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THE GOVERNMENT made a partial award of the Treasury bonds (T-bonds) it offered on Tuesday as rates rose on expectations that inflation in the world’s largest economy remained sticky, which could push back the US Federal Reserve’s policy easing.
The Bureau of the Treasury (BTr) raised just P11.528 billion via the reissued 20-year bonds it auctioned off on Tuesday, 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%. Accepted yields were 6.7885% to 6.994%.
The average rate of the reissued bonds rose by 35.7 basis points (bps) from the 6.593% fetched for the papers’ last successful award on Nov. 21, 2023. This was also 20 bps above the 6.75% coupon for the series.
The rate was likewise 4.52 bps higher than 6.9048% quoted for the 20-year bond and 4.99 bps above 6.9001% seen for the same bond series at the secondary market before Tuesday’s auction, based on PHP Bloomberg Valuation Service Reference Rates data provided by the Treasury.
Tuesday’s award brought the total outstanding volume for the bond series to P115.3 billion, the BTr said in a statement.
“The BTr awarded T-bonds at a higher rate amid expectations of robust US inflation reports this week,” a trader said in an e-mail.
Investors are awaiting the crucial inflation report this week that will likely shape the US rates outlook, Reuters reported.
Investors have had to dial back their expectations of rate cuts this year due to sticky inflation and are now pricing in 42 bps of easing this year, compared with 150 bps of easing anticipated at the start of 2024.
They are also pricing in a 60% chance of a cut in September, versus 75% a month earlier, according to CME FedWatch tool.
All eyes this week will be on the consumer price index (CPI) on Wednesday, which is expected to show that core consumer prices rose 0.3% month on month in April, down from 0.4% growth the prior month, according to a Reuters poll.
But before that, US producer price index was due to be released later on Tuesday, which analysts will parse through to get a sense of whether inflation is heading towards the Fed’s target of 2%.
The US central bank this month kept its target rate at the 5.25%-5.5% for a sixth straight meeting.
The T-bonds were partially awarded as rates rose due to renewed expectations of a rate cut by the Bangko Sentral ng Pilipinas (BSP) within this year after recent economic data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Headline inflation picked up for a third straight month to 3.8% year on year in April from 3.7% in March, the Philippine Statistics Authority reported last week. Still, this was slower than the 6.6% print in the same month a year a prior.
This was within the BSP’s 3.5-4.3% forecast for the April CPI and marked the fifth straight month that inflation settled within the central bank’s 2-4% annual target range.
The April CPI was also below the 4.1% median estimate in a BusinessWorld poll of 16 analysts.
For the first four months, headline inflation averaged 3.4%, lower than the BSP’s 3.8% full-year forecast.
Meanwhile, Philippine GDP expanded by 5.7% in the first quarter, faster than the 5.5% expansion logged in October-December 2023.
However, this was slower than the 6.4% growth seen in the first quarter of 2023 and was below the 5.9% median forecast of 20 economists in a BusinessWorld poll.
This also fell short of the government’s 6-7% full-year GDP growth target.
BSP Governor Eli M. Remolona, Jr. said before the release of both April CPI and first-quarter GDP data that if inflation settles within target and if economic growth is weaker than expected, the Monetary Board can cut rates as early as the third quarter. Otherwise, it could begin easing as late as the first quarter of 2025.
The Philippine central bank raised borrowing costs by a cumulative 450 bps from May 2022 to October 2023. It will meet to review policy on May 16, Thursday, where 17 of 19 analysts in a BusinessWorld expect it to keep its policy rate at a 17-year high of 6.5% for a fifth straight meeting.
The BTr wants to raise P210 billion from the domestic market this month, or P60 billion from Treasury 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 with Reuters
By Patricia B. Mirasol, Multimedia Producer
FAMILY-RUN enterprises should consider employing outsiders to professionalize their operations, according to siblings who own a local gift shop business.
