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A real estate sensation

Mixed-use developments have become a truly popular concept in the real estate industry in the Philippines. One will be hard-pressed to name a big real estate company that has no mixed-used project — completed, ongoing or planned — of its own.

These sprawling developments, characterized by having dedicated spaces for residential, commercial and sometimes industrial uses, are far from being a local phenomenon. “Around the globe, [mixed-use] development has emerged as the new development paradigm in today’s cities,” writes Sarah Horsfield of Urbis, an Australian architecture and planning firm.

Some may be surprised to know that mixed-use development is not exactly new. In the words of Laura Alvarez, of The University of Nottingham, it has been around “for as long as mankind.”

“Research has revealed that complex cave systems hosted multiple uses hundreds of thousands of years ago. The Romans built large multi-use complexes across their empire. And during medieval times, people used to manufacture, sell and live in the same building,” she writes in an article for The Conversation, a news and commentary Web site.

In a 2011 applied research paper published in Georgia Institute of Technology’s SMARTech, which houses theses and dissertations, author Joshua Herndon notes that traffic congestion, increasing gasoline prices, changing consumer demographics and a longing for the sense of place and community are among the factors that have contributed to the resurgence of mixed-use development, at least in the US.

But these same factors can also explain why the real-estate concept is growing in popularity in a rapidly developing nation like the Philippines.

Local property developers are very much into it, even though building one costs big bucks. Recently, Federal Land, Inc., a wholly owned subsidiary of GT Capital Holdings, Inc. has partnered with Nomura Real Estate Development Co. Ltd. and Isetan Mitsukoshi Holdings Ltd. to develop the $400 million retail and residential complex called Sunshine Fort Landmark in Bonifacio Global City in Taguig, which is expected to be finished in 2025.

Ayala Land, Inc. has already expended P10 billion in developing its 11-hectare mixed-use property, Cloverleaf, in Balintawak, Quezon City, whose first phase — covering an area of around five to six hectares — will likely be completed in 2022. A new mall was opened there late last month.

Meanwhile, a P30-billion township — which is another term used to refer to a mixed-use development — is being developed by Megaworld Corp. in San Fernando, Pampanga on the site of the iconic Pampanga Sugar Development Company.

Nevertheless, mixed-use developments are not universally accepted. “People don’t like the idea of sharing their residential spaces with industrial and commercial uses. Issues such as noise, smells and loss of privacy prevent some buyers from investing in mixed-use schemes,” Ms. Alvarez says.

But that is changing, if gradually. “Examples across the globe are showing that living, working, socializing and entertaining locally has multiple benefits such as shorter commuting times and a more active and engaged social life. This is true in both large cities and lower density areas,” she notes.

She continues: “What’s more, mixed-use developments can help residents to establish frequent contact and long-term relationships with others. Virtual reality and global communication systems are connecting people around the world. But they also detach people from those they are closest to. A built environment that keeps people together and offers more opportunities to meet could mitigate this problem.”

While property developers continue to expand their portfolio of mixed-use developments, they may want to focus more on amenity, which, Ms. Horsfield says, is the new value differentiator. “Developers are competing to win tenants/investors into their buildings by offering gold star amenity packages…” and these packages may include high-end, hotel-style facilities, even dog parks, dog washing stations and doggy lounges.

Mixed-use developers might also want to take into account precinct programming. “[I]t’s not just about green space, it’s what you do within it to engage, connect and entertain the community. Cinemas, markets, local exhibitions, food vans, are just some of the engagement platforms available,” Ms. Horsfield says.

“Developers must learn to work with designers and urban planners to bring together affordable, healthy, green, smart design in order to transform social outcomes. This means that today’s developers need to be sociologists, as people are now using space in fundamentally different ways.”

Living in mixed-use areas

Mixed-use development, which allows people to live, work, play and shop in one place, is becoming a more practical lifestyle. Consumer preferences for neighborhood and community features have shifted from large-scale residential developments to mixed-use developments, where residential, commercial, cultural and industrial uses blend.

Based on the National Community and Transportation Preference Survey conducted by National Association of Realtors in America, most of the respondents prefer walkable communities. The study revealed that 48% of respondents prefer to live in communities containing houses with small yards but within easy walking distance of the community’s amenities.

The poll also showed that millennials (ages 18 to 34 years old), which comprise the highest percentage of first-time homebuyers, prefer to live in a place where shops and restaurants are walking distance or only requires a short commute. They favor developing communities where people do not need to drive long distances to work or shop.

For many, walkable community means living in a community where everything you need comes in one place. But, is living in a mixed-use community fits your lifestyle and preferences? To help you decide, here are the pros and cons of living in mixed-use developments as identified by an online property company in Asia, PropertyGuru.

The first advantage of living in a mixed-use community is convenience. In PropertyGuru’s Web site, it explains that the best thing about living in a mixed-use development is residents don’t need to travel far from the comfort of their home to do some retail or grocery shopping.

Second, although mixed residential developments usually fetch a higher price, it is still considered as a good investment. Such developments are in demand due to its added benefits in terms of accessibility in commercial establishments. Thus, the cost is justifiable enough.

Residents in mixed-use community get to save money and time on fuel and parking. Since the essential establishments are walking distance, residents don’t have to use their car and spend some money for fuel. They are also free from experiencing the hassle of looking for parking spaces that could ruin their schedule and could cost them additional expense.

Above all of these, PropertyGuru says that convenience drives mixed-use community the most. “In a society where work takes up more than three quarters of a day, having shops and other amenities near home is a welcomed addition. Instead of travelling 15 minutes or half an hour to the nearest mall for some window shopping, residents can simply take the lift down and walk around leisurely without worrying about travel time overlapping with dinner or bedtime,” PropertyGuru says.

