“We’re done,” Chris Paul matter-of-factly noted in the aftermath of the Clippers’ loss to the Jazz yesterday. He was talking about their elimination from the postseason in a Game Seven at the Staples Center, but he could well have been referring to the Core Four that have spearheaded “the other franchise” in La-La Land for the last four years. After all, he, Blake Griffin, and J.J. Redick are heading into free agency, and there is cause to think they will very seriously consider their options. For all their collective skill set, they seem to run into one obstacle after another year after year; freak turns of events or unfortunate matchups have derailed their attempts to meet expectations. Are they simply snakebitten? Or are they really, truly any good together?
To be sure, the Clippers have had ample opportunities to prove themselves despite the curve balls thrown their way. Sure, they lost Griffin to yet another injury in Game Three of this year’s first-round series, making their campaign significantly more difficult. Then again, the opposition likewise competed with a handicap; Rudy Gobert had essentially been around in just two contests due to knee and ankle issues, and been absent or ineffective in the others. Yet, they were largely disengaged in yesterday’s rubber match, going down by 16 in the middle quarters and getting no closer than eight until the final buzzer.
On paper, the Clippers have looked ready and able to take the measure of the best of the National Basketball Association. They have a supermotivator calling the shots and three All-NBA players topbilling a deep, if uneven, roster. Then again, it’s precisely because of their tremendous upside that the results have been disappointing at best. In some cases, the whole can be greater than the sum of its parts. In theirs, it appears to be discounted. As to why, the answer depends on what color the lens from which their body of work is viewed.
No doubt, the Clippers will assess their alternatives as well. Unfortunately, they will not be without handicaps. There is the salary cap. And there is also Rivers’ middling record while wearing his front-office hat. As for the so-called curse, it is what it is until it’s broken. It lives to see another season. How long it hangs over their heads depends on them.
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.
THE PUBLIC’s satisfaction with the national government stayed “very good” last quarter under the administration of President Rodrigo R. Duterte, with noticeably better marks for providing jobs, defending the country’s territorial rights and fighting inflation, according to results of a June Social Weather Stations (SWS) survey. Read the full story.
REDUCING the 20% reserve standard will allow big banks to expand faster with additional funds at its disposal, the head of the Bank of the Philippine Islands (BPI) said, although such a move would have to be carefully timed so as not to cause major disruptions in the banking system.
BPI President and Chief Executive Officer Cezar P. Consing said he supports the Bangko Sentral ng Pilipinas’ (BSP) plan to eventually bring down the reserve requirement ratio (RRR) imposed on universal and commercial banks.
“I am for it because I think our RRR is among the highest in the region. I’d like to see us more in line with the rest of the region. I’d like to see banks being able to grow faster, and I think a lower RRR would help that,” Mr. Consing said in a recent interview in his office in Makati City.
BSP officials have been floating the idea of trimming the RRR since June 2016 as the BSP migrated to an interest rate corridor and introduced weekly term deposit auctions in order to capture excess money supply in the market that has been driving yields lower.
The current 20% RRR for big banks is deemed one of the highest in the world. Effectively, banks must set aside a fifth of their total deposit base with the BSP, which they cannot hand out as loans. These funds are effectively left idle and do not generate returns.
Upon assuming the top post on July 3, BSP Governor Nestor A. Espenilla, Jr. said discussions on the RRR cut remain live within the Monetary Board, with the central bank chief looking to reduce the requirement during his term as it stands as an “inefficiency to the financial system.”
Mr. Consing, however, cautioned against a sudden reduction of the reserve standard, as it could leave banks flooded with cash.
“You can’t do these things lightly. There can be negative effects if you do it too quickly if you do it too much at the wrong time,” the BPI official said, as he noted that he was “very confident” that the BSP will proceed carefully in order to minimize any negative spillovers once the threshold is lowered.
BSP officials have said that any tweaks to the RRR would come at a time of tighter liquidity conditions. The central bank’s weekly term deposit auctions, however, show that there remains ample money supply held by banks even after a year of introducing the new platform.
On the other hand, Mr. Consing said he remains “very comfortable” with current interest rates and robust credit growth, saying the pickup in lending has been “more measured” than the double-digit increases seen years ago.
“As a bank, I’d like to see rates go up a little bit, obviously — but that’s a banker’s view. If you’re the guy on the street, you want rates to stay low as long as you don’t have inflation and there’s good growth,” Mr. Consing said.
