Chelsea Logistics plans to convert common shares into preferred shares to raise funds

March 21, 2018 | 6:17 pm

Chelsea Logistics Holdings Corp. (CLC) plans to convert some of its common shares into preferred shares in order to support its capital spending for 2018.

In a disclosure to the stock exchange on Wednesday, March 21, the firm said the funds raised from the conversion of equity will fund acquisition of vessels, for strategic mergers and acquisitions, and the expansion of its shipping, transportation, and logistics projects.

“Aligned with its shipping business, there are a number of business opportunities being presented to the Company for the operation of airports and ports, and also facilities which can be utilized in connection with its logistics business. The creation of Preferred Shares will generate additional funds for the Corporation to utilize for these business opportunities,” the company said. — Arra B. Francia

Enterprise IT solutions boost PLDT revenues to record level

March 21, 2018 | 6:16 pm

PLDT Inc. posted a record P34.1 billion of revenues in 2017 from its enterprise business, up 11% from the previous year.

In a statement, PLDT said that its information and communications technology (ICT) service revenues increased by 26%, lifted by the 59% increase in Managed IT services and the 49% growth in cloud services, while data center services such as co-location, peering, and managed server hosting services also posted a double-digit 10% year-on-year growth.

Managed IT services include Business Process Outsourcing (BPO), Managed Service Desk, Managed Infrastructure, ERP Implementation, and Application Lifecycle Support while Cloud service include infrastructure-as-a-service (IaaS), Software-as-a-Service (SaaS), Contact Center-as-a-Service, and Cloud Professional Services.

PLDT Enterprise has said that it eyes more business ventures and investments in information and communication technologies and infrastructure expansion this year.

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. — Patrizia Paola C. Marcelo

Filinvest Land grows earnings by 9% in 2017

March 21, 2018 | 5:47 pm

Filinvest Land, Inc. (FLI) grew its earnings by 9% in 2017, fueled by the expansion of its rental properties alongside demand from both retail and office spaces.

In a statement issued Wednesday, March 21, FLI said it generated a net income of P5.83 billion last year, as revenues rose to P20.27 billion. The company did not mention the revenue growth from the year, but earlier reports show that revenues in 2016 stood at P19.5 billion.

“The company attributed the revenue increase to a major expansion of its rental property portfolio and the continued strong demand for its retail and office spaces,” FLI said.

The Gotianun-led firm booked P4.42 billion in rental revenues, up 30% year-on-year, after opening new office and retail buildings. 2017 saw the opening of Vector Three in Northgate Cyberzone Alabang, which added 36,000 square meters (sq.m.) of office space to FLI’s portfolio. — Arra B. Francia

Peso weakens as investors await Fed rate outlook

March 21, 2018 | 5:37 pm

The peso weakened against the dollar on Wednesday, March 21, as investors expect the US Federal Reserve (Fed) to hike its interest rates, which is seen to support the greenback.

The local currency ended Wednesday’s trading at P52.15 against the dollar, seven centavos weaker than the P52.08-per-greenback finish on Tuesday.

The peso traded sideways the whole day, opening the session stronger at P52.05 versus the dollar. Its intraday high stood at P52.03, while its worst showing for the day stood at its P52.15-per-dollar close.

Dollars traded slid slightly to $445.6 million yesterday from the $456.2 million logged the previous day.

“The peso depreciated near the close today as investors started to position towards the dollar in anticipation of a likely hawkish rate decision from the Federal Reserve,” a trader said in an e-mail.

The Fed is expected to raise interest rates this year, according to a Reuters report. Market players are also anticipating the Fed to signal more hikes in response to the tax cuts and government spending.

The central bank said late last year that there would be three quarter-of-a-point hikes this year, but some policymakers hinted that there could be more.

Meanwhile, investors are also anticipating should the Bangko Sentral ng Pilipinas (BSP) will also hike its interest rates during the Monetary Board meeting on Thursday, March 22.

In a BusinessWorld poll of 12 economists, seven see the local central bank hold on to its current borrowing rates. — Karl Angelo N. Vidal

NAIA consortium open to reducing concession period for airport rehab project

March 21, 2018 | 5:03 pm

The consortium of corporations bidding to rehabilitate the Ninoy Aquino International Airport (NAIA) said they are open to reducing the concession open period for their proposal.

