T-bill, bond rates may drop as BSP turns dovish

May 20, 2024 | 12:04 am

RATES of Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week may go down after dovish comments from the Bangko Sentral ng Pilipinas (BSP) chief.

The Bureau of the Treasury (BTr) will auction off P15 billion in T-bills on Monday, or P5 billion each in 91-, 182-, and 364-day papers.

On Tuesday, it will offer P30 billion in fresh 20-year T-bonds.

T-bill and T-bond rates could track secondary market yield movements following policy easing hints from BSP Governor Eli M. Remolona, Jr. last week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

At the secondary market on Friday, the 91-day T-bill went up by 1.73 basis points (bps) week on week to end at 5.7991%, based on PHP Bloomberg Valuation Service Reference Rates data published on the Philippine Dealing System’s website. Meanwhile, the 182-day and 364-day T-bills went down by 0.75 bp and 5.09 bps to end at 5.9006% and 6.0242%, respectively.

For its part, the 20-year bond saw its yield go down by 23.42 bps week on week to close at 6.6712%.

“The BSP MB (Monetary Board) meeting, which was considered a non-event, was liberal with their words, saying a cut is possible in August…

Expect a continuation rally as the dovish Monetary Board meeting could be considered as the game-changer,” a trader likewise said in an e-mail.

The Monetary Board on Thursday kept benchmark rates steady for a fifth straight meeting but signaled a “less hawkish” tone amid slowing inflation, with Mr. Remolona saying their easing cycle could begin as early as August.

The BSP left its target reverse repurchase rate unchanged at a 17-year high of 6.5%, as expected by 17 out of 19 analysts in a BusinessWorld poll. Interest rates on the overnight deposit and lending facilities were likewise kept at 6% and 7%, respectively.

Mr. Remolona said they are now “somewhat less hawkish than before” and could begin easing their monetary policy stance by the third or fourth quarter this year, adding they expect one or two 25-bp rate cuts within the second semester.

He said BSP may start easing ahead of the US Federal Reserve, which he expects to start cutting rates by September.

The Monetary Board’s only meeting for the third quarter is scheduled for Aug. 15. Meanwhile, in the fourth quarter, it will hold reviews on Oct. 17 and Dec. 19.

The Philippine central bank raised borrowing costs by a cumulative 450 bps from May 2022 to October 2023.

On the other hand, the Fed this month kept its target rate at the 5.25%-5.5% for a sixth straight meeting.

The US central bank hiked benchmark rates by 525 bps from March 2022 to July 2023. Fed officials recently said they remain cautious about kicking off their easing cycle amid data showing sticky inflation and a strong economy.

Last week, the BTr raised P17 billion from the T-bills it auctioned off, higher than the P15-billion program, as total bids reached P59.842 billion or nearly four times the amount on offer.

Broken down, the BTr borrowed P5 billion as programmed from the 91-day T-bills as tenders for the tenor reached P21.412 billion. The average rate for the three-month paper went down by 5.3 bps week on week to 5.727%. Accepted rates ranged from 5.698% to 5.755%.

The government likewise made a full P5-billion award of the 182-day securities, with bids reaching P19.91 billion. The average rate for the six-month T-bill stood at 5.893%, declining by 3.7 bps, with accepted rates at 5.873% to 5.91%.

Lastly, the Treasury raised P7 billion via the 364-day debt papers, higher than the programmed P5 billion, as demand for the tenor totaled P18.519 billion. The average rate of the one-year debt dropped by 1.9 bps to 6.037%. Accepted yields were from 6% to 6.045%.

Meanwhile, the last time the BTr auctioned off 20-year papers was on April 23, when it offered reissued bonds with a remaining life of 19 years and 10 months. The government made a partial award of P16.633 billion versus the P30-billion program as it capped the series’ average yield at 7.017%. Accepted yields were from 6.9% to 7.08%.

The Treasury wants to raise P210 billion from the domestic market this month, or P60 billion from T-bills and P150 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product for this year. — A.M.C. Sy

Thailand’s cannabis U-turn is a cautionary tale

May 20, 2024 | 12:04 am

TURNS OUT you can have too much of a good thing.

Last week, Thailand’s Prime Minister Srettha Thavisin ordered a U-turn on the country’s landmark cannabis policy, saying the plant should be soon classified as a narcotic again and its use limited to medical and health purposes. This decision comes two years after the former premier Prayuth Chan-Ocha’s administration decriminalized the drug in the aftermath of the pandemic. His aim? To bring tourists back to Thailand, tap into the multibillion-dollar medical marijuana business, and help struggling farmers grow a cash crop.

