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Industry says US demand strong despite flap over virgin coconut oil health claims

COCONUT PRODUCTS from the Philippines continue to enjoy strong demand from the US market, an industry association said.

The United Coconut Associations of the Philippines (UCAP) said virgin coconut oil and other processed products are riding the trend towards healthy lifestyles in the US, noting that a trade show in Maryland in September generated $6 million in orders.

“America still loves our coconuts,”  UCAP Chairman Dean A. Lao, Jr. said in a statement Wednesday.

Yvonne T. Agustin, UCAP executive director, noted that in the six months to June, exports of coconut oil totaled $1.132 billion, nearly doubling from a year earlier.

The association said coconut products face competition from the soybean oil industry, which disputes coconut oil’s health benefits.

UCAP medium chain fatty acids (MCFA) in coconut oil are linked to a lower incidence of cardiovascular disease in populations studied.

Dr. Fabian M. Dayrit, who chairs the Asia Pacific Coconut Community (APCC) Scientific Advisory Committee for Health, said APCC is planning a scientific conference with the United Nations Food and Agriculture Organization (FAO).

“FAO agreed to a technical meeting in a scientific conference among experts in 2018,” Mr. Dayrit said.

UCAP’s Mr. Lao said the country must invest in product research, citing the example of Thailand, which lead Southeast Asia in coconut product innovation.

“We are good in shipping in bulk.  (But) consumer products bring higher value,” Mr. Lao said. — Janina C. Lim

Predator unveils latest ultra-thin gaming laptop

PREDATOR Philippines introduced its latest gaming laptop with an ultra-slim physique and is equipped with NVIDIA’s latest graphics chip that allows laptops to possess desktop-level processing power.

The Predator Triton 700 is a slim (18.9 mm thin), 15.6-inch gaming laptop that features, among others, Intel Core i7-7700HQ processor, NVIDIA GTX 1080 graphics, and an onboard configuration software called “PredatorSense.”

The Predator Triton 700 comes in two variants: the NVIDIA GTX 1060 model (P134,999) and the GTX 1080 model with Max-Q design (P229,999).

 

PSEi climbs to new high on improved sentiment

THE MAIN INDEX extended gains on Wednesday, hitting a new record high once more, as shares tracked gains in the US market.

The bellwether Philippine Stock Exchange index (PSEi) rose 0.37% or 31.12 points to 8,344.05.

The all-shares index climbed 0.32% or 15.84 points to 4,907.84.

“The market seems to relish the new all-time high environment as investors are akin to hold on to their positions as the stock prices rise,” Frank Gerard J. Barboza, equity trader at Angping & Associates Securities, Inc., said via text.

“Optimism in the global market continues to influence local investors. Record high in Wall Street and an expected stronger global growth triggered market players to flock into the market,” First Grade Finance, Inc. Managing Director Astro C. del Castillo said in a mobile phone message.

Investors chose to shrug off news of higher valuations, crawling inflation and noise on the political front, added Mr. Del Castillo.

The three major US stock indexes posted record high closes for the second straight day on Tuesday, helped by gains in airlines and as car makers rose after strong September vehicle sales.

The Dow Jones Industrial Average rose 84.07 points or 0.37% to close at 22,641.67; the S&P 500 gained 5.46 points or 0.22% to 2,534.58; and the Nasdaq Composite added 15 points or 0.23% to 6,531.71.

“We see a continuation of the bullishness across sectors, not to bar the influence on sentiment by major US indices hitting record highs again. We shall observe volume and volatility levels while in this new territory for the PSEi,” Angping & Associates’ Mr. Barboza said.

All sector counters saw gains on Wednesday, led by services, which went up 0.90% or 15.7 points to 1,747.08.

Industrials jumped 0.58% or 64.92 points to 11,180.69; mining and oil increased 0.36% or 50.86 points to 13,930.05; holding firms expanded 0.30% or 25.73 points to 8,452.98; financials rose 0.28% or 5.76 points to 2,002.73; and property edged up 0.19% or 7.45 points to 3,909.37.

Advancers trumped decliners at 106 to 88 as 62 issues were unchanged.

Value turnover went down to P6.55 billion from Tuesday’s P7.25 billion, with 2.48 billion shares changing hands.

For the third consecutive day this week, foreigners dumped shares, with net selling totaling P426.39 million, albeit down from the P689.83-million outflow logged on Tuesday.

