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eSports league announces franchises for Overwatch tilt

SAN FRANCISCO — A league being formed for local-based eSports — competitive video gaming as a spectator event — has awarded seven franchises aimed at fueling the fires of fans with city-based teams.

Computer game giant Activision Blizzard announced Wednesday team rights in the Overwatch league, with buyers including the NFL’s New England Patriots owner Robert Kraft and baseball’s New York Mets chief operating officer Jeff Wilpon.

Teams have been bought in Boston, New York, Los Angeles, Miami, San Francisco, Shanghai, and Seoul for what is being touted as the first eSports league with teams rooted in cities.

Although millions of people watch eSports online and at global tournaments, backers of Overwatch say this approach is likely to draw in new audiences which can develop loyalty to their local players and attend community competitions.

Establishing local teams to compete in an Activision league devoted to its hit video game Overwatch could lead to some of the same treatment as traditional sports, with local matches held in real-world venues and trash-talk by fans wearing garb emblazoned with team logos.

“I think anchoring eSports teams in a community will change the way people think about the spectator experience,” Activision chief executive Bobby Kotick told AFP.

“The thing we really like about traditional leagues is local fans.”

Activision did not disclose the price of the franchises, but a source close to the matter confirmed reports that each cost about $20 million.

Kevin Chou, cofounder of mobile game company Kabam, bought the rights to a Seoul team, predicting that the league was going to take eSports “to the next level” in terms of market size and fan engagement.

Chou said he is partnering with a stadium in Seoul that can pack about 10,000 people and that he intends to fill the venue for Overwatch matches.

LOCAL HEROES
This league will be focused on competitive play of Activision’s team-based shooter game Overwatch, and a goal of building professional stars — possibly with big-league payouts.

The league is to get started later this year, with initial matches taking place in Southern California. Teams will share revenue generated by the latest entry in the booming trend of computer game play as spectator sport, according to Kotick.

New team owners will be recruiting players and getting rosters formed in coming months.

Kotick envisioned Overwatch players becoming local heroes and role models, similar to stars of real world sports.

“I think this is the next evolution of sports, and we want to be part of it,” Wilpon of the Mets baseball team told AFP.

“When you start seeing people wearing team hats and T-shirts around town, that will be very exciting.”

Advertisers aiming to reach real-world baseball fans have been expressing interest in ways to connect with online viewers, according to Wilpon.

“I see out advertisers looking for something different than we are giving them in the ballpark,” Wilpon said.

“And, there are advertisers in eSports wanting to go mainstream to local networks, so there are some cross-pieces we see that are very exciting.”

It is certainly a money-spinning industry, with global revenue in the hundreds of millions of dollars and growing, according to industry trackers.

Data shows that eSports fans watch and compete in growing numbers, bringing passion akin to that seen in traditional sports which have started to see audiences skew older, according to Kotick.

“We realized there is a great economic opportunity in eSports that would be enhanced with entrepreneurs as team owners,” Kotick said.

Overwatch boasts 30 million players around the world. Meanwhile, hundreds of millions of people watch eSports.

A strong focus of the Overwatch League is to provide competitive gamers with the kind of status typically given to professional athletes in traditional sports.

Teams in the league will share in revenue from sources such as licensing, broadcast rights, and ticket sales, according to Activision.

Overwatch was designed for eSports experiences, building in features such as international settings and characters representing a wide range of demographics, according the chief executive. — AFP

Maynilad allots P378M for sanitation program

MAYNILAD Water Services, Inc. is setting aside P378 million for its five-year sanitation program ending in 2022 as part of its mandate to help in protecting community health and the environment.

In a statement, the company said P318 million of the amount is allocated for the acquisition of 56 new vacuum truck units, which will expand its septic tank cleaning services to more customers.

“We appeal to our customers to have their septic tanks desludged because not doing so will result in serious environmental, health, and safety risks to their family and community,” Maynilad President and CEO Ramoncito S. Fernandez said.

