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Western Union expands network

By Melissa Luz T. Lopez,
Senior Reporter

WESTERN UNION has broadened its retail expansion through branches of LBC Express, Inc., as the global money transfer firm rides on the robust growth in remittance inflows to the Philippines despite growing interest towards e-payments.

The financial services firm said they have started the payout of money transfers via LBC as a sub-agent, as they remain bullish on the need for physical outlets at a time of increasing interest towards digital transactions.

“There’s still a big preference in terms of the retail type of experience, but I’m not saying that we disregard emerging trends,” Western Union country director Jeffrey D. Navarro said in a press briefing yesterday, noting that the expanded service network comes alongside options for online-based transfers.

LBC president and chief operating officer Mike A. Camahort said they have so far seen “very promising” pay-out volumes of Western Union and PERA Hub’s transactions through their outlets on the first month of offering the service, although refusing to give specific figures.

The logistics firm has over 1,200 locations nationwide, which can now be tapped by Western Union clients for cashing in remittances and payment transfers. Western Union’s largest agent network PERA Hub — the retail brand of the Aboitiz-led PETNET, Inc. — forged the deal with LBC which took effect recently.

These add to 5,900 Western Union agents all over the Philippines.

PETNET president and chief executive officer Lorenzo T. Ocampo said they are not threatened by increasing use of financial technology as market disruptors, noting that brick-and-mortar outlets remain a key point of contact for customers.

“The branch network where you can offer financial services that are compliant with the law and with a high level of customer service are still going to be very important.  When you talk about fintech, they still need a branch service network going forward,” Mr. Ocampo said during the briefing.

Money sent home by overseas Filipino workers (OFWs) totalled $18.595 billion as of August, up by 5.4% from a year ago and surpassing the central bank’s 4% growth forecast for the full year.

Mr. Navarro said they remain upbeat that remittance inflows will remain growing, noting that Western Union remains open to tapping more “strategic” partnerships through their agents. He added that the money transfer company is open to exploring ties with fintech firms but will depend on business strategies.

DA discouraging chicken imports to support local poultry industry

THE Department of Agriculture (DA) said there is “no reason to import” chicken now that the avian influenza outbreak has been contained and prices are beginning to recover ahead of the holiday season.

“There’s no reason for us to import,” Agriculture Secretary Emmanuel F. Piñol told reporters at the agency’s headquarters in Quezon City, noting that prices of poultry, which have improved since the outbreak in August, are still low.

He said he met recently with chicken importers who sought to verify the department’s policy on agricultural imports.

Mr. Piñol has been seeking to convince food processors and manufacturers to buy local and wants legislation to provide incentives for using domestic product.

“I cannot stop you but I am discouraging you,” Mr. Piñol told the importers.

“I told them to consider Filipino poultry raisers. They are only beginning to recover now. Prices have been down for three months,” he added.

Lawyer Elias Jose M. Inciong, president of the United Broiler Raisers Association confirmed that the liveweight price of poultry at farmgate started to rise in Central Luzon in late September.

Avian influenza or bird flu has the potential to kill up to 100% of domestic or wild birds affected.

The DA has said that the outbreak is a “hiccup” in agricultural output growth in the third quarter and that the period will still see year-on-year gains. —  Janina C. Lim

What to see this week

5 films to see on the week of October 20-27, 2017


The Foreigner
Quan (played by Jackie Chan) has had a tragic past — his two daughters were killed, and his wife dies soon after they start anew in the UK. Fifteen years later, his only surviving daughter is killed. As Quan searches for those responsible for his family’s tragedy, he seeks the assistance of Irish Deputy Minister Liam Hennessy (Pierce Brosnan), who also has a troubled past. Directed by Martin Campbell. Peter Travers of Rolling Stone commends, “Campbell keeps the action cooking and the suspense on a high burner in this compulsively watchable conspiracy thriller, while The Foreigner proves again is that Chan is the Man — now and forever.”

MTRCB Rating: R-13

Bad Genius
A straight-A student makes a class act out of an exam-cheating scheme. Directed by Nattawut Poonpiriya, it stars Chutimon Chuengcharoensukying, Eisaya Hosuwan, Chanon Santinatornkul, Ego Mikitas, Sahajak, Boonthanakit, Teeradon Supapunpinyo, and Thaneth Warakulnukroh. Maggie Lee of Variety writes, “Bad Genius deserves full marks for a whip-smart script that makes answering multiple-choice questions as nail-biting and entertaining as Ocean’s Eleven.”