“Several key speakers will keep investors searching for cues,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said, noting that St. Louis Fed President James Bullard is anticipated to deliver welcoming remarks at a conference on community banking at the Federal Reserve Bank of St. Louis, with Federal Reserve Chair Janet L. Yellen also expected to deliver remarks during the said event.

“Seems like [the] index could still trek higher but signs of profit taking is most probable,” said First Grade Finance’s Mr. Del Castillo. — Janina C. Lim with Reuters

House Bill No. 5636 vs Senate Bill No. 1592: Which is the better ‘TRAIN?’

On Sept. 20, the Senate Committee on Ways and Means filed its version of the Tax Reform for Acceleration and Inclusion (TRAIN) bill. There are differences between the House (House Bill No. 5636) and the Senate (Senate Bill No. 1592) versions and I will tackle some differing provisions specifically affecting employees.

COMPENSATION TAX
In the Senate version, though the P25,000 annual additional exemption for each dependent (up to a maximum of four children) was retained, the threshold amount for tax-exempt compensation income was lowered to P150,000 from P250,0000 in the House version. Consequently, this increased the effective income tax rate from 7.5%-29% to 11.25%-29.3% for annual compensation amounting to P400,000-P5,000,000. Further, the non-taxable 13th month pay and other benefits remained at P82,000 compared to the P100,000 increased threshold in the House version. Even with the maximum number of qualified dependents, employees would get more tax benefits under the House version.

MINIMUM WAGE EARNERS (MWES)
The tax exemption of the MWEs was removed in the House version while the Senate retained the current tax rules. The current minimum wage in the National Capital Region (NCR) for the non-agricultural sector is P512 per day. If we assume 313 working days in a year, this will translate into an annual gross income of P160,256 which is non-taxable under both the House and Senate versions.

But what if the employee is earning a little more than the minimum wage, say P515 or about P161,195 a year, and does not have any qualified dependent children? Under the House version, the entire amount will not be taxable. In contrast, a tax of P1,679.25 will be imposed under the Senate version which would result in a lower take home pay (P159,515.75) compared to that of MWEs. It does not seem fair for an employee to be better off earning minimum wage. I hope the Senate and Congress can further evaluate the appropriate amount of tax-exempt compensation income and consider the NCR’s current minimum wage in the process.

FROM 35% TO 32% FOR THE ‘ULTRA RICH’
When the House version was approved on May 31, majority of Filipino employees were pleased, except those considered ‘ultra rich’ or employees earning an annual income of more than P5 million. In the House version, these ‘ultra rich’ are to be taxed at P1,450,000 for their compensation income up to P5 million, and 35% on anything in excess of P5 million. This provision did not sit well with affected employees.

The Senate version was a welcome development to the ‘ultra rich’ since they will instead be taxed at 32% in excess of P2 million. The Senate version is deemed to be the better version for the ‘ultra rich’ but not entirely.

Let’s take for example a married employee with two (2) qualified dependent children who earns PHP5,200,000 in annual gross compensation income. 

Based on the above calculation, despite the 35% tax rate on compensation in excess of P5 million, the House version will be beneficial for those employees who have no or fewer qualified dependents and whose income is just a little above the P5 million mark. This is because the effective tax rate of a P5 million compensation package under the House version is just 29% while it is at 29.30% under the Senate version. Although the difference is just minimal, it goes to show that sometimes things are not always what they seem to appear, so better make those calculations.

15% PREFERENTIAL TAX RATE ON RHQ, ROHQ AND OBU EMPLOYEES
Another significant difference is on the 15% preferential tax rate on the gross compensation income of qualified employees of Regional or Area Headquarters (RHQ) and Regional Operating Headquarters (ROHQ) of multinational companies, and Offshore Banking Units (OBU).

Readers may be aware of the clamor raised by the removal of the 15% preferential tax rate in the House version because of its impact not only to the employees but primarily in the operations of the RHQ, ROHQ and OBUs.

It seems that the Senate heard the affected stakeholders’ appeal but only with one ear. In the Senate Bill, RHQ, ROHQ and OBU employees employed prior to Jan. 1. 2018 shall still enjoy the 15% preferential tax treatment until the end of their current employment. The preferential tax rate, however, will not apply beginning Jan. 1, 2018 which means there will be employees in the same tax classification but under a different tax system.