On the other hand, the worst thing about mixed-use developments is it can easily become overcrowded. Although the shopping malls and other establishments are originally meant to cater the residents, it is still open for everyone. Thus, the level of noise can get unmanageable, especially when there are bars and pubs in the vicinity.

And since high-income earners are usually the ones able to afford residential units in mixed-use community, prices of goods in shops and restaurants are largely driven up. “As a result of this, the disparity of wealth will only shape the neighborhood in favor of the target demographic, creating an unbalanced population model in the country,” the site says. — Mark Louis F. Ferrolino

The ‘mini cities’ of Manila

Fun fact: Did you know that much of the area that is now known as the city of Makati was once a hacienda called ‘San Pedro de Macati’? The hacienda was owned by the Zóbel de Ayala family, and included the Nielson Airport, the Philippines’ primary airport in the 1930s.

It does not take much imagination to see how much the country’s real estate landscape has evolved since then, with the rise of developments like Bonifacio Global City and McKinley Hill. As the Philippines grows wealthier, the real estate industry only becomes hungrier for new types of property to develop.

The rise of the township, or the mixed-use development, serves as an example. Here are a few of the most notable ones in Manila.

Ayala Center

Perhaps one of the most prominent mixed-use developments in the metro, the Ayala Center is a recreational, shopping, dining, and entertainment development located in the heart of Makati. The property includes hotels and several malls, including Ayala’s Glorietta and Greenbelt malls, all of which offer options for shopping, dining, gaming arcades, and cinemas. The Ayala Museum is also an attraction, with displays and exhibits on Philippine history and art.

The Ayala Center development originally started as separate shopping arcades and Greenbelt Park in 1988, before an expansion was launched to cover more than 50 hectares of facilities. It is located in the middle of Ayala Avenue, Epifanio de los Santos Avenue, Arnaiz Avenue, Paseo de Roxas and Legazpi Street.

Araneta Center

Considered as one of the central hubs of northern Metro Manila, the Araneta Center hosts numerous shopping establishments, hotels, office complexes, and the Araneta Center-Cubao MRT and LRT stations. Among the highlights of the area are Farmers Plaza, Gateway Mall, SM Cubao, the Aurora and Gateway Towers.

Acting as a centerpiece of the property is the Smart Araneta Coliseum, one of the largest multi-purpose indoor arenas in Asia. The Kia Theatre, set to be the country’s leading performing arts venue, Novotel Manila, a deluxe business hotel connected to Gateway Mall, are also situated within the center.

Eastwood City

Eastwood City, a 17-hectare development located in the Bagumbayan area of Quezon City, hosts multiple luxury residential condominium towers, the BPO-targeted office complex, malls, a hotel, a supermarket, and a police and fire station. The property was launched in 1997.

The most significant feature of the complex is Eastwood City Cyberpark, a BPO-targeted office complex which include the 20-storey Global One Center and the 10-storey 1880 Eastwood Avenue. The cyberpark is listed as an approved IT Center by the Philippine Economic Zone Authority, making export-oriented companies located therein eligible for temporary tax holiday, permanent reduced rate of corporate income tax, and other incentives.

Rockwell Center

Among the high-end mixed-use areas in Metro Manila is the Rockwell Center. First developed in 1998, the property has been expanding since 2012, with architectural firm Skidmore, Owings & Merrill drawing out the design. Features of the Rockwell Center include corporate office buildings, residential condominiums, a law and business school. The jewel of property is the Power Plant Mall, an upscale four-level shopping and dining complex at the heart of Rockwell Center.

The Proscenium at Rockwell will expand on the property with four new residential towers, office tower, and shopping areas, creating residential, retail, office, amenity and cultural spaces suited for the live-work-play lifestyle. — Bjorn Biel M. Beltran

Embracing challenges for growth and opportunities: ASP holds 58th Annual Convention

By Bjorn Biel M. Beltran

The internationally recognized Actuarial Society of the Philippines (ASP) is hosting its annual two-day convention from Nov. 16 to 17 at the Misibis Bay Resort, Cagraray Island in Bacacay, Albay.

The convention, which welcomes local and foreign professionals, is being held under the theme “Embracing Challenges for Growth and Opportunities.” Acting as the capstone to the organization’s various activities throughout the year, which include its general membership meetings, fellowship activities, sportsfest and professional development workshops, the convention also acts as the venue for professionals and other industry leaders to discuss significant issues and developments that are making an impact to the actuarial profession.

“Ten local and foreign experts will be discussing topics on diverse practice areas that relate to or affect the actuarial professionals,” ASP Vice President Jesselyn V. Ocampo told BusinessWorld.

“These topics were suitably chosen to stimulate the minds of the delegates to identify potential areas of growth and opportunities in their respective professions. In doing so, actuaries can face continually emerging professional challenges and become active and relevant participants in shaping and developing their respective organizations,” she added.

Ms. Ocampo also said that the convention will include a fellowship night, which will give the actuaries a venue to foster camaraderie to boost dynamic participation in the society’s current and future activities, and conclude in an induction night where a new set of ASP officers will take their oaths.

New risks, new challenges

Actuaries play an essential role to industries like insurance, pre-need and health maintenance organizations (HMOs), as they provide companies the means to assessing risks and measuring their financial possible impact. Financial service organizations and the academe also rely on actuaries for statistical, economic and financial analyses to make calculations and projections for a wide range of practical business problems. Actuaries are also used by many companies for their employee benefits and retirement plan consulting needs.

Life and non-life insurance companies and pre-need companies are strictly required to use actuaries in regulatory certification requirements such as for the valuation of future benefits to be paid and the development of new products. The HMO industry has recently been included in this list of companies being required to use actuaries, with the ASP actively assisting the Insurance Commission (IC) in drafting important circulars for the industry.

