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Restaurant Row (11/09/17)

A Diamond Christmas

DIAMOND Hotel Philippines is granting culinary Yuletide wish lists with a savory and sweet lineup of treats. Available for orders and delivery (minimum purchase required) are a number of holiday dinner savories and sides: US Angus beef rib eye, lechon de leche, Christmas turkey, porchetta with truffle rice, baked Mediterranean crusted Norwegian salmon, and salmon gravlax. To satisfy a sweet tooth there are cakes and pastries: Supermoist chocolate cake, baked cheesecake, mango hazelnut, and Le Royale. Add traditional holiday breads like Christmas fruit cake, lemon calamansi loaf cake, and marble cake; Christmas show-stoppers like The Tree, chocolate bark, and salted chocolate truffles; and crowd favorites like Christmas macarons and ube ensaymadas. There are also Christmas hampers or a treasure chest of luxuries specially curated for the holidays. To place an order for Christmas Goodies, Hampers, Party Platters or Gift Certificates, call Diamond Hotel at 528-3000 ext. 1121 or 1118 from 9 a.m. to 8 p.m., Mondays to Fridays; or e-mail restaurant_rsvn@diamondhotel.com. Orders must be placed at least three days before day of pick-up or delivery.

Sunday Roast at Epilogue

ENJOY a sumptuous Sunday lunch with family and friends as Epilogue Fine Bistro in S Maison, Conrad Manila offers its newest Sunday Roast promo. Feast on Epilogue’s special roast beef and Yorkshire pudding, available in limited quantities every Sunday from noon onwards for P599. To know more about Epilogue, visit www.epilogue.ph. Epilogue is at the G/F S Maison, Conrad Manila, Ocean Drive, Mall of Asia, Pasay City.

Holiday stockings

FOR the holiday season Cadbury Dairy Milk has put all its favorite chocolatey treats in one bag — the Cadbury Dairy Milk Holiday Stocking. The purple package contains Cadbury Dairy Milk Original Flavor, Cadbury Dairy Milk Oreos, Cadbury Dairy Milk Honeycomb and Nuts, and Cadbury 5 Star . The stockings, sold for P95 SRP, are now available in all leading department stores, supermarkets, and convenience stores nationwide.

New Japanese dishes

KATSU SORA, home of authentic Japanese tonkatsu and other premium dishes, has added a Ten Zaro Soba set and ebi tempura to its menu. Ten Zaro Soba is served chilled in a bamboo dish with ebi tempura on the side. Dip both noodles and tempura in the soba tsuyu sauce. Add sliced green onions, wasabi, and grated daikon for an extra kick. Meanwhile, Katsu Sora’s ebi tempura — fresh tiger prawns deep-fried in a light and crispy batter — are served with the restaurant’s signature tempura sauce. Katsu Sora has branches in many malls including SM City BF, TriNoma, Glorietta 4, Greenhills Shopping Center, and Ayala Malls Solenad in NUVALI, Sta. Rosa Laguna.

Romulo Café Christmas

IN THE memoirs of the late General Carlos P. Romulo, he recalled the joy of childhood Christmases, “the feasting and parties… midnight mass on Christmas Eve… and the sense of being safe with all one’s family in the presence of God.” Once home after the late-night mass, a rich feast greeted them and always included lechon and relleno. The Romulo Café replicates this family Christmas spread in all their branches, serving Lola Virginia’s chicken relleno and lechon roll (allow two days’ notice) this Christmas season. For orders and reservations, call: Romulo Café, Jupiter St., Makati City at 478-6406 (Amy); Romulo Café, Quezon City at 332-7275 (Gilbert); and Romulo Café, Alabang at 556-1443 (Edith).

Pizza promo extended

THE buy one, take one on pizzas promo at the Waterfront Manila Pavilion Hotel’s Patisserie and Seasons has been extended. For P500, get two whole authentic Italian pizzas in any flavors of your choice: Margherita, pepperoni, Our Cheese pizza, The Meat Lovers pizza, and Hawaiian pizza. Visit Seasons and Patisserie every Friday, Saturday, and Sunday of November from 11:30 a.m. onwards to avail this limited time offer treat. The Manila Pavilion Hotel is at United Nations Ave. corner Maria Orosa St. in Manila.