Is the partial granting of the 15% preferential tax rate the answer to the appeal of those affected or will it just create more drawbacks? Although this incentive was conferred by special law which the government can revoke at any time, should we not consider the uniformity of the law? It is possible that employees who are hired after the cut-off date may be granted salary adjustments to compensate for the impact of this provision on their net take home pay, but this is left to the discretion of the employer.

The above are just some of the differences between House Bill No. 5636 and Senate Bill No. 1592. Despite the TRAIN’s objective of a fair, simple and efficient tax system, it will definitely not be the case for all. I just hope that in the coming bicameral conference sessions, Congress and Senate will choose the TRAIN provisions that are most beneficial to the majority of the Filipino people and will be able to support the current administrations’ economic and social development projects. I hope it will no longer be the House or the Senate TRAIN but the Filipino TRAIN that is worth the wait.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

Floredee T. Odulio is a director at the Client Accounting Services group of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 845-2728

floredee.t.odulio@ph.pwc.com

How PSEi member stocks performed — October 4, 2017

Here’s a quick glance at how PSEi stocks fared on Wednesday, October 4, 2017.

Nation at a Glance — (10/05/17)

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

GDP growth projections for select economies

THE PHILIPPINES can still be expected to lead large Southeast Asian states in economic growth, the World Bank said in its latest regional assessment, even as it slashed its projection for the country in the face of “slower-than-expected implementation of public investment projects.” Read the full story.

Slow infrastructure rollout worries WB

Escolta might be the perfect location for your startup

Much has been written about the lost glory of Escolta Street in Binondo, Manila. Once the country’s entertainment and business capital, the historic district slowly became a thing of the past, its heritage structures already crusted with dirt, grime, and the passing of time.

But unlike most of the old structures that have been abandoned in the area, an 89‑year‑old building facing the Pasig River remains still, getting a fresh breathing and slowly becoming a hub for young artists and budding entrepreneurs.

This is the First United Building, formerly known as Perez Samanillo Building, designed by Andres Luna de San Pedro (son of Filipino painter and revolutionist Juan Luna) and built in 1928.

The red and white structure with geometric patterns such as boomerang‑like chevrons and spiral arches was once dubbed as Asia’s fashion hotspot, housing Berg’s Department Store, the go-to shop for the most lavish citizens of Manila during the American period. Movie production houses such as those of Nora Aunor and late comedian Dolphy were also located in the building.

Amid a call to revive the once‑thriving commercial district, new and artistic spaces had been established in the building since 2015, including Hub: Make Lab, a business incubator space, coffee shop The Den, and quaint bar Fred’s Revolucion.

The latest addition to these is a co‑working space called First Coworking Community.

Introduced in May, the about 75‑square‑meter room located at the fifth floor of the building is among the ongoing efforts to re‑introduce Escolta as an ideal location to grow a business.

Video Samantha Gonzales

“We want people to try working here. The general idea is if you like working at First Co‑working Community, maybe you would want to rent an actual space or look at other buildings and try to look for other spaces,” Arts Serrano, the 28‑year‑old architect who designed the space, told SparkUp in an interview. “It’s a step towards bringing more people in this district.”

According to Mr. Serrano, whose firm One Zero Design Collective, has also moved in the building, the co‑working space is the brainchild of Robert and Lorraine Sylianteng, a couple who hails from the family that currently owns the building, whom he met in an art festival held in a co‑working space a couple of years ago.

“I was seated behind them (Mr. and Mrs. Lianteng) and they asked me what’s the venue called, how it works, and why people go there. I explained to them that it is a co‑working space and that it’s a thing among the younger generation since we don’t have much money and we can only pay for a day worth of rental,” he recounted. “We met two years after and they asked me to turn a portion of the building into a co‑working space.”

In attracting young artists and entrepreneurs, he said First does not only provide a “communal” space, but also a picturesque view of the historic district, hence its design retaining the original room’s floor‑to‑ceiling windows to highlight the outside view showcasing today’s Escolta.

“This space, being on the fringe, shows a lot of characters and history, so we want to highlight those in our design. We also don’t want to create anything distracting in terms of the architecture or the interior,” he said. “Everything that we do here is a bit experimental given that the market isn’t really here and the space isn’t that accessible to most people.”

It can accommodate 36 people with seats provided and up to a hundred guests during a forum. Renting the space, which starts at ₱350 per day, includes access to the internet, printer, and even drinking water and coffee.