The ASP also aides the IC in technical working groups such as those organized to review guidelines for variable unit-linked life insurance products and to help companies prepare for the implementation of the new International Financial Reporting Standards 17 for insurance contracts.

Additionally, with the onset of developments in technology posing new risks to businesses, actuaries are getting involved in fields like cybersecurity, data analytics, and big data.

“The actuary can help try to manage risk by finding ways to measure it and make it tangible. Then once you’re able to measure risk, you’ll be able to mitigate it,” Froilan Emilio S. Racela, ASP president, told BusinessWorld.

Disruptive technologies and industries are drastically affecting how many companies operate, and the need for skilled actuaries grows ever greater. Mr. Racela said that one challenge for the actuarial profession in this changing industry landscape is the ongoing push for actuarial career relevance among students. Despite being one of the highest paying careers and consistently being ranked as one of the best professions in the world, as a profession unbeknown to many, and one where there are only about 70 Fellows in practice in the entire country, actuaries have a difficult time attracting new blood into the fold. Fellows are those who have fully completed the stringent actuarial exam requirements which are needed to be able to sign as an actuary.

“The question is how will we be able to keep ourselves attractive to the younger generation,” he said. “We’re still not as well-known as accountants, doctors, and engineers. We haven’t really been promoting ourselves. It’s in our plans but I think we can still do a better job at it,” Mr. Racela said.

“It’s always been our dream to multiply our number. One of our goals in our #ASP2020 strategic plan with the theme ‘Actuaries Set for Progress’ is to significantly grow our number. Now, we’re just about 70 fellows. Perhaps we can double that by 2020 with a total of 300 fellows and associates,” he added.

A community of actuaries

The ASP’s 58th Annual Convention aims to support the plans to increase the commitment and engagement of the members of the ASP. Mr. Racela noted that the first step for the growth of the profession will naturally be to strengthen its foundation: the technical knowledge and skill of the actuaries themselves.

“Just recently, the vision came to me that the ASP should be a community of actuaries, not just an organization, but a community. In a community, you are like brothers and sisters taking care of each other,” he said.

Part of the ASP’s initiatives for the year included a new Learning and Development Education Series that serves as a series of workshops on essential actuarial tasks towards developing the best practices and approaches. More than 25 ASP Fellows and Associates are involved with the series, acting as mentors to younger members of the ASP seeking to hone their craft. Knowledge and work experience are being shared unselfishly.

By making sure that everyone in the organization will be able to do their job well, Mr. Racela pointed out that the ASP will be able to increase the engagement and commitment of its members and transform the society into a community.

“That’s a vision that we should push for. We should not just be a professional organization concerned about how to do our own work, but more concerned about the people behind the profession, the actual members,” he said.

“In 2017, the ASP lost two stalwarts of the actuarial profession, Isagani de Castro and Ines Belleza. Mr. De Castro and Ma’am Belleza were instrumental in the development of the actuarial profession in the Philippines and we would like to honor them for all their contributions, especially how they helped support the careers of future actuaries. And this should really be what ASP is all about, a community of actuaries,” he added.

Weekend Watch: Ikarus Theatre Collaborative’s Bastion

There are two opposing old schools of thought when it comes to discussing the morality of man and why we need laws to govern us—naturalism and positivism. Saint Thomas Aquinas, the prime philosopher on natural law theory, believes that man is inherently good. God, who is good, gave us an innate sense of morality so that we would seek out his teachings and guidance even if we’ve never heard of him before. Law, therefore, is based on what God wants us to be. On the other hand, positive legal theory does not anchor itself on the supposed innate goodness of man, and that political leaders create laws for our fellow men to prevent ourselves from descending into chaos. Law, therefore, is based on what we set for ourselves.

Yet in Jay Crisostomo IV’s Bastion, a play staged by Marikina‑based Ikarus Theatre Collaborative, both the highest legal and religious authorities of the fictional city of Bastion came up with the same solution to solve the food crisis as the 45‑year long winter continues to rage. First, we sacrifice the old, then the infirm, and if worst comes to worst, the young. The law was implemented for the city’s survival, so that there will still be people left when winter is over. In the end, only The Mayor, The Nun, and the youngest of their eight children, Lilith, is left in the small city that has seemingly been forgotten by the national government. Oh, and by sacrifice we mean eat. Because what else can you eat in a world where nothing else grows?

While most stories begin on how this situation came to be, Bastion puts us at a time when winter is about to end. A masked Stranger, emissary of the national government— accompanied by his subordinates, the cheerful Petra and the morose Maximus— arrives to Bastion to announce that the time of plenty is coming. No longer will they want for food. No longer will they have to eat their own.

Now they must face the consequences of survival.

The play, penned by Crisostomo, marks the end of the season for the 2017 season of the Marikina‑based theater group, to be held at their home theater Dito: Bahay ng Sining starting the 17th of November. Members of the press were treated to a preview of the play’s first act last Friday, as well as a drink from the attached bar and café. Dito is also owned by Crisostomo, who hopes to create an affordable space for artists to stage plays, hold events, and just meet and chill in general.

As a big fan of celebrations of the macabre and the occasional pointless musings on what makes a man and what separates him from the monster, I enjoyed the play a lot. It’s so bloody you can almost taste the tang on the tip of your tongue. While there are obvious physical limits to theater (it was made to be affordable, after all), the actors make use of every little space until we are transported to another country— cold, cruel, desolate— a seeming exact opposite to the Philippines. In fact, being trapped in a small space with all these talented people can be overwhelming, and you’re forced to think of all these gory things whether you want to or not.

It’s also clear that friendship is a major driving force for the people of Ikarus Theatre Collaborative. Everyone— the actors, the production team, the writer— knows one another as friends and as friends of friends who eventually became friends. It’s this personal relationship between them that ensures that they come up with a production that both the crew and the audience can enjoy.

