Chanel’s creative director Virginie Viard to leave brand

June 10, 2024 | 12:03 am

CHANEL artistic director Virginie Viard is leaving the label, the luxury brand said on Thursday, kicking off speculation over who will replace her in one of the fashion industry’s most coveted positions.

“A new chapter is opening for Chanel Mode,” Chanel said in a statement, confirming the change, which was first reported on fashion news website Business of Fashion.

The privately owned label, known for tweed jackets, quilted handbags with double-C logos and the No. 5 perfume, did not name a successor as it thanked Ms. Viard for her “rich collaboration of five years.”

Ms. Viard, 62, worked at Chanel for nearly 30 years, alongside Karl Lagerfeld, whose role she took over in 2019 following his death.

She favored relaxed silhouettes with an 1980s flare and took a low-key approach compared to her predecessor, sending models along the Seine River and down a street in Manchester for recent fashion shows, for example — marking a contrast with the showmanship of Lagerfeld, who built towering sets — including a rocket ship and indoor waterfall — for his catwalk presentations.

Her departure comes as the industry adjusts to slower growth and several other labels, including Kering-owned Gucci, Valentino, and Burberry seek new creative direction to reignite sales.

The post-COVID pandemic boom, fueled by pent-up demand for fashion, has tapered off as shoppers spend less due to the rising cost of living.

Chanel teams will ensure the “continuity” of collections in the interim period, and the brand will host its fall-winter haute couture show 2024/2025 on June 25 in Paris, it said.

Rumors of a new designer at Chanel have swirled for years, most recently including talk of industry heavyweights like former Gucci designer Alessandro Michele, who has since been recruited to Valentino.

Chanel Chief Executive Leena Nair last month brushed off talk of a designer change, noting that ms. Viard had overseen strong growth in ready-to-wear fashion sales, which have surged two-and-a-half-times since 2018.

Sales at Chanel were up 16% last year to nearly $20 billion, a slower rate than smaller rival Hermes, which grew sales 21% to 13.4 billion euros, but faster than LVMH’s fashion and leather goods division, which was up 14% to €42 billion euros.

The world’s second-largest label after LVMH’s Louis Vuitton, Chanel is owned by French billionaire brothers Alain Wertheimer and Gerard Wertheimer. — Reuters

Villar warns public vs deepfake video pushing investment scheme

June 10, 2024 | 12:03 am

BUSINESSMAN Manuel B. Villar, Jr. has warned of a deep fake video on social media showing him discussing an investment scheme aimed at scamming the public.

“A deepfake video has been going around that uses a doctored video of myself talking about an investment scheme. This is a scam. Deceptive individuals used an old footage and digitally altered, using artificial intelligence (AI), what I was saying. I urge the public to disregard that video,” Mr. Villar said in a statement over the weekend.

“There is no such investment program. I enjoin the public to be more discerning and extra cautious when viewing posts and videos that use AI technologies and that promise easy money or success. There is no such thing as easy money. There is no substitute to good, old-fashioned sipag at tiyaga in achieving success in life,” he added.

In April, Forbes cited Mr. Villar among the top 200 richest people in the world, as his estimated net worth jumped to a record $11 billion this year.

At 190^th spot, Mr. Villar was the highest-ranking Filipino tycoon in the World’s Billionaires list released by Forbes. He was also the only Filipino who landed in the top 200.

Mr. Villar is a former Senate president and House speaker. He is currently the chairman of listed companies Vista Land & Lifescapes, Inc.; Golden MV Holdings, Inc.; supermarket chain AllDay Marts, Inc.; home improvement chain AllHome Corp.; and Vista Malls, Inc. — Revin Mikhael D. Ochave

Leveraging UnionBank’s legacy: A Q&A with UnionDigital Bank

June 10, 2024 | 12:03 am

By Lourdes O. Pilar, Researcher

UNION BANK of the Philippines (UnionBank) was the first listed bank in the country which secured a digital banking license for its unit, UnionDigital Bank, two years ago.

UnionBank, the banking arm of the Aboitiz Group, believes that setting up another digital bank unit is the more strategic plan, making the bank to “pause and re-create the ideal digital bank that will run differently having a different set of engines.”

The digital bank turned out to be the second engine growth for UnionBank.

With a mission to drive financial inclusion, the bank is dedicated to extend financial services to underserved communities by capitalizing on technology and decades of alternative data from the UnionBank ecosystem.

Since UnionDigital Bank’s launch in 2022, the bank has been focusing on serving the needs of the underserved communities by offering digital deposit and lending products and continue supporting the needs of these customers with additional products over time.

To know more about UnionDigital, BusinessWorld reached out to further explore what the digital bank can offer in the market, and other ventures they plan to have in the Philippines.

What follows contain excerpts of that interview.

As one of the six digital banks in the Philippines and the first and only digital bank backed by a universal bank, what advantages does UnionDigital have against other digital banks in the country?

As a subsidiary of UnionBank, we leverage on our parent’s legacy. UnionDigital draws on the strong heritage and extensive expertise of UnionBank, ensuring reliability and trust in its services.

UnionDigital is the second engine of growth for UnionBank dedicated to financial inclusion. As a digital bank, UnionDigital is uniquely positioned to extend financial services to underserved communities.

Our mission is to improve financial accessibility for underbanked Filipinos who traditionally have limited access to banking services.

We achieve this by:

Making banking services available to the unbanked, thus integrating them into the financial system.

Offering accessible credit solutions to those typically overlooked by traditional banks.

UnionDigital also has the competitive advantage of tapping an extensive customer base through the Aboitiz Group ecosystem.

What security measures have you developed to prevent illicit online banking activities? What are the tools that the Bank uses to protect its clients from fraud and anti-financial crime?

Our dedication to security is fundamental, deeply embedded in our corporate ethos through the principle of Security by Design.

This approach ensures that security measures are integrated seamlessly into every aspect of our banking operations.

We are also moving toward adopting the Zero-Trust Security Framework, a robust security model based on the principle of “Never trust, always verify.”

This model strengthens our protocols for managing data access, further securing our systems against unauthorized use.

UnionDigital builds on the requirements of the regulatory environment and is proactive in monitoring both security and fraud systems.

This ensures not only protection internally, but also and most importantly, for our customers.

According to the Bangko Sentral ng Pilipinas (BSP), digital banks are unprofitable due to higher nonperforming loan ratio at around 21%, compared to the banking sector’s 3.4%. As one of the digital banks in the country, how will you improve the loans you extended and improve your loan collection mechanism?

We continue to leverage data and analytics to gain insights into customer behavior, allowing us to tailor our loan offerings effectively.