“The space is a bit playful in terms of providing the actual working space, it’s not all tables and chairs. We provided spaces where people can sit on the floor or maybe work in a more causal and relaxed way,” he said, adding that the tables are arranged “so as not to box people out in one station and enable them to collaborate with other creative.”

Though the space has already created a buzz especially among young millennials on social media, Mr. Serrano said First Coworking Community remains “a work in progress.”

Video Samantha Gonzales

“We’re faced with some challenges in terms of the current structure of the building given that it’s a 1920 structure. There are still some other things that we’re still working on, but for now we want to create a space that is at least functional,” he said.

While the co‑working space’s initial patronage comes from mostly artists and creative entrepreneurs, Mr. Serrano said First is open to all kinds of startups, including tech‑related ones.

“Initially given the current food traffic here and a lot of artists, graphic designers, creative, we wanted to tap that market since we have Make Lab downstairs. But we don’t really limit our market,” he said. “We’re very open. Actually one of the things that we’re discussing is how we can integrate the idea to the community around us, not just to creatives, but also to tech‑based startups and other young entrepreneurs.”

For Mr. Serrano, First’s “perfect location” is its main advantage from its counterparts in Makati, Taguig, and other known business districts in the metro.

“I think what sets us apart is the location because you don’t really see this authenticity anywhere else and it’s the quality that everyone, not just startups, but also the more experienced entrepreneurs, needs to strive for—the authenticity that would inspire them to create more inspired works.”

While Escolta can’t regain its glory as the country’s center of business and entertainment (at least not in the near future, but who knows), he said it still has a big potential to become a cultural and entrepreneurial district.

“It’s a great catch locating here because we’re breathing new life to something that has been here for almost a century and it transcends beyond our own personal agenda,” he said.

“There had been a lot of talks about turning everything here in Escolta into call centers, into boutique hotels, but nothing really worked. What’s happening here in the First United Building, starting from the grass root and once space at a time, the vision is activated. It’s a collection of spaces that creates a sustainable environment which is a great model in re‑using old buildings.”

Bourse peaks past 8,300 mark

By Arra B. Francia
Reporter

OPTIMISM about the general economy and some foreign bourses’ record highs propelled the Philippine Stock Exchange index (PSEi) to pierce the 8,300 barrier to end yesterday’s trading at a new peak.

PSEi closed 8,312.93 yesterday, 56.65 points or 0.68% higher than the previous trading day, while the all-shares index closed 24.64 points or 0.51% more at 4,892.

“Our markets soared to a new high today, climbing further into record territory in sync with US markets also hitting new highs in yesterday’s closing,” the PSE quoted its president and chief executive officer, Ramon S. Monzon, as saying in a statement.

“Investors continue to remain bullish about the prospects of the Philippine economy.”

The PSEi has gained 21.52% year to date.

The benchmark index had broken through 8,300 amid trading on Sept. 21 (8,321.81) and 22 (8,314.44) but had been unable to sustain that level till the closing bell on those days.

Last month saw PSEi’s finish peak three consecutive times: 8,144.91 on Sept. 14; 8,180.85 on Sept. 15 and 8,294.14 on Sept. 18.

“The market went up because of a positive global economic outlook, and there’s very good US data that came out yesterday,” UPCC Securities Corp. equities trader Aristotle D. Reyes, Jr. said in a phone interview yesterday.

Reuters yesterday reported that a measure of US factory activity surged to a near 13-and-a-half-year high last month, while the Asian Development Bank last Sept. 26 upgraded its previous economic growth forecasts for “developing Asia” — a driver of world economic expansion that clocked an actual 5.8% in 2016 — to 5.9% in 2017 and to 5.8% in 2018 from the 5.7% for both years that was pencilled in April.

“Some stock exchanges in our neighbors went up also. I think… TOPIX reached all-time high,” Mr. Reyes said.

“It’s a better environment.”

Wall Street yesterday hit new highs, with the Dow Jones Industrial Average rising 0.68% to end 22,557.60, the S&P 500 Index gaining 0.39% to 2,529.12 and the Nasdaq Composite Index adding 0.32% to close 6,516.72.

Most Asia-Pacific markets were similarly up, with Japan’s Nikkei 225 and TOPIX Index, Hong Kong’s Hang Seng Index and the MSCI AC Asia Pacific rising 1.05% to 20,614.07, 0.65% to 1,684.46, 2.25% to 28,173.21 and 0.13% to 161.38, respectively.