The prime minister’s announcement shouldn’t come as a surprise — the new government has been weighing its options for a while. The weed experiment hasn’t gone as planned. Rowing it back won’t be easy, but the kingdom should persevere and attempt to regulate this sector — even if the consequences are painful. Ignoring it will affect the nation’s youth and social harmony — ultimately the industry is only benefiting businesses, not poor farmers.

Walking through the Thai capital Bangkok’s narrow alleyways recently, it was impossible to miss the numerous cafes that spilled on to the streets, or the distinct scent of marijuana wafting through the balmy air. These dispensaries sprang up seemingly overnight, after the decision to legalize cannabis was made in 2022. Even then it was controversial — and ever since, competing forces have been trying to reverse the decision.

Of course, there can be benefits in decriminalizing marijuana — one is less pressure on courts and prisons. There are major overcrowding issues in Thai jails, where 75% of inmates are there on drug-related charges. Research has also shown that taking cannabis off the underground illegal market helps to drive it out of the illicit drug trade.

Many parts of the US have already been through this evolution. Cities like New York have now adopted a far more liberal approach to decriminalization, but are also struggling with the consequences. It is unlikely that Thailand could learn from its experience. Culturally it is a far more conservative society, and sits in a region with harsh drug laws around possession and consumption.

Thailand used to have those laws too, but now it is the anomaly in Southeast Asia. Singapore for instance, imposes the death penalty for trafficking. It considers cannabis a highly addictive narcotic, has banned its consumption and runs regular campaigns that seek to show how much damage it has caused in other countries. At least two people were executed following marijuana charges last year.

In Indonesia, the death penalty is also used as a deterrent, although until recently it was rarely enforced. I reported extensively on the harsh drug laws and outgoing president Joko Widodo administration’s decision to prioritize cracking down on drugs. It’s a policy that is likely to be continued under the next leader, Prabowo Subianto.

In contrast, Thailand became the first country in Southeast Asia to allow the use of marijuana for medical purposes in 2019. Almost 8,000 dispensaries and a large number of consumer-agro firms have cropped up across the country, selling everything from cannabis buds and oil extracts to weed-infused candy and baked goods. Foreigners have also reportedly entered the unregulated market, opening shops and selling the drug. Under current decriminalization laws, cannabis products must not contain more than 0.2% tetrahydrocannabinol — the psychoactive compound that provides a high sensation — to be considered lawful.

Part of the push to legalize the plant was motivated by economics: The University of the Thai Chamber of Commerce said in a 2022 report that the domestic cannabis industry could be worth $1.2 billion by 2025.

But the U-turn is also being prompted by some very real concerns, particularly over the social and health impact on young people. Recent research shows that a quarter of 18-to-65-year-olds had used cannabis since decriminalization — up from 2.2% in 2019. Young people are also smoking more weed: 10 times as much — 9.7% in 2023 from 0.9% in 2019. Anecdotally, doctors have reported more patients seeking treatment after they’ve fallen ill or tried to wean themselves off cannabis. If the government does push through with its plans and classifies cannabis as a category-five drug, its possession could result in a jail sentence of up to 15 years and a maximum fine of 1.5 million baht ($40,600).

Banning the drug outright will no doubt cause a lot of pain to farmers, small business owners, tourists, and consumers. A middle-ground approach to return to medical usage would be wise. Taxing marijuana would also help to boost government coffers, and weeding out foreigners from the trade would help to regulate the sector and allow locals to benefit more — which was the original intent. Thailand has enjoyed the high from the lucrative industry long enough. It is now time for a managed and rational come down.

BLOOMBERG OPINION

Student-produced reality show presents competing food businesses

May 20, 2024 | 12:03 am

SparkUp_4-UST-OL — A sneak peek of the show's participants before they sell their products earlier this May.

Buckle your seatbelts for a thrilling duel in cuisine, tactics, and sales, as MORF, a student-led media agency from the University of Santo Tomas (UST), proudly presents their new game-reality show, Battle of The Hustle.

Now the agency’s second show, Battle of The Hustle features selected teams from UST’s College of Tourism and Hospitality Management as they launch their own food businesses to compete with one another.

Granted a starting budget of P5,000 pesos, participating teams are given the creative freedom to devise their own strategies and tactics to earn and sell as much as they can. Thus, they will be judged for their performance in managing their resources as they execute their cuisine theme, get customer feedback, and achieve high sales over a limited time period.

Moreover, viewers will also get a glimpse of the challenges that happen behind-the-scenes of a business in action. Of course as students, one would have to juggle the demands of their academics, all while innovating the next mouthwatering menu.

The show premiered on UST Tiger TV last May 15, which can be viewed on-demand on https://fb.watch/s6Aqvjtqip/.

