espouse the need to be aligned with a purpose,” Delgado added. “I think that they appreciate that we can recognize that they might not be attracted to us so we also have to convince them that we are the right employer.”

Insular Life Assurance Company, Ltd. is also reaqcuainting itself and its employees with the values of innovation. The 107‑year old coverage provider held a seminar, IKNOWVATE, on Nov. 29 for its employees and officers and invited several speakers to talk about what innovation can bring to a traditional company. Insular Life also held a pitching session with technology startups, with products that could bring some needed innovation to Insular’s services.

“We will be very passionate about innovation. It is a way to survive,” said Insular Life CEO Nina Aguas. “Of course Insular has survived all these years. In terms of durability, it is a company that has survived 107 years. We’re just ensuring that it will be here for another century for the next generation. And hopefully when it happens our great‑great‑grandchildren will be a part of Insular Life.”

“I’m very excited about innovation,” Aguas added. “We’re looking forward to what it holds.”

Among the speakers invited to IKNOWVATE was head of Ayala Innovation Vince Tobias. Ayala Innovation is Ayala Corporation’s think tank for developing innovation within another of the Philippines’ corporate giants.

“We were very happy with how we were doing,” Tobias said about how Ayala Corporation learned to embrace the importance of innovation. “So to bother people to think about innovation was very difficult. It took our Chair and CEO to say `You know what, we’re going to have an organization and it’s going to be here on a permanent basis.”

And they soon learned the importance of startups, which can reach customers with more ease than Ayala can. “Startups are more agile, they’re closer to the market. They’re quicker to adjust to what they see.”

“We’re big, Ayala is huge and that causes some distance to the customer,” Tobias explained. “We leverage on our access to finance and our people, so there’s not so much pressure to look at the finer details which the startups might be able to see. They’re leaner, they don’t have your resources so they’re more attuned to market needs and intricacies.”

Is this a sign for a future where startups and large companies can work together and benefit from one another? With these corporate giants seeking to adapt to the changing economic climate, signs point to yes.

Oct. sees less jobs, but quality improves

December 13, 2017 | 12:32 am

THE RANKS of jobless Filipinos grew in October, but job quality saw the biggest improvement in more than a decade, according to latest labor data which the government released on Tuesday.

The preliminary results of the Labor Force Survey (LFS) conducted by the Philippine Statistics Authority (PSA) put the unemployment rate at five percent in October, compared to the year-ago 4.7%. This is equivalent to 2.19 million Filipinos, up from 2.04 million a year earlier.

At the same time, there may be more better-quality jobs available in the labor market as the underemployment rate — the proportion of those already working but still looking for more work or longer working hours — improved to 15.9% from 18% last year, the lowest in more than 10 years. This represents around 893,000 less underemployed workers during the period.

The employment rate was 95% in the same month — consisting of about 41.6 million individuals — slightly less than October 2016’s 95.3%.

The labor force consisted of approximately 43.72 million individuals out of an estimated 70.4 million Filipinos aged at least 15 years old, taking the labor force participation rate to 62.1%, lower than the past year’s 63.6%.

The National Economic and Development Authority (NEDA) particularly noted in a statement the increase in employment of wage and salaried workers “by about 624,000” and the decrease in “vulnerable employment” — consisting of the self-employed and unpaid family workers — to 33.9% from 36.3% a year ago.

The self-employed made up 27.9% of the total employed, an improvement from 27.6% in October 2016, while unpaid family workers accounted for six percent, fewer than 8.6% last year.

Wage and salaried workers accounted for 62.3%, up from 60.6% the previous year.

“Regular conduct of job fairs and provision of livelihood assistance have contributed to the improvement of underemployment especially in areas outside of the National Capital Region (NCR). This is a good indicator that our efforts in the lagging regions are starting to take effect,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted in the NEDA statement as saying.

Underemployment in areas outside of NCR was 17%, lower than the past year’s 19.6%.

By sector, most of the new jobs were in industry and services. Hiring in services improved to 57% from 54.6%, while employment in industry rose to 18.1% from 17.1%.

Offsetting these gains were jobs lost in agriculture, which saw employment rate declining to 25% from 28.3% — representing around 1.4 million layoffs.

On the other hand, much of the declining underemployment was seen in agriculture, with a 32.6% rate in October that was better than last year’s 39.6%. Industry and services, meanwhile, saw underemployment rates increase to 19.5% (from 17.1%) and 47.9% (from 43.3%), respectively.

“[T]he annual drop in the underemployment rate during October was mainly evident in the agriculture sector,” said Security Bank Corp. economist Angelo B. Taningco, citing “favorable weather conditions.”