Australia’s S&P/ASX 200 Index, however, fell by 0.49% to 5,701.44.

“Philippine stocks broke new ground once more and US stock benchmarks traded in record territory Monday afternoon, as equities resumed a steady run-up that could set the tone for the final three months of 2017,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

UPCC Securities’ Mr. Reyes also cited government plans to further ease foreign ownership restrictions, saying: “Then there’s news yesterday that the government is looking at lifting foreign ownership rule so they want to relax it; so there’s a catalyst for us.”

Both Socioeconomic Planning Secretary Ernesto M. Pernia and Finance Secretary Carlos G. Dominguez III have said the government plans to start with economic sectors that will not need time-consuming legislation via a review of the Foreign Investment Negative List that should be out before yearend.

Also to be opened up — via legislation — are key sectors like retail trade and public utilities.

Among yesterday’s most actively traded stocks, those that gained were led by PXP Energy Corp. (which surged 13.75% to P7.86 apiece); Puregold Price Club, Inc. (4.57% to P54.90); Alliance Global Group, Inc. (2.68% to P16.84) and Security Bank Corp. (2.44% to P252 per share).

Yesterday’s most active stocks that lost were led by Jollibee Foods Corp. (which gave up 0.25% to P242 apiece); GT Capital Holdings, Inc. (0.08% to P1,205) and Universal Robina Corp. (0.07% to P152.50 each).

Regina Capital’s Mr. Limlingan noted that the market should establish “a firm base” above 8,300 before climbing further “[p]ero dapat kasi (but there should be) no negative shocks from the market.”

“We’re trying to establish a firm base above 8,300. If we can do that, then we can hit 8,500, but any negative externalities may send us back to 8,000.”

Mr. Reyes said the brokerage has revised its own year-end projection for PSEi to 8,800-9,000.

“As the market continues to be like this, and the Christmas season is on its way, maybe we can reach 8,800-9,000, because some companies hint that their earnings will go up also for the third quarter and fourth quarter,” he explained.

“So there’s not much bad news or bad catalyst right now.”

Banks’ soured debts still manageable as of July

BIG BANKS saw marginal growth of soured debts as of July even as total loans surged by a fifth from a year ago, keeping them on solid footing for sustained expansion, latest central bank data showed.

Universal and commercial banks’ non-performing loans (NPLs) totalled P104.034 billion in the seven months to July, climbing 6.3% from the year-ago P97.913 billion and three percent from last semester’s P101.006 billion.

NPLs are loans left unpaid at least 30 days past due date, which mean bigger chances of default that could spell losses for a bank.

However, the increase of bad debts remained muted compared to the growth of total loans, which surged by 19.3% to P7.065 trillion from the P5.922 trillion recorded in the seven months to July 2016, according to the Bangko Sentral ng Pilipinas.

Relative to total loans, the share of NPLs slipped to 1.47% from 1.65% the previous year, reflecting a sustained improvement of asset quality.

Non-performing assets held by local lenders in the form of properties seized from non-paying borrowers shrank by 5.1% to P75.874 billion from P79.949 billion worth of foreclosed assets a year ago.

Banks have the option to retrieve assets of value from defaulting borrowers in order to settle obligations.

Despite the slight increase of NPLs, big banks hiked their allowance for credit losses by 7.1% to P140.766 billion from the P131.458 billion which they set aside the prior year.

That was more than enough to cover the entire amount of soured debts in that period.

NPL coverage stood at 135.31% as of July, improving from 134.26% the previous year although less than last semester’s 137.89% ratio.

Bank loans granted during the period also remained largely funded by deposits, which grew 15% to P10.003 trillion as of end-July from P8.7 trillion in 2016’s comparable seven months.

Across the entire Philippine banking system, the share of NPLs also declined to 1.99% of total bank credit from a 2.19% share as of July 2016.

The same comparable seven months saw banks cumulatively grow incomes by four percent to P82.335 billion from P79.192 billion.

Moody’s Investors Service last week kept its “stable” outlook for Philippine banks over the next 12-18 months on the back of strong funding profiles and ample liquidity, even as it flagged a potential increase in credit defaults as lenders venture deeper into the riskier retail segment.

Still, the international debt watcher said bank profits will remain stable, with higher yields from the consumer segment expected to offset higher credit and operating costs.

