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Century Pacific Food income up 12.6%  on higher revenues

PO-LED Century Pacific Food, Inc. on Wednesday reported that its attributable net income rose by 12.6% for the third quarter due to higher revenues and better commodity prices.

In a stock exchange disclosure, the company said profits reached P1.43 billion, up from P1.27 billion the prior year.

“Amidst headwinds, we saw domestic consumer demand for our brands and products remain resilient, underscoring the relevance of affordability and accessibility,” Century Pacific Food Chief Financial Officer Richard Kristoffer S. Manapat said.

“We focused our programs towards value-for-money offerings and innovations,” added Mr. Manapat, who is also the company’s chief risk officer and chief information officer.

The company saw a 6.6% jump on its top line to P17.14 billion from P16.08 billion the previous year, driven by a 14% growth in its branded segment.

The branded business is composed of marine, meat, milk, and other emerging segments. It comprises the majority of revenues, the company said, describing it as its “strategic growth driver” that caters predominantly to the domestic market.

“Apart from a high base in 2022, the OEM (original equipment manufacturer) business was beset by softer markets in light of global inflation. Nonetheless, on a quarterly basis, sales were largely sustained,” the company said.

Its OEM tuna segment and coconut exports fell by 15% from last year.

“We also continued to benefit from a diversified, all-weather portfolio, which allowed us to deliver a consistent growth performance for both the top line and the bottom-line despite a complex operating environment, Mr. Manapat added.

For the nine-month period, Century Pacific Food’s attributable net income climbed to P4.63 billion, 9.7% higher than P4.22 billion the previous year.

The company’s revenues went up by 7% to P50.45 billion from P46.95 billion in the same period last year.

It said the rise was due to a 12% growth in branded sales amid better domestic demand for “consumer staples and value for money goods.” 

The company said milk and other emerging segments “outperformed, while core segments sustained their growth performance.”

Its OEM tuna and coconut segments, likewise, declined by 10% during the period.

Meanwhile, the company said that it is expanding the capacity of its General Santos solar plant to 8.6 megawatts (MW) from 5.2 MW, which is currently supplying power to its largest plant.

“As we move towards 2024, our focus remains in delivering consistent, long-term, and sustainable growth, and we will continue to invest in and manage the business accordingly.” Mr. Manapat said.

Company shares on Wednesday went up by 1.05% or 30 centavos to close at P29 apiece. — Adrian H. Halili

Dining In/Out (11/08/23)

Enderun offers master class with École Ducasse Paris

ENDERUN Colleges, in collaboration with its academic partner, École Ducasse Paris (founded by chef Alain Ducasse and recently awarded World’s Best Culinary Training Institution and Europe’s Best Culinary Training Institution for 2023 at the World Culinary Awards), will be holding a rare one-day masterclass titled “Healthy and Sustainable Cuisine by Alain Ducasse,” led by chef William Groult, Head of Pedagogy at École Ducasse Paris. The class is tailor-made for culinary professionals who aspire to delve into the culinary philosophy of the culinary legend. Mr. Ducasse’s ethos revolves around the principles of “living well” and “eating well.” The class will be held on Nov. 16, 10 a.m., at the Enderun Colleges Culinary Amphitheater, McKinley Hill, Fort Bonifacio, Taguig. The class costs P8,000. For details go to www.enderunextension.com.

Shake Shack teams up with Toyo Eatery

SHAKE SHACK is partnering with Toyo Eatery for its first chef collaboration in Manila. The limited-time salo-salo menu will be served on Nov. 11 from 9 a.m. until everything is sold out, at Shake Shack Central Square BGC. On the same day, the first guest will receive an exclusive Shake Shack x Toyo Eatery merch from the collaboration, while the first 30 dine-in customers will receive a limited edition Shake Shack x Toyo Eatery bucket hat. The merchandise will be available on the event day only. Shake Shack’s culinary director Mark Rosati worked with Tpyp Eatery’s chef Jordy Navarra on a menu celebrating Filipino cuisine: Chicken and Cheek BBQ (P595), which features an all-natural, cage-free crispy chicken thigh, hand breaded and dredged in Panaderya Toyo’s sourdough batter, topped with Toyo Eatery’s pork jowl (from black pigs pasture-raised on in a farm in Batangas and are antibiotic and hormone-free), BBQ sauce and a pickle medley of atsarang papaya, red onions, burong mangga, cucumber and aruy-uy, all served on a non-GMO potato bun; Inasal Fries (P325), crinkle-cut fries dressed in Toyo Eatery’s inasal mayonnaise, topped with garlic chips and served with fresh calamansi and vinegar chili dip; Rosella at Lambanog Lemonade (P275), a Shack-made lemonade with Toyo Eatery’s rosella syrup, spiked with tagay portions of lambanog (distilled fermented coconut sap); and, Tsokolate at Tostadong Bigas Concrete (P355), a frozen chocolate custard blended with Toyo Eatery’s classic toasted rice pudding, candied Palawan cashews, and candied cacao nibs.