Mitzie Irene P. Conchada, associate dean of the De La Salle University (DLSU) School of Economics, ascribes the higher unemployment rate to a 2013 law that increased excise tax rates for alcohol and tobacco products.

“The sector that registered the highest unemployment rate is the agricultural sector, particularly in the Ilocos region with 8.9%, which is higher than the national average of 5.6%,” Ms. Conchada said, referring to the country’s main tobacco growing area. “This was attributed to lower demand for tobacco products due to the higher excise tax on tobacco products implemented in 2013.”

The provision under the tax reform being finalized in Congress to raise the tobacco excise tax even further, she added, “will hurt many tobacco farmers and workers as big cigarette companies express the probability of closing operations in the country.”

Ms. Conchada said added that underemployment rate’s overall “decline could be attributed to more casual jobs being available this year.”

Rene E. Ofreneo, professor at the University of the Philippines School of Labor and Industrial Relations, said that the increase in unemployment rate was “negligible” while the decline in underemployment was “significant.”

“The latter can be interpreted to mean that better-paying jobs are increasing, which can be attributed to more available jobs and, in a limited way, gains in the anti-endo [end-of-contract] campaign,” he said.

Last March, Labor Secretary Silvestre H. Bello III signed Department Order (DO) 174 which spelled out the rights of employers and employees in contractual hiring arrangements. The order also banned “endo,” short for “end-of-contract” which refers to the practice of hiring workers in successive five-month periods, allowing firms to skip benefits given to permanent workers. DO 174 took effect on April 2.

The order, however, did not completely eliminate job contracting — an arrangement wherein an employer farms out jobs to a third-party contractor who then hires workers of its own.

Looking forward, Security Bank’s Mr. Taningco bared a positive outlook for the job market, saying: “The October figure leads the average unemployment rate for 2017 to settle at 5.7%, which matches my forecast for the year.”

“For 2018, I forecast a slightly lower unemployment rate of 5.5%; this hinges on faster economic growth supported by stronger government spending, business investment, and exports.”

For DLSU’s Ms. Conchada, the proposed increase in excise taxes on tobacco and sugar-sweetened drinks might adversely affect the agricultural sector in the long run. “I am concerned that the agricultural sector and jobs associated with it will continue to be affected with this increase in excise tax.”

“The government’s ‘Build, Build, Build’ program possesses job opportunities… hopefully the poor could participate as well. Moreover, local and international investment in the manufacturing and services sector continues to be rosy which could be a potential source of job opportunities.”

UP’s Mr. Ofreneo also said that one should read between the lines when looking at official employment data.

“[O]ne should also look into the situation of those who are not in school and yet not counted in the labor force. These are the idle working-age population who are not looking for work because they feel none are available to them…”

“The point is that the limited statistics that we have do not say much,” he added.

“For the job optimists, they can cite the declining rate of underemployment. For the pessimists, they can argue that more idle workers are not reflected simply because they are lumped with ‘not in the labor force’.” — Arianne Kristel R. Pelagio

October trade gap biggest on record as imports outpace exports in growth

December 13, 2017 | 12:31 am

By Ranier Olson R. Reusora
Researcher

FOREIGN SALES of Philippine goods grew for the 11^th straight month last October, but the double-digit increase in merchandise imports drove the monthly trade gap to its biggest on record, the government reported yesterday.

Preliminary data which the Philippine Statistics Authority (PSA) released on Tuesday showed export sales growing 6.6% to $5.37 billion in October, up from September’s 4.9%, but slower than the 9.7% increase recorded in October 2016.

The October data brought year-to-date export receipts to $53.11 billion, an 11.7% increase from the $47.554 billion recorded in 2016’s comparable 10 months.

The year-to-date pace is way above the government’s five percent growth target for the year.

On the other hand, imports increased by 13.1% to $8.21 billion in October from the year-ago $7.26 billion. It was also faster than September’s 4.4% growth.

On a cumulative basis, imports amounted to $75.06 billion year to date, up 8.3% from the $69.3 billion in 2016’s comparable 10 months, below the government’s 10% growth target for the year.

Consequently, the country’s trade deficit increased to $2.845 billion in October, wider than the gaps of $2.08 billion in September and $2.22 billion in October 2016.

October’s trade deficit is the worst monthly gap on record, surpassing the previous peak of $2.74 billion recorded last May.

Analysts, however, pointed out that this is not necessarily a bad thing.

“If you’d look at the historical trade balance data, this year is one of the widest and, on the economic expansion side, one of the strongest,” said Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines.