Maynilad said the budget for the trucks include smaller vacuum truck units with a capacity of 4 cubic meters. The units can enter narrow alleys “so that formerly inaccessible houses may be reached and provided desludging services,” it said.

The company said the remaining amount will be used to buy more septage treatment equipment, which will allow for the projected increase in septage collected from septic tanks in the coming years.

It said the sanitation program is part of the company’s P30.6-billion wastewater management program for the next five years.

“Maynilad customers interested in availing of the company’s septic tank cleaning service may call the Maynilad Hot line 1626 to determine the requirements and procedures,” the company said.

Maynilad serves most of Manila, parts of Quezon and Makati cities, as well as the cities of Caloocan, Pasay, Parañaque, Las Piñas, Valenzuela, Navotas and Malabon. Its franchise area includes the cities of Bacoor and Imus and the municipalities of Kawit, Noveleta and Rosario in Cavite.

Metro Pacific Investments Corp., which has a 52.8% stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. — Victor V. Saulon

Streaming TV apps grapple with password sharing

MORE THAN ONE-FIFTH of young adults who stream shows like Game of Thrones or Stranger Things borrow passwords from people who do not live with them, according to a Reuters/Ipsos poll, a finding that suggests media companies are missing out on significant revenue as digital viewership explodes.

Twenty-one percent of streaming viewers ages 18 to 24 said they had accessed at least one digital video service such as Netflix, Inc, HBO Now, or Hulu by using log-in credentials from someone outside their household at some time. Overall, 12% of adults said they did the same thing.

Subscription revenue is likely to come under scrutiny starting next week when TV industry players begin reporting quarterly earnings. Netflix, the dominant streaming service, releases its results on Monday.

Up to now, Netflix and other streaming networks have accepted some password-sharing, but they may face pressure from investors to change course if new sign-ups slow substantially, Wall Street analysts said. Revenue growth at Netflix is projected to drop from 31% in this year’s second quarter to 19% in the second quarter of next year, according to Thomson Reuters I/B/E/S.

“If Netflix goes from a 30% revenue growth story to a 10% story, there is absolutely going to be more focus on their leaving money on the table,” said Justin Patterson, an analyst with Raymond James.

Netflix declined to comment.

Respondents to the Reuters/Ipsos survey said they borrow passwords to save money on video subscriptions, which can be cheap on their own but add up with multiple services.

Donielle Bradshaw, a live-in nanny in Smyrna, Georgia, said she uses her 28-year-old sister’s password for Hulu, and her 32-year-old brother’s password for Netflix.

“I feel like since we are family, it’s OK,” said Bradshaw, 22, who estimates she watches four hours of shows on weeknights and 10 hours a day on weekends.

If companies cracked down on password sharing, Bradshaw said she would be willing to pay for her own Netflix subscription but is not sure about Hulu, which is owned by several media companies. “I binge a lot of shows on Netflix. I don’t think I could do without it,” she said.

Companies say they accept some sharing as a way to promote their programming to potential customers, but they also take steps to curtail blatant freeloading.

Many networks limit the number of people who can watch programming at the same time. Netflix, for example, allows two to four simultaneous streams per subscription, depending on the plan, and charges more for the higher number of streams.

HBO, a unit of Time Warner, Inc, actually encourages younger viewers to use its HBO Now and HBO Go services for free by offering it to about 100 US colleges and universities.

“For us it’s more important that at that age where they are not financially independent quite yet, they are habituating to using the product to ultimately aspiring to becoming paid customers,” Bernadette Aulestia, executive vice-president of global distribution, said in an interview.

Netflix executives also have said they know some viewers share passwords.

“We could crack down on it, but you wouldn’t suddenly turn all those folks to paid users,” Netflix Chief Financial Officer David Wells said at a Goldman Sachs conference last September.

MISSING A CHANCE
Industry analysts say companies are missing a chance to grow revenue. An analysis by Parks Associates estimated streaming providers will lose $550 million in 2019 from password sharing.

“There has been this kind of cavalier attitude about it,” Parks Associates analyst Glenn Hower said. “It hasn’t been a priority.”