MTRCB Rating: PG

Brad’s Status
When accompanying his son to the East Coast, Brad begins to contemplate his life. Despite his successful career and happy family, he questions whether he has failed in fate. Directed by Mike White, the film stars Ben Stiller, Austin Abrams, Felicia Shulman, Jemaine Clement, and Jenna Fischer. The New York Times’ A. O. Scott remarks, “Brad’s Status, a worthy addition to the burgeoning genre of empty-nest movies, smooths more feathers than it ruffles.”

MTRCB Rating: R-13

Only the Brave
Rotten Tomatoes gives Only the Brave — based on the true story of a group of heroic firefighters, the Granite Mountain Hotshots, who run toward danger to save their families, communities, and country — a 100% rating. Directed by Joseph Kosinski, it stars Jeff Bridges, Josh Brolin, and Miles Teller. The Hollywood Reporter’s Todd McCarthy writes: “By throwing down the welcome mat and inviting the viewer into close quarters with generally positive characters in a distinctive enclave within an otherwise recognizable small-town world, director Joseph Kosinski (Tron: Legacy, Oblivion) establishes a crucial audience bond that will make the tragic end you know awaits all the more powerful.”

MTRCB Rating: PG

Happy Death Day
A college student continuously relives the day of her murder and its details, until she discovers her killer. Directed by Christopher B. Landon, it stars Israel Broussard, Jessica Rothe, and Ruby Modine. David Edelstein of Vulture writes: “Well, even surefire things can end up missing by a wide margin. Not in this case, though. It’s a fun little movie, more of a giddy rom-com than a splatter-y slasher.”

MTRCB Rating: R-13

Gov’t plans Marawi bond sale in January

THE GOVERNMENT plans to sell 20-year bonds in “early January” to raise up to P30 billion to help rebuild war-torn Marawi City, the state Budget chief said yesterday.

“As far as the Marawi bond is concerned, it’s a go already. The plan is to start next year early January, so it’s a go,” Budget Secretary Benjamin E. Diokno said in a press briefing in Manila City when asked by reporters about financing the city’s reconstruction.

Conflict in Marawi City is about to complete its fifth month since militants aligned with the Islamic State dug in against government forces initially sent on May 23 to arrest their leader, Isnilon Hapilon, who was killed earlier this week.

Finance Secretary Carlos G. Dominguez III had said in August that the plan involved raising as much as P30 billion through “patriotic” bonds that could have a 20-year tenor.

National Treasurer Rosalia V. De Leon, however, told reporters after the government bond auction yesterday that the “sweet spot” may involve debt papers maturing in “five to seven years.”

A day after President Rodrigo R. Duterte declared the city “liberated from the terrorists,” Ms. De Leon said: “We’re waiting for the needs assessment.”

“We’re pleased that the conflict is over and we can start the rehabilitation,” she said.

“We’ll just have to find out what the total requirements will be before we’ll be able to do the issuance,” she added.

“In the meantime, we’re working on the Agri-Agra eligibility of the bonds so that will trigger stronger demand for the bonds, given that it would be a substitute for compliance” she explained, referring to the requirement under Republic Act No. 10000, or the Agri-Agra Reform Credit Act of 2009, for banks to earmark a certain portion of their loans to farms, fisheries or agrarian reform — or to invest in bonds certified as alternatives by the Agriculture department’s Agriculture Credit Policy Council.

More than 1,000 people, mostly rebels, have been killed in the battle for Marawi that rages on.

The heart of the city of 200,000 people has been decimated by near-daily air strikes by planes and helicopters.

Proceeds from the so-called “patriotic bonds” will help augment funds that the government has set aside for Marawi, such as P5 billion from this year’s budget and P10 billion next year, Mr. Diokno said, adding that military, education, social welfare, health and other government officials yesterday began Marawi’s needs assessment.

He added that the government may come out with a final rehabilitation and funding plan by the end of this month.

Mr. Duterte has said it will cost more than P50 billion to rebuild the city.