“Thus, a widening of the trade balance at this point in time, is not a concern,” he stressed.

“It just tells you that the economy is working and much is coming into the economy supporting production and economic activity.”

For Angelo B. Taningco, economist at Security Bank Corp., “the widening in the trade deficit during October would weigh on fourth-quarter GDP (gross domestic product) growth, which could result in a lower rate compared with the third quarter.”

“However, I still think GDP growth for the last quarter will likely stay within the 6-7% range.”

Total trade — the sum of exports and imports — increased by 10.4% to $13.578 billion for the month, faster than September’s 4.6% growth, but slightly slower than the 10.5% increase recorded in October 2016.

“We are encouraged by the performance of Philippine trade in recent months, especially with the consistent positive performance of exports,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted in a statement by the National Economic and Development Authority (NEDA) as saying.

“Cooperation and trade initiatives are integral to sustaining these gains.”

By category, Philippine manufactured goods, which made up 81.9% of the total exports in October, grew 2.9% to $4.39 billion.

Under this category, electronic products — which accounted for 53.2% of the country’s total export earnings — increased by 13.8% to $2.86 billion in October from $2.51 billion in last year’s comparable month.

Outbound shipments of the other major types increased as well, with forest products, petroleum products, mineral products and total agro-based products growing 872%, 179.1%, 51.5% and 0.6%, respectively.

“Exports, in general, are robust and would end the year strong,” said Union Bank’s Mr. Asuncion.

Sergio R. Ortiz-Luis, Jr., president of Philippine Exporters Confederation, Inc. (Philexport), attributed the country’s export growth during the period to the improvement of external demand, citing increasing sales to China as well as the recovery seen in European markets.

On the import side, inbound shipments of raw materials and intermediate goods — which made up the bulk of total import payments at 39.1% — increased 22.2% to $3.21 billion from last year’s $2.630 billion.

The imports of mineral fuels, lubricant and related materials were also up, recording a 15.9% increase, followed by consumer goods (14.8%) and capital goods (2.6%).

The increase in imports, Philexport’s Mr. Ortiz-Luis said, is “an indication that exporters are preparing for the year-end shipments, which will slow down in the early part of next year.”

“I expect the trade deficit to persist in the last two months of the year,” Security Bank’s Mr. Taningco said.

Union Bank’s Mr. Asuncion concurred, saying “[h]owever, the crucial indicator is the strength or the weakness of the peso…”

“At this point, I expect the peso to weaken into 2018, thus, encouraging exports because local products are more competitive, with imports coming in feeding production and industrial activities,” he said.

For his part, NEDA’s Mr. Pernia said: “For 2018, we are looking at improved performance in exports of agricultural products and semiconductors, which continue to comprise a huge portion of Philippine exports.”

He added that Philippine export performance “will likely remain in the positive territory” and should pick up due to higher demand brought by the holiday season.

Factory output expansion slowest in nearly 6 years

December 13, 2017 | 12:30 am

By Christine J. S. Castañeda
Senior Researcher

INDUSTRIAL PRODUCTION saw its biggest drop in almost six years in October, the Philippine Statistics Authority (PSA) reported yesterday.

In its latest Monthly Integrated Survey of Selected Industries (MISSI), the PSA said the volume of production index — a measure of factory output — contracted by 6.5% in October. The figure is lower than the revised 4.1% contraction recorded in September and a reversal of the 9.9% growth posted a year ago.

This was the worst turnout since December 2011 when factory output declined by 7.7%.

Year-to-date factory output growth averaged 3.6%, slower than the 10.1% growth logged in 2016’s January-October period.

Pulling down factory output were contractions in eight major sectors, namely: chemical products (-61%); tobacco products (-39.4%); textiles (-28.3%); footwear and wearing apparel (-27.5%); paper and paper products(-18.9%); petroleum products (-4.2%); transport equipment (-3%); and miscellaneous manufactures (-0.9%).

For Security Bank Corp. economist Angelo B. Taningco, the sharp drop in factory output in October “was induced by producer price inflation turning positive for the month, reflecting higher production costs.”

The Producer Price Index (PPI) for Manufacturing is a composite figure of producers’ prices of representative commodities included in the market basket.

For October, PSA data showed that the PPI for manufacturing inched up by 0.3% in October, a reversal of the declines of 0.6% and 4.8% posted in September and October 2016, respectively.

The last time the PPI grew was in September 2014 when it edged up 0.8%.

FACTORS
Union Bank of the Philippines (Union Bank) chief economist Ruben Carlo O. Asuncion blamed the contraction in manufacturing on “more expensive imported inputs due to the weak peso.”