Bastion will run from November 17 to November 25. Check out Ikarus Theatre Collaborative’s facebook page for more info.

Q3 growth beats market expectation

By Elijah Joseph C. Tubayan
Reporter
and Melissa Luz T. Lopez
Senior Reporter

ECONOMIC EXPANSION last quarter beat market expectations, the Philippine Statistics Authority (PSA) reported on Thursday, affirming the country’s place among Asia’s fastest-growing major economies and firming expectations among some analysts of interest rate hikes by next year.

Q3 growth beats market expectation

Gross domestic product (GDP) grew by 6.9% last quarter — the fastest clip in four quarters though slightly slower than the year-ago 7.1% — which Socioeconomic Planning Secretary Ernesto M. Pernia yesterday attributed “to sustained strong growth in exports and improvements in public spending, which then boosted the manufacturing sub-sector and the services sector.”

The actual pace topped the 6.6% median in a poll of economists BusinessWorld conducted late last week that also matched Moody’s Analytics’ own estimate.

The third-quarter clip fueled year-to-date GDP growth to 6.7%, already above the lower end of the government’s 6.5-7.5% full-year target for 2017 but still slower than the 7.1% logged in 2016’s first three quarters.

Mr. Pernia noted that the Philippines third-quarter pace already beats China’s 6.8% and Indonesia’s 5.1% for the same three months, though trailing Vietnam’s 7.5%. Markets are awaiting July-September GDP data to be reported on Nov. 30 by India, which is one of the major Asia economies to which the Philippines is also compared.

BY INDUSTRIAL ORIGIN
Services continued to lead as GDP growth driver, contributing 4.2 percentage points to expansion.

This sector, which accounted for 49.1% of national output, grew by 7.1% last quarter, faster than the preceding three months’ 6.3% and the year-ago 6.8%. Services’ growth, however, slowed to 6.7% year to date from the 7.5% recorded in last year’s comparable three quarters.

Industry, which contributed 27.8% to GDP and 2.5 points to growth, saw its expansion edge up to 7.5% from the second quarter’s 7.4%, even as this was a slowdown from the year-ago 8.8%. Industry’s growth slowed to 7.1% year to date from 8.5% in 2016’s comparable period.

Growth of agriculture, hunting, forestry and fishing — which accounted for 6.6% of GDP and contributed 0.2 of a point to growth — slowed to 2.5% from the second quarter’s 6.3% and the 3.0% clocked in 2016’s third quarter. But this sector saw a year-to-date turnaround to 4.6% growth from a 1.3% contraction the past year.

BY EXPENDITURE TYPE
Household consumption remained a key anchor of the economy, accounting for 55.7% of GDP in the third quarter.

Growth of household spending, however, eased to 4.5% last quarter from the preceding three months’ 5.9% and the 7.2% recorded in July-September 2016. The third-quarter pace tempered year-to-date increase to 5.4% from the 7.3% logged in 2016’s comparable nine months.

Mr. Pernia, in yesterday’s briefing, blamed the slowdown on increasing oil, utilities and food prices. “Some factors would include the rise in oil, gasoline and fuel prices. Also there were some upward adjustments in electricity and water (tariffs) and also some food items were rising somewhat,” he replied when asked for an explanation.

Another major contributor, in terms of expenditure, was exports, consisting of both goods and services, which contributed 53.8% to GDP. Total exports grew 17.2% — the slowest in three quarters — picking up from the 9.0% clocked in 2016’s third quarter. Similarly, year-to-date growth picked up to 19.2% from 9.9%.

Under capital formation — which contributed 23.1% to GDP and grew 6.6% compared to the second quarter’s 8.5% and the year-ago 21.7% — construction (contributing 8.2%) growth slowed to 2.8% from the second quarter’s 7.6% and from the 18.8% of 2016’s third quarter. “The growth was driven by the increase in public construction but was weighed down by the modest growth in private construction,” PSA said in its report.

Growth of government final consumption expenditure, which accounted for 8.7% of national output, picked up to 8.3% from the second quarter’s 7.1% and the year-ago 3.1%.

“In the past, economic growth usually took a deep nosedive after an election year,” Budget Sec. Benjamin E. Diokno said in a separate statement, adding that “government spending continued to be a robust driver of growth, contributing 0.9 percentage point to growth.”

“On the supply side, public construction also posted a 12.6% growth rate,” according to the same statement of the Budget department.

MONETARY POLICY VALIDATED
“The strong Q3 GDP growth together with manageable inflation are in line with our expectations and validate current policy settings,” BSP Governor Nestor A. Espenilla, Jr. told reporters in a mobile phone message.

“GDP growth also remains within current potential which will expand further in the future as investments in both physical and human capital ramp up.”

The Monetary Board kept borrowing rates unchanged in last week’s review, even as the overall increase in prices of basic goods and services clocked a three-year-high 3.5% in October. Inflation averaged 3.2% in the 10 months to October, matching the BSP’s estimate for the entire 2017.

Sought for his outlook, Mr. Pernia replied: “We expect the growth of fourth quarter GDP will be higher, or at least match the third quarter performance.”

Carlo O. Asuncion, chief economist at Union Bank of the Philippines, meanwhile, said in an e-mailed response to queries: “I expect GDP to grow significantly like that of 3Q” on the back of “still robust growth from the usual drivers” of household consumption — fueled by remittances from overseas Filipino workers — business process outsourcing sales, as well as a continued improvement in state spending.

“The strong Q3 2017 GDP growth rate means that the Philippines economy is estimated to achieve sustained robust growth of over 6.0% per year for the sixth year in a row,” said Rajiv Biswas, Asia Pacific chief economist at IHS Markit, noting that growth is seen to “exceed 6.0%” per year from 2018 to 2020.