The NAIA consortium had initially planned for a concession period of 35 years for their P350-billion proposal, but said they are open to shortening the period depending on negotiations with the government, and that they are “flexible” with what the government decides for the long term, even if would mean not pushing through with the third runway the consortium plans to build.

“We are open to a shorter concession period, but we probably won’t have time to build a third runway,” consortium spokesperson Jose Emmanuel “Jimbo” Reverente said in a press conference.

As the consortium is competing with the consortium of GMR Infrastructure Ltd and Megawide Construction Corp., Mr. Reverente said they have the advantage given they submitted the proposal first.

AC Infrastructure President Jose Rene D. Almendras said the consortium can receive the notice to proceed for their proposal to rehabilitate NAIA by year-end.

“If you look at BOT law and prescribed period for tendering Swiss challenge, You can get notice to proceed by December 2018,” AC Infrastructure President Jose Rene D. Almendras said.

The consortium of conglomerates Aboitiz Infra Capital Inc., AC Infrastructure Holdings Corp., Alliance Global Group Inc., AEDC, Filinvest Development Corp., JG Summit Holdings Inc. and Metro Pacific Investment Corp. (MPIC) submitted their proposal on Feb. 15, while Megawide-GMR submitted on Mar. 1 their $3-billion proposal with a concession period of 18 years.

“Our proposal has the best solution for the problem we have right now,” Mr. Reverente said.

The Department of Transportation (DoTr) has to grant the group original proponent status to the consortium. Afterwards, the National Economic and Development (NEDA) Board will evaluate the project and when approved will subject the proposal to a Swiss challenge.

“Our proposal has the best solution for the problem we have right now,” consortium spokesperson Jimbo Reverente said. — Patrizia Paola C. Marcelo

Budget department wants to use Dengvaxia refund for medical assistance to vaccine recipients

March 21, 2018 | 2:06 pm

THE BUDGET DEPARTMENT will ask the House committee on appropriations to file a supplemental budget that would allow the use of the refunds from unused Dengvaxia vaccines.

This comes after French pharmaceutical firm Sanofi Pasteur refunded P1.16 billion to the government last January.

Budget Secretary Benjamin E. Diokno said that the supplemental budget would enable the Department of Budget and Management (DBM) to release the funds to the Department of Health (DoH), which would be used to provide medical assistance to Dengvaxia vaccine recipients.

“The supplemental budget would allow the utilization of around PhP 1.16 Billion worth of refund from Zuellig Pharma, the local distributor of Sanofi Pasteur. The refund was made by the pharmaceutical company to cover the amount of the unused Dengvaxia vaccines,” Budget Secretary Benjamin E. Diokno said during a press briefing on Wednesday.

He said that the amount would cover the medical assistance program for medical kits, hospitalization, outpatient health services of patients that received the Dengvaxia vaccines. It would also fund the deployment of Nurse-Health Education and Promotion Officers (HEPOs).

Mr. Diokno said that the amount would cover about 870,000 Dengvaxia recipients, at P500 per vaccinee for the outpatient care package, and P300 per vaccinee for the medical kits.

The outpatient care package includes a Complete Blood Count (CBC), NS1 antigen test, urinalysis, medications and other required laboratory tests.

The medical kits, on the other hand, contain one thermometer, one mosquito repellent, two bottles of multivitamins, and one package bag.– Elijah Joseph C. Tubayan

Yes, bosses are checking your social accounts. Here’s proof

March 21, 2018 | 12:21 pm

So you’ve finally gotten your dream job. We’ve previously discussed how your potential employers are looking at your social media posts, but now you’re employed. You should be home free, right?

Wrong.

At the sidelines of Transgen: Awakening of the Digital HR, a seminar mounted by business students of the Polytechnic University of the Philippines in their campus last February 21, SparkUp asked human resources experts on whether or not your current employer looks at your social media accounts. Are your own social media accounts considered public space or a private space for all your rants, raves, and sassy commentary?

Multinational companies tend to check their employees’ LinkedIn and Facebook accounts, and have IT staff dedicated to this task.

Darwin Rivers, President of the Philippines HR Group (PHILHRG, Inc.) and seasoned HR practitioner, said that multinational companies tend to check their employees’ LinkedIn and Facebook accounts, and have IT staff dedicated to this task.

“Whether you’re an employee for a small or large company, what you need to remember is think before you click,” said Rivers. “Whatever you put on social media will reflect on who you are as a person.”