Sweets at Café Pronto

MARCO POLO Ortigas Manila’s Café Pronto’s signature all-chocolate confection, the Chocolate Haven, offers more than three textures, overloaded with three flavors of chocolate: dark chocolate sponge, dark chocolate mousse, and dark chocolate glaze. The dessert is part of the dessert station at Café Pronto’s Cucina buffet and is also available for P1,100.

Bucks net Bledsoe

It’s easy to see why the Bucks pulled the trigger on the deal that nets them Eric Bledsoe. Prior to agreeing to terms with the Suns, they had been on the losing end of the scores in four of their last five games. Notwithstanding the stellar play of Giannis Antetokounmpo, they suffered from predictability and lack of consistency, leading their front office and brain trust to add the notable two-way talent. For their cause, it helped, to be sure, that the target of their negotiations was being shopped aggressively, hence his lower price tag.

No doubt, the Suns’ poor bargaining position gave the Bucks the impetus to play hard ball. For all the contributions of slotman Greg Monroe, adding him to two protected draft picks for Bledsoe was a no-brainer. While they had assets with long-term deals that they would have loved to let go of, they succeeded in keeping Malcolm Brogdon off-limits, never mind the significant pushback to include the 2016-2017 Rookie of the Year in the trade.

Considering Bledsoe’s worth on both ends of the court, his acquisition should augur well for the Bucks, and fast. They certainly hope he hits the ground running; they lost once more yesterday, and look to arrest their slide on the road against the Spurs in his first game in a Bucks uniform this weekend. In any case, he should be a boon for Antetokounmpo, whose burden as anchor on both offense and defense has to be eased if they plan to go deep in the playoffs.

Meanwhile, Bledsoe will be spurred to put his best foot forward from here on. After having been banished from the Suns following his candid but ill-advised social media contribution regarding his desire to wear any uniform other than in orange and black, he wants to prove that he’s not locker-room poison, and that he can be as effective, if not more so, burning rubber for a postseason-bound squad. And not for nothing is coach Jason Kidd looking forward to seeing his new charge form a deadly pick-and-roll combine with Antetokounmpo.

Next year, the small-market Bucks will face a dilemma; they would like to stay outside of luxury-tax territory, but their latest move coupled with Jabari Parker’s impending foray in free agency figures to put them over the cap. First things first, though, and Bledsoe’s arrival should boost their position. Antetokounmpo needed a partner, and he just got one.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is the Senior Vice-President and General Manager of Basic Energy Corp.

Saudi Arabia says only private accounts suspended in crackdown

DUBAI/RIYADH — Saudi Arabia said it has only frozen the bank accounts of individuals and not those of the companies they own or manage, as the kingdom seeks to ease tension among global investors over a crackdown that’s seen princes and billionaires arrested.

The action, described by Saudi authorities as an anti-corruption drive, applies only to individual accounts held by “persons of interest,” and not to corporate ones, Saudi Arabian Monetary Authority Governor Ahmed Abdulkarim Alkholifey said in a statement on Tuesday. “It is business as usual for both banks and corporates,” he said, adding that there are no restrictions on money transfers “through proper banking channels.”

The arrests, which included Prince Alwaleed bin Talal, one of the world’s richest men and a shareholder in such global companies as Citigroup, Inc. and Apple, Inc., have reverberated across board rooms and financial institutions in the biggest Arab economy and globally.

Earlier, three people with knowledge of the matter said the central bank ordered banks in the kingdom to freeze the accounts of dozens of individuals who aren’t under arrest. Already, as much as $33 billion in personal wealth belonging to the richest detainees has been put at risk.

More may be on the way: The regulator sent a list of hundreds of names to lenders, telling them to freeze any accounts linked to them, two of the people said. They asked not to be identified because the information is private. The Saudi attorney general said in a statement released Monday that weekend arrests of princes, businessmen and officials were only “phase one” of the anti-corruption drive.

TRUMP’S BACKING
The detentions drew support from President Donald J. Trump but also raised concern among analysts that a power grab was underway. In all, 11 princes, four ministers and dozens of former ministers and well-known businessmen were taken into custody, according to Saudi media and a senior official who spoke on condition of anonymity.

The arrests were under the auspices of an anti-corruption commission that King Salman set up on Saturday, headed by his son and heir, Prince Mohammed bin Salman. The king also dismissed Prince Miteb bin Abdullah from his post as head of the powerful National Guard, taking out one of the last princes who had survived a series of cabinet reshuffles promoting allies of the crown prince.

