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Yields on BSP’s term deposits climb as banks crowd offering

By Melissa Luz T. Lopez
Senior Reporter

BANKS again swarmed the central bank’s term deposit facility (TDF) yesterday, although yields continued to climb as players sought higher yields amid some uncertainties in the market.

Demand for the three tenors reached P145.828 billion during this week’s auction, shooting beyond the P110 billion the Bangko Sentral ng Pilipinas (BSP) placed on the auction block. Total bids, however, slipped by a tad from the previous week’s P146.856 billion, although all instruments remained oversubscribed.

Nearly half of the tenders went to the seven-day term deposits which reached P70.838 billion, against last week’s P80.026-billion demand and the BSP’s P50-billion offering.

Despite the clamor, the average interest rate sought by banks rose to 3.1893% from 3.1767% previously. Banks sought for returns ranging from 3-3.2298%.

Meanwhile, bets climbed under the 14-day tenor to hit P52.255 billion, well beyond the P40-billion auction offering and last week’s bids worth P43.31 billion.

Yields for the two-week instruments picked up to 3.2404% from 3.1674% a week ago, marking a sustained rise since the new tenor was introduced in February.

Bids for the 28-day term deposits stood steady at P22.735 billion from P23.52 billion, just above the P20 billion which the central bank wanted to sell. The month-long tenor also saw the biggest increase in rates, with the average yield climbing to 3.3274% compared to 3.2627% last week.

The TDF serves as the central bank’s primary tool in mopping up excess funds in the financial system, especially after the regulator introduced a reduction in the reserve requirement ratio (RRR) imposed on universal and commercial banks.

The adjustment, which took effect March 2, is said to be operational as it seeks to reduce market distortions created by the “ultra-high” RRR regime that makes borrowings more expensive.

Central bank officials have said the RRR cut was timed as the central bank can now rely better on the weekly term deposit auctions to influence market rates, with the view that they can deploy other macroprudential and targeted risk management measures to contain its potential impact on inflation and credit growth.

BSP Deputy Director Dennis D. Lapid said on Tuesday that the central bank will continue to employ a “gradualist” approach in proceeding with further reserve cuts, but noted that it remains a live discussion in the Monetary Board.

He added that the recent pickup in TDF yields in recent weeks despite strong demand was likely “the effect of market uncertainty,” especially following the release of faster-than-expected February inflation rate which clocked in at 4.5% using the 2006 base year and 3.9% under the 2012 base. This is fastest pace recorded since October 2014.

The BSP will hold its next rate-setting meeting on March 22. The central bank decided to cut the RRR during its Feb. 8 meeting, but announced the “operational” move only a week after.

Next week, the central bank will again offer a total of P110 billion in term deposits. Broken down, it will offer P50 billion of the seven-day term, P40 billion for the 14-day, and P20 billion for the 28-day term deposits.

Mexican regional cuisine drives booming food scene

MEXICO CITY — Sure, every foodie loves tacos and enchiladas.

But what about lesser-known Mexican classics like cochinita pibil, the impossibly flavorful, slow-roasted pork dish from the Yucatan peninsula? Or escamoles, the ant larvae from central Mexico known as “insect caviar?” Or empanadas de mole, pastries filled with the savory chocolate sauce of the Oaxaca region?

Mexico has always been a major player on the world food scene. But increasingly, top chefs are embracing and promoting the country’s richly varied regional cuisine, driving the Mexican gastronomic experience to a whole new level.

One of the poster boys for the trend is Alejandro Ruiz, whose Mexico City restaurant Guzina Oaxaca drew a rave review in The New York Times with its “chic interpretations of traditional classics.”

Ruiz comes from the village of La Raya in the southern state of Oaxaca, where he grew up grinding corn and cooking for his family to help his mother, who worked full-time washing clothes.

His restaurant, which opened in 2014, is a celebration of his home state, a mountainous region known for its huge diversity of ingredients and deep culinary traditions.

“Where I come from, the kitchen is the most important part of the home,” Ruiz told AFP.

“What I do (in the kitchen) is who I am, it’s where I was born, it’s my mother’s milk. It’s in my DNA. What’s my identity? Oaxaca.”