Mr. Biswas, however, said a pickup in world crude prices and rapid credit growth could prompt the BSP to introduce a rate hike by next month.

Nomura Global Research even penciled a seven percent growth for the fourth quarter to secure a 6.7% average for the full year.

ANZ Research economists said latest growth data could prompt them to raise their 6.5% forecast for the entire year, even as they noted “intensifying” imbalances that could prompt two rate hikes from the BSP between January and March.

Asked whether the faster-than-expected growth pace raises the specter of overheating, BSP’s Mr. Espenilla replied that the economy is “not there yet.”

“That begins to be a concern if we’re persistently growing above potential,” the BSP chief told reporters.

“To keep growing strongly without overheating, we expand potential itself-through high quality investments funded in a sustainable manner,” he explained.

On the statistical probability of a windfall

By Nickky Faustine P. De Guzman

Her love stories spring from serendipity: an e-mail sent to the wrong person, a chance encounter at an airport, and getting stuck in an elevator. Jennifer E. Smith, the author behind the young adult (YA) books This is What Happy Looks Like, The Statistical Probability of Love at First Sight, and The Geography of You and Me, believes in fate and chance.

“I’ve been obsessed with moments in time that act as hinges, a split on before and after. Yesterday your life is one way and tomorrow it’s entirely different. I just love exploring themes on fate, timing, and chance,” said the author whose books have been translated into 33 languages.

Her brand is about happenstance, and she’s happy to find this voice as a writer to set herself apart from other novelists.

“Ever since I wrote the Statistical Probability of Love at First Sight I’ve got so many comments from readers who have met the love of their lives on a plane. These things absolutely happen in real life, and that’s what makes them fun to read,” she said.

It follows that her latest book, Windfall, is about statistics: What are the odds of winning the lottery?

Alice, who is secretly in love with her best friend, Teddy, buys him a lottery ticket as a birthday gift. Their friendship and love story are soon changed after he wins $140 million.

“Everybody has areas of interest, and about chances happen to be mine,” she said in an interview with BusinessWorld on Nov. 9, two days before she held a book signing in Cebu.

Always drawn to tales of good luck, the book she is currently writing, well, follows the same theme: a love story set in a train traveling from New York to San Francisco. It’s not yet done, and she feels no pressure to finish it anytime soon, since the book won’t be out until 2019. In between travelling for work and pleasure, she sits down to write, but she is quick to share that the right words don’t often come out.

“I try to write every day but it always doesn’t shake out. I don’t have a strict process, I wish I was more methodical but I’m in the mindset where if it’s not working in a day I don’t get stuck there in my computer for hours. I go out and take a walk or something. But if there’s something, on the flip side, if it’s working really well I’ll cancel my dinner plans and work through the night. Keep it going,” she said.

Asked about the significance of the written word in the “post-truth” digital age of “fake news,” she said fiction will always provide optimism.

“At times like these when you think the world is falling apart, you worry that it is less to be writing small stories. But it is actually the small stories that provide hope and empathy. I’m a firm believer that books are the lights in the crack — and we are in darkness right now. I think in a way it is more important than ever to be writing stories that are full of hope,” she said of her novels.

“It’s too broad to say that all YAs are escapism, but you can call my books as such,” she said.

Her books may be anchored on love stories, but they tackle universal stories on ambition, family, friends, and achieving dreams.

Her stories are also bankable when translated from page to the screen. At this moment, the team behind The Statistical Probability of Love at First Sight movie production is castings. Dustin Lance Black (Milk) wrote the script and will direct the film adaptation.

Still, the written words are always better than the moving pictures, she confessed. “I would like to think that any movies made from my books would be an exception because it only gets better with other people’s visions and interpretations, but in general, I do think that books are better than movies. You know, it’s a translation. It’s not the same thing, and I do tend to love books more than the movie,” she said, smiling.

But then again, we might as well visit the movie houses — and bookstores — because who knows what we might find there. A new love, perhaps?

Q&A WITH JENNIFER E. SMITH

Some people are very snobbish about YA because they think it’s too mushy or it’s for the kids only, how do you change these notions?

I think everyone was 16 once. There’s a wonderful nostalgia to YA. There’s so many great stories and writers working on the genre right now. There’s so many disparaging articles written about teens, but try to read books about them, see where they are coming from, what they are thinking. They are good books that just happened to be about 16-year-olds.

How has social media and the Internet changed the art of writing?

It can be a distraction, so I try to limit myself so I’m not perusing all day. I try to do it in chunks of time and give myself 20 minutes in the afternoon and at night, for example, but less focus on reading because of the political climate in the US where it’s a little bit bleak sometimes to be there all day. You sometimes need to step away but then it is important to keep up with what’s happening. I found it a lot harder this year than ever before. I particularly love Instagram, but I am not so active that it hindered my writing but I learned a lot by following other writers on Twitter. Following even If I’m not talking [to them] I learn a lot.

How do you deal with feedback, especially the bad?

I try to tune out, not because I don’t appreciate what people say. Sometimes it’s a huge privilege for me when people take the time to read and comment. If you read a review that is 99% great, that one thing that is negative is what you will remember a year from now. So it can be really hard, it can be distracting. And I don’t want to be crowdsourcing based on what people think should happen. Once it is out of my hands, it does not belong to me anymore, but the readers. They are completely entitled to their opinions, the same way I am entitled to mine when I read.

What would you do if you win the lottery like your character, Alice in Windfall?

I think there are a lot of themes in the book Windfall about good deeds, random kindness, and volunteering, and those are things that are important to me. There are, of course, things that I’d want to do that are a little bit more personal or selfish. I would love to travel even more than I already do, [would] love to buy cottage in Scotland. There are things I want to buy, like a bookstore. There’s something invigorating about the idea of winning enough money to help people’s dreams come true, especially now, it is so important to give kindness to the world. I don’t really play the lottery, and the odds are small, but you never know.