Papemelroti has started hiring nonfamily experts for its business, according to Peggy Margaret A. Pilapil-Lasa, chief human resource officer and one of the five siblings who inherited the 57-year-old gift shop from their parents Bienvenido and Socorro Alejandro.
“We’ve recently hired an HR professional because compensation is under HR, and that was something we had no idea about how to decide on — even for our employees,” she told BusinessWorld.
“We would just think, ‘Who would we really feel bad about… because they’re hard to replace?’”
The family also started hiring middle management to help with decisions for them and the rest of their more than 100 employees.
Papemelroti, which has 21 branches mostly inside malls around the Philippine capital, opened in 1976 in Ali Mall, Quezon City, and it was the family’s second gift shop after KorBen Gifts, which opened in 1967.
The name comes from the first syllables of the Alejandro siblings’ names — Patsy, Peggy, Meldy, Robert and Tina — who each helped in the business during summer breaks from school.
When the gift shop, which sells postcards, greeting cards, planners, notebooks, letter holders, mugs and personalized gift items grew, Ms. Lasa realized that there had to be a way to evaluate staff.
“I was the one who started writing down ways that we could evaluate them, and so HR became mine even if I had absolutely no training in it,” she said.
Balancing interpersonal and business demands is one of the challenges of family businesses, according to a January 2020 Harvard Business Review article.
Other potential issues include succession, compensation and underperforming executives.
Outsiders can bring expertise not available in the family, according to an article by Fairleigh Dickinson University. Nonfamily managers can likewise run day-to-day operations if no one in the family wants the role.
The rules are not clear-cut in a family business, Ms. Lasa said.
“I’m HR head, but if you have an opinion about it, you can give it. It’s not as if I’m an expert,” she added.
Succession isn’t a straightforward matter either — this is why the family is grateful someone from the third generation chose to work for Papemelroti, Patricia A. Paterno, the company’s managing director, said.
“You pray about succession and how it will go on because it’s a family business,” the eldest of the five Alejandro siblings said.
“I distinctly remember when I prayed and God said to me, ‘Don’t worry, I have a plan,’ and then Elyse P. Juan, my niece, came in,” she said.
As creative director, it was Ms. Juan, Ms. Lasa’s daughter, who pivoted the business online during the coronavirus pandemic.
“We would love to have the other nephews and nieces come in, but they’re busy with their own careers,” Ms. Lasa said.
A family business should offer unique items and have a personality to be successful, Ms. Paterno told BusinessWorld.
“What’s good about our family — and I think maybe a lot of family businesses — is that we have the same mission and vision,” she said.
Back when they had a store in Ali Mall, someone suggested that the family sell products with green jokes to drive sales.
“No way. That’s not the way we wanted our store to be,” Ms. Paterno said. “If you see our products, they’re inspirational. They’re God-centered.”
The family’s vision and mission, she added, is “hands to work, hearts to God.”
“Don’t wait until everything’s perfect,” Ms. Paterno said, noting how her mother started the company more than half-a-century with no capital and no background in business. “What she did have was this passion for making things, and she passed this on to us.”
“Each one of us has God-given gifts. If we can nurture and use it, God will work with us and make our dreams come true. I believe our business is an example of that.”
SHELL Pilipinas Corp. has earmarked a capital expenditure (capex) budget of up to P3 billion for this year, mainly allocated to its terminals and mobility stations.
About 50% will be dedicated to “improving the asset integrity and efficiency of our terminals across the country,” Reynaldo P. Abilo, Shell Pilipinas treasurer, said during the company’s annual stockholder’s meeting on Tuesday.
The company aims to enhance its primary facility, the Tabangao import terminal in Batangas, inaugurated in 2021.
“About 50% will be dedicated towards enhancing the mobility footprint that we have in the country,” he said.
“We ended 2023 with a total of 1,179 mobility stations, and we are planning to increase our mobility sites by about 20 to 25 new mobility stations this year,” he added.
Shell Pilipinas President and Chief Executive Officer Lorelie Quiambao-Osial said that the company is on track to deliver its fourth medium-range capable terminal this year, and the fifth to be delivered in 2026.