Sonax PHL introduces ‘DIY’ car care products

May 20, 2024 | 12:03 am

VELO_PAGE1_image6 — Waido Marketing and Distribution, Inc. President Edbert Tiu (left) poses with Waido Brand Manager Johann Tiu (right) at the launch of the Sonax ‘DIY’ car care products. — PHOTO BY DYLAN AFUANG

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By Dylan Afuang

SONAX, a German car care product manufacturer, recently introduced its new product ranges here. Local Sonax distributor Waido Marketing and Distribution, Inc. pitched these as do-it-yourself products that owners can apply on their vehicles themselves.

These are the Xtreme PPF Series, Xtreme Ceramic Series, and Beast Tire and Wheel Cleaner.

“Sonax has product ranges that cater to the different needs of cars, for all kinds of (car) enthusiasts and regular consumers,” explained Waido Brand Manager Johann Tiu to the media during the launch of the new products. “From wheel rims to windscreen, and paintwork to interior, make no compromises when it comes to caring for your car.”

The Xtreme PPF Series is the latest product in the Sonax line, and it’s designed to maintain the luster of a vehicle’s matte or glossy wrap or paint protection film. Made for wrapped vehicle exteriors, the Xtreme PPF + Vinyl Cleaner is a cleaner that’s formulated to remove road dirt, insect residue, and bird droppings.

Designed to remove shallow scratches, the Xtreme PPF + Vinyl Polish covers the car’s exterior with a shiny and waterproof layer. While enhancing the surface color, the Xtreme PPF + Vinyl Detailer removes light soiling without damaging the wrapped surface.

Backed by Sonax’s expertise in ceramic coating, the Ceramic Series aims to preserve a car’s exterior shine in between its ceramic coating sessions. To achieve this effect, the Series features the brand’s SI-Carbon Technology. The products in this range produce a glossy and long-lasting protective finish, strong weather resistance, and color enhancement to maintain ceramic-sealed paint works.

Intended for use during cleaning all surfaces of a car, the Xtreme Ceramic Active Shampoo creates a water-and-dirt repellent layer of ceramic sealant. This product can be used even when the car is not ceramic coated.

Next, the Xtreme Ultra Slick Detailer can easily remove slight surface soiling and dust.

Designed to complement Sonax ceramic-sealed vehicles, the Xtreme Ceramic Spray Coating is touted to protect and refresh paint for up to four months upon application. A vehicle’s unpainted plastic exterior bits can be protected from fading by the Xtreme Ceramic Plastic Sealing.

Meanwhile, the Xtreme Tire + Rim Detailer, Beast Wheel Cleaner, and the Beast Rim/Tire/Rubber Cleaner from Sonax maintain the cleanliness of a car’s rims, tires, and brakes.

Concluded Mr. Tiu, “Sonax is the market leader in car care products in Germany, and one of the leading brands worldwide since 1948.”

Sonax products can be purchased from its Lazada (lazada.com.ph/shop/sonax) and Shopee (shopee.ph/sonaxphilippines) stores.

Smart energy solutions sector sees rising demand — CHINT

May 20, 2024 | 12:03 am

SMART energy solutions provider CHINT said it foresees industry growth driven by the anticipated surge in demand.

“As such, we expect to see accelerated growth of the local smart energy industry, with the increasing demand for more accessible, reliable and safer power driving the need for smart energy solutions and infrastructure development,” CHINT said in an e-mail response to BusinessWorld last week.

This aligns with the government’s goal of increasing the share of renewable energy in the country’s power mix to 35% by 2030.

The company said that there is an increasing need for microgrids, transformers, and other high voltage electrical equipment to deliver power to the country.

“Smart energy systems can also offer cost savings. For instance, smart meters provide real-time data monitoring of energy consumption patterns, allowing consumers to identify areas they can cut back on,” the company said.

Last month, CHINT announced its partnership with LJ Industrial Fabrication, Inc. to give the market access to the former’s localized transmission and distribution products and services.

The company said that it can create a synergy by leveraging LJ Industrial’s infrastructure network and combining CHINT’s solutions to improve reliability and efficiency of smart energy infrastructures in the Philippines.

“With our extensive network, UL-listed and ISO-certified manufacturing capabilities, and commitment to after-sales support, we are fully equipped to bring CHINT’s innovation-led products all across the country, illuminating the future of energy in the Philippines,” LJ Industrial Chief Executive Officer and President Roland Nolan Enriquez said.

LJ Industrial is a part of the LJ Group, which is an original electrical manufacturer and panel builder.

“CHINT recognizes the opportunity to work with such businesses in the space to offer solutions that are designed to integrate seamlessly with smart grids, driving the nation’s transition to more renewable energy sources and, thus, reducing the country’s environmental impact,” the company said. — Sheldeen Joy Talavera

Farmers want say in gov’t sugar import plans

May 20, 2024 | 12:03 am

SUGAR producers said they need to be consulted on the Sugar Regulatory Administration’s (SRA) sugar import plans.