Defense Sec. Delfin N. Lorenzana has said that rehabilitation could start in January, as structures were unstable and parts of the city were still littered with unexploded munitions and home-made bombs.

Mr. Diokno said that the Executive may ask for a supplemental budget from Congress if the damage assessment exceeds expectations. That may come from the tax liability and unpaid fee settlement of P30 billion and P6 billion from Mighty Corp. and Philippine Airlines, respectively, on top of donations received from Japan and China as well as international humanitarian organizations.

Philippine state economic managers meeting with World Bank officials in Washington D.C. last week sought technical assistance from the multilateral lender, given its expertise in post-conflict rehabilitation. — Elijah Joseph C. Tubayan with Reuters

BSP wants single-digit reserve requirement ratio

THERE IS SIZEABLE ROOM to trim big banks’ reserve requirement to as low as single-digit levels from 20% currently, the central bank chief said, even as he noted that such a move will have to be timed carefully alongside tweaks to interest rates.

Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said plans to cut the reserve requirement ratio (RRR) imposed on banks remain live, noting that he would like to see a substantial reduction over the coming years.

“The RRR is something that I would like to personally see to single-digit level,” Mr. Espenilla told reporters on the sidelines of the 43rd Philippine Business Conference & Expo at The Manila Hotel.

“But there is a game plan for it. Our game plan is to do it in such a way to avoid the situation that we are unleashing too much liquidity that the economy is unable to absorb.”

Currently, banks must set aside a fifth of their total deposit base with the BSP, an amount which they cannot hand out as loans. These funds are effectively left idle and do not generate returns for the lenders.

The 20% RRR was last set in May 2014 and is among the highest in the world.

Mr. Espenilla previously described the hefty reserve standard as an “inefficiency to the financial system” and vowed to push for its reduction as he took over the central bank’s helm in July.

While refusing to provide a specific timetable for such changes, the BSP chief said such adjustments may be introduced at a time of reduced money supply in the domestic financial market.

“Liquidity can be reduced by more outflows from the economy,” Mr. Espenilla said.

“That’s a good time to inject liquidity by lowering reserves.”

He added that reforms to deepen the local debt market scheduled over the next 18 months would also set the stage for a possible RRR cut.

He said the reserve standard will be trimmed “in stages” rather than in one go.

Meanwhile, Mr. Espenilla said current conditions do not call for any adjustments to monetary policy rates, with inflation seen at bay and the exchange rate remaining flexible despite the peso’s depreciation versus the dollar.

“Our (inflation) forecast for 2017 is 3.2% and I think we will be able to hit that… So by itself, that is not a driver for us. There is no compelling reason for us to immediately change monetary policy,” the central bank chief said.

Mr. Espenilla said inflation is expected to hover “around 3.4%” in the last three months of 2017 to match the peak hit in September, but this is not a cause of concern for the central bank since this pace still falls within its 2-4% target band for 2017. This would likewise pull the inflation average to match the forecast, with the current nine-month tally at 3.1%.

The peso’s recent depreciation has been “moderate,” Mr. Espenilla said, supporting stronger remittance inflows — and therefore household spending that fuels more than three-fifths of the country’s economy — and export valuation.

Pressures from a balance of payments deficit are also seen “under control,” with the BSP chief attributing the trade-in-goods gap to increased importation for investments as the Philippine economy expands.

The BSP will again assess monetary policy settings on Nov. 9. The central bank has kept its policy stance steady for the last three years, except for procedural adjustments in June 2016 that paved the way for migration to an interest rate corridor system that has the overnight deposit rate at 2.5%, the overnight reverse repurchase rate at 3.0% and the overnight lending rate at 3.5%. — Melissa Luz T. Lopez

Uratex chief named Entrepreneur of the Year Philippines 2017

NATIVIDAD Y. CHENG, chairman and chief executive officer of Multiflex RNC Philippines, Inc. (Uratex), the country’s leading provider of foam and various products, was named the Entrepreneur Of The Year Philippines 2017 in an awards banquet held last night at the Makati Shangri-La hotel.

The Entrepreneur Of The Year Philippines 2017Ms. Cheng will represent the country in the prestigious World Entrepreneur Of The Year awards in Monte Carlo, Monaco in June 2018.