For example, we analyze transactional data to understand the needs of our customers better.

Our strong underwriting models are continually improved as we gain more insights into our target customers.

We collaborate closely with other digital banks through the Digital Banks Association of the Philippines, sharing learnings on financial inclusion, particularly in lending to the underbanked segment.

At UnionDigital, the collection process is crucial not only for financial viability but also for maintaining customer relationships. We utilize various tools for collection, including automated systems and our partner agencies.

The central bank earlier said only two digital banks posted a net profit in 2023 and the sector posted a combined net loss. What does UnionDigital need to do to become more profitable in the medium term? For the long term?

UnionDigital is one of the two digital banks that posted net profit in 2023.

Leading market share in loans and deposits

• We closed 2023 with 49% market share in loan portfolio, while in deposit, we ranked second among digital banks with a 25% share.

• 2023 also marked a significant milestone as we achieved profitability, showcasing growth in revenue by 13 times to over P5 billion.

UnionDigital will be further expanding access to credit

Expanding our market reach and enhancing our product offerings will be pivotal.

Advancing our strategy for a deeply integrated “Super Embedded” App.

Concentrate on deepening customer relationships and fostering financial inclusion through our community approach and embedded banking.

• This approach is designed to integrate our services seamlessly into the digital lives of our customers, providing personalized and accessible banking experiences.

• By strengthening our fintech capabilities and leveraging strategic partnerships within the Aboitiz Group ecosystem, we are poised to maintain our competitive edge and foster sustained growth.

What are your plans for the rest of the year? What products and services do you plan to offer in the market, and how would you differentiate these offerings from those provided by other digital banks?

We will continue to expand our services to the underserved through our loan offerings and very competitive deposit rates. UnionDigital will also be tapping new communities.

There will be new products and features on the app, including an enhanced portfolio of loan options and the introduction of virtual cards.

As early as last year, the BSP has been thinking of lifting the moratorium on the grant of new digital banking licenses to allow more digital banks to operate in the country. How would UnionDigital adapt to remain competitive amid the threat of new players?

This environment encourages existing digital banks, including us, to continuously enhance our offerings, streamline user experiences, and adopt new technologies to remain competitive.

For UnionDigital, the evolving landscape represents both challenges and opportunities. The entrance of new players could pressure existing digital banks to innovate more quickly and efficiently to retain and grow their customer base.

However, it also presents an opportunity for us to differentiate ourselves by leveraging on our existing strengths, particularly our solid foundation with UnionBank as our parent company and the expansive network within the Aboitiz Group supporting us.

For us, the key to success will lie in our ability to adapt to the changing industry dynamics, invest in technology and innovation, and maintain a customer-centric approach.

This will not only help us navigate the challenges but also seize the opportunities presented by the expansion of the whole Philippine digital banking ecosystem.

What do you think are the biggest risks faced by digital banks such as UnionDigital and what did you or are currently doing to eliminate these risks?

At UnionDigital Bank, we recognize significant risks such as the digital divide within our customer segments, cybersecurity threats, regulatory standards, and operational challenges.

Many of our customers do not have data connections, which limits their ability to engage with digital banking services. To address these risks, we are developing inclusive technology initiatives, such as low-bandwidth solutions, and actively supporting government projects that promote the digitization of the Philippines.

Additionally, we continuously fortify our cybersecurity measures, maintain rigorous communication with regulatory bodies to ensure compliance, and implement robust operational frameworks.

These comprehensive efforts demonstrate our commitment to delivering secure, reliable, and accessible services, empowering every Filipino, everywhere.

To know more about UnionDigital Bank, visit www.uniondigitalbank.io.

What’s in a name

June 10, 2024 | 12:02 am

A brand is a “name” that calls forth a “reputation” significantly above the standard expectations of the public for a product or service. The “name” is often made visual by a logo (like a nation’s flag), by a slogan (like a “credo” of an organization), or maybe a musical jingle (like a national anthem of a country).

Yes, a company can become inseparable from its brand. Coca-Cola the soft drink is synonymous with Coca-Cola itself, even though the company now owns Schweppes, Dr Pepper, and Hi-C, among hundreds of other brands.

The top five global brands in 2023 were Apple, Microsoft, Amazon, Google, and Samsung, according to a ranking by Interbrand. Microsoft’s score was up a big 14% year over year.

In marketing, the brand is created through elements of design, packaging, and advertising that, as a whole, differentiates and distinguishes the product from its competitors. The product contributes to the “brand equity” of the company that produces it. It earns “brand loyalty” from consumers. A successful brand provides a huge contribution to the income and profits of a company, giving it a competitive edge over others in the same industry.

There are protection laws for companies and products. Republic Act No. 8293 (the Intellectual Property Code) protects registered patents — any technical solution to a problem in any field of human activity which is new, involves an inventive step, and is industrially applicable, same as trademarks, copyrights, and industrial design.

To protect the consumer, the “truth in advertising” clause in the Consumer Act of the Philippines (RA 7394) prohibits “any person to disseminate or to cause the dissemination of any false, deceptive or misleading advertisement by… (any) medium for the purpose of inducing or which is likely to induce directly or indirectly the purchase of consumer products or services.”

Then there is the Philippine Competition Act (PCA) or RA 10667, the primary competition law of the Philippines for promoting fair competition in the marketplace and protecting the well-being of consumers in the process. The PCA was passed only in 2015, after languishing in Congress for 24 years. Its antitrust rules prohibit mergers, acquisitions, cartels, and cooperative agreements between market operators that would control the market. By limiting the market power of any particular firm, the more normal supply and demand forces will serve the wants and needs of the public.

But is the public still trusting the same brands, the same product/company names today?

What’s in a name, anyway?

The term “brand” is actually an intangible marketing concept that helps people recognize and identify a product and, at best, reach for it instead of one of its competitors. The tangible, physical delivery of a product still would be the role and responsibility of the company that owns the brand/name of the product. For better or for worse, many brands have changed company ownership.