The BSP’s policy-setting Monetary Board has kept benchmark rates within the 2.5-3.5% range over the past year and the reserve requirement steady since 2014, as it noted of benign inflation and firm domestic economic activity which did not need fresh interventions from the central bank. — Melissa Luz T. Lopez
Basketball-crazy Filipinos watched the Philippine Gilas team fall short during the recently-concluded 2017 FIBA Asia Championships in Lebanon. The all-Filipino line up fought with their “puso” or heart but still, their honed skills were not enough to land them a podium finish. Many sports analysts agreed that the presence of an import like Andray Blatche would have made a difference.
Similar to our international basketball campaign, “imports” also play a critical role in our nation’s economic advancement.
According to the Philippine Statistics Authority (PSA), the total foreign investments approved for the first quarter of 2017 by at least seven investment promotion agencies amounted to P22.9 billion. The PSA further stated that the Netherlands is providing the most field goals, so to speak, with 27.2% of the total foreign investment commitments.
These foreign investments come in various forms, one of which is by way of equity acquisition in a Philippine company. Pursuant to Republic Act No. 7042, also known as the “Foreign Investments Act of 1991,” foreigners can invest up to 100% in the equity of a domestic enterprise, provided that the enterprise is not in the investment negative list.
Some investors find equity acquisition a convenient way to invest. Joining an already strong team roster is always a better idea than building a squad from scratch. An existing company with goodwill already attached to it is a foreign investor’s dream team.
However, in joining a dream team, a foreign investor should still watch out for some tax considerations. One of the main considerations in buying shares of stock in a company is the tax issues attached to the transaction. In case of a straight sale, the possible tax implications are the Capital Gains Tax, Documentary Stamp Tax, and Donor’s Tax.
Consideration for the transfer of the share is an important factor to determine the possible tax implications. Among these tax implications is that the possibility of introducing donor’s tax into the transaction might confuse the foreign investors. In case the consideration or selling price is less than the fair market value of the shares sold, the difference will be treated as a donation and will be subjected to 30% donor’s tax even if the seller never intended to make a donation.
This imposition of donor’s tax is based on Section 100 of the Tax Code which states that “where property is transferred for less than an adequate and full consideration in money or money’s worth, then the amount by which the fair market value of the property exceeded the value of the consideration shall, for the purpose of the tax imposed by this Chapter, be deemed a gift, and shall be included in computing the amount of gifts made during the calendar year.”
The legislative intent behind this provision is merely to discourage the parties from manipulating the selling price to save on income taxes. Based on prior Bureau of Internal Revenue (BIR) rulings, it was recognized that the deemed gift provision is not absolute and could admit exceptions. One of which is when the sale was entered into as an ordinary commercial transaction for legitimate business purposes between unrelated parties and more importantly, the evil which was sought to be avoided by the law does not exist in the given set of facts (BIR Ruling [DA-(DT-065) 715-09]).
The BIR in another ruling said that for as long as the transaction is conducted at arm’s length such that a bona fide business arrangement was done in the ordinary course of business, a sale for less than an adequate consideration is not subject to donor’s tax (BIR Ruling [DA-652-06]). Further, the BIR ruled that when there is no intention to donate and the transaction was undertaken for a legitimate or bona fide business purpose, the transaction is not subject to donor’s tax (BIR Ruling DA-398-95).
However, the mere absence of donative intent is not sufficient to exempt the sale of the stock from the donor’s tax. The Supreme Court ruled in the case of The Philippine American Life and General Insurance Company, vs. The Secretary of Finance and CIR, that “the absence of donative intent does not exempt the sales of stock transaction from donor’s tax since Sec. 100 of the National Internal Revenue Code categorically states that the amount by which the fair market value of the property exceeded the value of the consideration shall be deemed a gift.”
Significantly, the tax implications do not simply end by paying the taxes due on the transaction. Whenever a transfer of shares is made, securing a Certificate Authorizing Registration (CAR) from the BIR is necessary (RMC No. 37-2012). The CAR is in the nature of a tax clearance certificate, indicating that the tax liability for the transaction has been properly paid. CAR is an indispensable requirement before any transfer of ownership of shares of stock not traded in the stock exchange can be effected.
Under existing rules, CAR may be processed within five days from submission of complete documents. However, such fast track processing has not been consistently put into practice. Taxpayers are aware that it normally takes time for the BIR to release the CAR.