Ms. Cheng was recognized for her decades of hard work, prudence, frugality and business sense that helped her build Uratex into a trusted, industry-defining organization with a nearly 50-year track record for quality. Today, Uratex is a leading provider of industrial foam, mattresses, food containers, textiles, monoblock furniture and automotive original equipment parts, including car seats, radiators and mufflers, among others.

Ms. Cheng also received the Master Entrepreneur award for applying sound management practices in the critical areas of the company including finance, business development, marketing, human resources and sales.

Ms. Cheng and her husband founded Polyfoam Chemical Corp. in 1968 with a capital of just P4,000.

Under her leadership, the Uratex Group of Companies, has developed products that are available in showrooms in 20 locations nationwide and over 1,000 retail establishments.

Besides direct exports to Guam, Australia and Asia, the company also supplies industrial foam to various export industries.

Other category awards presented were for the Woman Entrepreneur, Emerging Entrepreneur and Industry Entrepreneur categories.

Rissa Mananquil Trillo, co-founder and chief brand officer of Happy Skin Cosmetics, received the Woman Entrepreneur award for leveraging her personal insights and experiences from a career as a professional model to create a cosmetics brand that combined skin care with make-up tailored specifically for Filipinas. The brand revolutionized cosmetics, such that even doctors prescribe Happy Skin products for patients with sensitive skin. Since it was launched in 2013, the company has grown from five to 85 counters and 14 stores nationwide.

Lester C. Yu, founder and chief executive officer (CEO) of Fruitas Holdings, Inc., was named the Emerging Entrepreneur for establishing a market for affordable fresh fruit juices that catered to the mass market. Through his determination and perseverance, he was able to grow the business from a one-man kiosk into a group of companies with a network of over 850 stores nationwide and with 18 different food brands under its portfolio.

Jose R. Soberano III, chairman of the board, president and CEO of Cebu Landmasters, Inc. (CLI), received the Industry Entrepreneur award, specifically for the Real Estate industry. Mr. Soberano is credited for establishing a company to address the need for quality and affordable housing in Cebu, which later evolved to include residential estates, offices, condominiums and mixed-use residential projects. Today, CLI is recognized as one of the top local developers across the Visayas and Mindanao.

The recipients of the category awards were chosen from among 19 outstanding finalists representing enterprises from diverse industries from various regions in the country.

The other finalists were: Robert John L. Blancaflor (Robert Blancaflor Group, Inc.); Melesa D. Chua (CDC Holdings, Inc.); Levy V. Espiritu (DATEM, Inc.); Francis S. Ganzon (Bangko Kabayan, Inc.); Octavia D. Hizon (Hizon’s Restaurant and Catering Services, Inc.); Rommel T. Juan (Binalot Fiesta Foods, Inc.); Ricardo F. Lagdameo (Damosa Land, Inc.); Peter Ira P. Laurel (Lyceum of the Philippines University – Batangas and Laguna campuses); Maynard S. Ngu (Cosmic Technologies Inc.-Cherry Mobile); Ma. Estela O. Nievera (Cabalen Management Company, Inc.); Cristino L. Panlilio (Balibago Waterworks System, Inc.); Samuel L. Po (JS Unitrade Merchandise, Inc.); Charles M. Streegan (Pacific Traders and Manufacturing Corporation/HCS Management); Antonio S. Tan’s (Lion Commercial Corp.) and Lester Mark E. Yee (Esprutingkle Food Corp.)

SGV Chairman and Managing Partner and SGV Foundation Chairman J. Carlitos G. Cruz emphasized the importance of vision and innovation, saying that, “Now, more than ever, entrepreneurs are disrupting the way people do business, encouraging others to be more resourceful, ingenious and creative.”

“Our finalists understand the new paradigm – that the only way to manage and leverage on disruption is by cultivating innovation, both as a mindset and a strategy, in the same way that Mrs. Cheng has continually innovated her products to become a market leader in the Philippines.”

All nominees went through a strict financial data ranking system used by all Entrepreneur Of The Year participating countries.

The finalists were further evaluated by an independent panel of jurors composed of distinguished business personalities.