In a press statement yesterday, Socioeconomic Planning Secretary Ernesto M. Pernia said that the continued decline in factory output at the onset of the fourth quarter reflected the “less optimistic business sentiment of firms in the manufacturing sector.”

“The Business Expectations Survey of the Bangko Sentral ng Pilipinas reported expectations of seasonal slack in demand for some products and stiffer competition due to business expansion of some firms as reasons for their less favorable outlook,” Mr. Pernia said.

The National Economic and Development Authority (NEDA), which Mr. Pernia heads as director general, noted in its statement that the production volume of major export-oriented goods continued to increase on the back of the “ongoing recovery of global trade,” citing the 7.4% increase in Asian trade volume in the January to June period.

NEDA also noted the growth in food manufacturing and in the production of construction-related goods.

“Production volume and value of manufactured food grew at a slower pace in the same month, while production volume of construction-related manufactures remained robust in October,” NEDA said in its statement.

NEDA attributed the increase in the production of construction-related goods to higher demand for non-residential buildings which was complemented by the government’s higher infrastructure spending and capital outlays which grew by 15.4% in the July-September period.

Average capacity utilization — the extent by which industry resources are being used in the production of goods — was estimated at 83.8%, with 11 of the 20 sectors registering capacity utilization rates of at least 80%.

Going forward, Security Bank’s Mr. Taningco said: “I expect factory output to recover in the last two months of year on the assumption that producer price inflation would ease.”

For Unionbank’s Mr. Asuncion: “Expect a subdued factory output, but not for long as the peso has stabilized and strengthened from November until this month.”

Big banks’ NPLs rise 9%

December 13, 2017 | 12:15 am

By Melissa Luz T. Lopez,
Senior Reporter

BAD DEBTS held by big banks grew by nearly a tenth in October but accounted for an even smaller share relative to total loans granted during the period, latest central bank data showed, signalling strong asset quality among lenders.

Non-performing loans (NPLs) incurred by universal and commercial banks totalled P107.691 billion as of end-October, rising by 9.4% from the P98.425 billion tallied a year ago. The amount is little changed from the P105.36 billion in soured debts held as of the previous month, according to the Bangko Sentral ng Pilipinas (BSP).

NPLs cover debts left unpaid at least 30 days beyond due date, which are considered as risky assets as these have high risk of default.

The pickup in bad loans is softer compared to a 17% climb in credit lines granted by the banks, which rose to P7.363 trillion against P6.293 trillion a year ago. Relative to the total loan portfolio of these big lenders, NPLs accounted for a lower share at 1.46%, improving from 1.56% in October 2016.

Despite the improving asset quality, banks still opted to hike their reserves for potential loan losses to P144.945 billion, up by 8.9% to nearly match the rise in NPLs. This was more than enough to cover the total stash of risky debts held as of end-October.

The surge in loans has been supported by an equally buoyant rise in bank deposits, which grew by 16.3% to reach P10.306 trillion, latest central bank data showed. This leaves banks even more room to expand their lending operations, with existing loan lines amounting to just 71.44% of their deposit stash.

This is against the 20% reserve requirement imposed by the BSP on all banks operating in the Philippines, which stands as their buffers against potential funding crunch.

On the other hand, the lenders held on to fewer non-performing assets, with their holdings of idle real property down to P78.201 billion from P80.034 billion last year. Banks have the power to seize assets of value posted as collateral — such as homes and cars owned by defaulting clients — in order to recover losses from non-paying borrowers.

The central bank keeps a close watch on the NPL ratios of banks and financial firms in order to monitor asset quality and maintain the soundness of the financial system.

There are 42 universal and commercial banks operating in the Philippines, which saw cumulative net income pick up by 4.5% to P106.26 billion for the first nine months.

The share of bad loans also went down to 1.96% of total debts held by all Philippine banks, despite a 16.1% surge in lending which hit P8.342 trillion.

Central bank officials have downplayed overheating risks raised by economists as they take note of double-digit credit growth, with policy makers saying that strong lending simply supports increased production activities as the economy expands.

Lazada, Zalora expect record holiday sales in PHL

December 13, 2017 | 12:15 am

By Krista A.M. Montealegre,
National Correspondent

E-COMMERCE portals are poised to rake in record holiday sales this year, as malls pursue their expansion at a time when consumers can shop from the palm of their hand.

Lazada and Zalora are luring shoppers away from malls this holiday season by offering massive discounts in their respective platforms.