Companies could crack down if they want. Cisco Systems, Inc., for example, sells products that can detect abnormal activity on an account such as an unusual time or place, said Conrad Clemson, Cisco’s senior vice-president and general manager of service provider platforms and applications.

Cisco’s customers, which include streaming services and pay TV distributors, decide whether to use the information simply for monitoring or take additional steps such as sending a warning to account holders or shutting down an account, he said.

“A lot of service providers and content providers are very much in the experimental phase right now,” he said.

Streaming providers say they do track account use but have provided few specifics.

The Reuters/Ipsos poll was conducted online in English throughout the United States from June 8 to June 26. It gathered responses from 4,453 adults, including 3,557 people who said they streamed video from their cable TV provider or from standalone services like Amazon Prime, Hulu or Netflix. The poll has a credibility interval, a measure of accuracy, of 2 percentage points. — Reuters

Wacom targets 30% sales growth in PHL

TECHNOLOGY firm Wacom is looking to grow its business in the Philippines by at least 30% this year as it expects increased demand for its products citing the country’s position as a new art talent hub.

“There is an increasing demand for Filipino artists which means more demand [for our products]… the Philippines last year was the top source of artists in the ASEAN for major studios,” Antonius Malabanan, Wacom country manager for the Philippines, said during the launch 10 new products. “We’re targeting 30% growth in sales this year.”

The 35-year-old Japanese firm, which offers intuitive and natural user interface technologies used in smartphones and tablets for creatives, started its Philippine operations 20 years ago. The Philippines is its third top market in the region, after Thailand and Indonesia.

“There’s a need of 5,000 new artists in the next three years just to meet the demand of work from abroad,” Mr. Malabanan noted.

He added company’s target market in the Philippines are both consumer and the growing creative segment, also with the introduction of the K-12 program which offers creative courses.

Wacom Senior Director for Sales (Southeast Asia and South Asia) Ong Khiaw Seng, for his part, said that the long-term plan is to double its sales in the country as the animation industry in the Philippines is also growing.

“Long term or the next five years, we target to double (our revenue,” Mr. Seng said, although he did not disclose the financials of the company.

Historically, its most in-demand product is its entry-level Intous product — a line of creative pen tablets used by for drawing, sketching and photo activities.

Its new products include Wacom pen computers, pen displays, pen tablets, smartpads, and consumer-range line of styli for different creative needs.

The company sold 4,000 units in 2015 and 6,000 units last year. — I.C.C. Delavin

How PSEi member stocks performed — July 13, 2017

Here’s a quick glance at how PSEi stocks fared on Thursday, July 13, 2017.

Michael Jackson estate plans TV animated Halloween special

NEW YORK — An animated television special featuring Michael Jackson will premiere this year for Halloween in the latest posthumous project by the estate of the late King of Pop.

The estate said Michael Jackson’s Halloween will air on CBS in the United States around the Oct. 31 holiday dedicated to the ghoulish and supernatural.

The estate said in an announcement Tuesday that it was also in talks to broadcast Michael Jackson’s Halloween abroad.

Since Jackson’s sudden death in 2009, his estate has pursued a range of projects to monetize the legacy of one of pop history’s top-selling artists.

Success has been mixed, with the estate putting up for sale his Neverland ranch in California after early talk of preserving it.

Two new albums of unreleased material have come out since Jackson’s death but one of them, 2010’s Michael, was marred by controversy over whether Jackson would have wanted the unfinished music released or if he was even singing on all the tracks.

Jackson was an early enthusiast of adapting his music to videos and short films with his “Thriller,” a 14-minute extravaganza of Halloween-like characters, becoming a landmark in music history when it was released in 1983. — AFP

Hot money enters in June, flees in 1st half

By Melissa Luz T. Lopez, Senior Reporter

MORE FLIGHTY foreign capital entered the country in June on the back of investor confidence with legislative approval of the first tax reform package and “accelerated” net foreign buying at the Philippine Stock Exchange (PSE), the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

But June’s net inflow was not able to prevent the six-month tally to slip to a net outflow from a net inflow recorded in 2016’s first half.

