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Gross borrowings jump in October

BW FILE PHOTO

THE NATIONAL GOVERNMENT’S  gross borrowings jumped by 23.4% in October as domestic debt surged, the Bureau of the Treasury (BTr) said.     

Data from the BTr showed that gross borrowings rose to P225.202 billion in October from P182.429 billion in the same month a year ago.

Gross domestic debt more than tripled to P174.632 billion in October from P56.733 billion a year ago. This accounted for more than three-fourths or 77.5% of total borrowings during the month.

Broken down, domestic debt consisted of P90 billion in fixed-rate Treasury bonds, P71.78 billion in retail onshore dollar bonds, and P12.852 billion in Treasury bills.

Meanwhile, gross external borrowings declined by 59.8% to P50.57 billion in October from P125.696 billion a year ago.

This was composed of P42.514 billion in program loans and P8.056 billion in new project loans.

For the 10-month period, gross borrowings stood at P1.975 trillion, 1.5% lower than P2.006 trillion in the same period a year earlier.

Domestic borrowings slipped by 0.99% to P1.519 trillion during the January-to-October period, from P1.535 trillion a year ago. This accounted for 76.9% of total borrowings for the period.

Fixed-rate Treasury bonds made up the bulk or P1.055 trillion of local debt, followed by retail Treasury bonds (P252.091 billion), Treasury bills (P139.697 billion), and the retail onshore dollar bonds (P71.78 billion).

Meanwhile, external debt in the 10 months to October dropped by 3.3% to P456.311 billion from P471.655 billion.

This consisted of P187.573 billion in program loans, P163.607 billion in global bonds, and P105.131 billion in new project loans.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that higher borrowings in October was due to the government’s sale of retail dollar bonds.

The government raised $1.26 billion from the first retail dollar bond offering under the Marcos administration. This was higher than the minimum issue size of $200 million but below the $1.6 billion raised at the maiden retail dollar bond auction in 2021.

The dollar-denominated five-and-a-half-year bonds fetched a coupon rate of 5.75% and were awarded at rates ranging from 5% to 5.75%, bringing the average to 5.509%.

Mr. Ricafort also said that elevated interest rates also drove borrowing costs higher.

The Bangko Sentral ng Pilipinas (BSP) delivered a 25-basis-point (bp) off-cycle rate hike in October, bringing the benchmark rate to a 16-year high of 6.5%. It kept rates steady at its latest policy meeting in November.

Since May 2022, the central bank has raised borrowing costs by a cumulative 450 bps.

“Going forward, lower global crude oil and other commodity prices that help ease inflation towards the target of the central bank would eventually support a pause or even cuts in policy rates especially in 2024, and thereby help reduce new government borrowings and debt servicing bill,” Mr. Ricafort said.

“Tax and fiscal reform measures would structurally improve tax revenue collections and could lead to more disciplined government spending, thereby helping narrow budget deficits and the borrowings needed to finance the budget deficit,” he added.

In the January-to-October period, the budget deficit narrowed by 8.45% to P1.018 trillion from a year ago. This was equivalent to 67.88% of the full-year P1.499-trillion deficit program.

This year, the National Government set its borrowing program at P2.207 trillion, consisting of P1.654 trillion from domestic sources and P553.5 billion from foreign creditors. — Luisa Maria Jacinta C. Jocson

Asia’s chocoholics will indulge even as prices of cocoa skyrocket, industry says

TETIANA BYKOVETS-UNSPLASH

ASIA’S GROWING NUMBER of chocolate lovers will indulge their sweet tooth even as cocoa prices skyrocket to the highest level since the 1970s, a veteran of the industry says.

With more than half of the world’s people, Asia accounts for only roughly a quarter of cocoa consumption, making it a growth market for chocolate producers as populations — and disposable incomes — grow. Three years of pandemic restrictions dealt a severe blow, as entertaining, gifting and impulse purchases declined. Then the price of the key ingredient took off, thanks to punishing rains in West Africa.

“Cocoa and chocolate indulgences are still in demand,” said Elie Fouché, chairman of the Cocoa Association of Asia, who has worked in the industry for about 17 years. “Demand for cocoa and chocolate products has remained steady despite the price increases that we have observed already for quite a few months.”

Cocoa grinding in the Asia-Pacific, the best indicator of demand, has rebounded from COVID lows, Mr. Fouché said. While down from a year earlier as the industry finds its post-pandemic balance, the association said processing was “better than expected” in the three months through September.

“The dip is behind us,” Mr. Fouché said, speaking at Barry Callebaut AG’s factory in Malaysia’s southern state of Johor, one of the largest plants in Asia where beans are turned into cocoa mass, butter and powder — the key ingredients to make chocolate bars, cookies, ice cream and drinks.