An article in Esquire magazine (April 13, 2021) lists the companies (and their brands) owned by Jollibee Foods Corp. (JFC), the country’s largest food service network, with its 3,211 outlets in the Philippines, and 2,601 stores overseas, a total of 5,812 restaurants worldwide. These are:

1. Jollibee. The flagship brand is the Philippines’ largest fast-food chain, founded by Tony TanCaktiong in 1978.

2. Chowking

3. Greenwich Pizza

4. Red Ribbon

5. Mang Inasal

6. Burger King

7. The Coffee Bean and Tea Leaf

8. Pho 24

9. Panda Express

10. Highlands Coffee

11. Yonghe King

12. Tim Ho Wan (master franchise for the Asia-Pacific region except Hong Kong)

13. Dunkin’ Donuts (franchise for China only)

14. Hard Rock Café (a joint venture between Jollibee and Viet Thai International for Vietnam)

15. Hong Zhuang Yuan (Beijing-based)

16. Smashburger (100% owned, operating in US and some other countries)

Just as a parallel example, here are the companies owned or formerly owned by McDonald’s, Jollibee’s competitor (from mcdonalds.fandom.com):

1. McDonald’s (permanent; primary brand)

2. Ronald McDonald House

3. Weenie Hut Jr’s (2004-present)

4. Krispy Kreme (2010-up to the COVID shutdown)

5. Domino’s Pizza (until 2003)

6. Chipotle Mexican Grill (until 2006)

7. Pret A Manger (until 2008)

8. Redbox (until 2009)

9. Aroma (1999-2002)

10. Boston Market (2000-2007)

11. Firehouse Subs (2001-2005)

Now we continue with more brand acquisitions in the retail food industry in the Philippines.

The French Baker was founded by Johnlu Koa, then 27 years old, in 1989. He was supplying bread products to SM Supermarket while teaching Strategic Marketing as an assistant professor at the University of the Philippines. One day, Mr. Koa received an invitation from SM to open a store at SM City North EDSA, which was then emerging as the largest mall in the country. Today, French Baker enjoys the dominant market share when it comes to the French bakery-café category for over 25 years. Koa also has the master franchise of Taiwan-based bubble tea chain Chatime in the Philippines and had grown the global brand to 75 outlets prior to the onset of the pandemic.

Knowing the great potential of well-loved food brands sold in malls, of course it followed that Henry Sy’s SM Investments (SMIC) would either develop their own food brand or buy an existing known brand with established consumer loyalty. In 2018, SMIC acquired a 34% stake in Goldilocks, a bakery started by the Leelin sisters in 1966. The deal was for SMIC to eventually fully acquire the bakery chain, but this was scrapped due to “changes in the marketplace (COVID pandemic)” (Rappler, Aug. 4, 2021). In 2021, SMIC proceeded to increase its shareholding in Goldilocks to approximately 74% of the outstanding voting capital stock, making Goldilocks a subsidiary of SMIC.

Goldilocks, one of the most enduring and beloved Filipino brands, continues expanding as it rolled out an additional 30 franchise-owned stores in 2024. Goldilocks has 926 stores as of end-2023, of which 360 are franchised-owned stores. Goldilocks products are sold mostly in SM Supermarkets, which has 66 supermarkets, 54 hypermarkets, and 223 Savemore stores. SM has also acquired Cherry Foodarama and WalterMart supermarkets.

There are other examples of big corporations buying/selling profitable food brands. There is Republic Flour Mills (RFM), known for White King Flour and related products, buying the Royal pasta brand business, and the 1940s Selecta brand of ice cream and milk products. (Selecta bought the ice cream business from the Arce family in 1990.) In late 2012, RFM entered into a trademark and asset purchase agreement with The Pacific Meat Co., Inc., that divided the Swift brand production and marketing/distribution between them.

Just in April this year, listed bakery operator Balai ni Fruitas, Inc. bought the 40-year-old legacy brand Sugarhouse (cakes and pastries). Balai has a retail network of 118 as of end-2023. Its brands include Balai Pandesal, Buko ni Fruitas, and Fruitas House of Desserts.

Note that after Red Ribbon owners Danny and Tessie Moran (also the owners of The Plaza catering) sold it to Jollibee Foods Corp. in 2005, the Moran sons bought Amici, a popular pizza and pasta operation run by the Don Bosco School in Makati City.

A study, “When big companies acquire small ones” by the Small Enterprises Research and Development Corp.-UP ISSI (serdef.org, May 2, 2016), observed the trend in recent years — big companies acquiring smaller ones that are very promising or are already established in the market.

The question that is more often asked is: Why do big companies buy promising startups when they have the resources to put up competitive versions of such firms? Answer: “It makes perfect sense on the part of the big company. When developing a new business, product or service, big companies are bogged down with cumbersome policies, procedures, and protocols. The multi-layers of a corporate organizational hierarchy typically slow down decision making. It takes massive amounts of time, money, and manpower to build a new brand from the ground up.

“On the other hand, small companies, especially today’s young and technology-oriented startups, are much more agile. They can decide on the spot, cut corners, get out of the box or even throw out the box during an innovation run.”

Sam Hogg, a venture entrepreneur and columnist of Entrepreneur magazine, says “big companies have a lot to lose if a new venture fails. The risk is not only financial but also in terms of hurting the corporate image the company has worked so hard to build. On the other hand, the only risk in buying a small established firm is the danger of overpaying for what it acquires.”

For the smaller independent company with a name/brand — it is ever so thrilling to be wanted and wooed! “Name your price,” is the suitor’s irresistible offer.

That’s what’s in a name.

Amelia H. C. Ylagan is a doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Holzmann cautious on rate view

June 10, 2024 | 12:02 am

IT IS TOO EARLY to tell whether the European Central Bank (ECB) has initiated a shift towards lower borrowing costs after it cut its benchmark interest rate this week, ECB policy maker Robert Holzmann said on Saturday.

The ECB cut the rate it pays on bank deposits to 3.75% from a record 4% on Thursday but held back from promising any more easing after a string of disappointing wage and inflation data in recent weeks.

Mr. Holzmann, the head of Austria’s central bank, was the only member of the ECB’s 26-member Governing Council to oppose the rate cut. The bank’s decision had been widely expected after the ECB had telegraphed its intentions ahead of time.

Going forward, the bank would be looking to avoid putting itself in any sort of bind, Mr. Holzmann told Austrian radio. When asked whether the rate cut marked a shift towards lower borrowing costs, or was a step that did not commit the bank toward a particular direction, Mr. Holzmann was cautious.

“I think it’s a step in the right direction,” he said. “I hope — I don’t know — that there won’t be a need to raise rates again,” he added, saying future decisions would depend on data.

Among factors to consider would be the rate differential between the ECB and its US counterpart, the Federal Reserve, Mr. Holzmann said in the interview.

If, as US policy makers have intimated they would this year, the Fed does not cut rates three times, that would affect exchange rates to the euro’s detriment against the dollar, which could fan inflation in the single currency area, he noted.

The ECB could only declare victory on inflation once it had eased to the bank’s target of 2%, he said. — Reuters

Kanlaon agri damage estimated at P104.8M

June 10, 2024 | 12:02 am

AGRICULTURAL damage from the Kanlaon Volcano eruption was estimated at P104.8 million, according to initial reports from the Department of Agriculture (DA).