‘WHOLE OTHER LEVEL OF FLAVOR’
Oaxaca isn’t the only region whose traditional cuisine has been elevated to new levels of chic.

Mexico stretches from the deserts of the northern border to the tropical forests of the south, with long Caribbean and Pacific coastlines in between, giving it immense biodiversity and a sprawling palette of ingredients.

Its flavors are also shaped by its complex history, blending influences from its many indigenous groups, the Spanish conquistadors, European elites, slaves from Africa, immigrants from all over and the ever-present United States.

Laura Siciliano-Rosen, cofounder of the food blog Eat Your World, loses count listing her culinary adventures in Mexico’s myriad regions and sub-regions.

Dining in Mexico, she says, one minute you can be eating sinfully delicious tacos. Then, a few hours by bus — or a few Mexico City blocks or market stands away — “suddenly you’re eating turkey and hardboiled eggs and these really rich pastes, ‘recados,’ from the Yucatan peninsula, which is just a whole other level of flavor that only exists there.”

Mexican food’s strength is its “regionality,” she says — something that is only just starting to be exported abroad.

“The more people are learning about the regionality of the cuisine and how distinct and complex it is, the more they’re blown away, like ‘Wow, this is real Mexican food,’” she says.

PERUVIAN FUSION, MEXICAN DIVERSITY
William Drew, of the prestigious World’s 50 Best Restaurants list, says this is exactly what has propelled Mexican restaurants onto the closely watched ranking.

“The diversity is extraordinary,” he says.

“If you think you know what Mexican cuisine is, then you probably haven’t experienced enough of it.”

Mexico has two restaurants in the current top 50, which remains dominated by Europe: Enrique Olvera’s Pujol and Jorge Vallejo’s Quintonil, both in Mexico City.

But Mexico’s top chefs are nervously eying their colleagues to south, in Peru — whose fusion-fueled cuisine makes it a rival contender for the title of Latin America’s hottest food destination.

Peru’s mix of Andean, European and Asian influences — symbolized in recipes like “ceviche,” a refreshing dish of raw fish marinated in lime — has made its cuisine all the rage.

In fact, Peru has two spots on Restaurant’s current top 10: Virgilio Martinez’s Central at number five, and Mitsuharu Tsumura’s Maido at number eight.

The top Mexican restaurant, Pujol, comes in at 20.

STREET FOOD
That is making some people in Mexico nervous.

Mauricio Avila works at the Mexican culture ministry, and his job is to compile and preserve Mexico’s gastronomic heritage.

“Mexicans love food, and we’re proud of our food, but we don’t advertise it. We’ve always believed it wasn’t fancy enough for foreigners,” he says.

His office is actively encouraging the trend of celebrating Mexico’s traditional regional cuisines.

The government has released a 78-volume collection on Indigenous and Popular Cuisine — each dedicated to a place, an ingredient or an ethnic group. It is also working on an index of ingredients.

Sasha Correa, a Venezuelan gastronomy expert at Spain’s renowned Basque Culinary Center, says Mexico has an allure all its own.

“In a short time, Mexico has not only joined the phenomenon (of high-end dining in Latin America), it has done it with force, personality and a lot of distinctive elements,” she says.

And pity the misguided foodie who travels to Mexico City and only eats in trendy restaurants, when it is bursting with amazing food at nearly every street corner.

“An ideal trip to Mexico City is doing a mix” of the two, says blogger Siciliano-Rosen.

“But if you can’t do the high-end, just do the low-end 100%, because there’s so much variety, it’s so accessible, and you can try anything and it’s all going to be good.” — AFP

Google’s Larry Page tests flying taxis in New Zealand

WELLINGTON, NEW ZEALAND — Self-piloted flying taxis are being tested in New Zealand as part of a project backed by Google cofounder Larry Page that supporters say will revolutionize personal transport.

New Zealand regulators on Tuesday approved plans for Zephyr Airworks, a subsidiary of Page’s company Kitty Hawk, to develop and test the futuristic air taxis.

Known as Cora, the electric aircraft has a dozen lift fans on its wings, making it capable of vertical take-off and landing like a helicopter.

But developers say it is much quieter, meaning it could transport passengers in urban areas using rooftops and car parks as landing pads.