The younger generation in Asia likes to indulge, Mr. Fouché said. This, along with low per-capita consumption of chocolate compared with countries in Europe, will help the region remain a growth engine even at times of high prices. India, China and Southeast Asia especially have big potential.

The Asia-Pacific chocolate market is projected to reach close to $37 billion in revenue by the end of 2030, growing at a compound annual rate of 7% from now until the end of the decade, according to consulting firm Coherent Market Insights. That’s close to double the rate seen for the global market overall.

The catch, for now, is price. Cocoa futures traded in New York reached a 46-year high late last month as bad weather and crop disease hurt production and delayed harvests in West Africa, the world’s biggest-growing region. That prompted companies such as Mondelez International, Inc., maker of Oreo cookies and Toblerone, as well as Nestlé SA, to raise prices of products next year.

Inflated prices are likely to be sustained through 2024 as the market heads for its third consecutive supply deficit, Rabobank said in a report this month.

“When you look at official consumption data, grind data, they have been relatively resilient,” Mr. Fouché said.

The good news for chocolatiers is that there are additional products to lure consumers. Young gourmets are drawn to healthier chocolate, including products with a higher content of cocoa and flavanols, said Mr. Fouché, as well as so-called functional foods, like high-protein chocolate. Flavanols are known for their antioxidant properties.

“I want to eat something good. I want to eat something good for me and I want to eat also something good for the planet or good for the farmers,” he said. “These are trends which probably emerge first in the western world or developed world. Now they are finding their way also in the Asia-Pacific.” — Bloomberg

Building bridges for industrial peace and solidarity

APEX Mining Co., Inc. bags NCMB’s Outstanding Labor-Management Cooperation award

AMCINERO, the Labor Management Cooperation Committee of Apex Mining Co., Inc. (AMCI), was recognized for its outstanding labor-management cooperation (LMC) practices at the 13th National Convention on Labor-Management Cooperation held on Nov. 23-24.

The convention, with the theme “Reboot, Revitalize, Optimize: Getting Ahead Towards a Boundless Horizon,” was organized by the National Conciliation and Mediation Board (NCMB) in partnership with the Philippine League of Labor-Management Cooperation Practitioners (PHILAMCOP).

The journey of the committee began in 2014 when management called for employee solidarity in times of adversity. In response to the call, AMCINERO was born in February 2015.

With the help of the NCMB Region Office 11, the company built foundations for its LMC objectives, including fostering harmonious relationships, providing a platform for dialogue, and establishing communication strategies.

The key roles of AMCINERO were institutionalized through an electoral process to represent the laboring majority. The company’s malasakit (care) programs have taken it far in achieving industrial peace, with programs and activities regularly conducted to ensure a well-balanced workplace of high- performing teams and well-cared-for individuals.

The Labor Management Committee has established various subcommittees addressing the well- being of the employees, such as Family Welfare, Code of Decorum and Investigation, Corporate Social Responsibility, Labor Laws Compliance, and Productivity Improvement committees.

Engr. Ernesto Javier, Mine Division Manager of AMCI, said, “The company is simply complying with the mandates of the law. Whatever we do, it’s not just for the company; there is always a basis. That’s what we want for our fellow mine workers to understand.”

AMCINERO also emphasized the importance of programs that create a well-rounded workplace, extending beyond work to education support, disaster response, health and wellness initiatives, environmental advocacy, and socio-cultural awareness activities.

To support the objectives of the committee, AMCI constructed a dedicated office building for the LMC. The newly built LMC office provides a centralized space for discussions, planning, and consultations with fellow employees, contributing to the overall efficiency of labor-management cooperation.

“The AMCINERO Building has finally become a reality so that here we can open the discussions on the progress of the employees and the company,” said Employees Relations President Nathaniel Estacion.

AMCINERO has also taken steps to address employee commuting challenges in the motor pool area. It has started the construction of a shaded pathwalk, which will provide employees with a comfortable and convenient journey to work.

In addition, the labor management committee has demonstrated its commitment to employee well-being by converting an old COVID-19 facility into a gender-responsive restroom facility. Despite initial plans for demolition, employee representatives successfully lobbied for its preservation, ensuring accessibility and cleanliness for all.

“That time, it was not properly maintained. Since it has become so dirty, the management has decided to demolish the comfort room. The employee representatives lobbied against its removal. Since the employees still had to walk far to reach the CR after getting off the bus, having one nearby is a big help. We are committed to maintaining cleanliness in order to provide access to the restroom,” said Mill Area Representative Franco Aboabo.

Furthermore, AMCINERO has successfully achieved its objectives by collaborating with different departments to organize various activities and programs. They have provided medical and health assistance; educational support; financial aid; public infrastructure; social, cultural, and regional assistance; and information and education campaigns.

In addition to the recognition received by the company’s LMC, AMCI’s Grievance Machinery (GM) was the sole enterprise to receive a Special Award in Proactive Grievance Prevention Practice for efficiently addressing workplace concerns.