In a bulletin, volume of crops lost was 3,947.3 metric tons (MT) across 842.3 hectares, affecting 1,706 farmers in the area.

The DA said high-value crops sustained the most damage from ashfall and lahar flow following the eruption on Negros Island. The volcano is entirely within Negros Occidental but is near the border with Negros Oriental.

It added that in volume terms, damage inflicted on high-value crops amounted to 3,890.5 MT, valued at P101.2 million. Farmland affected by ash fall was 816.7 hectares.

Last week, Mount Kanlaon started erupting with a 5,000-meter ash plume, according to Phivolcs, the government volcanology service.

Phivolcs had placed Mt. Kanlaon under Alert Level 2, signifying a moderate level of volcanic activity.

Damage to the rice crop was valued at P1.37 million, with the volume of lost crops at 56.8 MT. Damage to the corn crop was P122 thousand, while damage to livestock was P2.17 million.

The DA said its Western and Central Visayas offices will provide seed, planting materials and bio-control measures to affected farmers. A quick response fund will also be tapped to rehabilitate farmland.

The DA said the Agricultural Credit Policy Council will lend farmers up to P25,000, payable in three years at zero interest. — Adrian H. Halili

What we know about the next-gen Tamaraw

June 10, 2024 | 12:02 am

Next-gen Toyota Tamaraw iterations were previewed at the recent Road Trek in Davao. — PHOTO BY ANGEL RIVERO

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Toyota’s iconic workhorse gets an all-new platform and more

THE TOYOTA TAMARAW, once an ubiquitous part of the automotive scene in the country, is scheduled to make a comeback this year after a long absence. Not only will this be good news in terms of providing more options to those seeking a flexible commercial (or even family) vehicle; the Toyota Tamaraw will ultimately be healthy for the economy as it will be manufactured in the Toyota Motor Philippines (TMP) plant in Santa Rosa, Laguna — leading, we expect, to more jobs.

Except for a November launch, TMP is keeping details of the next-gen Tamaraw very close to its chest. However, “Velocity” managed to get some information from a reliable source.

Everyone knows, of course, that the Tamaraw will be platformed on Toyota’s so-called IMV (Innovative International Multipurpose Vehicle) 0, a ladder frame chassis that is highly configurable. The final product in people mover (utility van) guise will measure 5,305-millimeter (mm) long, 1,795-mm wide, 2,100-mm tall, and with a wheelbase stretching 3,085mm. In summary, it is said to be “class-leading” in its category, and Toyota hopes this Tamaraw will allow the brand to even more thoroughly corner the market.

It remains to be seen what is to become of the Lite Ace badge, but it’s safe to assume that it will eventually be eased out of the market. We’ve heard this much from our sources, as well.

The Tamaraw has several crucial safety features such as air bags for both the driver and front passenger, along with anti-lock brakes and electronic brakeforce distribution. TMP also stresses that it is easy to service the Tamaraw as its “maintenance item access” is conveniently realized through the hood, unlike competitors which call for the front seats to be yanked upward.

Speaking of the hood, underneath the new-generation Tamaraw’s bonnet is either a 2.4-liter diesel or 2.0-liter gas mill. The diesel serves up 150ps at 3,400rpm; the gas delivers 139ps at 5,600rpm. Torque is pegged at 400Nm/1,600rpm for the higher grade, 343Nm/1,400rpm for the long-wheelbase (LWB) diesel, and 183ps/4,000rpm for the short-wheelbase (SWB) gas. Drivers realize the performance promises via a six-speed automatic (for the higher grade) or five-speed manual for the LWB and SWB. The diesel gets 16-inch alloy wheels, while the gas receives 14-inch steelies.

Other configurations (at least when the Tamaraw debuts in November) will be a dropside pickup, and aluminum van. As for the pricing? We hear that the dropside pickup will be priced from P850,000, while the utility van will be priced from P1.031 million. — Kap Maceda Aguila

Giving dads the gift of time

June 10, 2024 | 12:02 am

FEW things are more precious than a father, and here is a lineup of precious timepieces just waiting to be unboxed by dear old dad, from everyday selections from Seiko to cutting-edge tech by IWC Schaffhausen.

SEIKO: A WATCH FOR EVERY DAD
In celebration of Father’s Day, Seiko presents a carefully curated selection of timepieces to complement every father figure. Celebrate the man of the house with a timepiece that reflects his unique personality and passions in life.

To the dad who loves to dive, the Seiko Marinemaster series offers ideal choices. Each Prospex model — SJE097 featuring a white patterned dial, SJE099 with a light blue frosted dial, and SJE101 with a dial inspired by dark water is crafted for durability and precision underwater. With up to 200 meter water resistance, these watches are for adventurous dads into water sports.

For dads who thrive on the track or trail, the Seiko Speedtimer series is a top pick. SSC933 has a striking dark green design and black sub-dials, offering a sporty yet relaxed sophisticated look, while SSC935 features a sporty yet more polished style, showcasing a pale blue dial and sunray finishing. Both models have robust chronograph functions, making it a thoughtful present for dads who embrace the thrill of running. Designed for the sophisticated golfer dad, the Seiko Alpinist SPB409 offers a striking aesthetic with its white sunray dial and blue and red accents. It has wedge-shaped markers and stylized numerals and hands, which enhance readability and add a touch of elegance to the watch. Overall, the model — which comes in a white 110^th Anniversary collector’s box — embodies elegance and brings functionality in one.

For mountain-climbing dads who seek resilience and adaptability at high altitudes, the Seiko Landmaster SPB411 is made to conquer any terrain. This limited-edition model, which shows a sunburst gray dial, faithfully embodies the classic sports design and compact dimensions of its 1968 predecessor. Those who have career-driven and ambitious dads can opt to gift the classic and utilitarian SPB379 which features a matte black dial and band, or the modern and fancy SPB377 with a blue dial and strap. Both watches are great for those who balance business ventures with everyday pursuits. To the dad who suits any adventure, the Seiko Speedtimer SSC813 can be his ultimate day-to-day companion. Its white dial with a sand-blasted texture and black sub-dials makes it a versatile watch that keeps him ready for anything life brings his way.

Visit a Seiko store or shop online at shop.seikoboutique.com.ph.

TUDOR: NOW IN BRONZE
Tudor presents a bronze version of its famous Black Bay Fifty-Eight model, featuring for the first time a bronze bracelet fitted with a new clasp with rapid adjustment system. A new color palette, based on a rich “brown-bronze” tone, adorns the dial and bezel of a divers’ watch whose naval inspiration can be seen in every detail.