In a statement, the Sugar Council said it recommended an import plan decided in consultation with the industry, with due consideration given to market conditions.

“If sugar imports are the last resort to fill the shortages that may be caused by El Niño, the Sugar Council emphasizes the need for a logical, transparent, and consultative import program,” it said on Sunday.

Last week, the SRA said that it was studying to allow sugar imports during the end of the milling season to bolster supply.

SRA Administrator Pablo Luis S. Azcona said that the President had recommended allowing imports between 185,000 metric tons (MT) and 200,000 MT.

Administrative Order No. 20 tasked the SRA with streamlining and standardizing sugar import rules. It was also ordered to admit more traders into the sugar import program.

He added that the regulator and the Department of Agriculture will identify a trigger point for when to allow imports to enter the country.

“Unless the coming months see a spike in withdrawals (from inventory), the country might not need to import raw or refined sugar until the first quarter of 2025,” the group said. It added that if imports were to come in prematurely, it could cause the millgate price of domestically-grown sugar to drop.

“With local production predicted to be low in 2024-2025, sugar farmers are in for a double whammy,” it added.

The US Department of Agriculture is estimating that raw sugar production will be flat at 1.85 million metric tons (MT) during the 2024–2025 season, while cane production is estimated at 21.6 million MT.

Raw sugar production hit 1.92 million MT as of May 5, 9% higher than a year earlier.

The group added that excessive imports of sugar had caused the drop in millgate prices during the 2023-2024 milling season, prompting the government to directly procure sugar from farmers.

“While importing sugar can stabilize the retail market in the face of insufficient local production, it has to be a solution of last resort, done in consultation with stakeholders, especially sugar farmers, and its schedule and volume calibrated to avoid the milling season, it said.

The council is composed of the Confederation of Sugar Producers Associations, Inc., the National Federation of Sugarcane Planters, Inc., and the Panay Federation of Sugarcane Farmers, Inc. — Adrian H. Halili

Adidas plans cheaper versions of popular shoes

May 20, 2024 | 12:03 am

Samba_OG_Shoes_White_IE3437_04_standard — ADIDAS SAMBA — ADIDAS.COM.PH

ADIDAS is launching cheaper versions of its three-striped shoes like the white and black suede Samba as it aims to spread the trend, Chief Executive Officer Bjorn Gulden said on Thursday at the company’s annual shareholders’ meeting in Germany.

“It’s important to understand that not everyone can afford to buy a shoe for 120 or 150 [dollars], but everyone wants to take part in the same trends,” Mr. Gulden told investors in a presentation in Furth, near Adidas’ headquarters in Herzogenaurach.

Adidas will offer similar versions of the Samba and other shoes for $60 to $80, more affordable entry points than the $100 to $150 price tag for the main shoe lines, according to a presentation slide shown by Mr. Gulden.

“What we do at the top, 100 [dollars] and higher, we’re bringing that down. So, for Foot Locker, for Intersport, and for Deichmann, we’ve also got something to offer,” Mr. Gulden said. — Reuters

BSP to require financial firms to set rules on filing of cases vs personnel

May 20, 2024 | 12:03 am

THE BANGKO SENTRAL ng Pilipinas (BSP) is looking to require financial firms to come up with guidelines on the filing of legal cases against erring personnel to help mitigate operational risks.

In a draft circular released on its website, the central bank said it is seeking to amend the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions to mandate BSP-supervised financial institutions (BSFIs) to implement “board-approved policy governing the process and criteria to determine when to file cases against erring personnel, including dismissed directors, officers and employees.”

“This aims to reinforce measures, including filing of legal cases, to deter misconduct and promote discipline in the BSFIs for the protection of the depositors and other financial consumers,” it added.

Under the draft rules, banks must set up an “appropriate” operational risk management framework, which should include guidelines on the management of human resource-related risks, the BSP said.

“One of the major sources of operational risk is ‘people risk.’ In this regard, banks shall embed in their enterprise-wide risk management framework measures to identify, measure, monitor, and control human resource related risks,” the central bank said.

Banks will also be required to implement policies and risk management and control measures in their recruitment and selection separation from service and filing of legal cases.

“The board shall establish bespoke policy, comprised of process, procedures, guidelines and criteria, aligned with the overall framework for managing human resource-related risks, to determine when to file administrative, civil and/or criminal case against erring or dismissed personnel,” it said.

“Also, the policy must clearly indicate the decision-making process and approving authorities for the filing of administrative, civil and/or criminal cases,” it added.

Once the circular is finalized, BSFIs will have six months to comply with its provisions.