Final ASEAN chairman’s 31st summit statement now even softer on China

THE FINAL version of the Association of Southeast Asian Nations (ASEAN) chairman’s statement at the end of the bloc’s 31st summit — released to media more than a day after heads of state ended their meeting — turned out even softer on China than the diluted final document of the 30th leaders’ meeting last April.

ASEAN 50 logo

Both statements were issued under the Philippines’ chairmanship of ASEAN this year.

A copy of the statement, released yesterday, was markedly softer than the one issued at the end of the 30th summit in that it did not even mention differences among leaders on the bloc’s approach to China’s assertive behavior in the South China Sea.

The draft in April had cited “land reclamation and militarization that may further complicate the situation…” in a reference to China’s building spree and installation of weapons systems in the disputed area. That mention was deleted in the final statement of the 30th summit which nevertheless “took note of concerns expressed by some leaders over recent developments in the area.”

Presidential Spokesperson Harry L. Roque, Jr. had said in a press briefing on Monday that “at least two to three” ASEAN leaders again raised the matter despite President Rodrigo R. Duterte’s attempt to keep the dispute off talks.

The chairman’s statement on the 31st summit that ended last Tuesday carried a section on the South China Sea that “took note of the improving relations between ASEAN and China” and encouraged the “conclusion of a substantive and effective” code of conduct for the South China Sea (CoC).

CoC talks are scheduled to start early next year after ASEAN and China adopted the framework for negotiations last August, about 15 years since both parties signed a vaguely worded Declaration on the Conduct of Parties in the South China Sea (DoC) on Nov. 4, 2002.

Analysts have since cautioned that much remains to be seen in any time table that may result from next year’s talks and whether anything can even be enforced, especially since China has persisted in reclaiming land and building structures despite agreements among claimants to keep the status quo in the disputed area.

A landmark ruling by an arbitration court in the Hague last year said Beijing’s basis for its claim to much of the South China Sea — the so-called nine-dash line — did not have legal weight. But Mr. Roque told reporters yesterday that the ruling did not have any bearing on next year’s CoC talks since it concerned only the Philippines and China.

“We reaffirmed our commitment to the full and effective implementation of the DoC in its entirety, and the importance of undertaking confidence building and preventive measures to enhance… trust and confidence among parties,” read the ASEAN chairman’s statement on the 31st summit, noting “the successful testing” of a hotline among foreign ministries of claimant countries “to manage maritime emergencies in the South China Sea”.

It also said parties are now working to put into operation the Joint Statement on the Observance of the Code for Unplanned Encounters at Sea in the South China Sea.

“In our view, these are practical measures that could reduce tensions and the risks of accidents, misunderstandings and miscalculation,” the statement read.

“We likewise reaffirmed the importance of maintaining and promoting peace, security, stability, maritime safety and security, rules-based order and freedom of navigation in and overflight above the South China Sea.”

The 31st summit statement also remained silent on the plight of Myanmar’s Rohingya minority which United Nations officials have described as being tantamount to ethnic cleansing. Non-interference in members’ internal affairs has long been a key ASEAN principle.

At the same time, ASEAN “expressed grave concern over the recent provocative and threatening actions, including the nuclear test, by the Democratic People’s Republic of Korea on 3 September 2017 and its ballistic missile tests over the past year…” — R.A. Zamora

More govt’s manipulate media with ‘bots,’ trolls — study

WASHINGTON — More governments are following the lead of Russia and China by manipulating social media and suppressing dissent online in a grave threat to democracy, a human rights watchdog said last Tuesday.

A study of Internet freedom in 65 countries found that 30 governments are deploying some form of manipulation to distort online information, up from 23 the previous year.

These efforts included paid commentators, trolls, “bots” — the name given to automated accounts — false news sites and propaganda outlets, according to the Freedom on the Net 2017 report by human rights group Freedom House.

The report said online manipulation and disinformation tactics played an important role in elections in at least 18 countries over the past year, including the United States.

“The use of paid commentators and political bots to spread government propaganda was pioneered by China and Russia but has now gone global,” said Michael Abramowitz, president of Freedom House.

“The effects of these rapidly spreading techniques on democracy and civic activism are potentially devastating.”

Sanja Kelly, director of the Freedom on the Net project, explained such manipulation is often hard to detect, and “more difficult to combat than other types of censorship, such as website blocking.”

The organization said 2017 marked a seventh consecutive year of overall decline in internet freedom, as a result of these and other efforts to filter and censor information online.

Freedom House said China was the world’s worst abuser of internet freedom for a third straight year, due to stepped-up online censorship, a new law cracking down on anonymity online and the imprisonment of dissidents using the Web.

Other countries also increased their efforts to censor and manipulate information, the report said.

This included a “keyboard army” of people employed and paid $10 a day by the Philippine government to amplify the impression of widespread support of a brutal drugs crackdown, and Turkey’s use of an estimated 6,000 people to counter government opponents on social media.

Meanwhile, as Russia sought to spread disinformation to influence elections in the US and Europe, the Kremlin also tightened its internal controls, the report said.

Bloggers who attract more than 3,000 daily visitors must register their personal details with the Russian government and abide by the law regulating mass media — while search engines and news aggregators are banned from including stories from unregistered outlets.

The study also found governments in at least 14 countries restricted internet freedom in a bid to address content manipulation. In one such example, Ukraine blocked Russia-based services, including the country’s most widely used social network and search engine, in an effort to crack down on pro-Russian propaganda.

“When trying to combat online manipulation from abroad, it is important for countries not to overreach,” Ms. Kelly said.