The watch has a 39 mm satin-brushed bronze case whose color evolves to match its user’s habits, as well as a shaded matte brown-bronze dial with applied hour markers and Arabic numerals at 3, 6 and 9 o’clock. It’s powered by Manufacture Calibre MT5400, certified by the Swiss Official Chronometer Testing Institute (COSC) with a hairspring in silicon and a 70-hour power reserve. Snowflake hands, one of the hallmarks of the Tudor divers’ watches introduced in 1969, with grade A Swiss phosphorescent Super-LumiNova coating, adorn the timepiece.

A bronze bracelet with a Tudor T-fit clasp secures the watch, with rapid adjustment and a complimentary brown-bronze jacquard fabric strap is included.

A NOVELTY TO WATCH: IWC SCHAFFHAUSEN UNVEILS LUMINOUS CERAMIC TIMEPIECE
IWC Schaffhausen has developed a proprietary luminous ceramic technology called Ceralume. Based on a highly engineered and patent-pending process, developed by IWC’s engineering division XPL, the technology enables IWC to produce fully luminous ceramic watch cases for the first time.

Lorenz Brunner, Department Manager Research and Innovation at IWC Schaffhausen, said, “With the first fully luminous ceramic case rings, we underscore our role as a pioneer and innovator in ceramic watches. The development of Ceralume took several years. The main challenges we faced were producing watch cases with maximum homogeneity and meeting our exacting quality standards. To achieve these goals, we engineered a ground-breaking new manufacturing process — tailored to the unique combination of ceramic powders and Super-LumiNova pigments.”

The glow effect is achieved by adding high-grade Super-LumiNova pigments to the ceramic raw materials. Engineered by Swiss technology company RC Tritec, Super-LumiNova is a high-tech ceramic compound that behaves like a light storage battery. The material absorbs light energy from sunlight or artificial light, stores it temporarily and then emits the absorbed energy as visible light. This cycle can be repeated an infinite number of times without ever causing the material to age or diminishing its light storage capacity. In dark chamber tests, Ceralume watch cases have emitted a bright blueish light for more than 24 hours.

Conventional white ceramic is made by mixing zirconium oxide with other metallic oxides. These powders are shaped into a so-called green body, machined close to the final case geometry and then sintered at high temperatures in a kiln. For the white ceramic to glow in the dark, Super-LumiNova pigments are added to the mix of raw materials.

One of the main challenges in the development of Ceralume was achieving a perfectly homogeneous mix of raw materials despite their different particle sizes and avoiding particle accumulations. To achieve this, IWC’s engineers reverted to a dedicated ball milling process, which had to be customized to the raw materials used. In addition, the parameters of the sintering process and the grinding of the sintered ceramic body also needed to be specifically adapted to the luminous ceramic.

Using the new Ceralume technology, IWC’s experimental division XPL has manufactured a fully luminous ceramic concept watch for the first time. In addition to its Ceralume case, the concept watch in a Pilot’s Watch Chronograph 41 design features a white luminescent dial and a white luminescent rubber strap. The dial and the strap have also been enriched with Super-LumiNova pigments. The dial’s brass base is sprayed with a Super-LumiNova solution before the printing is added on top of the luminescent layer. Manufactured in an injection molding process, the white rubber strap is likewise enriched with Super-LumiNova pigments. Developed by IWC Schaffhausen, the patent-pending Ceralume technology will form the foundation of future developments and releases.

Inflation, El Niño, geopolitical tensions impacted markets in Q1

June 10, 2024 | 12:02 am

Meat-shop-vendor — PHILIPPINE STAR/EDD GUMBAN

By Karis Kasarinlan Paolo D. Mendoza

A MIXTURE of inflation, El Niño, and geopolitical tensions continued to rock the financial markets in the first quarter while analysts expect borrowing costs to come down in the latter half of the year.

The Philippine Stock Exchange index (PSEi) — the barometer for the country’s stock market — closed the first quarter at 6,903.53, up 6.2% from 6,499.68 in the same period last year. The index was also up 7% from 6,450.04 in the October-December 2023 period.

Meanwhile, data from the Bankers Association of the Philippines showed the peso closed at P56.24 to the dollar in the first quarter, weakening by 1.6% and 3.5% from the fourth and first quarters of last year, respectively.

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According to the Bangko Sentral ng Pilipinas (BSP), the peso weakened in the first two months of the year due to higher market expectations of US Federal Reserve’s monetary policy continuing restrictions following higher-than-expected US inflation and strong labor data.

“Concerns over potential escalation of geopolitical conflicts in the Middle East and in the West Philippine Sea also had an impact on market sentiment. Nonetheless, the peso recovered in March amid signals from the US Fed on the timing of its monetary policy easing cycle possibly in the latter half of the year,” the BSP said.

The demand for Treasury bills (T-bills) reached P551.49 billion with offered T-bills reaching P202.3 billion in the first quarter. Demand was higher than P443.8 billion in the same quarter in 2023, and P300.51 billion in the final quarter of last year.

The oversubscription amount reached P349.19 billion, nearly twice last quarter’s P188.22 billion.

Treasury bonds jumped to P1.07 trillion from P461.69 billion in the previous quarter.

At the secondary market, domestic yields rose by 24.23 basis points (bps) on average quarter-on-quarter based on the PHP Bloomberg Valuation (BVAL) Service Reference Rates published on the Philippine Dealing System’s website.

On an annual basis, yields were also up by 12.38 bps.

Alvin Joseph A. Arogo, economist at Philippine National Bank (PNB), said in an e-mail that expectations of easing interest rates led to “mostly favorable movements” in the local financial markets in the January-to-March period.

In January, former Finance Secretary Benjamin E. Diokno said the central bank may reduce borrowing costs by up to 100 bps if inflation settles within the BSP’s 2-4% target.

Inflation fell within the BSP’s target of 2-4%, averaging 3.5% as of end-May.

The BSP has kept its policy rate steady at 6.5%.

However, other analysts said that headwinds such as geopolitical tensions, global inflation, and El Niño dampened markets in the first quarter.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines (UnionBank), said in an e-mail that tensions between Russia and Ukraine and Israel and Palestine caused an increase in oil and energy prices, negatively impacting financial markets.

“The war in Ukraine and potential conflicts in the Mideast ramped up risk aversion and disrupted global economic growth,” Security Bank Corp. Chief Economist Robert Dan J. Roces likewise said in a separate e-mail interview.

“Rising inflation in major economies notably the US and a sentiment pivot by the US Federal Reserve on the back of mixed economic data triggered capital flight from emerging markets like the Philippines,” he added.