“We aim to be a major player in the energy industry, and we want to continue elevating industry governance standards and advanced energy transition at pace with society,” she said.
Michael Ramolete, vice- president for mobility, said that the company is aiming to grow against its competitors by winning back its customers.
“Obviously, our focus is to be able to win back customers through stronger product claims and integrated fuels and NFR promotions,” he said. “This will enable us to deliver both volume generation and brand premium versus our competitors.”
For 2023, Shell Pilipinas posted a 71% decline in its net income to P1.18 billion which was attributed to the decline in global fuel prices and elevated interest rates. — Sheldeen Joy Talavera
SOUTH KOREA’s tech-heavy stock market has found inspiration in an underappreciated sector of the nation’s sprawling economy. HD Hyundai Marine Solution Co. raised more than $500 million in its initial public offering (IPO) last week and immediately found momentum: The stock doubled in the first few days of trading, taking its market value past $5.8 billion.
It’s not a chipmaker like Samsung Electronics Co. nor an electric-vehicle battery supplier like LG Energy Solution Ltd. HD Hyundai Marine is in the ship-services business, and investors have taken notice. The biggest winner from its meteoric first-week rise is its largest shareholder, South Korea’s Hyundai conglomerate. Private-equity firm KKR & Co. is also counting its profits as it retains a 24% stake after the listing. KKR, HD Hyundai Co. and its slate of new investors are all betting that a global green movement that’s taking hold in industries from server farms to automobiles will prove lucrative to the ocean transport sector. Regulations implemented by the International Maritime Organization in 2020, called IMO2020, mandate hitting reduction targets for sulfur dioxide emissions to reduce shore-side air pollution. That means using less, and cleaner, fuel. A separate set of goals for greenhouse gas emissions, called the 2023 IMO GHG Strategy, aims to cut carbon-dioxide emission intensity 40% by 2030, including 10% of all fuels being zero-emission.
There’s a few ways these goals can be achieved. The first is to build entirely new ships with cleaner, more efficient engines. That’s happening, and is driving demand at ship builders. Another is to retrofit devices onto existing engines that filter exhaust air, make tweaks that ensure they run more efficiently, or convert them to dual-fuel so that they can use cleaner alternatives like methanol or ammonia.
Each of these choices requires a follow up-service, including checking and replacing components, as well as testing whether a ship is running at maximum efficiency. These ongoing costs will be an increasingly important part of marine-transport operations. It’s also an opportunity for maintenance companies.
HD Hyundai Marine’s business does both: retrofitting and after-market support for ships. It also provides fuel supply for maritime vessels, known as bunker service. Among the deals it has struck is a contract to help Greek operator Thenamaris LNG implement re-liquefaction on at least one of its carriers, a process that returns evaporated gas back to their tanks. This cuts wastage and carbon emissions. The business also installs treatment systems to clean up ballast water, a common cause of ocean pollution, to make ships meet stricter environmental regulations.
These eco-friendly vessels tend to require greater care — the engines are often more complex, and the parts more expensive. That’s why HD Hyundai Marine is so confident that revenue will keep rising. Splintering of supply chains and logistics will also be a driver.
According to the company, HD Hyundai Maritime’s annual turnover includes 50,000 purchase orders and 80,000 deliveries with warehouses in Busan, Rotterdam, Houston, Singapore, and soon Dubai. As global manufacturing diversifies away from China, we’ll see more factories open in Vietnam, India, Mexico, and Eastern Europe. Rather than replacing China, supply chains will require ships making calls in more ports and with more frequency.
To keep up, the firm will have to grow. IPO proceeds will go toward expanding shipyards in Southeast Asia, increasing warehouse capacity, and developing technologies for making vessels more green, Chief Executive Officer Lee Ki-dong said in an interview with Bloomberg News last week. Each of these moves will add cost and complexity, but if executed efficiently will also offer competitive advantages.