“We are offering a pollution free, emission free vehicle that flies dependably, we think this is the logical next step in the evolution of transportation,” Zephyr chief executive Fred Reid said.

The Cora prototype being tested in New Zealand’s South Island uses three on-board computers to calculate its flight path and is capable of carrying two passengers.

It has a range of 100 kilometers (62 miles) and can fly at 150 kmh at an altitude of up to 900 meters (3,000 feet).

Zephyr said using the air taxi would be a simple experience for passengers, similar to taking a ride-share in a car.

“You wouldn’t have to know anything about flying a plane. Cora could fly for you,” it said in a promotional video.

“And it would be all-electric, helping to build a sustainable world.”

It said Cora took eight years to design but then developers needed a suitable environment to safely test the new technology.

They settled on New Zealand because of its uncongested airspace and rigorous regulatory environment, with Reid saying local officials had embraced the idea.

“We had no idea what to expect,” he said.

“They could have laughed us out of the room. We were pitching something that sounded like science fiction.”

Cora has been given an experimental airworthiness certificate from the New Zealand Civil Aviation Authority.

Trialling the flying taxi service will reportedly take six years, with operations based around the city of Christchurch.

“This aircraft represents the evolution of the transport eco system to one that responds to a global challenge around traffic and congestion, and is kinder to the planet,” Christchurch Mayor Lianne Dalziel said. — AFP

Metrobank sets final terms for P60-B stock rights offer

METROPOLITAN BANK & Trust Co. (Metrobank) has set the final terms for its stock rights offering (SRO), through which it looks to raise P60 billion to fund its business operations and expansion.

In a disclosure to the local bourse on Wednesday, the Ty-led Metrobank said it will offer 799.8 million common shares priced at P75 apiece.

Eligible shareholders are entitled to subscribe to a share for every 3.976 common shares held as of March 21.

The offering will be conducted from March 22 to April 4.

“The capital raising exercise is expected to enable the bank to pursue these business prospects to sustain the loan growth momentum, leveraging on the bank’s sales and distribution network that has rapidly expanded in the preceding years,” Metrobank said in a previous disclosure.

Aside from this, Metrobank said the fresh capital will also be used to fund the acquisition of the remaining 20% stake of ANZ Funds Pty. Ltd. (ANZ) in credit card provider Metrobank Card Corp. (MCC), thereby fully owning the credit card issuer.

MCC is a joint venture between Metrobank and ANZ formed in 2003, with the local lender holding the majority 60% stake.

Late last year, the lender bought a 20% stake in MCC from ANZ worth P7.4 billion, according to receipt of central bank approval obtained Dec. 29.

In January, GT Capital Holdings, Inc., Metrobank’s majority stakeholder, said it intends to subscribe to at least its full rights entitlement in Metrobank’s stock rights offer.

UBS AG, Hong Kong Branch is acting as joint global coordinator, joint bookrunner and international underwriter of the offer, while Metrobank’s First Metro Investment Corp. will serve as joint global coordinator, joint bookrunner, issue manager and domestic lead underwriter. DBS Bank Ltd. will also act as co-manager and co-underwriter.

Aside from Metrobank, other banks have also announced plans to conduct SROs.

Bank of the Philippine Islands said it will hold a rights offering expected to raise up to P50 billion. The capital will be used “to support the growth and strategic initiatives of the bank.”

Meanwhile, Rizal Commercial Banking Corp. plans to raise P15 billion from an SRO. Proceeds will be used to expand its loan business as well as strengthen their capital ratio under the Basel 3 standards.

Last year, Metrobank posted a P18.2-billion core net income in 2017, up by 10% from the same period in 2016, on the back of robust growth in its loans and deposits.

Metrobank shares closed at P96.50 apiece on Wednesday, gaining 50 centavos or 0.52% from the previous day’s finish. — Karl Angelo N. Vidal

Smart ramps up rollout of LTE-Advanced

SMART Communications, Inc. is ramping up the deployment of LTE-Advanced (LTE-A) and carrier aggregation technology, as it seeks to improve mobile data services to its subscribers.