The Fed kept its policy rate at 5.25-5.5% on May 1, waiting for “greater confidence” in easing inflation before cutting rates, Reuters reported.

High commodity prices such as that of oil and food further spurred domestic inflation, Mr. Roces said.

On the other hand, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., sees possible rate cuts despite geopolitical tensions.

“Global crude oil prices still hovered among two-year lows or since January 2022 despite the increased geopolitical tensions between Israel and Iran. That could still help US and local inflation to ease further, thereby supporting possible cuts in Fed and local policy rates later in 2024,” he said.

“At a local lens, the Philippine markets were affected as the agriculture industry faced the firsthand effects of El Niño. With lower crop yields and higher production costs, companies that are reliant towards agriculture resulted in price increases,” Mr. Asuncion said.

The effect of El Niño is expected to persist until May, causing agricultural produce to continue increasing in prices.

“[El Niño] is also expected to affect the foreign exchange markets. Since the Philippines heavily relies on exporting agricultural goods, the country’s trade balance and currency value will be negatively affected,” Mr. Asuncion said.

INDICATORS TO WATCH OUT FOR
Mr. Roces said that easing geopolitical tensions or a slowdown in global inflation could bode well for market performance, but continued headwinds could lead to volatility.

He also noted that Philippine economic data and the BSP’s monetary policy decisions are key factors to watch out for.

Analysts also said that Fed rate cuts should be monitored closely, as the Fed could be matched locally by the BSP later in the year.

“The outlook for US monetary policy continues to be a significant factor for emerging markets and thus may exert some pressure on domestic financial markets. In particular, expected delays in the US Fed’s policy easing cycle have fortified risk-off sentiment among market participants, which may indicate increased safe-haven trade and continued broad US dollar strength,” the BSP said.

Analysts said that the BSP will also consider inflation, economic growth, and exchange rate stability before cutting rates.

“If inflation shows a sustained downward trend and settles within the target range 2-4%, a rate cut becomes more likely. Continued economic growth without inflationary pressures would support a rate cut, and a stable peso is crucial to avoid imported inflation and potential capital outflows,” Mr. Roces said.

The central bank likewise said that its priority is to ensure that inflation will consistently be within its target before it starts its monetary easing cycle.

“The BSP deems it appropriate to keep monetary policy settings sufficiently tight in the near term to ensure that inflation reverts back to target inflation path before shifting to an accommodative policy stance,” it said.

“Since inflation continues to persist, there will be an increase in the yield on fixed income securities, leading to capital losses for bondholders,” Mr. Asuncion said.

PNB’s Mr. Arogo sees interest rate at 6% by end-2024 as they expect inflation to settle within the BSP’s 2-4% target starting September.

“In our view, however, the BSP should not cut rates ahead of the Fed or else risk further exchange rate weakness. If the Fed eases by 25 bps each on September and December, the BSP could follow in October and December,” Mr. Arogo said.

He expects markets to remain volatile in the second quarter due to uncertainty of the timing and magnitude of rate cuts amid fluctuations in inflation.

Mr. Asuncion expects seasonal effects to remain a factor in the second quarter and throughout the year as La Niña may develop in July or August this year. He added that the unpredictably of the climate may negatively impact sectors such as agriculture, construction, and tourism.

“In line with La Niña, there is a risk of flooding and landslides which will lead to delays or increased government spending in the construction of public works and destroyed crops from floodings leading to an increase in the production cost and the price of agricultural produce. In this case, investors will be keen on potential fluctuations in the market, to anticipate potential upward spikes in these commodities,” he said.

The BSP also said that supply-induced inflationary pressures stemming from adverse weather conditions may shift expectations and lead to further second-round effects.

On the upside, domestic factors such as economic growth prospects as well as growth in remittances and foreign direct investments are expected to help markets, it said.

FOREIGN EXCHANGE (FX) MARKET
Mr. Asuncion: The monthly USD-PHP exchange rate has been moving within the 55.88-56.03 range on average. However, in the beginning of [the second quarter], this increased to an average of 56.99 for April. For the remainder of [the second quarter], exchange rates are expected to face an increase, especially for the month of May, as the Philippines experiences negative implications from external factors such as US monetary policy, extreme heat from El Niño, increasing geopolitical tensions, etc.

Mr. Roces: The peso faces depreciation pressure due to potential global capital outflows and a stronger US dollar.

Mr. Ricafort: Improved US/global market risk appetite that could support sentiment on Emerging Markets, such as the Philippines, after US stock markets again posted new record highs. It is important to note that the US dollar-peso exchange rate already posted a bigger increase compared to most ASEAN currencies since the start of 2024 and since the Russia-Ukraine conflict started on Feb. 22, 2022.

EQUITIES MARKET
Mr. Asuncion: PSEi index closed at 6,646, 6,945, and 6,904. As for [the second quarter], the month of April ended with a close of 6,700. With historical data and Autoregressive Integrated Moving Average (ARIMA) models, we have forecasted the remaining months to have a close of 6,733 and 6,765 for May and June, respectively. Evidently, decreasing by a substantial amount when compared to Q1 index. This, however, is set to recover as we forecast a close of 6,962 by the end of 2024.

Mr. Ricafort: The local stock market gauge, the PSEi, corrected lower recently, at 6,607.22 after higher-for-longer signals from most Fed officials recently that partly reduced the odds of Fed rate cuts. Mostly higher net income of local listed companies recently that could support valuations. Seven-month support is at 6,360, which helps keep intact the underlying upward trend/momentum over the past seven months or since October 2023.

BSP: External developments including uncertainty in the timing of the US Fed’s monetary policy easing cycle due to delayed US inflation progress, subdued global economic growth prospects amid the elevated interest rate environment, as well as geopolitical concerns in the Middle East are expected to influence movements in domestic financial markets in the remainder of the second quarter. Other factors affecting market sentiment, such as the increasing upside risks to domestic inflation, as well as lingering geopolitical tensions in the West Philippine Sea will likewise continue to influence market movements.

FIXED-INCOME MARKET
Mr. Asuncion: Fixed-income inflation during [the first quarter] headlined at 2.77%, 3.4%, and 3.7%. In [the second quarter], the headline for inflation in April was 3.8%. Based on historical data ARIMA models, we have projected that May and June will have inflation headline values of 3.97% and 4.47%, respectively, for the coming months. Since inflation continues to persist, there will be an increase in the yield on fixed-income securities, leading to capital losses for bondholders.