It’s not alone in the space. Alfa Laval AB of Sweden and Norwegian Kongsberg Gruppen ASA, named as peers in its prospectus, offer a similar collection of services. A handful of Chinese names are also in the mix. But HD Hyundai Marine’s biggest advantage is its parentage, including its affiliation with the world’s biggest shipbuilder HD Hyundai Heavy Industries Co.
Simply acting as Hyundai Heavy’s after-market sales and service business would be enough to give it an advantage over rivals, and it will definitely leverage that relationship. But in the long term, sustainable growth needs to come from building a reputation as a reliable provider of greening services.
There are myriad ways companies like HD Hyundai can mess up. Expanding too fast and overspending on new facilities is a big risk. Failing to keep up with industry trends, or the market itself suffering a downturn are others. Right now, investors don’t seem concerned. Their love for this exciting new category of company may wane when the EV market picks up again, or the smartphone sector finally returns to growth. But, for now, ship maintenance is exciting.
BLOOMBERG OPINION
*CO2 intensity refers to the amount of emissions per unit of work.
COMPANIES are trying all kinds of things to find their way in the increasingly competitive space industry.
A German startup is adding candle wax to that list.
HyImpulse Technologies last week launched a sounding rocket powered by a combination of liquid oxygen and solid paraffin — a petroleum byproduct that’s a key ingredient in candles.
Mario Kobald, who co-founded the company in 2018, is taking this approach because he saw too many young companies trying to develop rockets similar to Elon Musk’s industry giant SpaceX, which uses liquid oxygen and kerosene to fuel its workhorse Falcon 9 rockets.
“You cannot compete with the costs of a system that’s already on the market for many years when you have established players like SpaceX,” says Mr. Kobald, who started HyImpulse with several former classmates from the University of Stuttgart, where he received a PhD in aerospace engineering.
Instead, HyImpulse says its mission is to make access to rocket trips more affordable and environmentally friendly with “space-grade candle wax” as a key part of its strategy. The material is “cheap compared to kerosene,” Mr. Kobald says.
Paraffin also is “non-toxic and very safe to handle,” he says. The material’s stability allowed the company to transport a rocket — complete with the paraffin fuel — as ordinary cargo on a container ship from Germany to Singapore to Australia, without the need for expensive restrictions to prevent explosions.
“All of this translates into competitive costs for the customers,” says the 42-year-old Mr. Kobald.
Paraffin is a derivative of gasoline production, so it’s not exactly a green alternative to standard rocket fuels. In the future, though, Mr. Kobald wants HyImpulse to use paraffin created from carbon dioxide and water.
HyImpulse isn’t the first to consider paraffin’s potential. Researchers at NASA and Stanford University studied the material more than a decade ago, looking at its ability to burn quickly and provide the thrust needed by a rocket.
Last December, researchers from MIT’s Media Lab sent wax aboard a Blue Origin New Shepard flight to study the impact of microgravity on the material and its ability to be used as a fuel for de-orbiting spacecraft.
HyImpulse performed its biggest test of its technology on May 3 from a site operated by Southern Launch, a spaceport company with ambitions to become a leader in Australia’s nascent space industry.
The mission’s slogan of “light this candle” managed a twofer by highlighting the innovative fuel, while also hearkening back to US astronaut Alan Shepard’s memorable comment before he became the first American in space on a suborbital flight in 1961.
HyImpulse’s single-stage SR75 rocket went up 50 kilometers (31 miles), according to media reports. The company said in a statement that the test was a success but didn’t disclose details about the altitude or landing.
In its statement, HyImpulse said the SR75 is capable of reaching 250 kilometers, which would be high enough to send small satellites to very low-Earth orbit.
The company already has its sights set on more lucrative markets. It’s developing a larger rocket, also powered by liquid oxygen and paraffin, that will be capable of reaching altitudes of more than 500 kilometers and is scheduled to launch by the end of next year. — Bloomberg News
LONDON — For sale, vintage guitar with proven heritage. At least one not-so careful owner.