The panel was chaired by Former Philippine Prime Minister Cesar E. A. Virata, corporate vice-chairman of Rizal Commercial Banking Corp. The other panel members were Senator Paolo Benigno A. Aquino IV; Synergeia CEO Milwida M. Guevara; Securities and Exchange Commission Chairperson Teresita J. Herbosa; Department of Trade and Industry Undersecretary Zenaida C. Maglaya; Philippine Stock Exchange President and CEO Ramon S. Monzon and Xurpas Inc. Chairman and CEO Nico Jose S. Nolledo, who is also the 2015 Entrepreneur Of The Year Philippines.

The Entrepreneur Of The Year was founded in the United States by professional services firm Ernst & Young (EY) in 1986 to recognize the achievements of the most successful and innovative entrepreneurs worldwide. In 2001, EY expanded the program and launched the World Entrepreneur Of The Year awards.

In the Philippines, the SGV Foundation, Inc. established the Entrepreneur Of The Year program, in 2003. Jollibee Foods Corp. Chairman and CEO Tony Tan Caktiong, the first ever Entrepreneur Of The Year Philippines, went on to win as World Entrepreneur Of The Year 2004 in Monte Carlo, Monaco. Socorro Cancio-Ramos, founder of National Book Store, was named Entrepreneur Of The Year Philippines the year after, followed by Lance Y. Gokongwei, president and CEO of Cebu Air, Inc.; Senen C. Bacani, chairman and president of La Frutera, Inc.; Wilfred Steven Uytengsu, Jr., president and CEO of Alaska Milk Corp.; Jesus Tambunting, former chairman and president of Planters Development Bank; Tennyson G. Chen, president of Bounty Fresh Foods, Inc.; Erramon I. Aboitiz, president and CEO of AboitizPower Corp.; Jaime I. Ayala, founder and CEO of Hybrid Social Solutions; Inc.; Ben Chan, chairman of Suyen Corp. and Xurpas’s Mr. Nolledo.

Supporting the program as co-presenters are the Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange.

Official airline is Philippine Airlines.

Media sponsors are BusinessWorld and the ABS-CBN News Channel.

Banquet sponsors include Bounty Fresh Food, Inc.; CDO Foodsphere; Fiori Di Marghi; First Metro Investments Corp.; Global Ferronickel Holdings, Inc.; Hyundai Asia Resources, Inc.; Intermed Marketing Phils., Inc.; Jollibee Foods Corp.; LBC Express, Inc.; SteelAsia; Suyen Corp. (Bench); Universal Harvester, Inc. and Vista Land & Lifescapes, Inc.

Gov’t makes full award of 7-year bonds

THE GOVERNMENT fully awarded its offered Treasury bonds (T-bonds) on Wednesday with yields inching lower, as banks ditched the central bank’s term deposit facility for government securities.

The Bureau of the Treasury (BTr) yesterday raised P15 billion as planned from the reissued seven-year debt papers with a remaining life of six years and six months.

Total tenders stood at P29 billion, nearly double the government’s offer.

The average rate went down five basis points (bps) to 4.39% from the 4.395% logged when the papers were offered last Sept. 5. Yesterday’s result was also lower than the 4.5% coupon rate quoted for the papers back in April.

Prior to the auction, the seven-year papers were quoted at 4.6157% in the secondary market.

The yield on the papers rallied as the trading session ended, standing at 4.3988%.

National Treasurer Rosalia V. De Leon said there was renewed demand for longer-dated papers as investors preferred to put their cash in government securities instead of the Bangko Sentral ng Pilipinas’ term deposit facility (TDF), which also held an auction yesterday morning.

“There’s also the liquidity coming from this morning’s auction of the TDF. I think there’s also a preference… [investors looked] for yields so they went into the seven years, moving out of the shorter tenor brackets. It shows the very liquid tone of the market,” Ms. De Leon told reporters after the auction. “We’re very pleased with the result of the auction that we see.”

Yields on the term deposits offered by the BSP stood steady yesterday, with the sideways move driven by tempered demand for the instruments.

The 28-day tenor went back to an undersubscription this week, while demand for the week-long term deposits just matched the amount offered by the central bank.

Ms. De Leon also noted that investors were on a wait-and-see mode ahead of the BSP Monetary Board’s policy meeting on Nov. 9 and a possible US Federal Reserve hike before the year ends.

Meanwhile, traders said the result was expected amid developments in the North Korea missile crisis and possible tightening from the US and Philippine central banks.