“I can tell you that e-commerce sales grew in 11.11 and it will grow even better in 12.12,” Lazada Philippines Cofounder and Chief Executive Officer Inanc Balci said in a recent interview.

Taking a page from its key shareholder and Chinese e-commerce giant Alibaba’s Singles Day, Lazada is anticipating “bigger sales” in the six-day “online revolution” that ended on Tuesday. The company saw a record $123 million in sales across Southeast Asia last Nov. 11, nearly three times last year’s performance.

Lazada has enjoyed dizzying growth in the last two years, with marked improvement in delivery time, cost of items and assortment of products.

“When we first started six years ago, there was no professional, large-scale e-commerce site. The change started with us and other companies improved their operations as well because of competition,” Mr. Balci said.

Like Lazada, Zalora is feeling the strong consumer spending, noting that its own 12.12 promotion “should be bigger” than sales generated last Nov. 11, which was more than double the previous year’s level.

“E-commerce adoption is very much mainstream; it’s something everybody is doing now. We’ve seen that the big shopping events in the Christmas season has really gained a broad knowledge,” Zalora Philippines Managing Director Constantin Robertz said in a separate interview.

The potential is huge for e-commerce since online purchases in the Philippines account for only less than 1% of total retail sales, the lowest among the six largest markets in Southeast Asia, according to a report by market research firm eMarketer.

E-commerce may have gained ground, but hurdles continue to prevent the industry from taking off, said Colliers International Philippines Managing Director Richard T. Raymundo, citing the need to improve the country’s payment and logistics systems.

“While we recognize that the influence of e-commerce will grow to be more relevant in the near- to medium-term, we believe that it will not adversely affect the expansion plans of mall developers, for now,” said Claro dG. Cordero, Jr., head of Jones Lang LaSalle (JLL) Philippines’ research, consulting and valuation advisory services.

Around 2.2 million square meters of new shopping mall space will be completed all over the Philippines in the next four to five years, including an additional 400,000 square meters next year, according to data from JLL.

The expected annual completion is around 25% higher than the average new completions in the market since 2010.

Even Zalora sees no competition with mall developer Ayala Land, Inc., one of its shareholders after the Ayala group bought into the company earlier this year.

“We’re working together to enable retailers to reach consumers. In the end, we have a similar and synergistic position as enablers of the retailers,” Mr. Robertson said.

To thrive in this age of e-commerce, mall developers will have to evolve to provide more experiential shopping and at the same time, become a center for showcase stores and facilitate distribution network for fast moving consumer goods to serve the online market, JLL’s Mr. Cordero said.

“The retail space we know of needs to change. It will change in character. Shopping needs to be a different experience — an experience you cannot get from Internet,” Colliers’ Mr. Raymundo said.

BSP sees ‘muted’ impact from fresh US interest rate hike

December 13, 2017 | 12:14 am

FINANCIAL MARKETS could see some hiccups as a response to a fresh interest rate hike in the United States, although its impact is expected to stay muted as players have priced in this move, a central bank official said.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo said investors and market players have largely factored in a third round of a “lift-off” from the US Federal Reserve during their rate-setting meeting this week, which will keep the impact on global yields and exchange rates subdued.

The Fed is widely expected to raise benchmark rates by 25 basis points during their Dec. 12-13 review, which would mark the third tightening move from US policy makers this year.

“That [hike] has been factored already by the market. Of course after the fact, the market still would show some reaction but not as much as it is almost an anticipated and expected [event],” Mr. Guinigundo told reporters in an ambush interview.

Analysts are almost certain the rate hike will be introduced this week, following the release of the minutes of the Fed’s Oct. 31-Nov. 1 meeting that quoted policy makers as seeing the need to raise interest rates in the “near term.” Fed officials saw the US economy remains “poised for strong growth,” confirming observations of sustained recovery, Reuters said in a report.

Higher yields in the United States often trigger capital outflows from emerging markets like the Philippines, as investors go after competitive returns in the so-called safe haven.

Back home, BSP officials have repeatedly said they do not have to move in lock-step with the Fed, as domestic conditions remain the biggest consideration for the Monetary Board.

Inflation has averaged at 3.2% from January-November to settle within the 2-4% central bank’s target band. This is accompanied by robust economic growth, which has averaged 6.7% during the first three quarters to keep the Philippines as one of the fastest-growing in the region.

BSP Governor Nestor A. Espenilla, Jr. even said uncertainty over the pace of monetary policy tightening in the US and other advanced economies would likely trigger “bouts of volatility” in the financial markets, but said regulators stand well-armed to weather these headwinds. He noted the central bank can deploy various monetary policy tools to deal with such uncertainties as needed.