“The solution to manipulation and disinformation lies not in censoring websites but in teaching citizens how to detect fake news and commentary. Democracies should ensure that the source of political advertising online is at least as transparent online as it is offline.”

Freedom House expressed concern over growing restrictions on VPNs — virtual private networks which allow circumvention of censors — which are now in place in 14 countries.

It said internet freedom also took a hit in United States over the past year.

“While the online environment in the United States remained vibrant and diverse, the prevalence of disinformation and hyper-partisan content had a significant impact,” the report said.

“Journalists who challenge Donald Trump’s positions have faced egregious online harassment.” — AFP

MPIC sets P653-B capex for next 5 years

By Arra B. Francia, Reporter

SYDNEY, AUSTRALIA — Metro Pacific Investments Corp. (MPIC) will be setting aside P653 billion in capital expenditures for the next five years, as it continues to grow its toll roads business both in the Philippines and across the Southeast Asian region, as well as undertake projects under its power, water, hospital, and rail businesses.

The Philippine unit of the First Pacific group said the capex allocation from 2018 to 2022 forms part of its commitment to deliver high quality infrastructure projects that will take advantage of the Duterte administration’s “Build, Build, Build” program.

“(We) are very, very much focused on fixing fundamental challenges in society and with society’s infrastructure,” MPIC Chief Finance Officer David J. Nicol told reporters in a briefing here on Thursday.

Mr. Nicol said the company continues to look for areas where they can potentially submit unsolicited proposals to the government.

“Our strategy is to continue to find areas where infrastructure is inadequate, and continue submitting those proposals to government. We are focusing primarily in the Philippines, although as you have heard from our toll roads guys and water guys, there is some ASEAN focus developing. But overall the weight of that business will be in the Philippines,” Mr. Nicol said.

The power segment, the largest contributor to MPIC earnings, will have a capex of P400 billion to support the expansion of Manila Electric Company’s (Meralco) power generation capacity through coal resources, Global Business Power Corp. (GBP)’s foray into renewable energy sources, as well as a solid waste management facility in Quezon City.

MPIC is now awaiting the results of the Quezon City government’s evaluation for the P16-billion integrated solid waste management facility, which can convert 3,000 tons per day of municipal solid waste into 42 megawatts (MW) of baseload renewable energy.

For the toll roads business under Metro Pacific Tollways Corp., MPIC is pouring in P125 billion until 2022, given that it is currently constructing six projects. Half of the projects are set to create extensions to the North Luzon Expressway, the Cavite-Laguna Expressway, the Cavite-C5 South Link, as well as the Cebu Cordova Link Expressway, MPTC’s first project in the Visayas region covering 8.25 km to be built by 2020. 

The company has also submitted three unsolicited proposals, one of which is the Cavite-Tagaytay-Batangas Expressway to extend the Cavite-Laguna Expressway leading to Tagaytay and Nasugbu, Batangas.

“We thought we could get original proponent status hopefully before the end of the year, complete the (Swiss) challenge process early next year, and move to the implementation stage later next year. We think the first section going to Tagaytay is already viable, it can be constructed already,” MPTC President and Chief Executive Officer Rodrigo E. Franco said during the same briefing.

Maynilad Water Services, Inc., meanwhile, will spend P45 billion in the next five years for the development of bulk water projects in the Philippines and pursue projects in the ASEAN region.

The rail business, under Light Rail Manila Corp., will have P70 billion to upgrade and maintain the Light Rail Transit Line-1. The amount also includes any funds it would need should it be allowed to take over the Metro Rail Transit Line-3.

Metro Pacific Hospital Holdings, Inc will be spending P13 billion over the five-year period as it expands its capacity to 10,000 beds through acquisitions, and for the establishment of more clinics and specialty treatment centers.

In addition to the five-year spending plan, MPIC also has unsolicited proposals worth a total of P167 billion. Should the government award these projects to the company, the conglomerate’s spending until 2022 could reach P820 billion.

SPENDING FOR 2018
Of the five-year capex, P100 billion will be used in 2018, almost twice the P56 billion that MPIC committed to spend this year.

Broken down, MPIC’s capex for 2018 would include P12 billion for water, P38 billion for toll roads, P21 billion for Meralco, P17 billion for rail, P6 billion for hospitals, and P6 billion for logistics.

Including other First Pacific units in the Philippines such as PLDT, Inc. and Philex Mining Corp., Mr. Nicol said the capex for next year would reach around P145 billion.

MPIC will fund the aggressive capex program though a combination of equity partners, P90 billion of which will come from the company itself, through value crystallization in its portfolio, banks, and a potential bond offering. 

By 2021, the company said the power business will continue to be the biggest contributor to earnings at 42%, albeit lower than the current 52%, as the toll roads segment will have grown to 34% from the present 23%. Water will contribute 15% of earnings, down from the current 20%, while hospitals and other segments will still have 5%.

MPIC is one of three Philippine units of Hong Kong-based First Pacific, along with PLDT and Philex Mining. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls.

Shares in MPIC lost 18 centavos or 2.67% to P6.57 each at the stock exchange on Thursday.

Gov’t partially awards T-bills as yields ascend across the board

THE GOVERNMENT partially awarded Treasury bills (T-bills) offered in Thursday’s auction as yields rose across the board, with the market seeing higher possibility of a US Federal Reserve interest rate hike next month.

The Bureau of the Treasury awarded P18.5 billion out of the planned P20-billion borrowing yesterday from the three-month, six-month and one-year debt papers. The offer was oversubscribed, with bids reaching P29.9 billion.

Auctioned T-bills have reduced maturities given the adjusted settlement date in line with the country’s hosting of the Association of Southeast Asian Nations Summit earlier this week.