The central bank keeps track of the NPL ratios of banks and other financial entities in order to keep asset quality in check and maintain the soundness of the financial system. — Melissa Luz T. Lopez

The art and science of event styling

The Entrepreneur Of The Year Philippines 2017 has concluded its search for the country’s most inspiring entrepreneurs. Entrepreneur Of The Year Philippines is a program of the SGV Foundation, Inc. with the participation of co-presenters Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange. In the next few weeks, BusinessWorld will feature each finalist for the Entrepreneur Of The Year Philippines 2017.

The Entrepreneur Of The Year Philippines 2017

Robert Blancaflor
Managing Director
Robert Blancaflor Group, Inc.

CONFUCIUS once said, “Choose a job you love, and you will never have to work a day in your life.”

This was the case for Robert Blancaflor, 49, who gave up a successful banking career to pursue a creative calling to pioneer the first events styling company in the Philippines.

Mr. Blancaflor graduated from the University of the Philippines in the Visayas with an Accounting degree. After becoming a Certified Public Accountant, he moved to Manila and became a banker specializing in operations and government infrastructure. He held key positions in the local offices of notable global banks, becoming one of the youngest vice-presidents for the Manila office of a global bank, and was involved in the formation of the Securities Clearing Corporation of the Philippines (SCCP) and Philippine Central Depository, Inc. (PCDI) under the Philippine Stock Exchange.

Despite being a successful young banker, he wanted to do something more creative. He he had always been aware of his creative streak because of his mother’s garden. He would always encourage his mother to dress the table or decorate their family home with flowers.

Mr. Blancaflor’s first foray into events styling was serendipitous. His then soon-to-be-wed brother asked Mr. Blancaflor to help with all the arrangements. With this as his first “project,” Mr. Blancaflor, who was then partly based abroad, started to curate materials to bring back to the Philippines. The success of his brother’s wedding elevated his profile as a professional event stylist.

He officially established 1816 Flowers Company in 1997 and eventually rebranded it as Robert Blancaflor Group, Inc. (RBG) in 2007. He has since styled celebrity weddings like those of Aga Muhlach and Charlene Gonzales, Ruffa Guttierez and Yilmaz Bektas, Ryan Agoncillo and Judy Ann Santos, as well as the Raymart Santiago and Claudine Barretto’s nuptials. He also styled the wedding of Hong Kong actor Nicholas Tse and Chinese singer Cecilia Chung and newlyweds Vicky Belo’s and Hayden Kho’s ceremony in Paris, France. His clientele include non-Filipino clients, such as a tycoon in India, a datu in Malaysia and a Southeast Asian prince. He has handled local and international events including the Star Magic Ball as well as recent ASEAN, Asia Pacific Economic Cooperation and Asian Development Bank summits.

Mr. Blancaflor claims to have coined the term “events styling,” with focus on overall design, floral and non-floral décor, production and management. In 2015, he started Eighteenth Floristry & Event Rentals Company, Inc, which he says is the biggest equipment rental company in the industry. Unlike others that can provide only some needs of events, Mr. Blancaflor envisions RBG as a one-stop event shop offering a complete range of integrated services.

“It’s all about track record,” Mr. Blancaflor explained.

In an industry where you’re only as good as your last job, one faces the challenge of consistency.

He said he applies a transparent approach to ensure client satisfaction, clearly delineating what he can and cannot deliver. By setting ground rules and pushing his team to always go the extra mile for clients, he is able to manage expectations. He has also instilled a quality assurance system within the company.

RBG also benefits from a professional organization structure. Between its two companies, RBG is composed of 40 full-time employees and a pool of 250 people, with operation, human resource and accounting departments, among others. Using his operational background from his banking days, Mr. Blancaflor also came up with business continuity plans and other policies to ensure efficient day-to-day operations. He contrasts the flexibility, cross-functional capabilities and logistical expertise of RBG against his contemporaries, who are mostly one-person teams.

RBG imports heavily, with around 90% of flowers and rental furniture sourced from overseas. Hence, the peso’s current weakness against the dollar is a concern.

In addition, there is now an influx of foreign players in the local events scene.

Despite these challenges, Mr. Blancaflor is confident that his understanding of local tastes and cultures give him an edge.