The acoustic guitar that auctioneers say Eric Clapton used to compose his hit ballad “Wonderful Tonight” is going under the hammer next month with a guide price of up to $500,000.
Among its listed distinguishing marks are burns on the headstock, left by the cigarettes Mr. Clapton stuck under the strings.
The guitarist — who performed with the English R&B group The Yardbirds in the early 1960s, then with John Mayall & the Bluesbreakers, supergroups Cream and Blind Faith, Derek and the Dominos, and as a solo artist — acquired the instrument in the mid 1970s, auctioneer Bonhams said.
He used it to compose songs, including his 1977 hit about model Pattie Boyd, Bonhams added. According to rock legend, he wrote “Wonderful Tonight” as he was waiting for her to get ready for a party.
The 1974 000-28 Martin acoustic also has a sticker on the side reading “She’s in Love with a Rodeo Man,” a reference to the hit performed by Texas-born country star Don Williams, according to Bonhams.
Clapton sold the guitar at a charitable auction in 1999, it said.
It will be up for sale again at Bonhams’s “Rock, Pop & Film” auction at its London Knightsbridge saleroom on June 12 with a price estimate of £300,000 to £400,000 ($376,590 – $502,120). It will be on view there from June 9-11.
“Clapton is… one of the greatest living guitarists of all time and so to have a guitar that’s from such a pivotal time in his career and attached to such a pivotal song is a once in a lifetime opportunity,” Claire Tole-Moir, head of Bonhams’ Popular Culture department, told Reuters on Monday. — Reuters
ING BANK N.V. Manila expects more issuances of sustainability bonds from lenders and corporates this year, partly driven by the Bangko Sentral ng Pilipinas’ (BSP) push for this type of financing.
“I think everybody’s trying to look at how they can do it. When I talk about sustainability, it’s not just environmental or green — we also talk about social. When you talk about social, it can be, for example, low-cost housing… We’re also helping to encourage our partners towards that,” ING Bank Philippines Country Manager Jun Palanca said in an interview with BusinessWorld last week.
“We’re seeing quite a bit more now at least in the pipeline. So, assuming all of those close by this year, I think there will be more,” Mr. Palanca said.
He added the central bank’s push for sustainable financing has made lenders more interested in issuing these kinds of bonds.
“That’s top of mind for the BSP with the taxonomy [guidelines] that they released in February. So, they’re encouraging [the banks]. For the banking sector, if you issue a sustainability bond, it has an impact on your reserve requirement as well,” he added.
The BSP in February issued Circular No. 1187 containing amendments to the Manual of Regulations for Banks for the adoption of the Philippine Sustainable Finance Taxonomy Guidelines (SFTG) for banks.
The Philippine SFTG was developed with the help of the Financial Sector Forum, which is an interagency body composed of the BSP, Securities and Exchange Commission, Insurance Commission and the Philippine Deposit Insurance Corp., as part of the commitment of the financial sector supervisors under the Philippine Sustainable Finance Roadmap.
The guidelines serve as a tool to classify if an economic activity is environmentally or socially sustainable to serve as a guide for stakeholders in making investment or financing decisions.
“The SFTG aims to direct, accelerate, and increase capital flows to economic activities that promote sustainability objectives. including reduction of greenhouse gas (GHG) emissions and building climate resilience. It likewise promotes transparency and credibility by minimizing the risk of greenwashing and supports a just transition to a sustainable economy,” the central bank said.
“Banks shall use the SFTG when extending credit, making investment decisions, or designing sustainable financial products and services, among others. In issuing sustainable bonds, banks shall comply with the regulatory requirements articulated in the relevant sustainable bonds standards or guidelines issued by the Securities and Exchange Commission,” it added.
The BSP last week said banks have until the end of this year to comply with the SFTG.
The central bank at the end of last year also approved temporary measures to incentivize banks through extra lending capability and reduced reserve requirement rate for sustainable bonds issued by banks.