The events have reinforced speculation that King Salman was clearing any remaining obstacles to his son’s accession to the throne. But they were also lauded by many Saudis bearing the brunt of low oil prices who have long complained that the kingdom’s elite was above the law.

“It’s almost the equivalent of arresting Bill Gates to have Prince Alwaleed bin Talal under arrest,” Robert Jordan, former US ambassador to Saudi Arabia, told Bloomberg TV on Monday.

A genuine push against corruption would add to the credibility of Prince Mohammed’s push to prepare the economy for the post-oil era, including selling a stake in Saudi Aramco and bolstering non-oil revenue, he said. “If it turns out to simply be a power grab, then I think it’s going to hurt the Saudis in the long run, and certainly hurt this crown prince.”

The crackdown also comes amid an escalation in tensions between Saudi Arabia and Shiite-ruled Iran, its chief regional rival.

Pro-Iranian Yemeni rebels fired a ballistic missile on Saturday that targeted Riyadh’s international airport for the first time, a move Saudi officials said could amount to an “act of war” by the Islamic Republic. Iranian officials denied any involvement. Earlier that day, Lebanese Prime Minister Saad al-Hariri — a Saudi ally — unexpectedly resigned in a speech from Riyadh, blaming Iran for destabilizing his country.

“Investors have been hammered with bad news on the geopolitical front,” said Nabil Al Rantisi, the managing director of Abu Dhabi-based Mena Corp. Financial Services. “It’s not easy to see what is coming next.”

Saudi Arabia has welcomed Mr. Trump’s promise of a tougher policy against Iran, which he has described as a “rogue state.” Mr. Trump’s backing came in a tweet Tuesday morning from Japan.

“I have great confidence in King Salman and the Crown Prince of Saudi Arabia, they know exactly what they are doing,” the president said.

A senior Saudi official denied the crackdown had any other purpose than to fight corruption. The accused “will be subject to investigation according to the regular procedures adopted in the Kingdom,” he said.

According to the official, the charges against Prince Alwaleed include money laundering, bribery and extortion of some officials. Prince Miteb is charged with embezzlement, fraudulent employment and the awarding of projects to his own companies. Another royal family member, Prince Turki bin Abdullah, is accused of corruption related to a train project, using his influence to win projects for companies affiliated to himself, the official said. — Bloomberg

Invest your way to a second passport

By Karl Angelo N. Vidal

FOREIGN travel has increasingly become breezier and almost seamless for Filipinos as their newfound wealth has allowed greater spending power, but a major hurdle continues to hamper their stay overseas: the weak Filipino passport.

In the Passport Index released by immigration consultancy firm Arton Capital, the Philippine passport was ranked 65th out of the 199 countries and economies surveyed this year. In the said index, 30 countries allow Philippine passport holders to enter without visa, while 31 countries issue visa upon arrival.

Recent statistics has also shown that the travel industry is a growing market in the Philippines. Filipinos who travelled abroad in 2016 spent a total of P543.4 billion, more than double compared with P153.9 billion spent in 2007, the latest data released by World Travel & Tourism Council.

In the next 10 years, the council predicted that outbound travel and tourism expenditure may spike up to P1.72 trillion.

These figures show there are Filipinos who have money to travel — and to invest. With this in mind, it has become the driving force of multinational law firm Harvey Law Group (HLG) to provide businessmen and travelers alike a second passport by investing.

Jean-François Harvey, HLG founder and worldwide managing partner, in a recent media roundtable in Makati introduced how citizenship by investment can be a great tool in exploring new markets and tourism destinations.

While it is possible to acquire second citizenship without hiring a law firm, Mr. Harvey said that the process is “more complicated than what government websites are saying.”

“There are unknown and unwritten rules when it comes for applying,” Mr. Harvey said. “The process is not simple. But since we’ve been doing this for so long, we make it simple.”

Since 1992, HLG has been providing investment immigration programs, particularly in residency and citizenship-by-investment programs in more than 20 jurisdictions such as Australia, Canada, Cyprus, France, Greece, Italy, New Zealand, Portugal, United States, United Kingdom and the Caribbean region.

“There is something for everybody, for every budget [for prospect investment], and for how much tax you want to pay. For example, you can have an affordable Subway franchise; you can have an expensive medical franchise,” the HLG founder said.

In conducting its business, the company is thorough in how its clients do their business, that is why 2% of prospective applicants get rejected, Mr. Harvey said.

“There is a process behind it. We must make sure if [our client is] a good person. We need to check our clients by looking if they have criminal records, or are involved in [dubious] business,” Mr. Harvey said.