The BSP is accepting comments on the draft circular until June 1. — L.M.J.C. Jocson

Libre nga ba mangarap?

May 20, 2024 | 12:03 am

Kids-bicycle — AUSTIN NICOMEDEZ--UNSPLASH

Filipinos have a phrase “libre naman mangarap,” which can be translated to “it is free to dream anyway.” I mainly hear people use this remark sarcastically, when they resign themselves to the reality of an unattainable dream. Indeed, there is truth to this saying, especially for many who have limited, or even non-existent, means to realize such dreams. But what if I told you that even if dreaming is free, there are some people who are unwilling to pay that price?

Allow me to tell you a recent experience of mine which revealed this harsh truth.

As part of an ongoing project with the Barangay People’s Council (BPC) in Naga City, we conducted a community consultation to discover what barangay members desire. The rationale behind these interviews was to help the BPC’s leadership gather data on their neighbors’ interests and incorporate these into their five-year agenda. Through this activity, I had the opportunity to engage with BPC leaders and some of their members. Each one I conversed with shared interesting ideas, stories, and perspectives that shed light on the realities of living in our country.

However, I had a particularly memorable exchange with one person. Let’s call her Nanay Bituin. Nanay Bituin is in her late forties, has four kids, and manages her own sari-sari (sundries) store. Following the design of our interview guide, I first asked her what kind of future she wanted for her barangay. Normally people rambled about what they desire — but after giving her a few seconds to respond, it seemed like she had nothing in mind. I then tweaked the question by just asking what her own dream was for herself. She then replied by saying “wala ako maisip.” (I cannot think of one).

At that point, I struggled to decide how best I could continue the conversation. I then thought of asking her what she dreamt of for her children. Suddenly, the floodgates of information opened, and she started sharing. The dream, she explained to me, was for her four kids to finish school and find a job. She believes that being employed will provide her children with a monthly salary and financial stability that can help them live better lives. She does not want any of her children to get stuck managing their small store since its earnings are not enough to sustain their family’s needs. She added that in their barangay alone, there are too many similar stores competing for customers, which makes income volatile and insufficient to make ends meet. As the interview came to a close, we thanked each other and parted ways. She left to pick up her kids from school, while I continued to interview other members of their barangay.

In the succeeding days, this particular encounter kept coming up in my mind. I was feeling all sorts of emotions. For one, I was touched that she was willing to set aside her personal dreams and work tirelessly for her kids. I witnessed firsthand the selflessness and love of a mother who sacrificed her own personal fulfillment so that her kids would find their own. On the other hand, I could not help but feel bothered by the fact that she was resigned to the idea that she could no longer dream for herself. At this point in her life, she probably feels so powerless to fulfill her own dreams and change her fate. This encounter made me rethink the phrase “Libre naman mangarap.” While we are indeed free to dream, life becomes so difficult for some people that they become cynical and develop a fatalistic perspective. She therefore made me ask myself, “libre nga ba mangarap?” (Is it really free to dream?)

As I ponder this question, I surmise that all roads lead to poverty and inequality. On the surface, dreaming of a better life for oneself does not cost anything. Yet, the story of Nanay Bituin made me realize that to dream has a lot of hidden costs. Living in poverty is so costly that it numbs one’s hopes and aspirations for oneself. Let me paint the picture further. Even if she has a livelihood, Nanay Bituin still does not earn enough to keep her family secure. She is not even certain that she can afford to provide for all her children’s education and her family’s health. This is aggravated by the fact that she does not see a better opportunity for her to choose. If there was, she said that she would happily leave her highly competitive retail business.

In this sense, Nanay Bituin is no longer living to work, nor working to live, but rather working to survive. The poverty statistics of the Philippines tell us that she is not alone. According to the Philippine Statistics Authority, in the first semester of 2023, about 25.24 million Filipinos did not earn enough to meet their basic food and non-food needs. This means there are millions of other Nanay Bituins who are more preoccupied with what they need for today or tomorrow.

It also must be said that our current systems are failing to enable our people to dream. This is a cause for concern — if we allow unjust systems to make it hard for our people to dream, then it is possible that more Filipinos will adopt fatalistic perspectives. According to a scholar named Lawrence E. Harrison, countries that have fatalistic perspectives possess qualities that resist economic development. In countries with these qualities, the majority of their people only work to survive, believe that hard work will not get them anywhere, and are rarely willing to take entrepreneurial risks. These qualities (some of which are already present in Nanay Bituin) lead to low economic progress because people are more inclined to accept their unfortunate fate. In this case, they will no longer strive for better futures, hold decision makers accountable for their future, and at worst, get stuck in a culture of dependency and patronage that further aggravates their disempowered state.