Mr. Roces: If the BSP maintains current interest rates, fixed-income yields could rise, making existing bonds less attractive. However, new bond issuances with higher yields could be appealing to investors.

Mr. Ricafort: PHP BVAL yields mostly corrected lower since May 2024: Long-term PHP BVAL yields mostly among one-month lows, with the 10-year tenor at 6.7%. Further local policy rate pauses or cut (especially in 2024) could already be possible for the coming months, as fundamentally supported by the easing inflation trend as seen recently amid higher base/denominator effects; also, as a function of future Fed rate pause or cut. n

BPEC’s Delgado seeks stronger community participation in energy, water development

June 10, 2024 | 12:02 am

By Sheldeen Joy Talavera, Reporter

IN the energy and water sectors, Frits T. Delgado, president of renewable energy company BPE Corp. (BPEC), seeks to foster a collaborative community focused on problem-solving.

“I want a community that challenges itself rather than protects and becomes territorial,” Mr. Delgado said in an interview with BusinessWorld.

“I want it to be dynamic. I want people to contribute,” he added.

He also expressed his desire for a community that values not just the product, but also its narrative and goals, ensuring that its purpose is not forgotten when challenges arise.

“I want a community like that, that doesn’t only focus on the product, but the story and where it’s going, what we’re after here. So that when problems emerge, you don’t lose sight of why it was put there in the first place,” he said.

BPEC was founded in 2020 amid the coronavirus pandemic and began full operations in 2022. The company, headquartered in Pasig, is a partnership between advisory firm GAA Delgado, Inc. (GAAD) and BlueCap Hydro Group of The Hague, Netherlands. Their focus lies in the development of various micro-hydro projects utilizing BlueCap Hydro’s proprietary turbine technology.

BEFORE BPEC
Mr. Delgado started working as a business development officer at GAAD in 2016. He also became an advisor for two liquefied natural gas power plants.

“I came into college not knowing what I wanted to take. I really wanted engineering. Well, firstly, because I was pretty good at math and I loved figuring out how to build things, spacing them, and all of this. I liked learning about processes rather than rules,” he said.

He enrolled in an undergraduate program in management at Ateneo de Manila University but did not complete it. He then transferred to Kalayaan College to study psychology, which aided his understanding of human motivation.

“It felt like a default… There was no fulfillment in management at the time. Because I couldn’t contextualize it…, I think people have to get their hands wet first before you can apply management principles,” he said.

Mr. Delgado pursued a few units of a Master of Science and Management program but was unable to continue as he needed to dedicate his time to BPEC.

COMPANY PROJECTS
BPEC is currently constructing a pilot mini-hydropower project in Bulacan, scheduled to be commissioned in July, and is expected to be commercially operational this year, supported by an initial investment fund of $20 million.

Micro-hydropower plants, which typically range from one to 100 kilowatts in capacity, generate electricity by harnessing the natural movement of water.

In 2023, the company entered into a memorandum of understanding with the National Irrigation Administration to conduct a feasibility study for the pilot installation of a micro-hydropower plant at the weir of Angat-Maasim River Irrigation System in the municipality of Angat, Bulacan.

“We are funded by direct investments from the investor pool of my partner, BlueCap. We also receive partial funding from the Dutch government through specific grants and another from a soft loan provided by one of their development banks,” Mr. Delgado said.

He described the company’s turbine, to be used for the hydropower project, as unique “because it’s oriented horizontally… so it passes from left to right.”

Due to its small and modular design, the project can be installed in irrigation channels, which, he said, “enhances the overall value of the structure.”

“When managing water, it’s crucial to consider it as if it were infinite in nature but uncontrolled and disorganized, as it originates from nature.”

“There’s a concept of not building on the mountain, but building with it… You don’t compromise its integrity or aesthetics, but rather work in harmony with it. That’s the essence of what I aim to achieve with BPEC,” he added.

LESSONS FROM HIS FATHER
As he delves into his career, he said he brings with him the lessons from his father, Guido Delgado, who currently chairs GAAD and formerly served as president and chief executive officer of the state-run National Power Corp. (Napocor) from 1994 to 1998.

His father’s tenure as Napocor president was after the height of the power crisis in the Philippines in the early 1990s.

From October 1992 to May 1993, the main island grid of Luzon experienced rotating brownouts of up to 10 hours daily, as reported by the Los Angeles Times.

“A lot of the big functional plants were put up at that time,” he said.

Napocor provides power generation and associated power delivery systems in areas not connected to the transmission system, through the Small Power Utilities Group.

“There was a lot of mentorships involved from my father, of course. He’s very skilled in financial structuring, marketing, dealing with the regulatory and all that. I took all of that, all of those learnings, simulated it,” he said.

Excellence in immunization

June 10, 2024 | 12:01 am

The city government of Carmona, Cavite is a showcase of how leadership and community participation result in the effective delivery of health services, particularly immunization.

Carmona City achieved 85% fully immunized child (FIC) coverage rate in 2023 and 97.8% influenza immunization rate for senior citizens, as well as recorded zero cases of measles, polio, diphtheria, and neonatal and maternal tetanus for the past several years. In 2022 and 2023, Carmona City was among the Department of Health (DoH) Golden Jab Awardees for achieving the highest vaccination coverage for measles and rubella supplemental immunization among LGUs nationwide.

How did Carmona City achieve these impressive immunization milestones?

Mayor Dahlia Loyola presented Carmona City’s immunization initiatives during the Health Connect media forum in celebration of World Immunization Week 2024 and the 50^th anniversary of the Expanded Program on Immunization (EPI).

First, the city government provides a supportive environment for immunization by consistently increasing its annual budget allocation for purchasing vaccination supplies and additional vaccines, alongside enhancements in health facilities and cold chain logistics.

Health workers, public school teachers and students from Carmona City participated in the S.H.I.E.L.D. Against Cervical Cancer Program Strengthening HPV Immunization towards Elimination through Leadership Development. In partnership with the Philippine Foundation for Vaccination (PFV) and Raising Awareness on Influenza to Support Elderlies (RAISE) Coalition, the LGU organizes community vaccination for senior citizens on Sept. 11 of every year in celebration of Grandparents’ Day. House-to-house immunization activities are also regularly conducted to cater to bedridden residents.

In 2022, the LGU launched the “Bata V.I.P ka sa Carmona” vaccination incentive program to encourage students from Kinder to Grade 12 to get their complete and updated COVID-19 vaccines. The program provided a P500 cash incentive to all students who completed their first two doses and succeeding two booster shots, coupled with rice assistance to their parents. Through their Biyaheng Bakuna Centers initiative, the city government provides residents, particularly those from far-flung municipalities, with free transportation to vaccination centers.