He also said good health is also considered, since most of HLG’s citizenship programs offer free healthcare.

The VIP-oriented law firm is purely legal and transparent when it comes to its processes, he said.

“Our business is very public. We’re [not into] under-the-table processes. We’re very legitimate; there is law and immigration [policies to which we adhere]. There’s no funny business,” he said.

The most popular program under HLG is the citizenship in Cyprus. Its “platinum program,” albeit the most expensive, offers the best deal for most of its clients. Since Cyprus is a member of the European Union, clients use the citizenship to enter the European market.

Cyprus is also considered a tax haven by the firm since it offers only a 12.5% corporate tax, one of the lowest in the bloc.

To obtain Cypriot citizenship, a client must put invest €2 million euros worth of real estate investment. From there, clients can receive the same benefits of a European citizen, and can pass the citizenship to the client’s children.

“For investors who have successfully applied for the program, they’ve been able to secure a return on investment by renting or leasing out their property. These types of programs may appeal to second-generation, high net-worth Filipinos looking to reduce their risk by situating their assets in multiple locations,” HLG Country Manager Paul Boldy said in a statement.

While majority of HLG’s clients opt to avail of citizenship for new business opportunities, 10-12% seek a second passport for lifestyle purposes. With the help of HLG, investors can obtain passports that can take them “up to 125 countries” visa-free. A second passport is useful as it offers the power to travel to more countries without applying for visa.

“Right now in the Philippines, people are looking for travel. Therefore, they would [tend] to go for the most affordable program, which is the Caribbean program. They would opt for Dominica, Antigua [and Barbuda], Grenada, St. Lucia, and St. Kitts [and Nevis],” Mr. Harvey noted.

The Caribbean citizenship program is popular to clients who would want to avail retirement homes and beachfront properties.

While HLG has a back office in Ortigas for eight years now, the company opened an office in Makati office only in February because of the continuous demand from the local business community as well as booming domestic economy, Mr. Harvey said.

“For the last year or so, we are receiving more and more queries from the Philippine business community about second citizenship and immigration in general,” he said.

He also noted that HLG is bullish on the possible overseas expansion of some Filipino businesses.

“In this time, the Philippine economy is concentrating on the domestic market. But we’re starting to feel like the business community in the Philippines is starting to look overseas now,” he said.

“That’s why we think the time is right. We’re here to stay,” he added.

Security Bank raises P8.6B in fresh funds via LTNCDs

SECURITY BANK Corp. has raised P8.6 billion in fresh long-term notes, with the funds seen to support the lender’s expansion plans and manage existing debts.

In a statement, the listed lender said they received strong demand for the first tranche of long-term negotiable certificates of time deposit (LTNCD), allowing them to raise a bigger sum from the P5 billion which they initially offered to investors.

The debt notes carried a coupon rate of 3.875% for a 5.5-year tenor, due May 8, 2023.

The instruments were listed at the Philippine Dealing & Exchange Corp., marking the first debt instrument which Security Bank listed in the platform, the lender said. This allows investors to gain “better access” to the secondary market.

LTNCDs, like the regular time deposits, offer higher interest rates but cannot be pre-terminated. Instead, these can be sold at the secondary market.

In October, Security Bank secured approval from the Bangko Sentral ng Pilipinas (BSP) to float as much as P20 billion in long-term debt papers within a one-year period. The lender said the fresh funds it wants to raise will be used to gain access to “cost-effective” funding, which likewise allows the bank to diversify its funding sources, lengthen the tenor of its liabilities, and support future growth.

The Hongkong and Shanghai Banking Corp. and Standard Chartered Bank were assigned as joint lead arrangers and bookrunners, and will also act as selling agents together with Security Bank and Multinational Investment Bancorporation.

The bank last offered LTNCDs in August 2012, where it raised P5 billion in fresh funding.

Security Bank is the fifth-largest bank in the Philippines based on asset terms, according to central bank data.

The bank reported a P2.14 billion net income in the third quarter, jumping by 21% from the P1.8 billion posted during the same period in 2016 on the back of a 38% increase in loans and a 44% surge in deposits.

This brought Security Bank’s nine-month net profit to P7.4 billion, up by 12% from P6.6 billion during the comparable year-ago period.