Now, not everyone has adopted a fatalistic perspective in our country, but a sense of urgency is needed. A world values survey conducted in 2019 showed that many Filipinos, despite their harsh realities, still have mindsets that could push a more inclusive economic development — 66.8% of our low-income population said that they agree or somewhat agree with the idea that “hard work” will bring them a better life. Moreover, 61.5% said that they have a great deal or somewhat have control over their destiny. These data points showcase Filipinos’ resilience against all odds.

However, we should not be too comfortable with this noteworthy “resilience” of Filipinos. We have to ask ourselves: for how long can “resilience” keep the hopes of our people alive? How much suffering can millions of Filipinos really bear until their aspirations for a better life crumble?

If you are looking for answers, I am not here to provide them because this problem is much bigger than me or any institution. Instead, I wrote this piece for those of us who can still dream, with the hope that we can imagine a better life for most Filipinos and collectively act on this crisis of disempowerment staring right at us. So, whether big or small, I hope each of us can find ways to empower our people to no longer just “dream to live” but instead “live to dream.”

Carlo Lopa is currently taking his Master’s in Futures Studies at the University of Houston.

XPEL expels some car-paint protection myths

May 20, 2024 | 12:02 am

VELO_PAGE2_image2 — From left are XPEL Asia’s Christine Pu, XPEL Asia Vice-President Chris West, Hart International President Renault Tan, and XPEL Product Manager for Architectural Window Film Boon Khee Yeo. — PHOTO BY KAP MACEDA AGUILA

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By Kap Maceda Aguila

A BRAND-NEW CAR is a definite source of much joy and satisfaction for its owner and his or her loved ones. Of course, it’s a big-ticket item that represents a substantial outlay for its acquisition — regardless of who buys it and what is bought — and obviously becomes an important part of a family’s mobility tale.

It’s but natural then for the new owner to take more-than-usual care of the vehicle, and nothing can be more distressing than finding the first scratches or nicks on it.

Several executives of XPEL, a leading and premium global manufacturer of automotive protection solutions, were in town recently to meet with several members of the media to talk about the brand’s paint protection film (PPF) product — specifically designed to save a car’s clear coat and paint from the effects of sunlight, nicks and scratches, and other risks and challenges such as, yes, bird droppings. “XPEL leverages (its) core strength in research and development that resulted in (a) series of innovations such as proprietary formulation for films that features stain resistance and self-healing technology, among many others,” said the company in a release.

XPEL Asia Vice-President Chris West advised against excessive detailing work, particularly buffing done on one’s automobile exteriors which would progressively scrape away the clear coat. “The clear coat shouldn’t be polished off,” he stressed. “It protects the paint.” PPF will protect the clear coat and, ultimately, the paint. Buffing, he maintained, isn’t needed even when preparing a car for PPF. A preferred alternative is to use a clay bar, which lifts foreign matter from the surface. The ideal protective process for a vehicle is to apply PPF, then ceramic paint protection on top of it.

As for bird droppings, they should always be removed as soon as possible, as they will eat away even the film, but it definitely buys time before the excrement even reaches the precious clear coat. The price for XPEL PPF’s protection isn’t cheap — treating a Toyota Land Cruiser, said Renault Tan, who heads XPEL importer and distributor Hart International, will set a customer back around P280,000 — but is definitely worth it. There’s also a 10-year warranty on the adhesive.

“We’re today the largest provider of window tint and PPF at the dealership level in North America,” declared Mr. West. “While China is the largest market, I see opportunity here in Asia-Pacific, where there is window tint in every car. I’m really excited to figure out how to attack this market more, because for PPF, whatever country we’re in in APAC, XPEL is generally considered the premium brand.”

Interestingly enough, XPEL started in 1997 as a software company, Mr. West said. PPF was a relatively new concept in those days — first used on helicopter blades and NASCAR vehicles. When it filtered down to the mainstream, it was applied by people using a vinyl knife to trim the material. “Guys would get the paint cut,” the executive recalled.

To prevent this, XPEL founders made a software to generate a specific pattern for each brand and model, which would then be plotted on a cutting machine for a more efficient and perfect PPF fitment. This technology was applied for 3M film, before the company decided to do the product by itself.

“Since then, we’ve just continued to grow, eventually becoming listed on the Nasdaq and New York Stock Exchange. Through acquisitions, we have over 1,000 employees now,” added Mr. West, who revealed that the gross revenue for the international brand now breaches US$500 million. XPEL has also continued to work on its cutting patterns — today numbering over 80,000 via what is called the Design Access Program (DAP).

He continued to anticipate “rapid growth,” particularly in Asia-Pacific markets. That bullishness extends to the Philippine market, where the brand is becoming the choice product for owners of premium vehicles. Mr. West also believes there is business to be realized even among mid-tier automobiles as more people become fastidious about their rides.