 

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¡Olé!

Spain inspires couturier Michael Cinco

MICHAEL CINCO was in good company for his fashion show at the Marriott Grand Ballroom at Newport World Resorts on Nov. 27.

That evening, Mr. Cinco was given the Legacy Award of Excellence in Global Fashion at the Philippine Legacy Gala. The gala benefited The Philippine Missionari Della Fondazione di Carita, Inc. and the Gusi Peace Prize Foundation. Other awardees that evening included socialite Margarita “Tingting” Delos Reyes Cojuangco who was given the Legacy Award of Excellence in Philanthropic Missions, and singer and actress Sharon Cuneta who took home the Legacy Award of Excellence in Music.

Mr. Cinco’s award was given at the very last segment of the gala night, which was his fashion show, titled The Impalpable Dream of España. Mr. Cinco, in a backstage group interview, told reporters that he had been inspired by his travels, and that this is his third time showing off the magic of Spain. He had done it already in 2011, 2013, and 2023. As his inspirations, he cited the work of Spanish artists Pablo Picasso, Salvador Dali, Joan Miro, and architect Antoni Gaudí. “When I travel, I get some inspirations from the culture, the city, the architecture, and the arts in each city I visit,” said the designer.

The designer has dressed celebrities like Beyoncé, Jennifer Lopez, Britney Spears, Lady Gaga, Mariah Carey, Mila Kunis, Rihanna, and Naomi Campbell. Gowns he had designed for singer and actress Jennifer Lopez and former Miss Universe Pia Wurtzbach were on display during the evening.

The show, decorated with the bones of what looked like a cathedral’s ceiling, opened with red lights, and the sound of a Spanish guitar and the clopping of hooves. The clothes were designed around a palette of reds and blacks, showing off easily remembered cues of Spanish dress, such as velvet matador jackets and flamenco skirts.

Even the models themselves look inspired by Spanish art: we saw a model with curls straight out of a Velasquez painting, wearing a black robe with a design splashed in glitter at the back. A red bodice on the runway had a design shaped like a tree from a Goya painting, showing off the designer’s eye for detail.

More matador-inspired outfits appeared, featuring details like fans attached to the back, or multiple fans forming a peineta (hair comb). Some glitter details on the clothes appeared like spots of shiny red blood, perhaps an allusion to the gore and glory of bullfights; and some outfits suggested riding costumes, all of them showing off a vision of Spanish riding traditions, bullfighting, and dance.

Another segment of the show changed the lights from red to gold, and as a nod to Spanish ecclesiastical traditions, hooded “monks” in the background chanted in Latin, while the runway showed models in slick black outfits coupled with clothes with rich embroidery as if on a saint’s robe.

A third segment of the show had an opera singer performing the “Habanera” from the opera Carmen. And while she sang about birds, models in acid-green outfits came onto the runway, some of them wearing dresses with feathers. The same opera singer was there for the finale dress, a bridal gown resembling Grace Kelly’s, with rich lace detailing and lines on the bodice representing corsetry.

It had been announced that Mr. Cinco is planning to open a store in the Philippines, despite his own Dubai base. Asked about the opening, he said, “Maybe early next year,” and said that a ready-to-wear line may soon be available. “It’s a little bit of luxury-luxe,” he said.

Among the other honorees that night were Coco Martin who received the Legacy Award of Excellence in Television Entertainment, Ruffa Gutierrez for Outstanding Achievement in Entertainment Industry (accepted by her mother Annabelle Rama), Juan Ponce Enrile who was given the Legacy Award with the Highest Distinction, mayor Josemarie L. Diaz for Excellence in City Governance, mayor Sheilah Lacuna-Pangan for Excellence in City Legislation and Governance, Congresswoman Shernee Tan-Tambut for Excellence in Cultural Heritage Protection, Shirley Halili-Cruz for Excellence in Dance, Ann Ong for Excellence in Handcrafted Jewelry, Myrna Tang-Yao for Excellence in Women Empowerment, and June Cheryl Cabal-Revilla for Excellence in Corporate Finance Management. — JL Garcia

Avon study finds Filipino women’s partners control their appearance

RAWPIXEL.COM/FREEPIK

MANY women in the Philippines have partners who influence or control aspects of their appearance, according to a report by global beauty brand Avon, and their friends do nothing to help them.

“Over half (56%) of Filipino women have witnessed a friend whose appearance was controlled by their partner, and only 5% of women decided to speak up and take action,” Avon said in an e-mailed statement on Sunday.

The study commissioned by the beauty brand was conducted by global research company Censuswide with 7,173 women respondents from the United Kingdom, Italy, Romania, Poland, the Philippines, Turkey, and South Africa. The survey was conducted from Sept. 14 to 21 this year.