Seattle’s Best Coffee’s festive Javakula Collection

SEATTLE’S BEST Coffee is getting into the festive mood with the Premium Festive Javakula Collection “featuring flavors that will make you feel like Christmas is in every cup.” Available in all Seattle’s Best Coffee stores nationwide, the holiday collection sees the comeback of the Chocolate Lush Javakula made with Reese’s peanut butter chocolate, together with two new festive variants: the Cinnamon Dolce Javakula, an ice blended beverage with rich cinnamon flavor, espresso, caramel, and dark chocolate sauce on top of chocolate whipped cream ;and the French Vanilla Javakula, which combines French vanilla, espresso, and white chocolate. The Premium Festive Javaula Collection is available for dine-in, take-out, pick-up, and delivery through Facebook Messenger, Grabfood & Foodpanda.

Starbucks announces holiday beverages, merchandise

STARBUCKS has announced a slew of new Holiday offers from beverage, food, and merchandise. The Holiday beverages (which are also available via GrabFood, foodpanda, and Pick.A.Roo) are returning favorites Gingerbread Latte, Toffee Nut Crunch Latte, and Peppermint Mocha, all of which are available in hot, iced, or blended (coffee and cream based) variants, and Toffee Nut Crunch Cold Brew, which is available in nitro cold brew variant. Pastries are also available: Chocolate Crepe Cake, 17 layers of crepe with chocolate cream filling; the Chocolate Chip Overload Cookie; Red Velvet Whoopie Pie; Chocolate Toffee Nut Roulade; Pistachio Cake; Mango Tiramisu Cheesecake; and Mont Blanc Cheesecake. There are also savory items including Chicken Fajita Roll; Cacio E Pepe Croissant; Casarecce with Miso Butter Salmon; Chicken Pot Pie; and Turkey Ham, Egg, and Mozzarella on Cranberry Pecan Bread. Meanwhile, Starbucks Holiday Merchandise are available in all Starbucks stores and on the Starbucks flagship store on Lazada and Shopee while supplies last. These include a number of Philippine exclusives — the 2023 Holiday Been There mugs featuring the iconic holiday red cup which celebrates the local holiday get-togethers; limited-edition Holiday Rhinestones cold cups in Emerald Green and Sapphire Blue; and gift boxes of miniature versions of Bling Cups through the past seasons; and gift boxes of miniature versions of Bling Cups through the past seasons, among many others. Special coffee blends for the holidays are also available: the Starbucks Christmas Blend 2023, the Starbucks Christmas Blend Espresso Roast 2023, and the Starbucks Christmas Blend Blonde Roast.

7-Eleven launches Snack for Cash E-Raffle Promo

DINER who buy the 7-Eleven Big Bite Hotdog or 7-Fresh Siopao will get a chance to win up to P100,000 cash through convenience store 7-Eleven’s Snack for Cash E-Raffle Promo. Ongoing until Jan. 9, 2024, customers simply need to buy their preferred Big Bite or 7-Fresh Siopao snacks, scan the QR code, and provide their details to submit their raffle entry. They will also get twice the entries per scan when they use the CLiQQ app to pay for their purchase. In week 1-7 from Oct. 25 to Dec. 12, 16 lucky snackers will get a chance to win in the weekly draw: 10 winners of P10,000 each, five winners of P25,000 each, and one winner of P50,000. For week 8-11, from Dec. 13 to Jan. 9, 10 winners will each receive P100,000 from 7-Eleven. Promo participants can submit multiple entries and potentially win the minor prizes, P10,000 and P25,000, multiple times. The promo runs at all 7-Eleven stores nationwide. For more information and promo mechanics, visit www.711snackforcash.com.