Considering the foregoing, purchasing shares of stock as a mode of foreign investment might look less tedious compared to the other means for which a foreigner may invest in the Philippines. However, as in the game of basketball, we Filipinos play the game here differently. These imports in the field of economic investment must thoroughly consider the nature of how things are done “Filipino-style.”
Resembling sports, proper coaching may reveal helpful strategies for winning. Other means like establishing a new corporation, setting up a branch or representative office, or joint venture arrangements can be more beneficial than acquiring direct equity in an existing domestic company.
A study of the surrounding circumstances should first be thoroughly conducted before a foreign investor should enter into such transaction. It is always advised that a foreign investor should first conduct due diligence before stepping into the court. As basketball legend Larry Bird puts it, “first, master the fundamentals.”
Rizza Mariz P. Mañalac is an associate with the Tax Advisory and Compliance division of P&A Grant Thornton.
In the past few weeks, has a friend sought your advice on something? Have you given him good recommendations, suggestions or solutions to his problems? Has it ever crossed your mind that what you have done is actually an opportunity in both making a difference and making a fortune?
Brendon Burchard’s book entitled “Millionaire Messenger: Make a Difference and a Fortune Sharing Your Advice” tells us that all of us have a story or a message to share. The experiences we’ve had and the learnings we’ve gathered in the creation of our personal narratives could actually impact the world and add value to other people’s lives. What’s even better about it is you can actually earn from it! We are all messengers and we can be millionaire messengers at that.
How do we become Millionaire Messengers? Burchard shares with us a 10‑step program to follow.
Know your message.
What topics are you capable of discussing and are passionate about? Which one of these will help or impart knowledge to other people?
Choose your message’s recipients.
Who are the people you’d want to reach? To whom will your message be relevant the most?
Understand your recipient’s problems.
What are the struggles and challenges your recipients have encountered or are currently encountering? Get to know their pain points and what obstacles are hindering them from what they want to do.
Craft your message.
Develop your personal story and identify what difficulties or challenges you share with your target audience. It is important that your story will shed more light to their stories.
Package your message.
What channels or media will you use in order to share your message and story? In what manner would you want to send your message—writing, speaking, consulting, coaching, online marketing, delivering lectures, seminars, webinars, etc?
Develop your medium.
Once you’ve identified the medium that will best suit your story and personality, start creating it. In our case, we’ve chosen to showcase our many messages and stories through our website, Lifestyle Upgrade 101, and our books, “I Wish They Taught Money in School” and “Money Grows on Trees.”
Sell your message.
Promote your message and let everyone know what it is you offer. Provide them with relevant and quality content. Let your audience know that your message is something worth receiving.
Boost your credibility.
Your recipients will need to know that the messenger is trustworthy. Get their buy‑in by providing them with free content at the beginning. Convincing them that you are worth their time will eventually push them to consume your content even at a price.
Promote your message with the help of others.
Get other people to talk about you and what you do. Tap other institutions, groups or individuals, who would expand your message’s reach into their respective networks. Make them your partners.
Repeat and expand.
The idea is to not only settle with one message but to keep on building your offerings as you go along. What other messages or products could you share with your audience? Keep revisiting your story and always find ways to build your message. Stay relevant at all times.
Right now, we are currently delivering our messages and stories through writing, speaking and marketing online. The journey to being millionaire messengers have been extraordinary and we look forward to doing more and more in the years to come.
Follow these steps and keep on working on your message. We’re sure that soon enough, you too will have books and websites to make a millionaire messenger out of you.
In the meantime, we await the arrival of your message.
Clarissa Seriña‑de la Paz and Sharon W. Que are financial literacy advocates and the bestselling authors of “I Wish They Taught Money in School” and “Money Grows on Trees.” Check out their books at www.lifestyleupgrade101.com.
THE PHILIPPINES will maintain a modest current account deficit that is unlikely to hit alarming levels, with the component trade gap expected to “correct” in the next few years despite imports’ surge, officials of the Bangko Sentral ng Pilipinas (BSP) said.
BSP Governor Nestor A. Espenilla, Jr. allayed persistent concerns about a ballooning deficit in the country’s external payments position, saying that such worries should not weigh on the Philippine economy.
“[W]hat we need to take a look at, as it is, we are not talking about a blow-away current account deficit. The current account deficit today is much lower than one percent of GDP (gross domestic product), and we have no intention to see the current account deficit go higher than one percent of GDP,” Mr. Espenilla said at a forum hosted by the Economic Journalists Association of the Philippines on Friday.