Economists broadly expect the BSP to keep policy settings on hold during their Thursday review, in light of manageable inflation and firm domestic demand that remains supportive of overall economic growth. — Melissa Luz T. Lopez

PCC airs concerns over SM’s Goldilocks acquisition

December 13, 2017 | 12:14 am

By Patrizia Paola C. Marcelo,
Reporter

THE Philippine Competition Commission (PCC) has expressed concern over the SM Group’s acquisition of Goldilocks Bakeshop, Inc., saying the deal may give the latter an undue advantage over competitors operating in SM malls.

The PCC is currently reviewing SM Investments Corp.’s acquisition of a controlling stake in Goldilocks, which has breached the P1-billion threshold and requires the commission’s approval.

“The first one is making sure that… with potential tenants, that the same criteria will be applied to them, meaning automatically you will score low because you end being a competitor for example of Goldilocks. The other set would have to do with the kind of information that SM would have with regard to Goldilocks as well as the competitors of Goldilocks,” PCC Commissioner Stella Luz A. Quimbo said in a press briefing on Tuesday.

The PCC is asking SM to give a voluntary commitment to apply the same criteria for Goldilocks and its competitors when leasing mall space.

“One way is by voluntary commitments… They are well aware of what we think would be the competition problems. We have also provided guidance on how they can proceed, meaning specific guidelines on specific commitments they can propose and what are acceptable to the PCC,” Ms. Quimbo said.

Another possibility is for SM to set up a “Chinese wall” to prevent Goldilocks from accessing crucial information on competitors.

“As you know, there’s a centralized system which SM would have and which would allow SM to have detailed information on sales, pricing, etc. not only for Goldilocks, which it would own after the transaction, but all its competitors, to the extent that it would give undue advantage to SM,” Ms. Quimbo said.

SM currently operates 66 malls with a total gross floor area of 8 million square meters in the Philippines, while Goldilocks has a network of more than 500 stores in the country and abroad.

APPEAL
Meanwhile, the PCC said it filed an appeal with the Supreme Court over the Court of Appeals (CA) decision to junk its bid to review PLDT, Inc. and Globe Telecom, Inc.’s acquisition of San Miguel Corp.’s telecommunications assets.

“(On Monday), we in fact filed our appeal to the Supreme Court stemming from the decision of the Court of Appeals (CA) 12^th division,” PCC Commissioner Johannes Benjamin R. Bernabe said.

In the appeal, Mr. Bernabe said they argue the CA erred in deciding the $1.5-billion telecommunications deal was deemed approved.

In October, the CA’s former 12^th division ordered the PCC to permanently stop its review of the acquisition of SMC’s assets by the two telco giants.

The PCC also welcomed the possibility of the entry of a third player in the telecommunications industry, but cited challenges that need to be addressed for the new company to become a viable player.

“Based on the statistics that we have, we found that only 12.8% of the spectrum would be available for a potential third player,” Ms. Quimbo said. She added that a favorable SC decision would pave the way for a chance to “farm out” the limited frequencies.

Malacañang earlier identified China Telecom Corp. Ltd. as the Chinese government’s choice to enter the Philippine market. The National Transmission Corp. also said they can partner with a Chinese company, to hold 60%, or partner with another private company and share the 60%. Philippine laws require a maximum of 40% stake for foreign entities in public utilities.

PSE-PDS DEAL
The PCC has also cleared the merger of the Philippine Stock Exchange (PSE) and Philippine Dealing System Holdings, Corp. (PDS). PSE made an initial filing but then withdrew due to need to comply with requirements.

“Once it was deemed sufficient, then the review period commenced… on the 30^th day, a decision was arrived at, which essentially, effectively cleared the transaction from PCC’s end,” Mr. Quimbo said.

Cebu Landmasters to develop Davao CBD

December 13, 2017 | 12:13 am

CEBU LANDMASTERS, Inc. (CLI) will be developing the first central business district (CBD) in Davao City along with four Davao-based firms, it disclosed on Tuesday.

The Cebu-based property developer said it signed a joint venture agreement with Plaza De Luisa Development, Yuson Newtown Corp., Yuson Strategic Holdings, Inc., and Davao Primeland Properties Corp. on Dec. 11. The Davao Matina Business Park will sit on a 17.1-hectare lot in Matina, Davao City.

“Cebu Landmasters is bullish to invest in the Davao market and we are happy to serve the growing property requirements of the Davaoeños and of those coming from neighboring provinces,” CLI Chairman and Chief Executive Officer Jose R. Soberano III was quoted as saying in a statement.