“Of all the women surveyed, just under two fifths (39%) have witnessed their friend having their appearance influenced or controlled by a partner. A significant portion of Filipino respondents who had witnessed such a thing decided against speaking out, with 35% believing that it wasn’t their place to do so, while 33% believed it wasn’t an issue,” Avon noted.

When Filipino respondents were asked to specify those whose appearance they witnessed being manipulated by their partner, the top responses were a friend (56%), sister (32%), and cousin (32%)

Despite the close proximity between the witness and the abused, the hesitation to take action prevails due to a lack of awareness, it also said.

The research, which highlights the extent to which women suffer coercive control through the manipulation of their appearance by a male partner, was launched in tandem with the United Nations’ 16 Days of Activism campaign against gender-based violence.

In the Philippines, only 31% of women surveyed said they feel confident in recognizing the signs of domestic abuse and coercive control. Meanwhile, less than 40% know where to seek help in case they find themselves in an abusive situation.

This campaign shines a light on abusive behavior that uses appearance and makeup as a form of manipulation, Avon said.

The beauty brand noted that this can destroy a woman’s self-esteem and power. “This behavior is frequently cited as a part of or a precursor to physical violence… but it doesn’t have to be this way.”

In commitment to raising awareness around gender-based violence, Avon and global charity NO MORE have started the Reverse Makeup Tutorial video campaign. It aims to shine a light on controlling and abusive behavior designed to destroy self-esteem and a woman’s power using appearance and makeup as a form of manipulation.

“Avon works with charities around the world to provide vital services to women and girls impacted by emotional, verbal and physical abuse,” Avon’s chief executive officer Angela Cretu said.

“Violence against women and girls is still the most widespread human rights violation in the world. 16 Days of Activism is a moment to speak out against violence, which is why we’ve created this powerful film to raise awareness about all types of abuse and where to find help.”

For more information on Avon’s commitment to ending gender-based violence, and access to the NO MORE directory visit www.avonworldwide.com/supporting-women/violence-against-women-and-girls. — B.H. Lacsamana

Taiwanese skincare brand seeks to enter Philippine market next year

TAIPEI — Taiwan-based skincare brand Derma-Xpert is set to sell its skincare products in Philippine dermatology clinics and drugstores next year, an official said in the beginning of the month.

Its supplier, the Asia Pacific Lovaty Cosmeceutical Corp., recognizes the emerging skincare industry in the Philippines, and began talks with potential distributors in Manila last month.

“[Our goal for next year is to] seal the deal with [Philippine] distributors so they can sell in the Philippines,” Gia Lee, its sales representative, told BusinessWorld at the sidelines of the HealthCare+ Expo in Taipei City, Taiwan.

“Because [revenues from] the medical aesthetic industry is increasing in your country, maybe at least one product line [has] potential in your market,” Ms. Lee said.

Derma-Xpert has distributed its skincare products to clinics in Vietnam, Hong Kong, and Malaysia.

The brand has marketed its skincare products to clinics, Ms. Lee said, citing how a dermatologist prescribing their products would help build buyers’ trust in the product.

“We want the doctor’s recommendation,” she said. “Because if they (dermatologists) trust our product quality and there is no problem, [that means] they will sell our product in their clinic,” she added.

Ms. Lee also cited the company’s particular products, intended for post-dermatology procedure care, like medicines after laser treatment.

However, she noted the company’s plans to sell in more generally accessible places like drugstores, noting its bigger market.

“We are still figuring that out because some people [have said that] the clinic is a potential market for us. But clinics [give] very small value for us because the average beauty customers buy from the store,” Ms. Lee said.

She said the company plans to sell its products in clinics, drugstores, pharmacies, and spas in Malaysia, Vietnam, and the Philippines.

Revenue from the Philippine skincare market was projected to amount to approximately $1.8 million (P99.7 million), according to German survey platform Statista. — Beatriz Marie D. Cruz

How to fix the carbon crisis in fast fashion

CLARK STREET MERCANTILE-UNSPLASH

DHAKA — With all eyes on climate talks in Dubai, the world of fashion is working out how it can fulfil an ambitious pledge to slash the emissions it makes clothing the world with speed and style. And the outlook isn’t rosy.

Big brands have promised big cuts to their carbon footprint — but it is manufacturing that causes most of the environmental damage and somebody has to foot the bill for the radical change.

“The scale of the decarbonization challenge completely dwarfs the funds available,” said Vidhura Ralapanawe, executive vice-president at the fashion company Epic Group.

Hong Kong-based manufacturer Epic — which makes clothes in Bangladesh, Jordan, and Ethiopia — has been at the forefront of global efforts to clean up the environmental footprint of the 2 trillion-dollar fashion industry.

“We are working with local and global organizations to move the whole industry forward, while trying to bring together brands, retailers, manufacturers, mills, and service providers.”