The current account measures money flows from goods and services trade. A deficit means more funds from goods and service trading left the country than entered in a particular period.
The Philippines posted a $318-million current account deficit in the first quarter, equivalent to 0.4% of GDP.
The central bank expects the full-year balance to settle at a $600-million deficit equivalent to 0.2% of GDP — the biggest in 15 years – amid heavy importation of raw materials and capital goods as the Philippine government kicks off its ambitious P8.44-trillion five-year infrastructure spending program.
If realized, this would turn around from the $601-million surplus actually recorded in 2016.
Mr. Espenilla dismissed concerns about the increasing trade gap, stressing that it was natural for a developing economy to spend more in order to “accelerate investment ambitions.”
‘WE SHOULDN’T BE IN TROUBLE’
“What’s behind it is ramping up of investments. These investments, properly executed, should enlarge our productive capacity and our ability to export and produce goods and services,” the BSP chief said.
“So long as these investments are good investments, we shouldn’t be in trouble. The situation should remain very manageable,” Mr. Espenilla assured, adding that the current account should correct itself over time.
BSP Managing Director Francisco G. Dakila, Jr. said separately that the current account would be worrisome if the gap stretches to an equivalent of 3-4% of GDP.
“It’s probably just because the mindset is that, for quite some time, we had been experiencing the current account surplus, so the shift to a current account deficit is something which is quite new,” Mr. Dakila said during a roundtable discussion with reporters.
Analysts have said that the Philippines’ vanishing current account surplus has significantly weighed on sentiment towards the local currency, adding to external developments and geopolitical tensions that turn investors away from emerging-market currencies and towards the dollar as safe haven.
The peso traded at 11-year-lows earlier this month to settle at the P51 level versus the greenback. Year-to-date, the local unit has depreciated by 2.74%. — Melissa Luz T. Lopez
AFTER NEARLY seven months since sanctions were imposed on mines deemed to have transgressed environment laws, the multi-agency Mining Industry Coordinating Council (MICC) is expected to start its review of those orders by the end of September.
With a short list of mining experts and a partial budget in the bag, Finance Undersecretary Bayani H. Agabin told reporters on the sidelines of the Economic Journalists Association of the Philippines’ forum last Friday, “We’re looking at end of September,” when asked for the timetable for the start of the review.
Mr. Agabin had said earlier that Department of Environment and Natural Resources (DENR) — under Secretary Roy A. Cimatu who replaced staunch environmentalist Regina Paz L. Lopez in May — will provide P10 million, adding to another P10 million from the Department of Finance (DoF) to partly fund the review process. While the total is less than half the P50 million seen needed to complete the review, it should be enough to start the process, he had said.
The review, which is estimated to take three months to complete, will review DENR’s decision in early February to shutter more than half of the country’s 41 operating metal mines. It will be conducted by experts in the legal, social, economic, mineral development and environment dimensions of mining.
Mr. Agabin had also said that, after that review, the MICC will turn its attention on DENR’s subsequent orders in mid-February for 75 other projects still in pre-production stage to explain why they should not be similarly sanctioned for violations of environment laws.
It was that subsequent crackdown that caused the country’s wider business community to voice its concern on the integrity of the country’s investment rules, and prompted the DoF, which co-chairs the MICC with the DENR, to convene the multi-agency council.
Mr. Agabin added that MICC will also look into the DENR’s ban on open-pit mining imposed last April. “That’s the second thing that we have discussed that is important. MICC tasked the technical working group on economic fairs and on environment to again study whether open-pit mining should be allowed or not, because right now, there’s a department order that imposes a ban. We just have to re-study that,” he said.
Asked why the original schedule to start the review in March was not met, Mr. Agabin replied: “It is difficult to get experts because we want them to be independent… to be an expert you have to be working in a mine. So, we have to relax it a little bit: so (you can) have work with the mine, but you cannot audit the mine that you work in. — EJCT
HANOI — Nguyen Van Duc graduated two years ago with a bachelor’s degree in economics from one of Vietnam’s best universities.
Students and other attendees listen as US Secretary of State John Kerry speaks at the Ho Chi Minh University of Technology and Education in Ho Chi Minh City on January 13, 2017. — AFP
Today, he earns about $250 a month as a motorbike taxi driver in Hanoi.
Duc, whose parents took second jobs so he could be the only one of three children to attend college, is among thousands of Vietnamese college graduates who can’t land jobs in their chosen field, even though the nation’s unemployment rate is just 2.3%.