Davao Matina Business Park will host seven office buildings, four retail buildings, 29 residential condominiums, six town house-style buildings, one hotel, one convention center, one medical building, and a civic or community center, as per concept studies drafted for the project.

“We pay close attention to the needs of the market and we design and build our developments with the market in mind,” Mr. Soberano said.

The first phase of the project will include site development, the office building, retail building, a residential condominium, and a civic or community center. This will start in 2018, with completion slated for 2021.

Yuson Commercial Investments President and Chief Executive Officer Frederick H. Yuson, who represents three of the companies CLI has partnered with, noted this is the “best time” to develop the property that was previously a golf course.

“The property has been utilized as a golf course since the 1960s and this is the best time to transform it into a business park to be able to contribute to the economic and social development of the city,” Mr. Yuson said in a statement.

Mr. Soberano said they are also planning to acquire a 2.2-hectare lot adjacent to the property in order to bring the total project area to almost 20 hectares. The company is also in talks with more companies to acquire more lots adjacent to the property to further expand the project size.

Davao Matina Business Park marks CLI’s third project in Davao City, with the first two being the residential brand MesaTierra Garden Residences and mixed-use estate Project Riverside. Construction for the two projects are currently ongoing and will be completed by 2020 and 2021, respectively.

CLI looks to grow its profit by 42% to P1.7 billion in 2018, on the back of its continued expansion in the Visayas and Mindanao area. Revenues, meanwhile, are expected to reach P2.77 billion, 67% higher year on year.

The company’s earnings surged 77% in the first nine months of 2017 to P960 million on the back of P2.77 billion in revenues.

Shares in CLI added three centavos or 0.64% to close at P4.75 apiece at the stock exchange on Tuesday. — Arra B. Francia

Peso slips against dollar

December 13, 2017 | 12:13 am

THE PESO slipped against the dollar yesterday as the Philippines posted its biggest monthly trade deficit on record.

The local unit closed at P50.51 against the dollar on Tuesday, 15 centavos stronger than the P50.36 finish a session ago.

The peso opened slightly stronger at P50.33, also serving as yesterday’s best showing. Its intraday low, meanwhile, stood at P50.52.

Dollars traded on Tuesday surged to $665.6 million, up from yesterday’s $509 million.

Traders said the peso fell back to the P50.50 level after the Philippine Statistics Authority data released on Tuesday showed the trade deficit, the gap between Philippine imports and exports, widened to $21.95 billion from the $21.75-billion deficit booked in a comparable year-ago period.

“The peso weakened against the dollar because of the negative perception regarding the trade deficit,” Ruben Carlo O. Asuncion, chief economist of Union Bank of the Philippines, said in a phone interview.

However, Mr. Asuncion noted the widening trade gap is “not something to be worried about.”

“It’s actually a good sign. I would say it’s quite normal for a growing economy like the Philippines because goods, especially capital goods, have come pouring in to support economic activity,” Mr. Asuncion said, adding Philippine inflation is still intact and debt-to-gross domestic product ratio is one of the lowest.

However, Mr. Asuncion noted that while it is not quite a concern, the trade deficit is something to monitor.

Meanwhile, another trader noted investors have “covered their positions” ahead of the outcome from the US Federal Reserve’s policy meeting this week.“For today, the dollar rallied following the widened Philippine trade deficit as market players covered their position ahead of the FOMC (Federal Open Market Committee) starting (Wednesday),” a trader said.

During the two-day policy meeting that will end on Wednesday, the Fed is widely expected to hike interest rates.For today, a trader said the peso would move between P50.40 and P50.60, while Mr. Asuncion gave a wider range of P50.40 to P50.90, noting that the Fed rate hike will push further the peso downwards.

“However, the anticipated decision of BSP (Bangko Sentral ng Pilipinas) to keep their monetary policy rates steady might counter the drag the Fed rate will bring,” Mr. Asuncion added. — Karl Angelo N. Vidal

Olympian Diaz considers 2017 an ‘adjustment’ year

December 13, 2017 | 12:10 am

By Michael Angelo S. Murillo
Senior Reporter

COMING off a banner 2016 that saw her win a silver medal in the Rio Summer Games, weightlifter Hidilyn Diaz considers 2017 a year of adjustments filled with a lot of lessons which have given her a better perspective on what she is doing and helped her be more motivated moving forward.

In an interview with BusinessWorld during the thanksgiving for athletes and media hosted by sports apparel brand Under Armour, of which Ms. Diaz is a brand ambassador, early this week, the Olympian shared that she is set to finish the current year “recharged” after starting it with clouds of doubt hanging over her.