Foreign portfolio investments yielded a $79.56-million net inflow last month, recovering from May’s $24.35-million net outflow but still dwarfed by the $450.87-million net inflow in June 2016.

Such investments are often called “hot money” given the ease by which these funds enter and leave markets, versus the more stable foreign direct investments.

The Philippines got $2.016 billion in aggregate inflows last month, 35.77% more than May’s $1.285 billion and 11.41% more than June 2016’s $1.81 billion.

Outflows totaled some $1.937 billion last month, 28.31% more than May’s $1.509 billion and 42.52% more than June 2016’s $1.359 billion.

Net inflows in June’s first two weeks offset outbound capital as the month drew to a close, central bank showed.

“This may be attributed to positive investor sentiment relative to the anticipated resolution of the conflict in Marawi City, accelerated net foreign buying, and approval by Congress of the first tax reform package,” the BSP said in a statement yesterday.

On May 31, the House of Representatives approved on third and final reading its version of the tax reform bill, which seeks to reduce personal income taxes while raising fresh revenues from higher excise levies on fuel, cars and sugar-sweetened drinks. The reform is now in the Senate, which has questioned moves to remove value added tax exemption of lower housing segments and of cooperatives, among other concerns. The Finance department wants to implement these tax adjustments by January 2018.

About 82% of capital inflows went to PSE-listed firms — mostly to shares of holding firms, property companies, telecommunications firms, banks and utilities — yielding $311-million net inflows.

About 17.2% went to peso-denominated government securities while the 0.8% balance went to other peso-denominated debt papers, yielding a $247-million net outflow and a $16 million net inflow, respectively.

Investors also anticipated the end of conflict in Marawi City between government forces and hundreds of militants who had pledged allegiance to the Islamic State, the BSP said.

Clashes in that central Mindanao city have been raging for nearly two months since they erupted on May 23.

The 60-day martial law proclamation covering the entire Mindanao that was declared after the Marawi conflict erupted is set to expire on July 22.

The government has yet to declare Marawi as completely free of terrorists, but President Rodrigo R. Duterte had said last Tuesday that he expected the crisis to lift in “10-15 days”.

The peso also returned above the P50 level versus the dollar since June 20 and has since been trading at 10-year lows.

OUTFLOWS IN FIRST HALF
Despite hot money’s recovery in June, the first semester still saw a $460.83-million net outflow, reversing from the $593.87-million net inflow recorded in 2016’s comparable six months.

The central bank said this reflected heightened market uncertainty due to local and international developments like the Department of Environment and Natural Resources’ crackdown in February on several mining projects and interest rate increases in the United States in March and June.

The United States, the United Kingdom, Singapore, Malaysia, and Luxembourg were the biggest sources of foreign funds in June, accounting for a cumulative 80.1%.

The US continued to be the main destination of outflows, getting 64.7% of the total.

OUTLOOK

“Robust economic growth and manageable inflation that are supported by appropriate fiscal and monetary policies coupled with healthy corporate earnings will help attract more foreign portfolio capital into the country,” said Angelo B. Taningco, economist at Security Bank Corp., adding that “progress in tax reform deliberations and infrastructure spending in the upcoming months will be a boost to foreign investor sentiment, and delays on these two could pose a concern or challenge in encouraging foreign portfolio investments.”

The central bank expects hot money to post a $900-million net outflow this year, reversing a $404.43-million inflow in 2016, according to latest official estimates announced last month.

Trump in Paris with Russia scandal in tow

PARIS — Donald J. Trump arrived in Paris on Thursday for a presidential visit filled with Bastille Day pomp and which the White House hopes will offer respite from rolling scandal back home.

Air Force One touched down at Paris’ Orly airport shortly after 0630 GMT, with US president beginning a 24-hour trip that coincides with France’s national day on Friday and the 100th anniversary of US involvement in World War I.