During every official event and activity, City Health Office and barangay health stations personnel include information dissemination on the importance of immunization in maintaining and improving the health of our constituents. Mothers Class sessions are held every Bakuna Day to empower parents and enhance immunization literacy.

Town hall meetings are organized, and advocacy videos are shown to build trust in vaccines and bolster vaccine uptake during supplemental immunization activities.

Second, the city government provides policy support for immunization. The then Carmona Municipal Council passed Municipal Resolution No. 018-2010 to support the DoH “Bakuna ang Una sa Sanggol at Ina” program by allocating the necessary funds for vaccination and other related EPI activities. They also issued Executive Order No. 61 directing the prioritization and intensification of Carmona’s vaccination program. The city government also utilizes the Local Disaster Risk Reduction Management Office (LDRMM) Fund to purchase additional vaccines and supplies for outbreak response activities.

Third, the city government strengthens community action by initiating Barangay Emergency Health Response Teams for timely disease surveillance and reporting. Barangay health workers (BHWs) as well as family health workers (FHWs) provide invaluable support to supplemental and catch-up immunization activities.

The LGU engages with various community stakeholders and partners such as NGOs, civil society organizations, the Department of Education (DepEd), parent-teacher associations (PTAs), and religious organizations to ensure effective information dissemination and immunization demand generation.

Fourth, health workers’ skills are developed through local training and budgetary support for capacity-building seminars. Interpersonal communication training has transformed BHWs to “Bakuna Champions” who are boosting vaccination updates in Carmona City.

Lastly, the city government reoriented health services through the establishment of the Health Promotion Unit and Health Promotion Board. This reorientation underscores the shift towards prioritizing health promotion and disease prevention alongside basic health services.

Looking ahead, the city laid out the administration’s plans. First, develop a comprehensive immunization plan. Second, strengthen the city’s cold chain infrastructure. Lastly, increase the annual budget allocation for capacity development in support of immunization.

The Mandanas Ruling by the Supreme Court in 2018 and confirmed in 2019 mandates a substantial increase in the share of National Government tax revenue transfer to local governments. It is expected to provide opportunities for improving service delivery through enhanced decentralization.

While awaiting the full implementation of the Mandanas Ruling, Mayor Loyola called on the National Government to provide budgetary support to second- to sixth-class municipalities to enable them to implement effective health programs including immunization initiatives. First-class LGUs are more than capable of funding immunization programs if they want to, she added.

Teodoro B. Padilla is the executive director of Pharmaceutical and Healthcare Association of the Philippines (PHAP). PHAP represents the biopharmaceutical medicines and vaccines industry in the country. Its members are in the forefront of research and development efforts for COVID-19 and other diseases that affect Filipinos.

Debt yields drop on May inflation data

June 10, 2024 | 12:01 am

YIELDS on government securities (GS) mostly went down last week as Philippine inflation picked up at a slower pace than expected last month.

Yields, which move opposite to prices, fell by an average of 2.73 basis points (bps) week on week, according to data from the PHP Bloomberg Valuation Service Reference Rates as of June 7 posted on the Philippine Dealing System website.

Rates at the short end were mixed, with the rate of the 91-day Treasury bill (T-bill) going down by 3.18 bps to 5.7038%. Meanwhile, yields on the 182- and 364-day T-bills went up by 4.07 bps and 1.61 bps to 6.0003% and 6.0814%, respectively.

At the belly of the curve, yields on the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) went down by 2.65 bps (to 6.2818%), 4.05 bps (6.3418%), 5.09 bps (6.3992%), 5.7 bps (6.4564%), and 6.27 bps (6.5645%), respectively.

At the long end, the 10-, 20-, and 25-year debt papers dropped by 5.69 bps (to 6.6947%), 0.32 bp (6.8254%), and 2.78 bps (6.8141%), respectively.

GS volume traded rose to P14 billion on Friday from P12.51 billion on May 31.

Analysts attributed the mostly lower GS yields last week to softer-than-expected May inflation.

“The May inflation was a surprise to the downside as market expectations were at 4% and the 3.9% figure was on the lower end of BSP’s (Bangko Sentral ng Pilipinas) expected range.

Although it was at a six-month high, it was mostly expected to spike until July due to base effects,” a bond trader said in a Viber message.

The Philippine consumer price index (CPI) accelerated to a six-month high of 3.9% in May from the 3.8% pace in April, the government reported last week.

Still, this was slower than the 6.1% in May last year. This was also within the BSP’s 3.7-4.5% forecast fro the month and was a tad lower than the 4% median estimate in a BusinessWorld poll of 16 analysts.

“Yields were still lower for the week as they tracked the movements in US Treasury (UST) yields and was instead spurred on by the inflation print,” the bond trader added.

“UST yields [moving] lower reflect market pricing in Federal Reserve rate cuts as well, so that means easier for BSP to deliver on their own projected cuts,” a second bond trader added.

On Thursday, benchmark 10-year US Treasury yields were a touch higher at just over 4%, although that was still near their lowest in two months, after data this week hinted that the US labor market is finally cooling.

That included private US payrolls on Wednesday and a report on Tuesday that showed job openings fell in April to the lowest in more than three years.

However, on Friday, surprisingly strong US monthly jobs data dimmed hopes that the Federal Reserve would soon follow euro zone and Canadian interest rate cuts, causing Treasury yields to shoot higher.

The world’s largest economy added 272,000 jobs last month, beating the 185,000 hires predicted by economists and derailing an investor consensus that the jobs market had slackened just enough to push consumer prices lower.

The benchmark 10-year US Treasury yield, a benchmark for borrowing rates globally, leapt over 15 bps after the jobs report, to 4.4335%, its biggest one-day jump in about two months.

The two-year yield, which tracks interest rate expectations, climbed nearly 17 basis points to 4.8868%, following six straight days of declines until Thursday. Bond yields rise as prices fall.

Money market pricing just after the payrolls data implied traders saw the Fed only starting to cut rates from their 23-year high of 5.25-5.5% by November. US interest rate futures also lowered the chances of the Fed’s cutting rates by 25 basis points in September to 56%, down from around 70% on Thursday, according to LSEG’s Fedwatch.

For this week, the bond traders said GS yield movements will depend on the latest US jobs data released on Friday.

“Market will react to the [non-farm payrolls] figure from the US and its consequent effect on rate cut expectations by the Fed. While the BSP has stated that it can reduce ahead of the Fed, it is unlikely to do so given the potential effects on the peso-dollar exchange rate,” the first bond trader said. — Karis Kasarinlan Paolo D. Mendoza with Reuters