McDonald’s serves improved Chicken McDo

MCDONALD’S Chicken McDo is now bigger as it uses better cuts that will ensure not only tastier and juicier chicken in every order, but bigger sizes. McDonald’s has also introduced a new breading procedure that results in an even crispier and flakier chicken skin. Finally, there are McDonald’s sulit offers — the one-piece Chicken McDo with double rice, and the one-piece Chicken McDo with McFloat.

Jollibe offers Chickenjoy Christmas Perfect Pairs promo

THIS HOLIDAY season, Jollibee is holding its newest limited-time offer promo. From Nov. 3 to 30, customers can avail of Chickenjoy Christmas Perfect Pairs, which pairs a one-piece Chickenjoy with the side of their choice. With Pair A, choose among Regular Fries, Extra Rice, Coke Float, or Peach Mango Pie for P109 and save as much as P26. With Pair B, choose between limited-time offerings Choco Banana Pie or Cookie Caramel Sundae for P125 and save as much as P16. Chickenjoy Christmas Perfect Pairs is available nationwide for a limited time only.

Binalot opens 1st branch with Shell

FILIPINO fast-food chain Binalot has officially opened its first branch with Shell at the Shell Mobility on EDSA Balintawak. One of the highlights of the Shell Mobility EDSA Balintawak is the introduction of the largest Shell Cafe in the country. This spacious café offers a welcoming atmosphere for patrons to enjoy quality coffee, snacks, and meals, further enhancing the overall experience at this Shell location.

Global-Estate Resorts’ profit up as sales rise

GLOBAL-ESTATE Resorts, Inc. (GERI) said its nine-month net income grew slightly on the back of higher real estate sales as well as improved hotel and leasing operations.

In a regulatory filing on Wednesday, GERI said its net income for January to September hit P1.47 billion, up 1.6% from P1.45 billion a year ago.

“Net income remained at P1.5 billion considering more vertical projects were sold this year compared to mostly horizontal projects last year,” GERI said.

GERI, a subsidiary of Tan-led Megaworld Corp., said its consolidated revenues rose 23% to P6 billion from P4.8 billion, led by its real estate business.

The company’s real estate sales rose 22% to P4.7 billion from P3.9 billion carried by bookings from its various projects in Boracay Newcoast, Southwoods City in Laguna, and Twin Lakes in Laurel, Batangas.

Reservation sales also increased by 15% to P15.6 billion as of September.

“Projects in Boracay Newcoast, Eastland Heights in Antipolo, Rizal, and Twin Lakes contributed 79% of GERI’s total reservation sales,” the company said. 

GERI’s hotel operations rose 73% to P441 million from P255 million due to higher occupancy and revenue per available room following the continued rise in local tourism and meetings, incentives, conferences and exhibitions (MICE) activities.

The company’s hotel operations consist of hospitality properties in Boracay and Tagaytay.

Meanwhile, GERI said leasing revenues from its office and mall properties rose 29% to P409 million from P317 million a year ago led by retail spaces.   

“The contribution of retail spaces continues to be the key driver of growth, as commercial rental income accounts for majority of the total leasing revenues for the period,” GERI said.

“This was driven by improving tenant sales brought about by the increase in foot traffic in the company’s commercial developments, particularly in Southwoods City, Twin Lakes, and Alabang West,” it added.

Currently, GERI has nine tourism and integrated lifestyle communities across the country spanning over 3,300 hectares of land. These communities include Twin Lakes in Laurel, Batangas; Southwoods City in Biñan, Laguna and Carmona, Cavite; Alabang West in Las Piñas City; Boracay Newcoast in Boracay Island, Aklan; Sta. Barbara Heights in Sta. Barbara, Iloilo; and Eastland Heights in Antipolo, Rizal.

The other GERI communities are The Hamptons Caliraya in Lumban-Cavinti, Laguna; Arden Botanical Estate at the boundary of Trece Martires and Tanza in Cavite; and Sherwood Hills in Trece Martires, Cavite.

“We will continue to deliver projects that provide the best value to all our investors, and of course, projects that further help boost our country’s tourism industry,” GERI President Monica T. Salomon said. 