Mr. Palanca added that the rising number of renewable energy projects presents opportunities for banks and other firms to expand their sustainable financing portfolios.
“If you are a bank or a corporate, you would want to tap that. You can expand your investor pool, which helps your share price at the end of the day,” he said.
However, these planned sustainability bond issuances could be delayed or adjusted if the BSP’s easing cycle does not begin this year as expected, Mr. Palanca said.
“Notwithstanding, I think there are a number of banks that are still going to the market anyway. So, what they’re doing is they’re shortening the tenor. Instead of three years or five, they’ll shorten it to two, for example,” he said.
ING Bank Manila will also continue to encourage banks to be more sustainable by introducing related products, Mr. Palanca said.
“Sustainability is the heart of ING as a whole and that’s what we want to be known for… We’ve been trying to come up with new products not just on the lending side, but also in the financial market side and the advisory side where we can help our clients or encourage our clients to go through that journey to be more sustainable,” he said.
“In addition to that, we’re also thought leaders in helping our clients through more structured solutions to be able to achieve their goals with a sustainability angle,” Mr. Palanca added. — Aaron Michael C. Sy
RAZON-LED Bloomberry Resorts Corp. recorded an 11% drop in first-quarter consolidated net income to P2.6 billion on weaker VIP and mass table game revenues at its Solaire Resort in Parañaque City.
“In the first quarter of 2024, Solaire in Entertainment City reported lower VIP and mass table game revenues that resulted in an 11% decline in consolidated net income, Bloomberry Chairman and Chief Executive Officer Enrique K. Razon, Jr. said in a statement to the stock exchange on Tuesday.
“If net income were adjusted for P279 million of Solaire Resort North pre-operating expenses, net income would have declined by only 3%. We had a strong showing in the heavily domestic slot machines segment where revenue grew by 24% year-over-year,” he added.
Consolidated net revenue declined by 3% to P12.5 billion, while consolidated earnings before interest, taxes, depreciation, and amortization fell by 14% to P4.9 billion.
Total gross gaming revenues (GGR) at Solaire Entertainment City fell by 8% to P14.8 billion. VIP rolling chip volume declined by 36% to P106.9 billion, while mass table drop fell by 8% to P11.1 billion.
VIP and mass tables GGR dropped by 33% and 6% to P4.3 billion and P4.6 billion, respectively.
Electronic gaming machine GGR reached P5.9 billion, up by 24% year over year.
Solaire Korea’s Jeju Sun Hotel & Casino recorded P15.6 million in GGR during the period, up by P14.5 million from P1.2 million recorded in the previous quarter.
Bloomberry saw a 4% increase in consolidated non-gaming revenue to P2.2 billion during the period.
Solaire recorded a 2% jump in non-gaming revenue to P2.1 billion. Hotel occupancy reached 77.4%, higher than 76.9% in the first quarter of 2023. Solaire Korea’s non-gaming revenue grew to P94.5 million.
Meanwhile, Mr. Razon is banking on the upcoming launch of the $1-billion Solaire Resort North in Quezon City to boost Bloomberry’s market share.
“This strong local demand heightens our anticipation for our second property which will open on May 25. By increasing our mass table offerings and effectively doubling our slot machine capacity, Solaire Resort North will put Bloomberry in a prime position to gain market share,” Mr. Razon said.
Solaire Resort North spans 1.5 hectares and consists of 38 floors. It has 526 guest rooms and suites, 2,669 electronic gaming machines, and 163 tables across four casino levels.
On Tuesday, Bloomberry stocks retreated by 3.05% or 31 centavos to P9.87 each. — Revin Mikhael D. Ochave
The Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act was enacted on Feb. 3, 2021. Based on the data from the Department of Finance, 910 projects with total investments of P1.02 trillion, across varying priority sectors listed in the Strategic Investment Priority Plan, have been approved under the CREATE Act as of 2023. However, during the three years since its passage, investors and industry groups have raised concerns on the lack of clarity and consistency in the implementation of CREATE.