“Investors are slightly bullish right now given North Korea tensions,” one trader said in a phone interview, also noting that investors flocked to the seven-year papers as this was the second to the last offer of the tenor for this year.

“Right now, more of next offers are in 10 years. There’s still a seven-year offer in December, and as well as a four-year. Anything that’s less than 10 years, there’s demand,” the trader said.

“We’re waiting for the announcement for the next Fed, and then locally we know that there’s inflation pressure, and banks are looking at a possibility of a December rate hike for the Philippines,” a second trader said in a phone interview.

“I think those scenarios are playing a factor. That auction was good but comfortable for investors at a certain level,” the second trader added.

The Philippine Statistics Authority earlier reported that prices of widely used goods and services increased by 3.4% last month, jumping from 3.1% in August and the 2.3% logged a year ago.

BSP Governor Nestor A. Espenilla, Jr. has said that they are in no rush to tweak monetary policy settings, with the wider trade gap expected as the country imports materials it will use for its aggressive infrastructure push, and does not necessarily have to move in sync with the US’ policy stance.

The BSP has kept its policy stance steady over the last three years, except for procedural cuts which took effect in June 2016 which allowed the shift to an interest rate corridor. Currently, benchmark rates range within 2.5-3.5%.

The government plans to raise up to P150 billion from domestic sources this quarter, lower than the P195 billion programmed for the July to September period. — Elijah Joseph C. Tubayan

Meralco mulls purchase of up to 100MW additional solar capacity

By Victor V. Saulon, Sub-Editor

MANILA ELECTRIC Co. (Meralco) is considering to buy up to 100 megawatts (MW) solar capacity after it agreed to three power supply agreements (PSAs) that have become the benchmark for pricing electricity produced by the renewable energy.

“We’re looking at an additional solar power that’s been offered to us,” Oscar S. Reyes, Meralco president and chief executive officer, told reporters on the sidelines of an industry forum.

“We’re looking whether we can at this stage accommodate 50 to 100 MW more and then we’ll take a look at the impact on the distribution grid and certain circuits,” he added.

Mr. Reyes said the company was studying the acquisition of more solar capacity because of its impact on the electricity distribution system.

“We’re doing it in a way that we also want to ensure that the penetration or injection of solar in the system is something that the distribution grid can absorb without adversely affecting the quality of power performance,” he said.

He said if there is a capacity to buy more, the move would also be determined by whether it is “right price and beneficial to our overall generation charge.”

“We’re in discussion with certain parties,” Mr. Reyes said. “Maybe in the next three to six months.”

On Oct. 9, 2017, Meralco announced that it had executed a PSA with Solar Philippines Tarlac Corp. for the sale and purchase of solar power at a rate of P2.9999 per kilowatt-hour. The rate is significantly lower than the prevailing solar feed-in-tariff rate of P8.69/kWh.

The PSA came after Meralco subjected an offer of P3.50/kWh from another company to price challengers as required under rules on competitive selection process. It is to take effect upon the approval by the Energy Regulatory Commission (ERC).

“We’re also looking forward to how ERC will resolve the pending petitions,” said Lawrence S. Fernandez, Meralco vice-president and head of its utility economics. Mr. Fernandez was referring to Meralco’s previous two PSAs with separate solar power developers priced at P4.69/kWh and P5.39/kWh.

Gloria Victoria C. Yap-Taruc, one of four ERC commissioners, said the pending PSAs are being studied by the regulator’s technical working group before these are transferred to the commissioners for deliberation.

Meralco buys power for distribution to its 6 million customers based on its requirement. Last year, its energy sales reached 40,142 gigawatt-hours, higher by 8.1% compared with the previous year.

“In terms of our procurement of [solar] renewables, we already have signed up about 185 [MW],” Mr. Reyes said.

For October, PSAs and independent power producers respectively account for 43% and 45% of Meralco’s total requirements. Power purchases from the wholesale electricity spot market makes up the rest.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc.

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

SHEC buys HK-based firm

SBS PHILIPPINES Corp. is taking its expansion overseas with the acquisition of a company with property interests in Hong Kong for P77 million.

In a disclosure to the stock exchange on Wednesday, SBS said its wholly-owned subsidiary SBS Holdings and Enterprises Corp. (SHEC) acquired a 4.25% equity interest in Joune Holding Limited (JHL).