On Wednesday, shares of GERI at the local bourse closed unchanged at 76 centavos apiece. — Revin Mikhael D. Ochave

World wine output to fall to lowest in 60 years

GUNTER HOFFMANN-UNSPLASH

PARIS — World wine production is expected to fall to its lowest level in 60 years in 2023 due to poor harvests in the Southern Hemisphere and in some major European producers, the International Organization of Vine and Wine (OIV) said on Tuesday.

In initial projections, the OIV pegged world wine output, excluding juices and musts, at between 241.7 million and 246.6 million hectoliters (mhl), with a mid-range estimate of 244.1 mhl.

This would be 7% lower than last year and the smallest since 1961 when it had fallen to 214 mhl, the OIV said. A hectolitre is the equivalent of 133 standard wine bottles.

“This negative scenario can be attributed to significant declines in major wine-producing countries in both Hemispheres,” the OIV said in a statement.

“While in the Southern Hemisphere, Australia, Argentina, Chile, South Africa, and Brazil recorded year-over-year variations between -10% and -30%, in the Northern Hemisphere, Italy, Spain, and Greece are the countries that suffered the most from bad climatic conditions during the growing season,” it said.

OIV expects Italian wine production to drop 12% to 44 mlh, its lowest level since the poor harvest of 2017.

The tumble means Italy will lose its position as the world’s largest wine producer, with France set to reclaim the number one spot for the first time in nine years.

Drought-hit Spain kept its position as the third largest wine producer despite its production set to fall to the lowest in the last 20 years, down 14% fall in output from last year and down 19% on the five-year average.

The sharp fall in Italian and Spanish production would lead to a 7% drop in EU output this year at 150 mhl, the third lowest production level since the beginning of the century.

US wine output, the world’s fourth largest, was expected at 25.2 mhl this year, an increase of 12% from 2022. Cool temperatures and heavy winter rains in the Napa and Sonoma regions brought much-needed moisture to the vines after several years of drought, the OIV said. — Reuters

D&L Industries earnings slip 33%

LISTED D&L Industries, Inc. logged a 33% drop in its third-quarter net income due to lower sales. 

In a regulatory filing, the company said its net income for the July-to-September period dropped to P552 million from P822 million a year ago.

The company’s sales fell 27% to P8.49 billion from P11.58 billion last year.

Meanwhile, D&L Industries logged a 29% drop in its nine-month net income to P1.79 billion from P2.54 billion last year.

The company said sales fell 27% to P24.72 billion compared with P33.91 billion a year ago as the figure has yet to reflect the potential of the new Batangas manufacturing plant, which started operations and issued its first invoice in July.

“The drop in earnings was mainly due to the challenging business environment with the lingering effects of high inflation coupled with the incremental expenses related to the commercial operations of its Batangas plant,” D&L Industries said.

D&L Industries’ Batangas plant caters to the company’s growing businesses in the food and oleochemicals segments. The facility is expected to also boost its capability to produce downstream packaging.   

“While incremental expenses are more apparent at the start of operations of a new plant, we have confidence that this will be a huge benefit to the company, as what we have seen multiple times over the past 60 years,” D&L Industries President and Chief Executive Officer Alvin D. Lao said.

“We believe that there has never been a more exciting time for D&L. Our Batangas plant will allow us to explore opportunities that were previously beyond our existing capabilities. With the new plant, we will open new markets, expand our range of higher value-added products, and deepen innovations that will further push our boundaries,” he added.

Separately, Mr. Lao said in a virtual briefing that D&L Industries and its subsidiary, Chemrez Technologies, Inc., have an opportunity with the government’s plan to increase the mandated biodiesel blend to 3% from the current 2%.

“Recently, there’s been a lot of talk, even from the President himself, saying it’s time to consider a 3% (biodiesel) blend. For us, that’s going to be positive for volumes, for the industry in general. It makes a lot of sense,” Mr. Lao said. 

“Plus, relying less on fossil fuels means lower pollution. It’s also better value-added for our coconut oil,” he added.

Shares of D&L Industries at the local bourse rose one centavo or 0.16% to P6.30 apiece. — Revin Mikhael D. Ochave

China’s wine market ready to welcome likely return of Aussie wine as ties improve

JEFF SIEPMAN-UNSPLASH

NEWS that punitive tariffs on Australian wine introduced by China in 2021 would be reviewed as part of a push to improve the relationship between the two countries was cheered by many, including Campbell Thompson.