RBG uses social media as both a marketing and research tool, staying up-to-date with the latest trends and making these items and designs available in the Philippines. It also innovates by pre-fabricating elements of frequently used stage designs to improve mobility, deployment and set-up, reducing costs.

Last April, Mr. Blancaflor was one of 100 awardees of EventsVenue PH’s Seal of Excellence. The award was given to events industry members who exemplify excellence and quality.

His social responsibility projects include pro bono event hosting for the Philippine Red Cross and the Philippine Cancer Society.

From banking to styling, Mr. Blancaflor’s journey to becoming one of the country’s leading events stylists has always been driven by passion. His advice to aspiring entrepreneurs: “Find a business you can put your heart into and commit to it.”

The official airline of the Entrepreneur of the Year Philippines 2017 is Philippine Airlines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. Banquet sponsors are Bench; Bounty Fresh Food, Inc.; CDO Foodsphere; Fiori Di Marghi; First Metro Investment Corp.; Global Ferronickel Holdings, Inc.; Hyundai Asia Resources, Inc.; Intermed Marketing Phils. Inc.; Jollibee Foods Corp.; LBC; SteelAsia and Universal Harvester, Inc.

The winners of the Entrepreneur Of The Year Philippines 2017 will be announced in an Oct. 18 awards banquet at the Makati Shangri-La hotel. The Entrepreneur Of The Year program is produced globally by Ernst & Young.

Gov’t makes full award of 5-year T-bonds

THE GOVERNMENT raised P15 billion as planned in reissued five-year Treasury bonds (T-bonds) on Tuesday, amid strong appetite for papers at the shorter end.

The Bureau of the Treasury fully awarded reissued government securities with a remaining life of four years and three months.

Tenders reached as much as P29.951 billion, almost twice the P15-billion offering.

The T-bonds were quoted at an average rate of 3.979%, 24.7 basis points (bps) lower than the 4.226% yield logged during the July 11 auction.

At the same time, the average yield notched yesterday was also below the original 4% coupon rate attached to the papers when they were first offered in January.

This rate was likewise lower than the 4.6107% quoted for the five-year debt papers in the secondary market before the Treasury’s auction. The yield was unchanged at the close of trading.

National Treasurer Rosalia V. De Leon said there was heightened demand for the shorter-tenored bonds as the Bangko Sentral ng Pilipinas cut its offer of 29-day term deposits for today’s auction to P100 billion from the P110 billion placed on the auction block last week.

“We saw good demand. So I guess everybody’s flocking the GS (government securities) market and the offering today is something that caters to their appetite given that it’s in the belly of the curve,” Ms. De Leon told reporters after the auction on Tuesday.

“We’re happy with the participation of the GSEDs (government securities eligible dealers). I suppose that’s because they want to improve their respective performances. Sometime before the end of the year, we’ll also be selecting our market makers, so everybody’s showing a good performance so they will be in that circle of market makers,” she added.

The official was referring to the government’s enhanced GSEDs program, where market makers are designated and expected to stand as liquidity providers and actively give bid and offer quotes to the regulator, to improve the performance of the primary debt market and at the same time, enhancing liquidity in the secondary market.

Traders interviewed meanwhile said the auctioned papers saw high demand as markets are pricing in the US Federal Reserve’s planned balance sheet unwinding, signalling a hawkish view on monetary policy.

“The auction was in line with expectations. Prior to the auction, market did bids [that] were between 3.95-4.05%, in line with market indication, and then as expected, there’s still strong demand at the shorter end. That’s why it’s two times oversubscribed – due to the Fed unwinding,” the first trader said via phone.

Another trader said the rally in yields should only be short-lived, with rates likely to rise in the long term as they track the movement of US Treasuries.

“The longer view for the yields is it should go up. There should be a short rally coming anytime now as the Treasury has been consolidating the past few days,” the second trader said by phone.

“It should be higher. It’s more of the unwinding of the Fed and then so far, locally, we’re planning to issue more bonds, so the tendency for the investors is they will wait and see the tenor levels before investing, not unless the yield is good enough,” the trader added.

Meanwhile, the government plans to offer so-called “patriotic bonds” worth P30 billion, which will be earmarked to the rehabilitation of the conflict-torn Marawi City.

Ms. De Leon, however, said that the government is currently awaiting for the needs assessment before providing concrete plan for the bond issuance.

“Anything that we will have to borrow should have an underlying spending program,” she said. — Elijah Joseph C. Tubayan

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