Accompanied by First Lady Melania Trump, the 71-year-old stepped onto French soil for the first time as president hoping the visit will distract from weighty allegations that his family and inner circle colluded with Russia to win the 2016 US election.

The scandal has put his son and top aides in legal jeopardy and cast a pall over his efforts to remake American politics.

During the lightning visit, Mr. Trump — who sees himself as a transformative figure in US politics — will be the guest of honor at festivities marking a pivotal point in the French Revolution, after a trip to Napoleon’s tomb and a Michelin-starred dinner at the Eiffel Tower.

Mr. Trump and his host, recently-elected French President Emmanuel Macron, will watch troops parade down the Champs-Elysees and mark 100 years since America entered World War I on France’s side.

Mr. Macron, 39, is hoping to use the weight of history and French grandeur to charm the unpredictable Mr. Trump — six weeks after welcoming Russia’s Vladimir Putin at the grandiose Palace of Versailles.

In London, Berlin, Brussels and Paris, European leaders are wondering how best to handle the US president, whose nationalist “America First” agenda has upended transatlantic relations.

Mr. Macron hopes to build a relationship with the new occupant of the White House that might enable him to influence US policy or, at the least, help avoid serious strains between the EU and Washington.

There are already tensions over climate change and trade, while Mr. Trump was openly critical of the EU last year and snubbed a handshake with German Chancellor Angela Merkel during their first meeting in March.

“It’s very difficult to play chess with a man whose strategy is a complete mystery and whose only consistency is his pursuit of American national interest,” foreign affairs expert Bertrand Badie of Sciences Po university in Paris told AFP.

“To imagine that you might change his mind on something is simply mad.”

MACRON, THE ‘ANTI-TRUMP’
Talks between the two leaders are expected to focus on joint efforts to combat the Islamic State group in Iraq and Syria, where American and French troops are in action side-by-side. They will dine together at the Jules Verne restaurant up the Eiffel Tower, enjoying stunning views of the French capital along with their wives Melania and Brigitte.

Messrs. Trump and Macron appear to have little in common, with their views at odds on everything from globalization to immigration.

Mr. Macron was even described as the “anti-Trump” during his run for the French presidency this year.

As well as a huge generational gap — Mr. Trump at 71 is almost twice Macron’s age — there is scant evidence of any overlap of interests in their personal lives.

Mr. Macron also criticized Mr. Trump’s decision to withdraw the United States from the global Paris climate change agreement last month and used the American’s own slogan against him, saying: “Make our planet great again.”

Mr. Macron told regional newspaper Ouest-France on Thursday that Paris and Washington had “an essential point of convergence: fighting terrorism and protecting our vital interests.”

However, he also lamented “a protectionist tendency (which) has resurfaced in the United States.”

“I want to defend free and fair trade,” he added.

But sources in the French presidency insist ties are healthy even after a muscular handshake seen as a battle of wills between the two of them when they first met at a NATO summit in May.

“The relationship is excellent,” said one member of Mr. Macron’s team.

PRAGMATIC APPROACH
Manuel Lafont-Rapnouil, an expert at the European Council on Foreign Relations think tank, said Mr. Macron had no choice but to try to build ties with the US president.

“Whatever you think, the United States is still the United States and we need them on lots of issues. You can’t just say ‘Trump is there so let’s wait until he’s gone,’” he told AFP.

“Even if it is very difficult to handle someone as unpredictable as him, you need to try to salvage what you can.”

Nearly 11,000 police officers will be on duty, with France in its highest state of alert after a string of terror attacks since 2015 that have killed more than 300 people.

And in early July, police charged a 23-year-old suspected far-right activist with plotting to assassinate Mr. Macron at the Bastille Day parade. — AFP

Megawide sets rail foray

By Imee Charlee C. Delavin, Senior Reporter

MEGAWIDE Construction Corp. — which had been an active competitor for public-private partnership (PPP) deals in the previous administration — is venturing into railways with its acquisition of a stake in a consortium that aims to build an elevated 9.77-kilometer line between Diliman in Quezon City and Lerma in the City of Manila.