“After a long layoff following the Rio Games, there was time that I did not want to go to training anymore. I didn’t want to go on a diet to make weight and I was questioning where all of these are heading,” said Ms. Diaz, who is currently studying at the College of St. Benilde, where she is taking up a Business Management course.

“Maybe it does happen to most athletes who have been doing a particular thing for a long time like I have been. You hit a phase where you tend to ask questions on whether you want to continue or not. And that came to me in 2017,” she added.

But the Zamboanga native said that as the year progressed she was able to adjust after coming to a realization that she still has a lot to give as an athlete and to the sport of weightlifting which has opened many opportunities for her.

Ms. Diaz cited a series of events that gave her a renewed sense of purpose to continue what she is doing.

The staging of the first Hidilyn Diaz Weightlifting Open Championship in July and the opening of her own weightlifting gym in October made her reaffirm her belief of the potential of the sport to be a gold source in the Olympics.

Competing and finishing on the podium in 5^th Asian Indoor and Martial Arts Games in September and in the International Weightlifting Federation World Championships (IWFWC) last month, too, stoked the fire in her to forge ahead and continue to making the country proud.

“The competitive juice is definitely back for me after competing in the AIMAG and the World Championships. I’m looking forward to the next challenges and doing better in them, including the Olympics in 2020 and the Asian Games next year,” said Ms. Diaz, who also cited her finding the right balance between training and living her life of late as important as well in her renewed commitment to her sport and push for excellence.

In the AIMAG which took place in Ashgabat, Turkmenistan, Ms. Diaz snatched the silver medal in the 53-kilogram (kg.) category for women while at the IWFWC in Anaheim, California, she won silver in the clean and jerk in the women’s 53-kg. weight division and a bronze by lifting a total of 199 kg. in her category.

Looking ahead, Ms. Diaz said she will make it a point to have ample time to prepare for the Asian Games in 2018 which will happen in August in Jakarta, Indonesia.

“I will work with my team, especially my coaches who have been a big part of what I have gone through this year, in preparing for the Asian Games in August. It’s an important tournament for me and I have to prepare well, making sure I don’t get burned out and be ready come competition time so that I can be in a better position to win and give honor to the country,” Ms. Diaz said.

Bulls gore depleted Celtics

December 13, 2017 | 12:09 am

CHICAGO — The Chicago Bulls took full advantage of Kyrie Irving’s absence to romp to a 108-85 blowout against the Boston Celtics on Monday.

Nikola Mirotic scored 24 points while Bobby Portis added 23 as the Bulls (6-20) stunned the Eastern Conference-leading Celtics.

Boston’s preparations had been jolted after star point guard Irving was ruled out with a thigh injury just before the game in Chicago.

With forward Marcus Morris also missing with a sore left knee, the Celtics were forced to field an under-strength team just 24 hours after facing Detroit on Sunday.

The Bulls exploited Boston’s makeshift lineup to full effect, with Mirotic producing a dominant display which also included eight rebounds.

It was a superb display from Mirotic and Portis, who notoriously came to blows in a practice session in October which left Mirotic with multiple facial fractures and a concussion.

The Bulls have not lost since Mirotic returned from those injuries in his season debut last Friday after missing 23 games.

The Montenegrin said he and Portis had put their differences behind them to build a “great chemistry.”

“Bobby and I, we are playing good, we are finding each other and we are bringing that energy that the team needs,” Mirotic said.

Bulls coach Fred Hoiberg also paid tribute to the way Portis and Mirotic had bonded.

“They’re both pros,” Hoiberg said. “I love to see the way they’re playing together. Hopefully they’ll keep it going.”

Al Horford led the Boston scoring with 15 points, one of five Celtics five players in double figures.

Boston fell to 23-6 with the defeat but remain secure on top of the Eastern Conference table with Toronto (17-7) their nearest rivals.

Boston had led 29-28 after the first quarter but Chicago romped clear in the second, surging into a 56-42 lead at the half.

Chicago managed to keep Boston at arm’s length through the third quarter, maintaining a 15-point cushion at 78-63 heading into the fourth.

Chicago kept up the pressure in the final quarter, outscoring Boston by eight points to close out a deserved win.

“Sometimes, you get your butt kicked — it’s as simple as that,” Celtics coach Brad Stevens said.

“Chicago dictated the whole game, they played harder than we did, they played with more presence than we did, they played more competitive than we did, they played with more authority than we did.

“You’re not going to win very many games when you play like that.” — AFP

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