Broken down, the Treasury fully awarded the 89-day papers after total bids reached P12.92 billion, higher than the P8 billion offered. The papers fetched an average rate of 2.148%, up by 19.1 basis points (bps) from the 1.957% booked during the Oct. 23 auction.

The government also raised P6 billion worth of 180-day bills as planned at an average rate of 2.563%, 10.6 bps higher than the previous auction’s 2.457%. The debt papers were met with P10.87 billion worth of demand.

Meanwhile, the 362-day debt papers were partially awarded, with the government set to issue just P4.5 billion worth of the tenor against the P6.15 billion the banks sought to buy and the P6 billion up for grabs. The T-bills carried an average yield of 2.952%, higher by 9.9 bps than the 2.853% rate at the last auction.

Prior to yesterday’s auction, the three-month, six-month and one-year T-bills were quoted at yields of 2.6736%, 3.0107% and 2.9073%, respectively.

At the close of trading, the 91- and 182-day papers rallied, fetching rates of 2.151% and 2.5876%, respectively. Meanwhile, the yield on the 364-day T-bill dropped to 2.9237%.

National Treasurer Rosalia V. de Leon said yields inched up as market players see a likely Fed interest rate hike before the end of the year.

“We’ve already seen [this] even during previous [Treasury bonds auction], the market is already inputting the 97% possibility of a Fed rate hike…,” Ms. De Leon told reporters.

Traders meanwhile said the uptick in yields was within expectations.

“As expected, higher by around five to ten basis points [compared with the previous] auction. I think maybe as the rest of the curve increased ahead of the Treasury bill auction, so it aligned,” a trader said.

Another trader attributed the higher yields to the release of the country’s gross domestic product (GDP) growth data for the third quarter, which showed that the Philippine economy expanded by 6.9% in the period.

“The GDP was strong so that’s higher inflationary expectation,” the first trader said, adding that the “new supply in the short-end in the planned RTB (retail Treasury bonds)” was also at play.

Meanwhile, Ms. De Leon announced after the auction that they will be offering RTBs for the second time this year in time for the holidays.

“This is why we’re offering the comeback of the RTB [because we’ve seen that there’s a lot of liquidity],” Ms. De Leon said, noting that the strong appetite in the retail sector also compelled them to issue another batch of the retail bonds the year.

“During the April issuance, we saw a very strong yet unmet demand [because we saw a demand] around the P500 billion, [yet] we just accepted P180 billion.”

Ms. De Leon said the Development Bank of the Philippines and the Land Bank of the Philippines will lead the offering, while China Banking Corp., BDO Unibank, Inc., Bank of the Philippine Islands, and Security Bank Corp. will act as selling agents.

Asked about the bonds’ indicative rate, Ms. De Leon said they will have to “align with the market.”

The offer period will be from Nov. 20 to 29, while the issue date will be on Dec. 4. — Karl Angelo N. Vidal

DoubleDragon profits surge amid continued CityMalls expansion

DOUBLEDRAGON Properties Corp.’s earnings surged 66% in the third quarter of 2017, primarily from the expansion of its community malls around the country.

In a statement issued Thursday, the property developer said its consolidated net income for the July to September period stood at P1.02 billion, versus P616.8 million it realized in the same period in 2016. Third quarter revenues nearly doubled to P2.45 billion from P1.28 billion a year ago.

DoubleDragon attributed the company’s robust growth to the rising number of CityMalls in provincial areas, citing the shift from traditional to modern retail in third-tier cities while e-commerce gains steam in urban areas.

“We expect the inflection point of these transitions to be felt within the next three years, just in time for the completion of our goal of having a strong network of 100 CityMalls in the provincial areas of the Philippines. We are glad that CityMall has already started to gain significant traction in the countryside, which we aim to dominate as we grow organically,” DoubleDragon Chairman Edgar J. Sia II was quoted as saying in a statement.

Mr. Sia said the company is now helping modernize the provincial retail environment with the expansion of CityMalls across the country.

“The business model of CityMall is positioned to remain relevant beyond the age of digitalization because we focus on delivering only basic necessities, and generally, the supermarket, cinema, services and food tenants combined occupy more than 70% of a typical CityMall. CityMalls are also conveniently located in provincial city centers within close reach of its market,” Mr. Sia said. 

For the first nine months of 2017, DoubleDragon’s earnings soared 83.7% to P1.4 billion, after doubling revenues to P4.08 billion. 

Rental income from CityMalls’ operations rose 194% to P448 million during the January to September period, from P152.2 million posted in the same period last year. The company continues to add to its mall leasing portfolio with the opening of its 25th CityMall located in Koronadal City, South Cotabato, last Nov. 8. 

Operations from CityMall contributed to the company’s recurring revenues of P764 million for the first three quarters of 2017, now accounting for 18.7% of the company’s total revenues from just 7.7% in the same period a year ago. 

Its industrial segment through newly incorporated unit Central Hub Industrial Centers, Inc. will also allow DoubleDragon to service the consumer market’s needs for warehouse, commissary, cold storage, light manufacturing facility, or logistics distribution center.

DoubleDragon, co-chaired by Jollibee Foods Corp. founder Tony Tan Caktiong, is further expanding its leasable portfolio through the hotel segment with brands Hotel 101 and JinJiang Inn.

Meanwhile, construction for its office projects in Metro Manila — the first phase of DD Meridian Park in Pasay City and Jollibee Tower in Ortigas Center — is set to be completed by year-end and 2018, respectively.

“Coming from zero leasable space in 2013, DoubleDragon expects over 300,000 square meters of leasable space to be onstream by end of this year 2017. All geared towards its 2020 goal of 1.2 million square meters of prime and appreciating leasable space portfolio,” Mr. Sia said. 

Shares in DoubleDragon were up 55 centavos or 1.46% to P38.30 each at the Philippine Stock Exchange on Thursday. — Arra B. Francia

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