The Beijing-based Australian Chief Executive Officer of wine importer and distributor The Wine Republic has spent more than a decade making his living from bringing wine, much of it from Australia, into the China market.

“We are looking forward to the tariffs being removed. I think for Australia there is definitely an opportunity,” he said.

Late last month, as ties between Beijing and Canberra improved, the two sides announced they had reached a consensus to settle a World Trade Organization dispute about wine and that anti-dumping tariffs, which weren’t set to expire until 2026, would be reviewed.

Australian Prime Minister Anthony Albanese kicks off a visit to China on Saturday, the first visit by a sitting Australian leader since 2016 as the trading partners continue to work on stabilizing ties.

The introduction of a 218% tax on most Australian wine introduced by China early in 2021 prompted that trade, previously valued as high as $1.2 billion annually, to collapse.

Penfold’s maker, Treasury Wine Estates, said in 2022 it had lost 97% of its China business due to the introduction of the tariffs, it’s shares rose more than 5% on news they could soon be removed.

Prior to Australia’s call for an investigation into the origins of COVID-19 in 2020, Australian wines imported into China were subject to zero tariffs following the signing of a free trade agreement in 2015, giving them a 14% tariff advantage over many other wine producing nations.

Mr. Thompson is already in touch with the 10-plus Australian wineries he worked with before 2021, along with some newer players, in expectation that tariffs will soon be removed.

Though he says this is good news, perhaps paving the way for the return of Australian wine to the Chinese market by early next year, he is not necessarily expecting business to bounce back immediately.

“I don’t think that’s realistic any time soon. However, for a lot of good quality Australian wine producers … customers still know the wines and I think will re-engage with those wines fairly readily,” he said.

Layla Wang, co-owner of Trio Wine Bar in Beijing agreed that Chinese market perceptions of Australian wine haven’t changed in the years since it was last available, with no clear winner in the battle to take over Australian wine’s market share.

The bar’s small cellar is lined floor to ceiling with bottles of wine from all over the world, and Ms. Wang said the market has become more crowded as people seek out new and different wine experiences, leading to the increased popularity of homegrown Chinese wines, biodynamic and natural options.

“I think even if people have been away from Australian wine for a while, every time we talk about this category of wine, we all think it’s a very good quality wine,” Ms. Wang said, sat at her bar.

“For us, we’re definitely delighted as it signifies offering more choices to our customers. For consumers who haven’t had Australian wines for years, many will be eager to try them again.” — Reuters

The Maharlika Strategic Investment Fund governance issues: Aligning with best practice

FREEPIK

(Part 2)

“A camel, it has been said, is a horse designed by a committee.”

— Amartya Sen,
“The Possibility of Social Choice,” Nobel Lecture, December 1998.

The International Forum of Sovereign Wealth Funds (IFSWF) lists 120 funds as of 2022, of which 48 are members of the IFSWF which committed to adhere to the Santiago Principles (24 generally accepted principles and practices adopted in October 2008 in Santiago, Chile).

Of these 48 members, about half are not funded by commodity revenues, contrary to the common impression that a sovereign fund requires a surplus to begin with.

There are two types of sovereign funds: A sovereign wealth fund (SWF) is borne out of Surplus. A strategic investment fund (SIF) is borne out of Scarcity. (Shanti Divakaran, Havard Halland, Gianni Lorenzato, Paul Rose and Sebastian Sarmiento-Saher, Strategic Investment Funds: Establishment and Procedures, World Bank 2022, page 1)

SWFs from Surplus. The key goals of these SWFs are: to serve as a Stabilization fund in support of government surplus/deficit, as a Savings funds for future liabilities such as pensions, and as a Reserve investment to meet adequate reserve levels. To achieve these, SWFs are tasked to generate optimal returns within reasonable or prudent risk limits. Examples are the Middle East oil exporters (Kuwait 1953, Saudi Arabia, UAE, Qatar, Iran), Norway (oil), Botswana (diamonds) and Chile (copper).

SIFs from Scarcity. The World Bank reported that in the last 20 years, about 40 countries facing fiscal constraints have established strategic investment funds, 20 of them since 2020 to address COVID-19 related constraints (Divakaran, et. al. page 2).