“The more widespread deployment of LTE-Advanced with carrier aggregation is the cutting edge of our broader effort to deliver world-class Internet service to our customers. Our ramped-up rollout of LTE-A is boosting Smart mobile data speeds in more areas of the country,” Mario G. Tamayo, PLDT and Smart senior vice-president for network planning and engineering, said in a statement.

PLDT, Inc.’s wireless unit said it is rolling out carrier aggregation, a “feature of LTE-A which enables the combination of two or more radio frequency bands in order to deliver bigger bandwidth and much faster data speeds to mobile phone users.”

Smart said it has activated 3CC CA sites, which combine three frequencies, in Metro Manila and other major cities. These include Baguio; Sta. Rosa, Calamba and Biñan in Laguna; Iloilo, Bacolod, Tagbilaran, Ormoc Cagayan de Oro, Dipolog, and Zamboanga.

“We plan to roll out more sites with carrier aggregation capability in more areas across the country this year. In Metro Manila, we are deploying 4CC starting with Marikina and Quezon City,” Mr. Tamayo said.

This year, Smart is doubling the number of LTE base stations to about 17,700 and increasing the number of LTE-equipped cell sites to more than 6,800. It is also deploying another LTE-A based technology called 4×4 Multiple Input Multiple Output, which raises the radio frequency efficiency by using multiple antennas for sending and receiving data.

PLDT earlier said it will spend as much as about P58 billion this year, a historic amount for the company for massive network infrastructure spending.

PLDT reported a P13.4-billion net income for 2017, lower than P20 billion in 2016.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — PPCM

On auction: ivory, porcelain, and more

DELICATE porcelain and ivory religious items and intricate ornaments highlight Casa de Memoria’s auction on Saturday.

With a bidding price that starts at P600,000, the ivory “Holy Trinity Blessing Niña Maria with Saints Joachim and Anne” (18th-19th century) is the most expensive among the lots.

Why would someone sell something so beautiful, historical, and intricate as this? Casa de Memoria’s research specialist, Gregorio Caliguia III told BusinessWorld that “old people” who have religious pieces such as the Holy Trinity are “scared” that their relatives will not be able to take care of such beauty. So they consign them to auction houses, where they will be bought by another person who will see it as a treasure and not as junk.

Besides, preserving a piece of history can get expensive, so much so that owning one sometimes becomes a liability rather than an asset. Restoration can be expensive, for example — restoring a painting’s colors can start at P10,000 while repairing fractures in fragile pieces can start at P100,000.

Also going under the hammer is another interesting ivory piece called “Infant St. John the Baptist in Ivory with Architectural Retablo,” which starts at P450,000. The staff, which the baby John the Baptist should be holding is, unfortunately, missing. There are also cracks on John’s torso and face — signs of ageing. Mr. Caliguia said ivory should be stored in air-conditioned rooms, but not in a too cold room, as it will cause the ivory to crack.

The European ivory pieces evoke serenity and holiness — an apt reminder of the coming Holy Week. The other ivory items come from China, including a finely carved scroll case, a small carved ball called “Ball of Happiness,” and a boat with intricate details. Each item is a work of love and labor; a showcase of the Chinese’ mastery of the craft.

Aside from the ivory, up for sale are a number of porcelain pieces — jars, jugs, pots, pitchers, and bases, in different shapes and sizes. They are all Chinese exports that travelled the world through the Galleon Trade.

The primary markets of this East-meets-West themed auction are serious and starting collectors, the well-traveled, and the Chinese community.

Mr. Caliguia said Chinese clients are meticulous. They don’t like cracks and defects in porcelain, preferring to buy the flawless ones. Filipino buyers, on the other hand, are okay with small signs of aging. He said Filipinos appreciate defects that add to the charm and character of an item.

“For this collection, the appeal lies in the history of how it came about: A romantic take on the Orient, and of melding different styles of Asian influences that morphed into a style of its own,” said Casa de Memoria marketing manager, Camille Lhuillier.

The auction will be held on March 17, 2 p.m., at Casa de Memoria, 156 Jupiter cor. Comet sts., Bel Air, Makati City. To view the lots, visit http://www.casadememoria.com/auction/auction-0010/Nickky Faustine P. de Guzman

Internet overseers weigh privacy of website owners

SAN FRANCISCO — The group overseeing Internet addresses is scrambling to balance the privacy of website owners and the right to know who is behind online pages.