Invited Mr. Tan, “XPEL offers you the very best when it comes to preserving and enhancing the aesthetics of your vehicle. We have it all, and we’re more than ready to serve your needs with genuine XPEL protective products.” XPEL also offers a host of other products including automotive window film, architectural film for buildings or homes, ceramic coating, marine coating, marine PPF, airplane coating, and even coating and tints for helicopters.

Official XPEL dealers are located in Metro Manila, Pampanga, and Cebu. An installer will open soon in Davao for genuine XPEL products and services.

Space data fuel India’s farming innovation drive

May 20, 2024 | 12:02 am

BENGALURU — Lokeswara Reddy, an Indian farmer with two decades of experience, has seen his crops flourish after lean years, thanks to earth-observation satellites.

Shifting climate patterns, high input costs, a scarcity of labor and erratic weather began to disrupt his earnings about 10 years ago, said Mr. Reddy, 52, currently a contract farmer with global giant Syngenta.

Satellite data, gathered and crunched by Indian startup Cropin and provided to him by Syngenta, now gives him optimal sowing times, weather warnings, and better use of irrigation and pesticides, he said.

Mr. Reddy said that over the last decade he has increased his net profit to 20,000 rupees ($240) per acre on corn at his farm in the southern Indian state of Andhra Pradesh, up from 5,000 – 10,000 rupees.

“We are on a surer footing when it comes to agricultural practices; (using satellite data) safeguards us from climate change, pest and disease, problems with irrigation scheduling,” he said.

The Indian government, which just relaxed foreign investment rules for the space sector, is leaning heavily into the use of satellite data to solve problems on the ground, with agriculture a key focus.

Reuters spoke to 11 experts and farmers, six startups in the industry and three NGOs who said space technology and big data were primed to help Indian agriculture reach new heights.

“India’s path to leadership in the new space race lies in utilizing the power of data, and applications within the agricultural sector offer immense potential,” said Pawan Goenka, chairman of the Indian National Space Promotion and Authorization Centre, the country’s space regulatory body.

Market Research Future, an India-based data analysis firm, says the global space agriculture market will be worth $11.51 billion by 2032, up from $4.99 billion in 2023.

Although China holds the largest market share, the sector is growing faster in India than anywhere else in the Asia-Pacific region, it said.

Cropin, founded in 2010 and backed by both Google and the Gates Foundation, recently signed a deal with Amazon Web Services to crunch satellite data to solve for global food insecurity.

Cropin’s partnership with farmers, the World Bank and the government of India in 244 villages digitized more than 30,000 farm plots, covering 77 crop varieties across climate zones, a company project analysis in 2019 showed.

The study showed 92% of the farmers involved increased their average yield by 30% and their farm revenue by nearly 37%. The company got similar results in Africa.

Cropin and others are tapping into a burgeoning sector. The use of satellite data for crop insurance and horticulture has a market potential of about $1.35 billion over the next 5 years, Deloitte said in a report.

Baring Private Equity-backed SatSure, another Indian startup, crunches earth observation data to inform loan analysis. Chief Executive Officer Prateep Basu said there are about 70 million active farmer bank accounts in the country, representing roughly 38% of the total pool. That makes up about $200 billion of all lenders’ loan books, he said.

India has 2,743 agricultural tech startups, many of which incorporate satellite data or other space technology. Funding hit a high of $1.3 billion in 2021; companies gathered $394.4 million in 2023 and $136.7 million so far in 2024.

But there are barriers to large-scale adoption of space technology in agriculture. The average landholding size for farmers in India is just 1.08 hectares. That fragmentation, coupled with poverty and low levels of literacy, pose challenges for tech adoption, industry experts said.

“Agriculture has never been a tech-forward sector and often farmers want to rely on traditional practices, or the wisdom of their forefathers,” said Raghunath Reddy, a Syngenta manager.

In India, McKinsey says agricultural technology has the potential to grow farmers’ incomes by 25% to 35%.

Indian Finance Minister Nirmala Sitharaman, in her 2023 budget speech, announced a 703 million rupee ($8.42 million) accelerator fund to boost agritech startups. In March 2023, the government said the fund was supporting 1,138 such companies.

For farmers like Mr. Reddy, agriculture tech has meant better living standards — over the past few years he has bought a car and bought a new house in town.

“This increase in earnings also means better education for my son, who has plans to be a software engineer abroad, in the US or London. At the end of the day, we want a better future for our kids,” Mr. Reddy said. — Reuters

Gov’t debt yields go down

May 20, 2024 | 12:02 am

By Abigail Marie P. Yraola, Deputy Research Head

YIELDS on government securities (GS) traded in the secondary market went down last week following US consumer inflation data and the Philippine central bank’s decision to keep borrowing costs unchanged and signals about potential rate cuts as early as August.