JHL is in the process of closing a purchase agreement with Maxco International Development Limited, which in turn owns a total of 4,641.7 square meters of land in Tuen Mun, New Territories, Hong Kong.

SBS noted that the property is located near the Mass Transit Railway station currently being constructed in the area, which will also be linked to the Hong Kong International Airport in Chek Lap Kok Island. This will likewise be connected to the Tuen Mun-Chek Lap Kok Link Bridge, also set to be linked to the Hong Kong-Zhuhai-Macau bridge slated to be completed in 2018. The company said it expects to seal the agreement within the month.

The acquisition forms part of SHEC’s plan to continue investing in property companies.

“The investment is in furtherance of the diversification and investment strategy of the SBS Group to invest in small ownership stake in companies investing in real properties to have a more diversified interest in different property holdings at a lower capital requirement and risk exposure to the company,” SBS said.

Shares in SBS lost five centavos or 0.81% to P6.15 apiece at the stock exchange on Wednesday. — Arra B. Francia

PhilRatings gives PSBank top grade

PHILIPPINE SAVINGS Bank (PSBank) bagged the top corporate rating from a Manila-based debt watcher, with its solid loan growth and a stable funding profile supporting the bank’s creditworthiness.

The listed lender announced yesterday that it secured a PRS Aaa (corp.) rating from the Philippine Rating Services Corp. (PhilRatings), or the highest corporate credit rating on the firm’s scale. This means that the bank has a “very strong capacity” to fulfill its financial obligations within a one-year horizon.

“The rating takes into consideration PSBank’s solid market position, underpinned by its well-defined growth strategy; the continued growth in the bank’s core interest income, attributable to loan portfolio expansion; expectations that the bank’s funding profile will continue to improve, supported by increased levels of current and savings deposits; and the favorable outlook for domestic consumer credit,” the bank said in a disclosure.

PhilRatings is the first domestic credit rating agency accredited by the Securities and Exchange Commission and the Bangko Sentral ng Pilipinas.

In the statement, PhilRatings said PSBank is a “significant” player in the consumer lending market, propped up by an upbeat car loan portfolio which is expected to keep growing for the rest of the year.

Loans granted by the thrift bank reached P137.01 billion during the first semester, up by 12.9% from the P121.35 billion posted a year ago as auto loans climbed by a fifth.

Upgrades geared towards improved customer experience and digital products and financial services are also seen to broaden the bank’s reach to capture more retail clients and small and medium-scale firms, the credit rater said.

“The overall outlook for consumer lending is positive, driven by auto lending, card lending, and mortgages/housing,” PhilRatings said in the statement.

“Factors which will positively contribute to the continued growth of consumer lending include the Philippines’ sustained economic growth, its stable banking system, and a demographic profile which suggests a strong retail market over the long term.”

The Philippine economy expanded by 6.4% during the first semester, with the International Monetary Fund expecting a 6.6% growth for the entire year.

Alongside robust loan growth, PSBank is seen to enjoy a “stable” funding base as it takes in more deposits led by higher amounts held in current and savings accounts, which are deemed “more stable” compared to time deposits.

PSBank reported a P1.18-billion net income from January to June up by 2% from the P1.16 billion booked during the same period in 2016. The bank has said that it is eyeing to book a double-digit growth in its bottom line for the entire year. — Melissa Luz T. Lopez

Peso declines on strong US data, dollar demand

THE PESO grew weaker yesterday as the dollar picked up steam on the back of improving factory output in the United States, coupled with domestic corporate demand and profit taking which pushed the currency lower.

The local unit closed at P51.405 versus the greenback, down 7.5 centavos from Tuesday’s P51.33 finish.

The peso depreciated throughout Wednesday’s session as it opened at P51.37, and even hit a trough of P51.425 against the dollar. It touched P51.35 as its best showing for the day before settling at the closing rate.

One trader said the downward move of the peso was likely a reaction to a stronger dollar, which was supported by positive data overseas.

“The peso depreciated on Wednesday as the dollar’s appeal improved following the release of better-than-expected US industrial production report,” one trader said.

Reuters reported that US factory output expanded by 0.3% in September, reversing a 0.7% drop in August as the impact of the twin hurricanes waned.