The key to progress, he said, is a positive partnership between brands and manufacturers. “Given the investment and risks manufacturers are taking, they need support in terms of long-term partnership as well as business terms that are sensitive to pricing,” added Mr. Ralapanawe.

Fashion is one of the world’s most damaging industries.

Behind 2% to 8% of all greenhouse gas emissions, it sucks up scarce water and creates vast amounts of pollution and waste. The industry in 2018 set the goal of halving emissions by 2030 and reaching net zero by 2050. But progress has been slow.

Britain’s monthly fashion habit alone creates the same carbon footprint as 900 round-the-world flights, according to the Oxfam charity. A 35-mile car trip creates the same environmental damage as making one cotton shirt, it added.

The stats have only got worse as the global appetite for fast fashion grows, with ever more consumers chasing the latest catwalk-to-high street trends.

Industry also knows that as of next year, it must comply with European Union legislation forcing companies to report and address emissions in their supply chains, with manufacturing to blame for about 80% of all apparel sector emissions.

But as global fashion brands pledge to drive down emissions and power towards the 2050 net-zero goal, textile and garment manufacturers are demanding that brands share the financial burden of investing in low-carbon technology and processes.

Last month, Transformers Foundation — a New York-based think tank that speaks for denim makers and brands — released a report urging more collective action to achieve a climate transition.

Kim van der Weerd, intelligence director at Transformers Foundation, said the apparel sector rarely asks “who pays” for the big transition, assuming that it is the suppliers whose facilities must change who will foot the bill.

“That is both impractical and inequitable,” she told the Thomson Reuters Foundation, given that suppliers have far less money than the big brands.

Experts said decoupling the key sticking point — who must act and who can pay — could help break the impasse, putting suppliers in charge of what changes to make and ensuring that brands duly invest in that overhaul.

PAYING FOR AMBITIONS
Textile makers want a range of funding options from the brands they feed to finance a new, cleaner production line.

Mohiuddin Rubel, a director at Bangladesh’s apparel makers’ trade body — the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) — said fashion brands can support suppliers by offering grants, low-interest loans, and direct investments. That will help suppliers move to more renewable energy and energy-efficient technology, as well as retain workers, he said.

Some initiatives are already underway. 

The Apparel Impact Institute (AII), a US think tank promoting sustainable investments, formed the Fashion Climate Fund last year that mobilized $250 million with the aim of unlocking $2 billion of finance and cutting 150 million tons of carbon from fashion over the next three decades. Kurt Kipka, chief impact officer at the Institute, said the fund could help speed cuts as the sector is ripe with opportunity for rapid reform.

Among suggested easy, quick wins: recovering heat from the water used in production or improving boiler efficiency.

Apparel makers said making climate finance available, accessible and affordable for suppliers is essential for a low-carbon future for fashion. But the sums involved are sizeable. If the industry wants to achieve net zero by 2050, it will need more than $1 trillion of investment, said an AII report.

NO COOKIE-CUTTER
Besides a shortfall in funding, the industry faces another big hurdle to rapid decarbonization — the sheer diversity of priorities and problems faced by its myriad suppliers.

In densely populated Bangladesh, suppliers find it difficult to generate enough rooftop solar power as most factory buildings expand vertically rather than horizontally, limiting roof space, cloth makers told a climate conference held in Dhaka in October.

In Pakistan, factories are unable to cut deals with third parties that would supply renewable power to help them cut emissions, and must instead make the reductions in-house, said the Transformers Foundation report.

In other words, one size will not fit all.

“If our approach is to take the collective goal of the Paris Agreement and to divvy it up equally amongst companies without taking feasibility into consideration, we will fail,” said Ms. Van der Weerd of the denim industry think tank.

Epic Group’s Ralapanawe said the needs of a giant may not be the same as those of a heavily leveraged small supplier, and a mix of financial tools will be needed to meet both.

Kurt Kipka, chief impact officer at the Apparel Impact Institute, said helping suppliers lighten their footprint demanded flexibility from funders.

“It’s imperative that we meet industry and partners where they are — based on the different needs of leading facilities and facilities only starting in the decarbonization journey,” he said. — Thomson Reuters Foundation

Seltos sets the scene

Three variants of the Kia Seltos are available: 1.4 Turbo SX (P1.688 million), 1.5 EX (P1.288 million), and the 1.5 LX (P1.198 million). — PHOTO BY DYLAN AFUANG

Kia PHL updates crossover model, announces rollout of electrified vehicles in 2024

By Dylan Afuang

IT MAY have been introduced just weeks ago, but the reskinned and retooled Seltos already represents Kia Philippines’ plans for next year.

Led by the Ayala Corp.’s automotive division, the local arm of the South Korean car maker in 2024 intends to deviate further from the public’s perception that the brand centers only on affordable products.