“It’s best that you use social media advantageously for your career, in terms of networking with people, fellow professionals who can help you develop your skill sets and broaden your network,” he added. “It will ensure that in the long run that you’ll have people to help you in growing your career.”

“Social media should be used as a tool to network, for knowledge, and to develop,” is Ramos’ key belief when it comes to being a social media‑savvy employee. “Don’t use social media as a way to vent.”

Privacy, he believes, is a primary responsibility of the social media account owner.

Anthony Santos, the HR and administration officer of the International Cabin Attendant School (ICATS), said that social media is something that their company takes seriously.

“We consider it a public space,” he told SparkUp. “In businesses today, it’s important that you’re transparent. Your customers and patrons have expectations from the moment they get in contact with you.”

This expectation of social media being a public space applies not only to the company’s social media accounts but also to the accounts of the employees. “Employees carry the brand of the company,” Santos said. “So there should be a limit on how they act.”

Just like how you’d probably hide filter out your most embarrassing teenage moments and drunk parties from your parents, prudence should also be practiced when it comes to your social media presence with employers and the public.

Social media has come a long way from being private blogs on journal sites and anonymous board sites. With everything being integrated on sites like Facebook and Twitter, social media has become a public space. At least through the eyes of your employer.

How global trends are shaping fintech

March 21, 2018 | 12:16 pm

No one can escape the inevitable. Blockchain, a rather controversial buzzword thanks to its role in virtual currencies, is seen to disrupt the business landscape—even the financial technology industry.

In fact, blockchain technology will “greatly shape” the future of the Philippine’s financial service industry. This is according to J.P. Ellis, CEO and co‑founder of Singapore‑based C88 Financial Technologies that operates digital financial service market eCompareMo, at the company’s event Finovation 2018 last March 15 in Makati City.

“Blockchain and massively open and secure ledgers improve transparency and intra‑institution data sharing,” he said, adding during a roundtable discussion with reporters: “We differentiate strongly between blockchain and cryptocurrency. Cryptocurrency in many respects is speculative financial instruments, we don’t invest in that. However it is built on top of this concept, blockchain, which is essentially an open, public ledger.”

Launched in 2015, eCompareMo is an online financial tool that provides Filipino users with information about loans, credit cards, and insurance policies offered by its partner banks and insurers, to match their financial needs. Since then, the company has tied up with over 20 service providers in the Philippines and has been generating at least a million visits monthly.

While the company is keen to utilize blockchain, Ellis clarified that eCompareMo.com has no plan to involve virtual currencies (VCs) in its operation. VCs like Bitcoin, Etherium, and Ripple are digital forms of money enabled by blockchain.

He further said: “We are very keenly involved in financial technology regulations in the entire region, [but] we are not involved in cryptocurencies at all. We don’t endorse it, we don’t have a stand on it.”

Alex

But while cryptocurrency isn’t in the horizon for eCompareMo just yet, it did join another bandwagon through this (controversial) technology: AI. The company launched its AI‑powered chatbot called “Alex” during the event.

The chatbot responds to queries from customers opting to avail financial products available in the platform.

“We believe that [AI] will be able to solve our customers’ needs 24/7. A lot of customer questions are very standard, so this can be automated,” Ellis said, adding that AI “reduces costs” and cut long waiting time for consumers.

The chatbot, according to Mercedes Limson, chief commercial officer, was built in‑house and is proprietary.

“Our chatbot will also offer products that are related to your needs, and then give you alerts should you need to, say, update your insurance,” Limson said during the roundtable discussion.

Global trends

The company also named three other global trends that will shape the local fintech industry, namely big data, product customization, and information security.

“Big data [will] improve everything virtually, from parking risk to detecting fraud,” he said. “[The] ability to offer personalized pricing and more financial product manufacturing is better for customers [while] leveraging cloud [can] move the industry to world class information security and cybersecurity standards.”

These technologies, according to Ellis, will respond to the “demand of the market for faster and more convenient ways to accomplish financial processes.”

“Big data [will] improve everything virtually, from parking risk to detecting fraud,” he said. “[The] ability to offer personalized pricing and more financial product manufacturing is better for customers [while] leveraging cloud [can] move the industry to world class information security and cybersecurity standards.”

These technologies, according to Ellis, will respond to the “demand of the market for faster and more convenient ways to accomplish financial processes.”