“Megawide has acquired the right to participate in the Philippine National Railways’(PNR) East-West Railway Project (EWRP) from the project consortium composed of East-West Rail Transit Corporation and Alloy MTD,” Megawide said in a regulatory filing on Thursday, confirming an earlier disclosure of A Brown Company Inc., one of the members of the East-West Rail Transit Corp (EWRTC) consortium together with Netcore Dev’t. Ltd. and Venere Holdings Ltd.

“Megawide has the option to buy up to 60% of the equity of the special purpose company that will be incorporated for the project.”

A. Brown had said in its July 12 regulatory filing that the consortium of East-West Rail Transit Corp. has given Megawide the right to participate in the PNR East West Railway Project as an additional consortium member and the project consortium will now be composed of EWRTC, Alloy MTD and Megawide.

The EWRP, which will run along Quezon Avenue and España Boulevard, will have 11 stations and provide interconnecting facilities with neighboring railways, according to the PPP Center’s Web site.

It has yet to bag approval of the Investment Coordination Committee of the National Economic and Development Authority (NEDA) which is the penultimate green light needed before final approval by the NEDA Board that is headed by President Rodrigo R. Duterte.

DIVERSIFYING FURTHER
Sought for details yesterday, Megawide President and Chief Operating Officer Edgar B. Saavedra said the development is part of the company’s move to diversify its portfolio.

“Part of our diversification program is to invest in transportation infrastructure such as airport, transport terminal, roads and rails wherein we can leverage on our engineering expertise in building efficient infrastructures and operating experience in airport,” Mr. Saavedra said.

“We’d like to replicate our success and learnings from operating the MCIA (Mactan-Cebu International Airport) into rails.”

Megawide and Bangalore-based airport operator GMR Infrastructure Ltd., won in April 2014 the contract for the P17.52-billion MCIA project under PPP program of the government of former president Benigno S. C. Aquino III.

“For now, we’re just confirming our participation following A. Brown’s disclosure. It’s still [subject] for NEDA approval and the design also will still be finalized so we can expect numbers like cost and acquisition to keep moving,” Mr Saavedra said.

The Duterte administration has veered away from relying only on PPP, arguing that it took an average of three years from conceptualization for a project to start construction under that framework.

Instead, it is pushing a “hybrid” framework that will rely on national government or official development assistance (ODA)funding for the construction phase and PPP for operation and maintenance. Some businessmen have questioned the wisdom of that shift, arguing that the government lacked competence for such major projects and that state debt could unduly balloon in the ODA route.

In its disclosure to the Philippine Stock Exchange, Megawide said its entry into the project is a “testament to its deep experience” as an engineering, procurement and construction contractor.

“Megawide supports the Duterte administration in its push for reliable, sustainable transport infrastructure,” Mr. Saavedra was quoted as saying.

“A solution is needed for Metro Manila’s worsening traffic congestion and we believe efficient mass transportation is the answer,” he added.

“Engineering and construction are vital components in any infrastructure project; in fact, they are the basis of Megawide’s capability in infrastructure development. This will guide our participation and vision for EWRP.”

Aside from the MCIA contract, Megawide was awarded the PPP for School Infrastructure Project (PSIP) Phases 1 and 2 that entailed the construction of almost 10,000 classrooms across Luzon and costs P9.89 billion and P3.86 billion respectively; and the P2.5-billion Southwest Integrated Transport System, the country’s first integrated transport hub.

Construction of PSIP’s first phase — consisting of 9,296 classrooms in the Ilocos Region, Central Luzon and in the Cavite-Laguna-Batangas-Rizal-Quezon region immediately south of Metro Manila — was completed on Dec. 4, 2015.

Sought for comment, Luis A. Limlingan, business development head at Regina Capital Development Corp., said: “All companies need to diversify their portfolios.”

Summit Securities, Inc. President Harry G. Liu for his part said the move could be a “long-term vision” of Megawide given “increasing number of rail projects” in the government’s pipeline.