Instead, Kia Philippines embarks to capture an aspirational appeal through various marketing initiatives and offerings — its network of dealerships adopting a new corporate identity, while providing upscale customer experiences along with its lineup of stylish and modern vehicles.

Belonging to the latter category is this updated compact crossover — the first of five new cars which include Kia’s electrified vehicles and the battery-electric EV5 that the company plans to introduce by 2024.

If Kia’s goal is realized, the Seltos and its stablemates that follow should immensely resonate with buyers’ hearts and budgets in equal measure.

The brand’s aspirations and plans were announced by AC Motors Automobile Group President Antonio “Toti” Zara III, in a gathering that unveiled the new Seltos to the media and representatives of local Kia dealerships. Kia Philippines Chief Operating Officer Brian Buendia and AC Motors Chief Executive Officer Jaime Alfonso Zobel de Ayala also graced the occasion.

“Loaded with standout style, latest technology, advanced driver assistance systems, and enthusiastic performance, the Seltos is in a league of its own,” Mr. Buendia boasted of the updated crossover that was first introduced locally in 2020.

Three versions of the Seltos are now on sale, with the range led by the 1.4 Turbo SX (P1.688 million), followed by the 1.5 EX (P1.288 million), and the 1.5 LX (P1.198 million).

Styling tweaks applied to the crossover include a reshaped grille and headlights, and 17-inch alloy wheels featuring split-spoke alloys. The most distinctive change can be found at the rear end, where separate taillight assemblies on the previous model are replaced by a rear light bar that spans the entire width of the car’s rear.

The SX model sports a 1.4-liter turbocharged gas engine, dishing out 140hp and 242Nm of torque combined with a seven-speed dual clutch automatic transmission driving the front wheels — propelling the car from zero to 100kph in a quoted 9.7 seconds.

LX and EX trims, meanwhile, feature a naturally aspirated 1.5-liter gas mill, with 115hp and 144Nm of torque and is mated to an intelligent variable transmission (IVT).

The feature set of the Seltos is significantly improved inside. For example, the SX gets a wireless device charger, ambient interior lighting, a panoramic sunroof, and a full panoramic display. Six SRS air bags, Smart Cruise Control with Stop-and-Go, Forward Collision Avoidance Assist, and Parking Distance Warning are features of the top-tier SX model.

But Kia Philippines’ upmarket realignment doesn’t stop with the Seltos, as Mr. Zara expressed.

“(The year) 2024 will be an exciting year,” the executive continued. “We are coming in with four new models. (A number of these models) will come either as full-electric vehicles or hybrid-electric vehicles.”

As Mr. Zara confirmed only the launch of the EV5, he said, “It will be consistent with the Ayala Corp.’s strategy of moving the industry towards electrified mobility, as (it builds) an EV ecosystem.”

According to Mr. Zara, the Philippine car industry by 2024 anticipates surpassing the record 473,943 units achieved in 2017. About 14,000 of these, or three percent of industry sales overall, are predicted to be electrified. AC Motors — which also handles Chinese EV manufacturer BYD here — surely wants to contribute significantly to those lofty figures.

Once it arrives, the EV5 compact SUV will be retailed alongside the EV6 in the local Kia lineup. No details on the EV5 for the Philippine market were divulged, but in the Chinese market, the vehicle is quoted to feature 64- and 88-kWh battery packs with the latter achieving a range of 720km per charge, as well as regenerative braking functionality.

CTA grants most of Petron’s claim for tax refund

CTA.JUDICIARY.GOV.PH

THE COURT of Tax Appeals (CTA) granted Petron Corp.’s P459.96-million tax refund as part of its claim for erroneously paying excise taxes on petroleum products sold in 2017.

In a 32-page decision dated Dec. 5, the CTA Special First Division determined that only the specified amount from Petron’s tax refund claim of P465.65 million can be granted after an examination of the documents submitted by the oil company.

The ruling consolidated separate petitions for the excise taxes paid on the importation of Jet A-1 fuel supplies that were either locally produced, worth P10.5 million, or imported, worth P455.14 million.

Petron claimed that it was entitled to a refund under Section 135 of the revised tax code, which states that petroleum products sold to international carriers are exempt from the payment of excise tax. It first filed a request to the Bureau of Internal Revenue on June 22, 2018.

The appellate court ruled that the company has met the conditions for tax exemption stipulated in the law, such as the sales of petroleum products to international carriers and tax-exempt entities.

“When it is shown that the tax-paid petroleum products have become tax-exempt within the context of Section 135 of the Tax Code, the excise taxes which were previously paid thereon shall then be regarded as ‘erroneously or illegally collected,’ and thus subject to refund,” read part of ruling penned by Associate Justice Marian Ivy F. Reyes-Fajardo.