Shares in Security Bank ended yesterday’s session at P259.40 each, up P6.40 or 2.53% from Tuesday’s close of P253 apiece. — Melissa Luz T. Lopez

Biggest Argentina food company seeks partner to fuel Asia growth

THE WORLD’s biggest maker of hard candies is seeking a strategic partner to help it expand outside Latin America.

Arcor SAIC, the closely held Argentine food conglomerate, would be willing to do a stock swap with a partner to get access to more overseas markets, especially in Asia. Luis Pagani, the chairman and a majority owner with family members, says that while talks haven’t begun yet, Arcor’s family ownership might appeal to other global candy makers that value similar structures. Ferrero International SA and Mars, Inc. are among those kind of family owned confectionery companies, he said.

“We all know each other,” Pagani, 60, said in an interview at his office in Buenos Aires. “I know all the owners and they know the importance of Arcor in America. The opportunities will surface.”

Arcor will likely seek to sell shares at some point, and Argentina has become a favorite of emerging-market investors looking to profit from President Mauricio Macri’s pro-business policies, but Pagani says he feels no pressure to rush an offering right now. Argentine companies have $2.6 billion of share sales in the pipeline, on top of the already $15.7 billion in equity sales and debt issuance since Macri took office in December 2015.

“We would never do an opportunistic IPO,” Pagani said. “We would only do it looking to the future, as a way to expand to other markets outside Latin America, most likely Asia, where half of the world’s population lives.”

Pagani said Arcor, the maker of Bon o Bon bonbons, Aguila chocolates and La Campagnola fruit jams, will most likely finish this year with revenue of $3.1 billion and earnings before interest, taxes, depreciation and amortization of $300 million, cementing its status as Argentina’s biggest food producer.

Arcor owns 51% of Bagley Latinoamerica SA, a Buenos Aires cookie producer whose remaining stake is held by Danone. It also has a strategic alliance with breadmaker Bimbo SA in Mexico and a branding alliance with Coca-Cola, Inc. to sell products in Peru.

The company will seek to make acquisitions in Latin America, particularly consumer, agribusiness and packaging businesses in Mexico and Brazil, which Pagani said it could pay for by using its cash flow taking on new debt.

The food producer has the lowest borrowing cost among Argentine peers, and Moody’s Investors service rates Arcor’s $500 million of bonds. Since the notes were sold in June 2016, they’ve returned 15%, beating the emerging-market corporate average of 9.8%.

In Brazil, Pagani is watching for a decision by the country’s antitrust regulator that may force Nestlé SA to divest from some of its businesses. In Mexico, the consumer sector is appealing as the market is heavily segmented and Mexicans are high sugar consumers.

A long-term grower of sugar cane for its candy business, Arcor is testing other agribusiness ventures. It became a strategic partner with Argentina’s largest dairy producer Mastellone SA in 2015, and as part of the agreement has the option to become the controlling shareholder by 2021, or even earlier if it pays a premium to Mastellone bondholders.

Pagani says the association has opened the door to exporting milk-based products to Africa, the Middle East and Asia, where competing products are coming from New Zealand.

Final pricing will depend on Mastellone’s profit levels at the time of closing the deal. The dairy company had adjusted earnings of $70 million in 2016, and is poised to end 2017 with almost $100 million, according to Mastellone’s bond filings.

Pagani declined to give a value for Arcor, which he and his siblings own a majority stake in, citing security concerns. But he says the business is poised for long-term growth.

“Arcor will be a rewarding company because we are the most sustainable,” he said. “Being sustainable will be the most important thing in the future.”

Less than a month after Argentine voters affirmed support for Macri and his policies in midterm elections, Pagani says the president’s path to re-election is clear in the 2019 ballot. He values the engineer’s efforts to improve infrastructure — a much needed improvement in a country where transportation costs are three times higher than in Chile — and thinks that government policies could help bolster growth in agribusiness.

“Argentina has the potential to become a major agribusiness exporter but it needs to build a consistent brand and cut logistics costs,” he said. — Bloomberg

Local shares down on Wall Street, consolidation

THE Philippine Stock Exchange index (PSEi) on Wednesday stayed above 8,500 but continued its downward move as Wall Street dropped and as the local market consolidated.

The index closed at 8,508.49, down 13.32 points or 0.15%.

The all-shares index closed at 4,971.03, up 4.43 points or 0.08%.