Duterte is ‘for’ abolition of political dynasties but doubts it will get approved

March 21, 2018 | 4:25 am

By Arjay L. Balinbin

President Rodrigo R. Duterte doubts if the proposal to abolish political dynasties in the Philippines will hurdle Congress.

Mr. Duterte told local government officials during the general assembly of the League of Municipalities of the Philippines (LMP) at the Manila Hotel on Tuesday, March 20, that he supports the banning of political dynasties in the country; however, he doubts if Congress will approve it.

“A few of the principled men, I would say, want this kind of thing about dynasty [being] abolished. I am for it. Ang problema, lulusot ba ‘yan? (The problem is, will it get approved?),” the President said.

Mr. Duterte described the common practice in Philippine politics, where family members of an outgoing politician also get elected.

“Because, sa atin, pagkatapos mo eh (in this country, after your term,) they would ask for your son or your wife or…So, I don’t know,” he said.

The President explained why his daughter Sara Duterte-Carpio was elected as his replacement as mayor of Davao City.

“Inday really is a…she’s a character and she can be mean. The Davaoeños want to continue ‘yung ano ‘yung nagawa mo (what I have started). Ano ba talaga ang nagawa ko? (What have I really accomplished?),” he said.

He added: “Why is it so peaceful (and) so clean? Drug is minimal and the law and order is very good. It took me about three terms really to perfect the system.”

The members of the Consultative Committee (ConCom) to Review the 1987 Constitution had approved last week the proposed anti-political-dynasty provisions in the federal constitution that they are set to present to Mr. Duterte for consideration in time for his State of the Nation Address in July.

“A political dynasty exists when a family whose members are related up to the second degree of consanguinity or affinity whether such relations are legitimate, illegitimate, half or full blood, maintains or is capable of maintaining political control by succession or by simultaneously running for or holding elective positions,” ConCom said.

Hence, the Committee is proposing that “no person related to an incumbent elective official within the second civil degree of consanguinity or affinity, as described above, can run for the same position in the immediately following election.”

“Persons related within the second civil degree of consanguinity or affinity are prohibited from running simultaneously for more than one national and one regional or local position.”

Duterte backs closure of Boracay for a few months

March 21, 2018 | 4:21 am

By Arjay L. Balinbin

President Rodrigo R. Duterte on Tuesday, March 20, assured the inter-agency task force working on the rehabilitation of the country’s world-famous Boracay island that he would support its recommendation, even if the closure of the island would take “a little bit longer.”

The President made the announcement during the general assembly of the League of Municipalities of the Philippines (LMP) held at the Manila Hotel on Tuesday night.

The President said the Department of Interior and Local Government (DILG) officer-in-charge Secretary Eduardo M. Año informed him last Monday, March 19, that “he thinks” the rehabilitation of the island “will take a little bit longer.”

Mr. Duterte added: “I answered him. I said, ‘General, you are there. I placed you there. Whatever your decision is, I will support you.'”

“It’s up to you. You just make the recommendation, and if I find everything that is alright and in consonance with the… [We’ll] go for it,” the President said further.

According to Mr. Año, Boracay’s rehabilitation “will take about something like six months.”

“Then do it, I told him,” the President said.

The Department of Environment and Natural Resources (DENR), DILG and Department of Tourism (DoT) recommended the one-year total closure of Boracay island last week, March 15.

Presidential Spokesperson Herminio Harry L. Roque, Jr., in a press briefing at the Palace on Monday, said the President will study the best option, but it will definitely not be a permanent closure of the island.

The spokesman likewise assured that Mr. Duterte’s decision would take into consideration the “plight of the small resort owners” and the impact on the economy, especially at the local level.

Maiden ‘panda’ offer oversubscribed

March 21, 2018 | 12:33 am

THE GOVERNMENT raised 1.46 billion renminbi (RMB) on Tuesday from its maiden “panda” bond sale amid “overwhelming demand” from both offshore and onshore investors, the Investor Relations Office (IRO) announced in a press statement on Tuesday.

The offer of the three-year debt papers was more than six times oversubscribed at 9.22 billion RMB against the 1.46 billion RMB that the government placed on the auction bloc.

“With a tight spread of 35 basis points (bps) above benchmark (China Development Bank three-year notes’ 4.65%), the three-year Panda bonds fetched a coupon rate of 5.00%,” the government’s IRO said in its statement, noting that offshore investors accounted for 87.7% of the offer.