“In university, we only received heavy theoretical training and a lot of Ho Chi Minh’s ideology with communist party history,” the 25-year-old said.
While Vietnam’s schools equip students with basic skills for low-wage assembly-line work, its colleges and universities are failing to prepare youth for more complex work.
As wages rise and basic manufacturing leaves for less expensive countries, that may threaten the government’s ambition to attain middle-income status, defined by the World Bank as per capita income of more than $4,000, or almost twice the current rate.
“Countries that have been successful moving up to the next economic stage already had developed country levels of education when they were middle-income economies,” said Scott Rozelle, a Stanford University development economist.
“Countries that didn’t have that collapsed or became stuck in the middle-income trap.”
Singapore, South Korea and Taiwan developed high-quality colleges long before their economies needed a more educated work force, he said.
Conversely, economies such as Argentina, Brazil and Mexico slowed after reaching middle-income status — in part because of insufficient investments in education, Mr. Rozelle said.
College students frequently spend much of their first two years learning about revolutionary leader Ho Chi Minh, socialism and party history at the expense of critical thinking and other skills expected by employers.
The upshot: firms are reluctant to pay more for workers with degrees that often lack commensurate skills, says the Vietnam Chamber of Commerce and Industry.
The jobless rate among young people with university degrees is 17%.
UNDER PRESSURE
“You have private and foreign companies arriving that want better skilled workers, quality managers and engineers,” said Nguyen Xuan Thanh, a senior fellow at the Harvard Kennedy School of Government in Ho Chi Minh City.
“The middle class is expanding. Vietnam families want better education. So the pressure is on the political system to deliver.”
More parents are now sending their children overseas to study in order to improve their work prospects.
The number of Vietnamese studying in Japan, including language schools, grew more than 12-fold in the six years to May 2016, reaching about 54,000, according to the Japan Student Services Organization.
Authorities acknowledge the challenge.
“The government is trying to improve the quality of training in college and university,” said Nguyen Minh Thuyet, who is overseeing the Ministry of Education’s new curriculum strategy.
“We need to overhaul their curricula to reduce training of impractical subjects,” Mr. Nguyen explained.
“But the progress is still very slow. Not much has been done.”
Vietnam has expanded the number of colleges and universities across the nation over the last decade to about 450.
The government plans to have 560,000 new students enter college and university in 2020, which will be about an eight percent increase over 10 years.
Despite the nation’s 97% literacy rate, just a third of Vietnam’s labor force had a high school degree last year, according to the Institute of Labor Science and Social Affairs.
At this stage of development, Vietnam has posted rapid expansion rates even with its low productivity record — the World Bank forecasts growth will exceed six percent until 2019.
But it remains miles behind regional peers when it comes to getting the most out of its work force.
The economy has one of the weakest industrial productivity levels in the Association of Southeast Asian Nations. Singapore’s is 26 times higher than Vietnam; Malaysia 6.5 times greater and Thailand and Philippines about 1.5 times.
NEW PROGRAMS
There are some reasons for optimism.
Fulbright University Vietnam, the first independent and non-profit institution approved by the government that received initial funding from the US State Department, opens this fall, said Thuy Dam Bich, Fulbright’s president.
Marxism will be taught as it would in western universities — along with philosophers such as Hegel and Kant, she added.
Companies are also providing additional education to get workers up to speed. FPT Corp., the country’s largest listed telecom and technology company, has educational branches around the country for about 20,000 high school, college and university students. Intel Corp., which operates an assembly and test plant in Ho Chi Minh City, has committed to spending $22 million on several programs.
But for those stuck in the state system, education can be “a big waste of time and money,” said Luu Quang Tuan, deputy head of the Institute of Labour Science and Social Affairs.
“Many graduates lack critical skills such as teamwork and organizational skills to work in companies,” he said.
“It is also holding back the economy.” — Bloomberg
THE BATTLE to take back Marawi City from Islamic militants, martial law over all of Mindanao and damage from the Visayas quake added to the weakening peso and the rainy season to weigh on business sentiment this quarter, taking the overall confidence index to its weakest in three years, the central bank reported on Friday. Read the full story.
ALAIN Spinedi, CEO of Louis Erard, is in the best position to talk about the company and its products. “I’m the guy who knows the collection best, I know all the reference numbers,” he said in an Aug. 22 presentation marking the Swiss watch brand’s reentry into the Philippines.