“Philippine stocks were sold down, just as US stocks fell on Tuesday, retreating from records hit earlier in the session. Questions continued to swirl over the timing of the Republican Party’s tax bill, as well as what form it could eventually take in order to have a higher likelihood of passage soon. European stocks fell slightly on little catalyst,” Luis A. Limlingan, managing director at Regina Capital Development Corp., said in a text message yesterday.

The Dow Jones Industrial Average eked out a fourth consecutive record high close on Tuesday, while the S&P 500 ended marginally lower after a disappointing profit forecast from Priceline and a drop in financials.

The Dow Jones Industrial Average ended up 0.04% at 23,557.23 after spending most of the day in negative territory. The S&P 500 dipped 0.02% to 2,590.64. The Nasdaq Composite slipped 0.27% to 6,767.78.

“For the short to medium term….The market is going through consolidation against the record high and recent down,” Harry G. Liu, president of Summit Securities, Inc. said in a phone interview.

Mr. Liu said investors will be looking to the upcoming Association of Southeast Asian Nations (ASEAN) Summit for leads.

“We will see whether this will improve foreign investment, foreign attitude towards the Philippines,” he said.

Among the sectors, only financials and industrial posted gains on Wednesday. Financials closed at 2,096.57, up 27.24 points or 1.31%, and industrials closed at 11,014.06, up 42.75 points or 0.39%.

On the other hand, holding firms closed at 8,651.66, down 52.05 or 0.59%; services at 1,696.57, down 7.02 points or 0.41%; mining and oil at 13,182.89, down 77.02 points or 0.58%; and property at 4,024.91, down 29.51 or 0.72%.

Value turnover inched up to P7.67 billion on Wednesday from the previous session’s P7.02 billion as 1.6 billion shares changed hands.

Decliners outnumbered advancing stocks, 128 to 91, while 36 names closed unchanged.

Net foreign buying climbed to P144.67 million yesterday from Tuesday’s P10.62 million.

Most Southeast Asian stock markets were muted on Wednesday, with Indonesia slipping from a record close, as investors took a breather in the absence of market-moving data. However, Vietnam stocks firmed to hit a fresh near decade high, while Singapore held on to two-year highs.

Global equities were largely muted as concerns of a delay in US tax reform proposal and apprehension over Saudi Arabia’s rising tensions with Iran soured investor sentiment. — P.P.C. Marcelo with Reuters

2017 APEC CEO Survey

THE PHILIPPINES is expected to be among Asia Pacific’s “biggest domestic investment winners” this year, according to an annual survey of multinational professional services provider PwC that nevertheless showed confidence among business leaders in the country slipping from 2016. Read the full story.

Nation at a glance — (11/09/17)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

How PSEi member stocks performed — November 8, 2017

Here’s a quick glance at how PSEi stocks fared on Wednesday, November 8, 2017.

Top bosses share management tips for budding founders

The great thing about heading your own startup is that you get to handpick your own people. The daunting thing about heading your own startup is that you have to handpick your own people. There’s no HR department to hold your hand, you have to be familiar with your labor laws and regulations, and then there’s managing who you’ve hired.

Fortunately, SparkUp is here to guide you on the road to business success. (Just don’t forget us when you get there.) And if you weren’t there to attend the Spark Series last October 25 at the UP School of Economics, don’t worry. We’re coming to more schools soon with more insightful topics. But for the mean time, here’s the rundown of what happened and what we can learn from stellar heads of Filipino startups on how to manage your future party.

For Qwikwire co‑founder Ray Refundo, hiring starts early. “How did I start my first hiring? I started with interns and students,” Refundo said during the Spark Series. “The most important employees in my company are still students.”

Sure, students don’t come with training and experience, but Refundo made that work to his advantage. “The good thing about hiring interns is that once you get them on board they become independent,” he explained. “And when you train people well, you can trust them.” That cuts off from the stress of having to do everything by yourself as the head of your company. You can delegate tasks to the people you can trust, which makes life less stressful for you later on.

Your employees can and will still make mistakes, he admits. Again, not exactly a bad thing, since that’s a natural part of working with human beings. “Employees need the freedom to be creative and the freedom to make mistakes,” Refundo said. “As long as they understand that a mistake is made they can rectify it later on.”

Meanwhile, Dindo Marzan, managing director of Voyager Innovations, the digital innovations arm of PLDT and Smart, advises budding startup founders to stick to their PEEPS: People, Education, Experiment, Pivot/Perish/Persevere, and Solution.