“[They] want to participate in infrastructure developments to ease traffic,” he noted.

Megawide saw its consolidated net income dip four percent in the first quarter of the year to P549.01 million from the P573 million it made in 2016’s comparable three months as its construction business slowed, even as returns from its MCIA operations continued to grow.

The listed builder attributed the slight decline to the “cyclicality of the construction industry” in that period, while noting that construction is expected to ramp up this semester and enable the firm to meet its targets.

The construction business contributed 88% to total consolidated earnings in the first quarter, while its MCIA operations accounted for 12%.

Earlier, Megawide expressed its interest to participate in the various airport projects of the government.

Megawide, along with GMR Infrastructure Ltd., said it is open to joining the bidding for the P12.55-billion Clark International Airport Expansion Project which the government will offer to investors.

Megawide shares gained eight centavos or 0.44% to end Thursday’s trading at P18.26 each, outdoing the industrial sectoral index — under which its shares are listed — which fell by 0.12%.

China says upholds sanctions as North Korea trade rises

BEIJING — China insisted Thursday it was abiding by UN sanctions on North Korea despite a jump in its trade with the nuclear-armed nation that comes amid growing US calls for Beijing to rein in its neighbor.

Sino-US relations have soured in recent weeks as President Donald J. Trump has urged Beijing to step up diplomatic and economic pressure on North Korea over its nuclear ambitions.

Tensions rose after North Korea’s test this month of an intercontinental ballistic missile that could reach the US mainland.

Despite Washington’s calls for action, trade between China and its neighbor increased 10.5% to $2.5 billion in the first six months of the year compared to the same period last year, including a 29.1% jump in exports.

But customs administration spokesman Huang Songping said Beijing was upholding the UN sanctions against the regime of Kim Jong-Un.

“Simple accumulated data cannot be used as evidence to question China’s severe attitude in carrying out UN Security Council resolutions,” Mr. Huang told a news briefing.

He pointed to a 13.2% drop in imports from North Korea in the same period as an example of the pressure, adding that there have been sharp decreases every month since March.

“UN Security Council sanctions are not a total ban on shipments. Trade related to DPRK (Democratic People’s Republic of Korea) people’s livelihood, especially those that reflect humanitarianism should not be influenced by the sanctions,” Mr. Huang said.

China announced in February the suspension of coal imports from the North, striking a blow at a major source of income for the hermit state.

Mr. Huang said coal imports dropped by three-quarters in the first half, and all those shipments had been made before February 18.

Mr. Trump has complained that trade increased between the two despite calling on his Chinese counterpart Xi Jinping to use the nation’s unique diplomatic and economic clout over North Korea as leverage.

“Trade between China and North Korea grew almost 40% in the first quarter. So much for China working with us — but we had to give it a try!” Trump tweeted on July 5.

Previous Chinese customs data showed two-way trade with the North had risen 30.6% in dollar terms in the first three months of the year.

The US ambassador to the UN, Nikki Haley, said on Sunday that Washington would crank up pressure on China to ensure it implements sanctions over the missile test.

She told the Security Council last week that the US planned a new resolution that would also ensure existing measures are enforced. — AFP

S&P slashes Philippine GDP growth projection

S&P Global Ratings has tempered its gross domestic product (GDP) growth outlook for the Philippines this year, according to a new report published yesterday, even as it continues to see a healthy external position and debt burden for the economy.

The international debt watcher now expects the Philippine economy to expand by 6.4%, slower than the 6.6% forecast given in March, according to its midyear Asia-Pacific Sovereign Rating Trends report.

At the same time, S&P retained its 6.4% growth forecast for the Philippines for 2018, to be followed by a pickup to 6.6% in 2019 and 6.7% in 2020, according to its latest estimates.

It did not give any explanation for the revision.

S&P maintained its “BBB” rating with a “stable” outlook on the Philippines in April, with the view that domestic conditions “remain conducive for sustained economic growth.”