Louis Erard Sport Chrono (watch with metal bracelet) — BRIAN M. AFUANG
“I am intimate with the brand.”
Such familiarity allows Mr. Spinedi to be honest about Louis Erard’s strategy in the Philippines, admitting he “made a mistake” in positioning the brand upon its initial foray in the country. He said: “We came in with ‘me-too’ products that one can find in many other brands. And then we didn’t do anything — we thought only about prices. Twenty years ago, you just put a product in the window. Today’s buyers are different. They are not buying the product; they are buying into the whole brand.
“This time, we have chosen a completely different approach through some very unique designs… to bring in sophisticated products to the Philippines,” Mr. Spinedi said regarding Louis Erard’s comeback through Lucerne Luxe, retailer of the Swiss watch industry’s best wares. “Together with Lucerne’s ideas, we can always tell a story around the product.”
At Louis Erard that story is premised on what the company chief describes as “accessible luxury,” typified by timepieces lavished with complications but which are tagged with mid-tier prices. Headlining the list is the brand’s Regulator & Power Reserve model that belongs to the Excellence collection.
As its name identifies it, this watch has separate dials for the hour, minute, and second readout. The top subdial tells the hour, the bottom one sweeps the seconds, and minutes are counted on the watch’s main dial. Located at nine o’clock is a power reserve meter, a handy touch since the watch relies on a hand-wound ETA Peseux 7001 movement that has been tweaked in-house. Besides details like a sapphire crystal and an engraved case back, the watch also flaunts blue finishing for each of its four hands. Such touches approximate high horology stuff while sticking to a price tag that does not breach mid-tier levels.
“This is how we develop our haute horlogerie image for Louis Erard. Differentiating us from our competitors in the same price range are watches like the Regulator,” Mr. Spinedi explained.
The Regulator actually goes deeper into Louis Erard’s history. Mr. Spinedi said the watch’s module (“not the movement,” he was quick to clarify) was developed by the man after whom the brand is named. (Louis Erard watches first came out in 1931, but like most Swiss watch companies, fell quiet in later decades. Mr. Spinedi headed its rebirth in 2003.)
“The Regulator is a signature for Louis Erard,” he said.
GETTING DESIGN RIGHT
Design is inherent in the brand as well, influenced by Mr. Spinedi himself as he points the direction the design of the company’s produce takes.
“I give a brief to the designers. I tell them we buy this movement, use a skeleton… we discuss; do we use steel, or blue screws, or a gray or a black dial? And they do the rest,” he said, noting he has only rejected one watch design so far.
“It was a little bit of a crisis,” he recalled. “But a couple of years later they said I was right.”
Mr. Spinedi bared he also prefers working with a small team, bringing with him only three people “on the table” to discuss a new product, and dealing with a sole designer for a project. “I tried once to work with two designers. It was a disaster.”
Recent discussions have led to the introduction of a new model intended to expand Louis Erard’s appeal to younger buyers — the Sportive Sport Chrono collection. Aimed at people 35 years old or younger, the pieces go against the traditionally classical designs for which Louis Erard has been known since its 2003 resurrection. The Sport Chrono mixes together elements that make chronographs popular (a three-subdial layout and black bezel on a substantial 44-millimeter case) with a legendary movement — the ETA Valjoux 7750. This means the watch looks back at tradition but is also contemporary enough.
“Classic design is always a part of our strategy. But the Sport Chrono has [the kind of] classic design that’s also modern, not old-looking,” according to Mr. Spinedi.
What is also a part of the company’s plans is to keep its watches’ prices reasonable; Mr. Spinedi said he restarted Louis Erard because of the dearth of mechanical timepieces on offer that cost between $600 and $2,000. Though some models are now priced markedly higher over the range — the result of a stronger Swiss franc and the supply crimp in ETA movements — Mr. Spinedi argued these watches still represent good value.
“We have lost a little bit of our USP of extremely affordable watches. But it’s very difficult to find this kind of quality product from other brands,” he said.
In its return to the Philippines, Louis Erard is banking on the merits of its higher-end models, positioning these as more affordable but equally competent alternatives to the established European brands. Plus, it is also keen on offering value rather than focusing on volume.
“It is true that Louis Erard has very little brand awareness in the Philippines today,” Mr. Spinedi admitted. “So we need to communicate the value [inherent] in our watches.
“I believe the end users of Louis Erard in this country do not want mass-produced products. Our buyers are people who will say ‘I want to be unique.’”