The nonprofit Internet Corporation for Assigned Names and Numbers (ICANN) began a week-long meeting Monday focused on the fate of the public Whois database, which shows contact information for those who own websites.

A General Data Protection Regulation (GDPR) set to take effect in the European Union on May 25 could make revealing personal information about website owners in Whois illegal.

This week’s ICANN meeting in Puerto Rico is the last before the GDPR deadline.

“We will try to find a path forward,” ICANN global domains division president Akram Atallah told AFP in a telephone interview.

“There is a lot of work still to be done, but we are working as fast as possible.”

While the GDPR backs the right of people to “be forgotten” online, it raises the question of whether to shield personally identifying information about website owners listed in a Whois directory created by ICANN for transparency.

The GDPR applies to people, not organizations with fictitious names, but comes into play if individuals are somehow identified, according to ICANN.

Problems arise, for example, if a company name or e-mail address is the same as the person who owns it.

If ICANN were to simply discontinue the Whois index in Europe, that could create a haven for those from other parts of the world who want to hide which websites they own.

ICANN’s understanding is that Whois information can be published, as long as the nonprofit group can justify that doing so is in the public interest.

“We propose trying to keep as much of the policy we have unchanged while being in compliance with the law,” Atallah said.

WHO SEES WHOIS?
ICANN is refining a plan to divide Whois into two tiers — one open to the public as is currently the case and a second that could be accessed as needed by police, researchers or others with legitimate queries.

It remained to be determined whether journalists would get access, according to Atallah.

“We are asking data protection agencies in Europe for their advice on the plan and if it works,” Atallah said.

Some behind websites complain that having contact information available to the public at Whois brings the potential for spam or even physical violence, according to ICANN.

Meanwhile, much focus has been put being able to find out who is behind websites or services to guard against cons or malicious manipulation of public opinion.

“We are trying to strike a balance,” Atallah said.

ICANN contracts with registered website owners require them to provide identifying information for Whois, but that clause would be invalid if it was made illegal.

“We hope that we can actually get the ICANN community to agree on a middle ground,” Atallah said.“This is forcing the issue.”

The ICANN meeting ends Friday. — AFP

Luxury car dealership business drives Berjaya PHL’s Q3 profit

BERJAYA Philippines, Inc. booked a single-digit growth in the quarter ending January 2018, as the company recorded higher sales in its luxury automobiles segment.

In a regulatory filing posted on Wednesday, the listed firm reported a net income attributable to the parent of P194 million in the three months ending January, up by 3% from the P188 million it booked in the same period a year ago.

Revenues grew at a faster pace, picking up 26% in the same period to P6.87 billion against P5.45 billion in the three months ending January 2016.

This pushed Berjaya Philippines’ nine-month attributable profit to P624 million, jumping 76.8% year on year, while revenues gained 9.33% to P21.3 billion. Earnings per share in the company stood at six centavos.

“The increase was primarily due to a higher revenue contribution from H.R. Owen in the financial period under review,” the company said, adding that it also benefited from fluctuations of the British pound to the Philippine peso during the period.

H.R. Owen PLC is an England-based luxury vehicle dealership operator, which distributes luxury car brands such as Rolls-Royce, Bentley, Lamborghini, and Bugatti. Berjaya Philippines’ equity ownership in H.R. Owen is currently at 98.38%.

Berjaya Philippines also engages in the sale and distribution of vehicles under the Mazda brand through a 28.28% interest in Berjaya Auto Philippines, Inc. The company further has a 20% interest in Ssangyong Berjaya Motor Philippines, Inc., which also sells and distributes vehicles under the Ssangyong brand in the Philippines.

Berjaya Philippines is also in the hospitality business through Perdana Hotel Philippines, Inc., which operates Berjaya Makati Hotel in Makati City.

Also under its portfolio is Berjaya Pizza Philippines, Inc., which runs pizza chain Papa John’s Pizza.

Earlier this month, the company invested in restaurant operator Berjaya Food Berhad, which operates the Starbucks and Kenny Rogers Roasters brands in Malaysia.