These SIFs are focused on Domestic investments, mainly on infrastructure. These SIFs have the Double Bottom Line goals of achieving optimum financial returns on their liquid assets or investments AND pursuing projects that deliver economic and social returns, (the Ireland Strategic Investment Fund, India’s National Investment and Infrastructure Fund (NIIF), the Nigerian Sovereign Investment Authority). Certain SIFs have a triple bottom line, with the added goal of mobilizing of private capital (Senegal’s FONSIS).

The IMF clearly considers the Maharlika Fund a strategic investment fund. At the conclusion of its 2023 Article IV Mission, its Oct. 2, 2023 statement to the media said that “the Maharlika Investment Corporation (MIC) could contribute to the push for closing infrastructure gaps and green investments by following best practices in strategic investment and accountability frameworks.”

A key principle in strategic planning practice is Form Follows Function (organize to achieve clearly defined objectives).

This article compares the provisions of RA 11954 and the implementing rules and regulations (IRR) with what is considered best practice in governance and accountability, identify what may be missing, and what may need to be corrected by way of amendments to the IRR or by simply invoking the inherent powers of the MIC board.

There are critical committees and line functions important to the effective functioning of a strategic investment fund that were not expressly provided for in RA 11954 or in the IRR. However, the MIC board would have the inherent powers to create or establish them. These are:

1. An Investment Committee. Aside from evaluating financial investments on the fund management side, the SIF model calls for a strong functional expertise in credit evaluation, project evaluation, project finance focused on the commercial viability of the projects long-gestation projects such as infrastructure, beyond the National Economic and Development Authority (NEDA) baseline evaluation of economic and social returns (Section 14, item h and item k, Section 17, item k).

This investment screening capability is important for the MIF to establish credibility with the prospective partners (fellow SIFs, ADB, WB, IFC) and private investors. The Indian NIIF considers the Investment Committee such a crucial function that it was given the “sole power over investment decisions … without government participation in line with global best practices” (World Bank 2022, page 241) for each of its three funds — Master fund, Fund of funds, and Strategic Opportunities fund.

2. A Chief Financial Officer. To oversee the overall financial results of the company, including the separate sub-funds, and ensure that they contribute to the desired overall results. The Indonesian INA has a CFO at the same level as the Chief Risk Officer (CRO) and the Chief Investment Officer (CIO).

3. A Compliance Committee (board level). In the case of Norway, the Compliance and Governance oversight is combined in one committee (ISWF, Santiago Principles: 15 Case Studies, page 119).

Reporting to the Compliance Committee, the Chief Compliance Officer (CCO) ensures compliance with disclosure and transparency mechanisms, standards, policies and procedures set by the Board (Article IV, Section 17.i.), and compliance with numerous laws, regulations and issuances (Sections 16, 29, 39, 40, 41, 48, and 49).

Also, to comply with the 24 Santiago Principles (Article VIII, Section 42) and to promote ESG — environment, social, governance — principles (Article IV, Section 17.b).

4. Related Party Transactions (RPT) Committee (board level). This is one way to implement Santiago Principle No. 13 (“professional and ethical standards should be clearly defined and made known to the fund’s governing bodies, management and staff”). All related party transactions are disclosed as part of the annual report. Indonesia’s INA has an Ethics Committee on its Supervisory Board (2021 Annual Report page 73).

Of the four independent committees, two are provided for in the law and IRR — Risk Management (Section 26, IRR Section 41) and Audit (RA 11954 Article V, Section 21, item r) — while the other two — Compliance/Governance and Related Party Transactions — can be created by the MIC board.

Best practice in corporate governance calls for the majority of the committee members to also be independent directors, including the committee Chair.

In this respect, the provision for the Risk Management Committee (RMC) is not aligned with best practice. It provides for only one independent director (the committee Chair) instead of a majority or three of five members.

The inclusion of the “Key” Risk Officer (the CRO) and another senior executive as members of the RMC presents a conflict of interest for the CRO, who should not be voting on his own recommendations to the RMC.

In some jurisdictions (Malaysia’s Khazanah Nasional and India’s NIIF), the Audit and Risk Committee functions are combined.