Another trader pointed out that the weaker peso seen yesterday may have been due to buying interest among local corporates which was also supported by profit taking. The bellwether Philippine Stock Exchange index dropped by 0.78% to 8,431.73 from the fresh record high recorded on Tuesday.

Overall, the second trader also attributed Wednesday’s “muted” session to a wait-and-see stance taken by market players, as they “await new leads to dictate the direction of dollar-peso trading.”

Investors traded $497.6 million during the session, lower than the $893.2 million exchanged the previous day and lower than the $500-600 million daily average.

For today, the first trader expects the exchange rate to move within the P51.30 to P51.50 range, noting that the peso could depreciate further as a result of possibly hawkish remarks from Federal Reserve officials in their scheduled speeches. The trader added that possibly weaker growth for the Chinese economy could spur safe-haven buying in favor of the dollar.

On the other hand, the second trader sees the peso moving within P51.25-P51.45, noting that any data catalysts could influence the exchange rate.

Asian currencies were subdued on Wednesday as investors waited for any clues on the outlook for China’s foreign exchange policy from a key Communist Party Congress.

President Xi Jinping said in his opening speech to the twice-a-decade gathering early in the day that China will deepen market-oriented reforms of exchange rates and interest rates, reiterating an oft-heard government pledge.

The Chinese yuan ticked up against the dollar, after the People’s Bank of China set its official yuan midpoint  at 6.5991 to the dollar.

The Singapore dollar also ticked up against the dollar, while the Malaysian ringgit was closed for a national holiday. — Melissa Luz T. Lopez with Reuters

Cirtek targets to grow Quintel revenues to $500M

By Arra B. Francia, Reporter

CIRTEK HOLDINGS Philippines Corp. (CHPC) is looking to grow revenues of United States-based antenna firm Quintel to $500 million in the next three to five years. 

“Objective is to grow into a $500-million revenue company three to five years down the road, and then we will compliment it with one or two more strategic acquisitions in order to bring it into a half-a-billion-dollar revenue company,” CHPC Vice-Chairman and President Roberto Juanchito T. Dispo told reporters in a media roundtable discussion with Quintel officials in Makati on Wednesday.

CHPC’s newly acquired firm is expected to bring in bulk of its revenues during this period, as it captures a bigger share of the US antenna market where it already serves two major telco players, namely AT&T and Verizon.

“The existing market share now is 10% now for AT&T and Verizon, respectively… The 20% market share from where we are right now can easily be done in one or two years, that’s how confident we are,” Mr. Dispo said, noting that they will be increasing sales by 20-40% year on year with the introduction of new products and more innovations to existing products. 

CHPC acquired Quintel last July as part of efforts to further expand its footprint in the antenna market, which is expected to grow into a $14-billion industry by 2020.

Once Quintel reaches its revenue target of $500 million, Mr. Dispo said they are looking to list the company in the Nasdaq Stock Market.

“The listing of course, it’s in the horizon. It’s in the business plan. The important thing is how to be able to grow the top-line of the company from where it is now. Next year we’ll probably do $200 million for Quintel. Target is to grow into $500 million. That’s a perfect size for revenue in order to access Nasdaq listing but we will not stop there,” Mr. Dispo said. 

Asked for other future acquisitions, the executive said the company remains to be in the lookout for companies that can complement their product offerings. For instance, they have already invested in CloudMondo, a start-up firm in Silicon Valley that looks to implement a global, high-bandwidth Wi-Fi network.

“Also looking to investing in AI, artificial intelligence. We believe that it’s a growth area that we should be capitalizing on moving forward as an independent model, and also a business model that can complement antennas…we are envisioning that, that antenna can already do data analytics, client profiling, and even predicting buying behavior of a subscriber of AT&T and Verizon,” Mr. Dispo said.

On the other hand, CHCP will also be holding talks with the Department of Information and Communication Technology, Department of Energy, and local telco players such as Globe Telecom, Inc. this Friday to provide support in improving connectivity in the country.

“We will be having meeting with Globe , high-level technical people to be able to share this technology to the local operator here and then there’s another meeting that’s being arranged with the PLDT, [Inc.] and the Smart [Communications, Inc.] people,” Mr. Dispo said.

Shares in CHCP rose 70 centavos or 1.6% to P44.50 at the Philippine Stock Exchange on Wednesday.

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

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