Petron is the country’s largest oil company and the only one with a refinery. It also does business in Malaysia. The company has a combined refining capacity of 268,000 barrels per day and produces a full range of fuels and petrochemicals.

Its regional operations cover about 40 terminals and around 2,700 service stations where it retails gasoline and diesel.

For nine months through September this year, Petron recorded a consolidated net income of P9.5 billion, up 16% from P8.2 billion a year ago.

During the period, it registered a consolidated sales volume of 93.6 million barrels, up 16% from the 80.4 million barrels sold in the same period last year. — Jomel R. Paguian

In China’s slowing beauty market, big brand discounts won’t cut it

FREEPIK

SHANGHAI — Expensive beauty hauls are a thing of the past for Evelyn Zhu. The Chinese branding professional says she now only spends on skincare essentials, joining millions of other consumers who have cut back on cosmetics in the world’s second biggest market.

“In recent years we all bought so many products,” the 32-year-old from the affluent eastern city of Hangzhou said. “My bathroom cupboard is full, it’s hard to say I need much more.”

This restraint, which has taken hold amid a slowing economy, spells bad news for global firms such as L’Oreal, Estee Lauder, and LVMH who for years banked on China’s $52-billion beauty market for growth.

Regional brands such as Japan’s Shiseido, which counted China as its top market for years, are also struggling.

But while the economic woes have certainly weighed on sales, analysts say the main issue facing the multinationals is their slowness to adjust to the shifting priorities of consumers, who have become more discerning about what they buy and are increasingly finding that local brands are more suited to their needs.

“What Chinese consumers are still keen to spend on are high efficacy products,” said William Lau, chief executive of multibrand beauty retailer Bonnie and Clyde, which stocks luxury international brands including Chantecaille and 111skin.

“What you’re seeing is a downgrade in lifestyle-driven luxury and premium brands,” he added.

Botanee Biotech’s sensitive skincare brand Winona is one of the beneficiaries of this paring back. 

The Chinese brand, which is priced at around the same level as L’Oreal products, is known for combating redness, a concern that marketing firm iResearch reported affects two-fifth of women. Analysts from CMB International estimate Botanee’s revenue will grow almost 18% this year to 5.9 billion yuan ($824 million), with Winona responsible for most of these gains.

By comparison, sales for the global beauty giants are expected to fall.

DEEP DISCOUNTS
An analysis from brokerage Jefferies showed first half China sales down 8% at LVMH’s beauty division, while sales at Estée Lauder Companies, which counts on China for one-third of its business, fell 12% over the same period.

Shiseido reduced its full-year profit forecast in November on slower China demand, which has also been hit by a boycott by some consumer of Japanese products following the release of treated radioactive wastewater in August.

L’Oreal, Estee Lauder, and Shiseido did not respond to a request for comment.

These results also come off the lower base of 2022, when the combined color cosmetics and skincare markets in China lost 9.5% of their value, data from Euromonitor shows.

While the market research firm expects growth of around 6% this year, it forecast won’t get back to its 2021 market size of $54.4 billion until 2025.

So far, the multinationals have responded to the slowdown by offering deep discounts of up to 40% and gifts during peak shopping events such as the annual online Singles Day festival, but analysts say the data shows even that isn’t really helping.

Luxe skincare brand La Mer, which rarely discounts, gave so many gifts-with-purchase over Singles Day that every sale resulted in almost the same amount of product being given away.

Independent data firm Syntun estimated that GMV, or gross merchandising volume, of beauty and personal care fell 6% year on year across all online shopping platforms. GMV is commonly used proxy for sales among e-commerce operators.

“The biggest global names have seen their Tmall GMV decrease by about 40% on average during 11.11,” said Jacques Roizen, the Shanghai-based managing director of consulting at Digital Luxury Group, a digital agency for luxury brands.

“Now we see you don’t have discounting as an acceleration lever you can press to go deeper or wider, because they’re already maxed out,” Mr. Roizen added.

Gregoire Grandchamp, co-founder of Next Beauty, a brand management partner for niche beauty players looking to grow in the China market, said the discounts offered by the beauty brands online this year have been “insane.”

But while these larger brands are better able to compete online than smaller companies that lack their marketing budgets, they are not immune to the slowdown in demand.

According to Grandchamp, the sooner they adjust to China’s new normal of single-digit growth rather than chasing the growth of yesteryear with brand equity-eroding discounts, the better.

“I think the way groups like L’Oreal will react will be to say, Okay, maybe it’s better not to have this euphoric growth, but to be more in a more rational market,” he said. — Reuters

China, Chongqing, Changan (Part 2): Growth over growth

The Changan Hunter pickup

OUR CHANGAN AUTO brand experience in China was a clear flexing of muscles for the Chongqing-headquartered automaker.

While it is steadily growing its portfolio here to earn a place as a legitimate option to meet what most car browsers are looking for, Changan also served notice that it can enter even more segments and price points should it decide our market is ready for them.