Bond yields, which move opposite to prices, fell by 12.54 basis points (bps) on average week on week, based on PHP Bloomberg Valuation Service Reference Rates data as of May 17 published on the Philippine Dealing System’s website.

Rates mostly fell last week. Yields on the 182- and 364-day Treasury bills (T-bill) edged down week on week by 0.75 bp and 5.09 bps to 5.9006% and 6.0242%, respectively. Meanwhile, the 91-day T-bill went up by 1.73 bps to yield 5.7991%.

At the belly of the curve, yields on the two-, three-, and four-year Treasury bonds (T-bonds) declined by 6.93 bps (to 6.3587%), 8.55 bps (6.4016%), 10.48 bps (6.4335%), respectively. The five- and seven-year T-bonds also went down by 13.73 bps to fetch 6.468% and by 23.23 bps to 6.5373%, respectively.

At the long end, the 10-, 20-, and 25-year debt papers likewise saw their rates fall by 23.95 bps (to 6.6117%), 23.42 bps (6.6712%), and 23.53 bps (6.6706%) respectively.

GS volume traded rose to P29.05 billion on Friday from P8 billion a week earlier.

Bond yields moved lower as April US consumer price index (CPI) data were within market expectations while the US retail sales report fell short of estimates, a bond trader said.

“[These] data sent UST (US Treasury) yields lower, helping support the local GS market as it tracked the movement,” the bond trader said in a Viber message.

A second bond trader said the market responded positively to the government’s partial bond award last week as it showed some restraint on the Bureau of the Treasury’s (BTr) part to keep yields within market range.

The BTr raised just P11.528 billion from the reissued 20-year bonds it auctioned off last week, lower than the P30-billion program, despite total bids reaching P36.703 billion.

The bonds, which have a remaining life of 14 years and eight months, were awarded at an average rate of 6.95%, while accepted yields ranged from 6.7885% to 6.994%

“With US CPI coming out lower than expected, this bolstered the market’s resolve and drove yields to rally by as much 30 bps,” the second trader said in a Viber message.

US consumer prices increased less than expected in April, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut, Reuters reported.

Hopes of the Federal Reserve starting its easing cycle this year were further bolstered by other data on Wednesday showing retail sales were unexpectedly flat last month. The reports suggested that domestic demand was cooling, which will be welcomed by officials at the US central bank as they try to engineer a “soft landing” for the economy.

The consumer price index rose 0.3% last month after advancing 0.4% in March and February, the Labor department’s Bureau of Labor Statistics said.

In the 12 months through April, the CPI increased 3.4% after climbing 3.5% in March. Economists polled by Reuters had forecast the CPI gaining 0.4% on the month and 3.4% year on year. The annual increase in consumer prices has slowed from a peak of 9.1% in June 2022.

A separate report from the Commerce department’s Census Bureau showed retail sales unchanged in April after increasing 0.6% in March. Economists had forecast retail sales, which are mostly goods and are not adjusted for inflation, gaining 0.4%. Sales rose 3% year on year in April.

The first trader added that the Bangko Sentral ng Pilipinas’ (BSP) “less hawkish” tone at its meeting last week boosted buying interest, which resulted in lower GS yields.

The second trader said the market became more bullish after the BSP chief’s hints on rate cuts potentially starting by August, which would likely be ahead of the US Federal Reserve.

The Monetary Board on Thursday kept benchmark rates steady for a fifth straight meeting but signaled a “less hawkish” tone amid slower-than-expected inflation, with BSP Governor Eli M. Remolona, Jr. saying their easing cycle could begin with a 25-bp cut as early as August.

The BSP left its target reverse repurchase rate unchanged at a 17-year high of 6.5%, as expected by 17 out of 19 analysts in a BusinessWorld poll. Interest rates on the overnight deposit and lending facilities were likewise kept at 6% and 7%, respectively.

Mr. Remolona said they could cut rates by the third or fourth quarter this year. He said they expect one or two 25-bp rate cuts within the second semester.

The Monetary Board’s only meeting for the third quarter is scheduled for Aug. 15. Meanwhile, in the fourth quarter, it will hold reviews on Oct. 17 and Dec. 19.

For this week, the first bond trader said the market will look for more catalysts as the Fed has kept its cautious stance on rates following mixed data out of the world’s largest economy.

“We should see yields establish a range after the recent rally and take its cue from the BTr’s 20-year bond auction [this] week,” the second trader said.

The government will offer P30 billion in new 20-year T-bonds on Tuesday. — with Reuters