Shares in Berjaya were last traded on March 13, with a closing price of P4.92 apiece. — Arra B. Francia

A summer barbecue goes fancy with Sub-Zero fridge, Wolf grill

SUMMER MEANS that the sun is out, and if it is, well, so should you. Sub-Zero and Wolf give you more reasons to be out in the sun for this season with its new outdoor kitchen suite, consisting of a refrigerator, an outdoor grill, and a warming drawer. Barbeque parties might never be the same again.

The grill was presented via a sunset barbeque party with chef Tony Boy Escalante, the man behind Tagaytay’s famous Antonio’s and Balay Dako. Using the tools given him, Mr. Escalante prepared Watermelon Feta Arugula Salad, Risoni Salad, Grilled beef slides with caramelized onions and gruyere, leg of lamb, smoked pork ribs, and grilled cinnamon pineapples.

The Sub-Zero outdoor fridge drawers have been engineered to take on ambient temperatures of up to 43° Celsius. It is clad in heavy-gauge stainless steel that withstands UV rays, salt, and moisture, elements that would corrode lesser quality materials. This unit is efficiently sealed to lock in cold air, ensuring maximum freshness for food stored inside. It was built to create an ideal low-temperature, high-humidity environment that’s key to optimum preservation. This is available in a 24-inch width.

An example given by Deneb Plazuela, brand manager for Sub-Zero and Wolf, about a key feature of this fridge drawer is that this one does not sweat while placed outside — unlike you, or other refrigeration units.

As for the grill, it heats up from direct heat from powerful gas burners that are evenly absorbed by a layer of ceramic briquettes that then distribute uniform heat to the top surface. It also has individually contained grill burners that give you the freedom to work with varying temperature zones, so you can crank up the heat while grilling burgers, and carefully brown buns on a more medium setting — all at the same time. Even better, models at 36-inches and wider have a dedicated infrared sear zone. It also comes with a rotisserie system powered by an infrared burner, so you can rotate a whole chicken or even a leg of lamb without a hitch. This is one of the features that Mr. Escalante likes, saying that with the infrared burner, he can do anything, even braise or stew while the action happens in the grill.

Sub-Zero and Wolf 2
Wolf’s 42-inch Freestanding Outdoor Grill with side burner and cart.

The grill can cost up to six digits, and if you can afford that, then you can definitely afford help. However, Stephen Sy, president of Focus Global, Inc. (which distributes the products) argued that maybe inside the house one trusts the help to putter around the kitchen, but it’s a different case in less formal settings outdoors.

“For the outdoors, you’d want to do it yourself,” he said. Even the guests can dive in and help.

Also, little known fact, but HRH Prince Philip, the duke of Edinburgh likes to slap sausages and steak on a grill by himself when he and his family (who just so happen to be royal) take their summer holidays.

“Most of our clients already have a beautiful outdoor space, so the outdoor kitchen really brings out the aesthetics of the place, and also the functionality of the [space],” said Ms. Plazuela.

As for Mr. Escalante, he liked the camaraderie fostered by being outside. There, he says, he can talk to his guests, not be stuck inside the kitchen, and he can even get some help, when the guests want to grill their own food. “Everybody gets involved.”

Sub-Zero and Wolf showrooms can be found in The Residences at Greenbelt, Twenty-Four Secen McKinley, Pioneer cor. Reliance Sts. in Mandaluyong City, and The Design Center of Cebu. — JLG

IC places five firms under conservatorship for failing to meet net worth requirement

THE INSURANCE Commission (IC) has shut down five non-life insurers for failing to meet the minimum net worth requirement.

In a statement on Wednesday, IC said it shuttered the operations of five insurance firms, namely First Integrated Bonding & Insurance Co., Inc., Investors Assurance Corp., Metropolitan Insurance Company, Inc., Plaridel Surety & Insurance Co., and Premier Insurance & Surety Corp., and were put under conservatorship.

As a consequence, these companies are no longer permitted to write new insurance policies. The commission will then appoint a conservator for each of these insurers mandated to take charge of the management of the companies and their assets and liabilities.

Insurance Commissioner Dennis B. Funa said the regulatory body ceased the operations of these insurers after they failed to comply with the P550-million minimum net worth requirement set by the agency.