“Choose the right people with the right attitude,” Marzan explained the first P, adding that it isn’t always about qualifications and educational attainment. Sometimes it’s about personality. “As an investor I would rather invest on a person who knows his stuff and can keep a low profile.”

And then there’s education, which he said has to be continuous, especially with how quickly technology develops nowadays. “Sometimes you need to unlearn because either your business has been disrupted or things have changed,” Marzan said. Related to quick changes are Experimentation, and the second set of P’s. Experimentation means doing constant testing of your product. “If you’re creating a product, you better test your RAT (riskiest assumption test),” he added. And after that, to cope with the changing times, you to decide if you have to pivot your company to a better position, perish and accept defeat, or persevere and go through with what you’re already doing.

In the end, “it always boils down to the solution. Identify the pain point and find the solution,” he said, on how to make a successful startup business. -Lucia de Guzman

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

Catch more informative talks as SparkUp continues its Spark Series caravan across Metro Manila’s top colleges and universities. Like our Facebook page to stay updated.

IMF flags sources of domestic risk

By Melissa Luz T. Lopez
Senior Reporter

THE CENTRAL BANK should be ready to deploy its tools to temper rapid credit growth in the Philippines, the International Monetary Fund (IMF) said, flagging potential overheating despite generally favorable economic conditions.

“The combination of high credit growth, buoyant private investment, and fiscal expansion without tax reform could lead to overheating of the economy,” the IMF Executive Board said in a statement, although clarifying that there has been “no evidence” of credit booms so far.

“The stance of monetary policy remains appropriate, but the BSP (Bangko Sentral ng Pilipinas) should be ready to tighten if there are signs of overheating.”

Bank lending has been growing at a double-digit pace, with domestic credit surging by 21.1% in September which is the fastest in at least two years, according to central bank data.

And while the IMF welcomed legislative progress on the first of up to five tax reform packages, it encouraged the government “to consider additional revenue measures,” saying it “appreciates the breadth of the envisaged tax reforms, but cautions that reform efforts may have a lower revenue yield than originally projected because of dilution in Congress.”

Hence, it encouraged the government to consider reducing the exemption threshold for personal income tax, raising the value- added tax rate, rationalizing tax concessions and exemptions, and accelerating the implementation of new excise tax rates for automobiles and petroleum products.

The multilateral lender completed its annual health check on the Philippine economy on Oct. 26, as it adopted recommendations of staff members who visited the country on July 26-Aug. 9.

The global monetary authority expects Philippine gross domestic product (GDP) to grow by 6.6% this year and by 6.7% in 2018, driven by robust domestic demand, a recovery of exports, and a fiscal stimulus coming from the government’s infrastructure push. This would mean that the government’s 6.5-7.5% growth goal is doable for the year, but that the IMF’s projection for 2018 will fall short of the officially programmed 7-8%.

Accompanying upbeat economic growth is low inflation, with the IMF seeing a 3.1% average for 2017 and 3.0% for 2018, well within the central bank’s 2-4% target band.

Sizeable foreign reserves, a low level of government debt and a budget deficit equivalent to three percent of GDP are also supportive of sound macroeconomic footing.

Current economic conditions present a “good opportunity” for the administration of President Rodrigo R. Duterte to pursue its inclusive growth agenda, the multilateral lender noted, supported by increased infrastructure and social spending to be funded by fresh revenue streams under the tax reform plan eyed in place by January 2018.

Even while the IMF said external risks pose as the biggest threat to the local economy, it flagged that “the main systemic risks to financial stability are high credit growth and concentration” among conglomerates and real property developers.

Still, the IMF said the BSP remains well-equipped to respond to possible hiccups, with higher interest rates and capitalization standards seen as immediate responses.

“Macroprudential policies should be used to address systemic risks to financial stability. In case of a broad-based credit boom, the BSP should raise capital requirements, supported by monetary policy tightening if accompanied by overheating,” the IMF added.

“Targeted macroprudential policies should be used if sectoral credit growth is excessive.”

The central bank will be tightening its watch on the property sector after it required more detailed data on real estate lending and project finance, as it enhances vigilance for emerging asset bubbles.

The IMF also cited the need to “carefully calibrate” the central bank’s plan to trim reserve requirements imposed on banks, even as it acknowledged that unwinding the 20% level over time will help “reduce macrofinancial risks.”

The BSP has kept benchmark borrowing rates at 2.5-3.5% as of its September review, with economists expecting the central bank to keep policy steady in the near term amid manageable inflation and robust domestic economic activity.

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