“The Philippines was able to diversify its investor base with participation originating from both onshore and offshore investors.”

The IRO cited a 5.00-5.60% price range prior to the auction, saying that “overwhelming demand” kept the coupon at the low end.

It described the offer’s oversubscription as “the all-time largest coverage for any panda sovereign issuer.”

“The Philippine government’s successful inaugural issuance of panda bonds highlights the investor confidence that the country enjoys on the back of its strong credit profile,” the statement quoted Finance Secretary Carlos G. Dominguez III as saying, describing the successful auction as “one of the concrete results of President (Rodrigo R.) Duterte’s foreign policy.”

Mr. Duterte had startled the country’s traditional partners by announcing in a speech during an October 2016 visit to Beijing, China — shortly after he took office at end-June that year — his “separation” from the United States and pivot to China and Russia. His economic managers scrambled to whip up a press statement by noon the following day that Mr. Duterte was merely referring to an independent foreign policy.

The maiden panda bond sale followed a March 14-16 road show in Singapore, Hong Kong and China that was led by National Treasurer Rosalia V. de Leon and Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Guinigundo.

China-based Lianhe Credit Rating Co. Ltd gave the yuan-denominated bonds an “AAA” rating and stable outlook, noting that the debt issue has the “lowest expectation of default risk.”

Panda bond sale proceeds will be converted to pesos and will help fund the government’s infrastructure projects and other financing requirements. The government is embarking on an P8-trillion infrastructure spending program until 2022, when President Rodrigo R. Duterte ends his six-year term, in an effort to boost economic growth to 7-8% until then, from 6.7% recorded in 2017 and the 6.3% average logged in 2010-2016. The government plans to borrow P888.23 billion this year to plug its budget deficit capped at three percent of gross domestic product. — Elijah Joseph C. Tubayan

Growth mainstays in focus for 2018

March 21, 2018 | 12:32 am

By Melissa Luz T. Lopez
Senior Reporter

STRONGER consumption coupled with the government’s infrastructure push will drive economic growth this year, S&P Global Ratings said, as exports are likely to normalize from last year’s record pace.

“After strong export contributions in the middle of 2017, we expect the traditional pillars of growth — consumption and investment — to be in focus in 2018,” the international debt watcher said in its monthly report released yesterday.

“Part of the investment growth will be from the government’s increased push to develop infrastructure, which we expect to raise economic growth in the medium term.”

S&P expects Philippine gross domestic product (GDP) to expand by 6.5% this year which will keep the Philippines in the ranks Asia’s fastest-growing major economies.

However, the pace will slow from the 6.7% growth recorded in 2017 if realized, and will fall short of the government’s 7-8% target.

Robust infrastructure spending led by the public sector is expected to push economic activity, the credit rater said.

The government plans to spend as much as P1.1 trillion on public works this year, forming part of the P8-trillion program for infrastructure up to 2022, when President Rodrigo R. Duterte ends his six-year term.

State infrastructure spending increased by 15.4% to P568.8 billion last year from 2016, surpassing a P549.4-billion program under the 2017 budget, according to the Department of Budget and Management.

This brought overall spending up by 11% to P2.824 trillion in 2017 and led to a P350.6-billion deficit equivalent to 2.2% of GDP.

A more upbeat consumer market will likewise stoke economic activity.

“The first phase of tax reform is now being implemented and the cut in personal income tax should help private consumption,” S&P said, referring to Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law that took effect on Jan. 1.

TRAIN reduced personal income tax rates for those earning below P2 million annually. The foregone taxes — estimated at P10 billion — will be offset by the removal of some value-added tax breaks; raising fuel, automobile, mineral and coal excise tax rates, as well as adding levies on sugar-sweetened drinks and cosmetic surgery.

The TRAIN is expected to raise P82.3 billion in the law’s first year of implementation.

S&P noted that the TRAIN law will cause a “temporary spike” in inflation due to the new taxes, but will in turn generate additional revenues to support government spending.

Inflation surged to a three-year high in February at 3.9% under the revised consumer price index.

Strong household consumption and increasing state spending, especially on infrastructure, are expected to help offset slowing growth in merchandise exports after a 10.2% increase in offshore sales of Philippine goods in 2017.

S&P said it does not expect a “significant” widening in the country’s current account deficit — fueled largely by a record trade deficit — but added it remains watchful about volatilities that could affect remittances, oil prices and imports.