There are two proposed CREATE MORE (to Maximize Opportunities for Reinvigorating the Economy) bills currently pending with Congress: Senate Bill No. 2654 (SB No. 2654) and House Bill No. 9794 (HB No. 9794). The salient features include:
On Value-Added Tax (VAT) Refund Claims — Both bills propose to categorize claims into low, medium, and high-risk claims based on the amount of claim, tax compliance history, and other criteria. SB No. 2654 proposes to transfer refund claims to the Revenue Operations Group under the Department of Finance. HB No. 9794 proposes to create a refund lane for expediting low risk claims and prescribes a threshold for automatic grants without the need for verification.
The 90-day period to decide remains. However, in case of denials, HB No. 9794 provides that the taxpayer will have 10 days from communication of the denial to file substantiation documents in the form of a request for re-consideration and that the denial shall not be final unless the taxpayer has been provided the opportunity to request a reconsideration. The proposed process may need to be clarified considering the Tax Reform for Acceleration and Inclusion Law (TRAIN) has already reduced the administrative period from 120 to 90 days. Will the 10-day period be included in the 90-day period? How many days should the Commissioner have to act on the reconsideration?
On Enhanced Incentives to Registered Business Enterprises — HB No. 9794 seeks to grant corporations electing to be under the enhanced deductions regime an income tax rate equivalent to 20% rather than 25% for income de-rived from its registered projects or activities. HB No. 9794 also seeks to grant a local business tax rate not exceeding 2% of gross sales for registered business enterprises (RBEs) availing of income tax holidays or enhanced deductions. Further, both bills seek to enhance the deductions by allowing 100% of expenses attributable to expenses relating to trade fairs, exhibitions, or trade missions. SB No. 2654 also included equipment attributable and not just those which are exclusively used for the registered project or activity.
However, the website of the Organization for Economic Co-operation and Development’s reveals that the Philippines, along with other ASEAN countries, have undertaken to work and adopt appropriate legislation consistent with the Inclusive Framework on Base Erosion and Profit Shifting (BEPS). The framework introduces a 15% global tax for multinational companies with at least €750 million in revenue. It is reasonable to expect that the final version of CREATE MORE will be forward-thinking and consider how to evolve tax incentives to align with the global minimum tax, but still attract and retain the covered foreign investors.
Both bills also propose to amend Section 294 of the Tax Code by providing a separate provision on local business tax. HB No. 9794 also seeks to exempt RBEs from the following: taxes on the business of printing and publication; franchise tax; amusement tax; annual fixed tax for every delivery truck or van of manufacturers or producers, wholesalers or dealers, or retailers of, certain products; local business tax; fees for sealing and licensing of weights and measures; regulatory, building, inspection, or permit fees and charges imposed by local government units; taxes levied by provinces, cities, or municipalities on business; barangay taxes, fees, charges, fines, and other financial impositions and real property taxes, except on property owned by developers. The additional exemption may serve as an additional incentive since RBEs still find the 2% local tax on gross sales to be onerous.
On the Work from Home Arrangement — Lastly, both bills also seek to provide a work from home arrangement for RBEs in the IT-BPO (information technology and business process outsourcing) sector provided that they are compliant with the requirements set by their IPA (Investment Promotion Agencies), within the geographical boundaries of the economic zone or freeport, and should not be more than 50% of the total workforce.
However, the telecommuting law has always been an existing law. Certainly, our lawmakers must also consider transitory rules for those IT-BPO companies that opted to shift to the Board of Investments.
The policy behind the crafting of both bills is laudable. Both seek to enhance fiscal incentives regimes and give a more stable investment climate to attract new investors and to ensure old investors stay in the country. It is the hope of this author that the eventual law crafted by our lawmakers will ensure the economic growth of our country and certainly CREATE more, rather than less.
The views and opinions expressed in this article are those of the author. This article is for general information and educational purposes, and is not offered as, and does not constitute, legal advice or legal opinion.