“These companies are not operating on net losses. Based on the respective 2016 annual statements of these companies, all have positive net worth but short of the minimum amount required under the Insurance Code,” Mr. Funa was quoted as saying in the statement.

However, Mr. Funa clarified that the insurers will continue to process and pay claims of their policy holders.

“This means all insurance contracts issued before the conservatorship order remain valid and the obligation of the company towards its policyholders still exists until the expiration of their policies.”

The insurance commissioner explained that the purpose of placing the insurers under conservatorship is “ to preserve the going concern value of the company, returning it to health or ultimately resulting in a receivership.”

“There are several routes that may result in the lifting of the conservatorship order including entering in a merger or consolidation with an existing insurer or a purchase and assumption agreement with an investor,” Mr. Funa said, adding that existing shareholders or new investors may infuse additional capital to meet the minimum net worth requirement.

Last month, seven insurers — six non-life and one life insurance firm — voluntarily surrendered their licenses to the IC for failing to meet the P550-million minimum net worth requirement, and were issued individual servicing licenses for the orderly run-off of their businesses.

As a result, the previous 66 non-life insurers in 2016 is now reduced to 55.

Under the amended Insurance Code, the minimum net worth of insurance companies shall increase every three years.

From the previous P250-million minimum net worth, IC required the insurers to have P550 million net worth effective end-2016.

The capitalization requirement will again increase to P900 million in 2019 and P1.3 billion in 2022.

In preparation for the next increase in net worth requirement, the commission will be requiring all insurers to submit their respective capital build-up plan.

Meanwhile, Mr. Funa assured the insuring public of the financial strength of the insurers despite their decrease in number. — Karl Angelo N. Vidal

‘Critical’ security flaws found in AMD chips

Washington — Security researchers said Tuesday they discovered flaws in chips made by Advanced Micro Devices that could allow hackers to take over computers and networks.

Israeli-based security firm CTS Labs published its research showing “multiple critical security vulnerabilities and exploitable manufacturer backdoors” in AMD chips.

CTS itemized 13 flaws, saying they “have the potential to put organizations at significantly increased risk of cyberattacks.”

The report comes weeks after Intel disclosed similar hardware-based flaws dubbed Meltdown and Spectre, sparking widespread computer security concerns and a congressional inquiry.

CTS said the newly discovered flaws could compromise AMD’s new chips that handle applications in the enterprise, industrial and aerospace sectors, as well as consumer products.

In a 20-page white paper, the researchers said the AMD Secure Processor, the gatekeeper responsible for the security of AMD processors, contains “critical vulnerabilities” that “could allow malicious actors to permanently install malicious code inside the Secure Processor itself.”

“These vulnerabilities could expose AMD customers to industrial espionage that is virtually undetectable by most security solutions,” the researchers said.

CTS said AMD’s Ryzen chipset, which AMD outsourced to a Taiwanese chip manufacturer, ASMedia, “is currently being shipped with exploitable manufacturer backdoors inside.”

This could allow attackers “to inject malicious code into the chip” and create “an ideal target” for hackers, the researchers said.

“CTS believes that networks that contain AMD computers are at a considerable risk,” the report said.

“The vulnerabilities we have discovered allow bad actors who infiltrated the network to persist in it, surviving computer reboots and reinstallations of the operating system.

“This allows attackers to engage in persistent, virtually undetectable espionage, buried deep in the system.”

AMD, one of the largest semiconductor firms specializing in processors for PCs and servers, said it was studying the latest report.

“At AMD, security is a top priority and we are continually working to ensure the safety of our users as new risks arise,” the California-based company said in a statement.

“We are investigating this report, which we just received, to understand the methodology and merit of the findings.”

Analysts at the security firm enSilo said the AMD flaws could be worse than those affecting Intel chips.

“The impact of these vulnerabilities is more severe than Meltdown/Spectre as it allows an attacker to execute highly privileged code and persist on the victim machine,” enSilo said in a blog post.

Additionally, some of the flaws may be nearly impossible to patch.

“We estimate that without patches from AMD, protection against the vulnerabilities can be limited at best,” enSilo researchers said. “The best protection is to block malware that attempts to leverage these vulnerabilities.” — AFP

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