OTHER NOTABLE PROVISIONS
Chief Investment Officer (CIO) (Section 24, IRR Section 40). The position of Chief Investment Officer is crucial. Adding the Operating to the CIO role makes it a confusing dual function, as the CIO and COO functions are very different and require different skills sets. Both Khazanah and INA have the Chief Investment Officer position only.

Terms of Directors (Section 20. Board of Directors). Compared to the three-year term for regular directors, the one-year term may not be conducive for the Independent Directors (ID) to act independently. While the IDs can be reappointed yearly up to the nine-year term limit, the one-year term may be interpreted as signaling a level of uncertainty from a governance viewpoint.

Corporate Life of 35 Years (Section 53, IRR Section 72). This is a very curious provision, given the very long, even multi-generational, time horizon usual for sovereign funds. The Revised Corporation Code of 2019 (RA 11232, Section 11) has already made the life of a corporation perpetual from the previous 50 years. Indeed, “meron nang forever” in corporations! At the recent Montgomery Summit on sovereign funds, it was noted that the Norwegian fund managers have indicated that their investment horizon is 100 years. At the practical level, however, Congress can just renew its “corporate term” after 35 years.

There is a precedent, not widely known, for correcting an error. The Indonesian Investment Authority was thought to have been well studied before its establishment in 2020, but the constitutive law creating the INA was apparently not perfect. The INA 2022 Annual Report reported that the Constitutional Court of Indonesia (Mahkamah Konstituti or MK) ruled in Nov. 25, 2021 that the Omnibus Law creating the INA (Law No. 11 Year 2020 on Job Creation) is “conflicted with the 1945 Constitution of the Republic of Indonesia” (Notes to the audited FS, Note 30 Significant Event, page 65).

However, in the same ruling the court gave a two-year window to rectify the law, and by Dec. 30, 2022, the Indonesian government issued “Government Regulation in Lieu of Law No. 2 of 2022” which replaced the Omnibus Law. Despite the legal issue, the INA website reports its latest assets under management at $10 billion.

The foregoing are by no means exhaustive, and more experienced experts in the field have more thoughtful comments. Hopefully, they could still serve as useful inputs to improve the provisions of the Maharlika Fund closer to what President Ferdinand Marcos, Jr. said would be “closer to perfect” with sufficient clarity that the right pieces are being put together in the proper way, to inspire confidence and attract prospective partners and investors.

 

Alexander C. Escucha is president of the Institute for Development and Econometric Analysis, Inc., and chairman of the UP Visayas Foundation, Inc. He is a fellow of the Foundation for Economic Freedom and a past president of the Philippine Economic Society. He wrote the handbook on the Overview of the Business of Banking for the BAP. He is an advocate of best practice in corporate governance with over 40 years’ experience in banking and finance, particularly in strategy, communications, technology, and stakeholder/ investor relations.

alex.escucha@gmail.com

STI Holdings income doubles to P874M  

LISTED educational institution STI Education Systems Holdings, Inc. more than doubled its net income during the fiscal year 2023 that ended in June led by higher enrollment figures.

In a regulatory filing on Wednesday, STI Holdings said its net income rose 110% to P873.8 million compared with P416.2 million a year ago due to the “robust increase in enrollment in school year (SY) 2022-2023.”

STI Holdings’ financial year, consistent with its academic calendar, starts on July 1 and ends on June 30 of the following year.

“STI Holdings registered a total of 94,312 students for SY 2022-2023, a 14% or 11,683 student increase from the 82,629 enrollees in SY 2021-2022,” the company said.

“Additionally, there was a 17% rise in new student enrollment, with 41,565 students joining in SY 2022-2023 compared to 35,566 the previous year,” it added.

Owned and franchised schools of STI’s subsidiary, STI Education Services Group (ESG), logged a 12% jump in enrollment to 81,697 students, while iAcademy and STI West Negros University (WNU) posted 4% and 35% enrollment growths, respectively.

STI’s tuition income rose to P3.1 billion from P2.4 billion in the previous fiscal year led by the growth in enrollment.

The company’s consolidated gross revenues rose 27% to P3.4 billion from P2.7 billion the prior fiscal year.

STI ESG offers associate and baccalaureate degrees and technical-vocational programs in the fields of information and communications technology, business and management, hospitality management, tourism management, arts and sciences, engineering, education, psychology and criminology. It also offers junior and senior high school.