Evangeline R. Villajuan is an associate of the Tax department of the Angara Abello Concepcion Regala Cruz Law Offices.
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LONDON — The fictitious Crawley family and their servants running a sprawling English country estate in the early 20th century are returning for a third Downton Abbey movie, which will feature old and new faces.
The award-winning Downton Abbey gained a huge following in Britain and the United States after it first aired as a television series in 2010. It went on for six seasons and was followed by two films, released in 2019 and 2022.
In a statement on Monday, Universal Pictures, Focus Features and Carnival Films said series creator Julian Fellowes had written the third film in the Downton Abbey franchise and that many original cast members, including Hugh Bonneville and Elizabeth McGovern — who play patriarch Robert Crawley and his wife Cora, respectively — would return for the new movie.
The Holdovers actor and Oscar nominee Paul Giamatti and Joely Richardson, most recently seen in Netflix series The Gentlemen, join the cast with the former playing Cora’s brother Harold Levinson, the statement added. Mr. Giamatti played the character in a Christmas special.
The Crown star Dominic West, who played actor Guy Dexter in the 2022 film Downton Abbey: A New Era, will reprise the role in the new movie.
Simon Curtis will also return as director after helming the second movie. — Reuters
A POWER STRUGGLE at grocery delivery company Getir is turning increasingly bitter as the Istanbul-based startup shuts down foreign operations and shareholders spar over key management positions.
The acrimony between the company’s Turkish founders and foreign investors, led by Abu Dhabi’s wealth fund Mubadala, reached a new high last week following the dismissal of an executive in charge of strategy, according to several people with direct knowledge of the matter, who asked not to be named speaking about problems inside the private company.
Getir’s management, led by co-founder and Chief Executive Officer Nazim Salur, on May 6 dismissed Chief Strategy Officer Derya Erdemli, who was supportive of foreign investors’ strategy of downsizing, the people said. Mubadala is Getir’s biggest shareholder, holding about 30% compared with 25% for Mr. Salur and other Turkish investors, the people said.
Getir, Mubadala, Mr. Salur, and Ms. Erdemli declined to comment for this story.
The internal strife is a sign of the once-hyped rapid delivery market — and its flagship company — crashing back to reality. Getir’s promise to deliver groceries in 10 minutes worked well in Turkey — where labor and operating costs are low — but was tougher to execute abroad, despite the startup raising a mammoth $2 billion in venture capital to fund its expansion, according to data from PitchBook.
As pandemic-era lockdowns eased and costs rose, Getir’s valuation fell from $11.8 billion two years ago to $2.5 billion as of September. Other investors in Getir include marquee tech-investment firms Sequoia Capital and Tiger Global, and former Sequoia Capital partner Michael Moritz.
The dispute between Mubadala and Mr. Salur first came to a head in December, when Getir’s foreign investors pushed its top management to downsize international operations and cut cash burn. Mubadala was at the time pressing Mr. Salur and other executives to quickly exit operations around the world and refocus on Turkey, the company’s home and largest market.
In February, as Getir continued to struggle to cut costs abroad, Mubadala executives visited Turkey to observe its home-country operations in person, according to the people. Mubadala executives spent weeks in the country and demanded faster action to refocus all operations on Turkey, where it has cost and logistical advantages it doesn’t in other regions.
After that trip, Mubadala said additional funding would be conditional upon changes in the board and a revamp of senior management, according to the people. Mubadala, along with other investors, agreed to provide as much as $200 million, Bloomberg News previously reported, with that amount split into tranches and full disbursal contingent on Getir meeting certain targets. Of the total, $90 million has already been paid, the people said.
In late April, the parties agreed to those conditions, the people said. But Mr. Salur has not yet called a fresh meeting to determine a new board — and Ms. Erdemli’s removal looks set to further inflame tensions with his backers, the people said.
Last month Getir announced that it was halting operations in the UK, Netherlands, Germany and the US, where it also owns delivery service FreshDirect. It said FreshDirect would continue its operations. — Bloomberg News