In the Changan universe are sub-brands Deepal (or Shenlan, purveying electric vehicles), Avatr (its premium EV line with joint investor CATL, the world’s leading battery manufacturer), Changan Qiyuan (electric vehicle line under the Changan brand), Changan Uni (ICE-powered vehicles), Oshan (mid-level SUVs and MPVs), and Kaicene (commercial vehicles).

To note here is that while Changan is the biggest ICE player in China, it already is making lots of headway in the electric vehicle department and, in fact, is dedicating a couple of sub-brands to the effort.

For Inchcape Philippines, the key to rolling out Changan models — and ultimately, brands — is that its dealership network can support the vehicles in terms of after-sales service. “We should be able to support what we sell,” declared Changan Auto Philippines General Manager Maricar Parco (See our interview with her on the right).

For now, Changan Auto Philippines has 19 3S dealerships — a number that will increase to 30 by 2024’s end. This number takes into account two company-owned facilities, including the flagship dealership to rise along Libis in the second quarter (the second is in a yet-to-be-determined location in NCR).

In China, the girth of the company is on full display — from the sweeping views and large footprint of the Dianjiang test site, smooth-running factory of Liangjiang, and the multi-brand test session we had (although a little too abbreviated). The messaging is clear in that Changan wants to be taken seriously — certainly as its so-called Vast Ocean plan takes effect. This basically looks at exponentially growing Changan’s market outside of China — to the tune of 1.2 million cars by 2030.

Message received.

A touch of royalty: Julien’s auctioning off outfits from Princess Diana and Princess Grace

ONE CAN GET the chance to place their hands on history with a sale by Julien’s Auctions and Turner Classic Movies (TCM) with an auction titled Glamour, Grace and Greatness on Dec. 17, the conclusion of Julien’s 20th anniversary celebration.

Up for grabs is a blouse worn by Diana, Princess of Wales for her engagement portrait, snapped by photographer Antony Armstrong-Jones, Earl of Snowdon (and Princess Margaret’s husband). The blouse is in blush pink crepe, with a ruff-like collar, loose pleating on the front, finished off with a pink bow. It was made by David and Elizabeth Emanuel, who also designed the royal’s 1981 wedding dress. In a press release, the auction house says that the blouse was presented on a rack of options for then-Lady Diana Spencer to choose from for her engagement portrait. The same statement quotes Elizabeth Emanuel’s book, A Dress for Diana, that the fashion team at Vogue had assembled a rack of clothing from a variety of designers to present to the future Princess of Wales (who died in a car crash in 1997 after her well-publicized divorce with then-Prince Charles). According to Ms. Emanuel, a client was trying on one of their custom-made gowns and left a black mascara stain on the skirt when taking it off. The Emanuels salvaged the remains of the dress, using the fabric to make this blouse that found its way onto that rack of clothing presented to Diana. Ms. Emanuel said that “When she saw our blouse on the rack she fell in love with it, asked who had made it and was directed to us.”

Ms. Emanuel sold this blouse from her archive in 2010. It was previously on display at Kensington Palace in London as part of the exhibition “Diana: Her Fashion Story” that ran from 2017 to 2019. The blouse is currently estimated between $80,000 to $100,000; with a single bid as of the time of writing at $80,000.

Another piece of Diana memorabilia sure to create some buzz is her Jacques Azagury dress, which she wore to a dinner held by the Mayor of Florence, Italy when she was on an official royal tour of Italy with then-Prince Charles in April of 1985. The dress features a black velvet bodice with embroidered stars in metallic thread made from Jakob Schlaepher fabric with a two-tier royal blue organza skirt with a sash and bow. The dress has padded shoulder pads, typical for the decade, that go into long sleeves that taper at the wrist. The dress, with an estimate up to $200,000, currently has a bid at $100,000.

There are more royal memorabilia at the auction: there are holiday cards signed by King Charles and the late Elizabeth II, as well as royal funeral service itinerary documents from the funerals of George VI, Queen Mary, and the Duke of Windsor.

More items associated with famous blondes will also be in the sale. There’s a costume design sketch for the late Princess Grace of Monaco, for her movie To Catch a Thief (estimated between $5,000 to $7,000); and dresses and scarves owned by Greta Garbo. There’s a clock owned by Marilyn Monroe ($2,000 to $4,000), and a nude photograph of her, owned by late Playboy founder Hugh Hefner. Dresses worn by Audrey Hepburn, as well as letters sent to friends, will also be in the sale; a highlight includes her yellow Hubert de Givenchy coat worn in her movie Charade (estimated between $20,000 to $40,000).

The auction will be held in Los Angeles on Dec. 17 (10 a.m PST) but the auction house is taking online bids. Register for online bids through JuliensAuctions.com.

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