A stable outlook means that the country’s ratings are unlikely to change over the next year or so.

The credit rater likewise expects price increases to remain manageable over the next four years, with estimates for annual inflation forecast falling within the central bank’s 2-4% target band. For 2017, S&P expects inflation to average 3.4%, slightly higher than the BSP’s latest 3.1% forecast.

Prices of basic goods and services inched up by 3.1% from a year ago in the first semester, according to latest data from the Philippine Statistics Authority.

In its latest assessment for the country’s credit rating, S&P counted the Philippines’ external position and fiscal and debt burden as “strengths,” largely due to the hefty dollar reserves held by the central bank and the declining share of debt to gross domestic product (GDP).

Gross international reserves totalled $81.413 billion as of end-June, enough to settle 8.7 months’ worth of import payments and is well above the three-month international standard.

The country’s debt-to-GDP ratio also slid to 41.87% in the first quarter from 43.56% the previous year, according to the Finance department.

The debt watcher stood “neutral” on its institutional and monetary assessments, as well as on budget performance.

It is now watching if the government can stay the reform course.

“We may raise the ratings if the newly calibrated fiscal program under this administration significantly boosts investment and economic growth prospects, or if improvements in the policy environment lead us to a better assessment of institutional and governance effectiveness,” S&P’s mid-year report read.

The country’s “stable” outlook means ratings will likely steady over the next 12-18 months.

“We may lower the ratings if the reform agenda stalls or if the recalibrated fiscal program leads to higher-than-expected deficits sufficient to reverse the progress made under the previous administration.”

The Finance department hopes to implement its first of up to five tax reform proposals by January 2018. The first package now awaits Senate approval after the House of Representatives passed it on May 31. The additional revenues are expected to help fund the Duterte government’s P8.4-trillion infrastructure spending plan over the next six years. — Melissa Luz T. Lopez

China opens first overseas military base

BEIJING — Ships carrying personnel for China’s first overseas military base, in Djibouti in the Horn of Africa, have set sail to begin setting up the facility, as China’s rapidly modernizing military extends its global reach.

Djibouti’s position on the northwestern edge of the Indian Ocean has fueled worry in India that it would become another of China’s “string of pearls” of military alliances and assets ringing India, including Bangladesh, Myanmar and Sri Lanka.

China began construction of a logistics base in Djibouti last year. It will be used to resupply navy ships taking part in peacekeeping and humanitarian missions off the coasts of Yemen and Somalia, in particular.

It will be China’s first overseas naval base, though Beijing officially describes it as a logistics facility.

State news agency Xinhua said late on Tuesday the ships had departed from Zhanjiang in southern China “to set up a support base in Djibouti.”

Navy commander Shen Jinlong “read an order on constructing the base in Djibouti,” but the news agency did not say when the base would begin operations.

Xinhua said the establishment of the base was a decision made by the two countries after “friendly negotiations, and accords with the common interest of the people from both sides.”

“The base will ensure China’s performance of missions, such as escorting, peace-keeping and humanitarian aid in Africa and west Asia,” it said.

“The base will also be conducive to overseas tasks including military cooperation, joint exercises, evacuating and protecting overseas Chinese and emergency rescue, as well as jointly maintaining security of international strategic seaways,” Xinhua said.

Foreign ministry spokesman Geng Shuang told a daily news briefing the base would enable China to make “new and greater contributions” to peace in Africa and the world and would benefit Djibouti’s economic development.

Djibouti, which is about the size of Wales, is at the southern entrance to the Red Sea on the route to the Suez Canal. The tiny, barren nation sandwiched between Ethiopia, Eritrea and Somalia also hosts US, Japanese and French bases.

The People’s Liberation Army Daily said in a front-page commentary the facility was a landmark that would increase China’s ability to ensure global peace, especially because it had so many UN peacekeepers in Africa and was so involved in anti-piracy patrols.

There has been persistent speculation in diplomatic circles that China would build other such bases, in Pakistan for example, but the government has dismissed this. — Reuters

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