The company’s STI WNU offers programs and courses ranging from basic education to graduate levels, while iAcademy has specialized programs in senior high school and college that are centered on computing, business and design.

On Wednesday, shares of STI Holdings at the local bourse rose P0.005 or 1.12% to end at 45 centavos each. — Revin Mikhael D. Ochave

Paramount asks judge to shoot down Top Gun heirs’ copyright lawsuit

TOM CRUISE in a scene from 2022’s blockbuster Top Gun: Maverick — IMDB.COM

PARAMOUNT Pictures has asked a California federal court to throw out a lawsuit claiming that the 2022 blockbuster Top Gun: Maverick violated a copyright belonging to the heirs of reporter Ehud Yonay, whose article “Top Guns” inspired the original Top Gun movie.

Paramount told the court on Monday that the heirs’ case should fail because Maverick is not similar to the article other than their “shared subject of Top Gun and the fighter pilots who teach and train there, to which Plaintiffs have no special right.” Yonay’s widow Shosh Yonay and son Yuval Yonay said in a dueling motion that Maverick was a derivative work of Top Guns and that Paramount “ignores the plain similarities between its Top Gun movies and the Story from which the films were literally derived.” They asked the court to rule that Maverick infringed their copyright in the article.

“Jerry Bruckheimer and Paramount raced to lock up exclusive film rights under copyright to Yonay’s Top Guns precisely because it was so unusually compelling and cinematic,” the Yonays’ attorney Alex Kozinski said in an e”mail. “Now that the copyright has reverted to Yonay’s family under the Copyright Act Paramount shrugs — ‘What copyright?’ and claims it was just a bunch of ‘facts.’”

Representatives for Paramount did not immediately respond to a request for comment on Tuesday.

Paramount obtained exclusive movie rights to Yonay’s “Top Guns,” a 1983 article about the US Navy’s Top Gun fighter-pilot training school, before making the hit 1986 Tom Cruise film Top Gun, according to the Yonays’ complaint filed last year.

The Yonays told the court that they reclaimed the rights to the article in 2020 under federal copyright law. They argued that Paramount violated their rights by failing to license the article again before making Top Gun: Maverick, and asked for a share of profits from the movie and other damages.

Top Gun: Maverick was one of the highest grossing films of 2022, earning nearly $1.5 billion globally that year.

Paramount argued on Monday that the Yonays could not prove copyright infringement because Maverick and “Top Guns” have dissimilar plots, themes, characters, dialogue and other artistic elements.

“For two works about Top Gun, the Article and Maverick are remarkably different,” Paramount said. “And the little they share is unprotectable.”

The Yonays on Monday countered that the works had “numerous similarities.” They said that Paramount’s arguments “ignore and hand-wave away the numerous creative choices Yonay made in crafting his cinematic portrayal, which breathed life into the technical humdrum of a navy base, birthing [Paramount’s] billion-dollar franchise.”

The case is Yonay v. Paramount Pictures Corp, U.S. District Court for the Central District of California, No. 2:22-cv-03846. — Reuters

No, Gazans can’t rise up against Hamas

AHMED ABU HAMEEDA-UNSPLASH

“THEY COULD HAVE risen up, they could have fought against that evil regime which took over Gaza in a coup d’état.”

Israeli President Isaac Herzog ought to know better than to have said that. But those who don’t — those who had no call to pay attention to Palestinian politics until a month ago — might be forgiven for asking why Hamas has never faced a serious uprising from within their Gazan redoubt in the 17 years it has ruled the strip.

That it has not allows some, in Israel and elsewhere, to suggest that the majority of the 2.3 million Palestinians who are confined to the 139 square miles of Gaza must approve of the terrorist group’s actions, including the horrific attack on southern Israel on Oct. 7. To follow this line of reasoning is to conclude that all Gazans are complicit in terror. “It’s an entire nation out there that is responsible,” Herzog told reporters a few days after the attack. “This rhetoric about civilians not aware, not involved, it’s absolutely not true.

And Herzog, remember, is from the liberal side of the Israeli political establishment: A former head of the Labor Party, he unsuccessfully ran against the right-wing Prime Minister Benjamin Netanyahu in the 2015 parliamentary elections. In 2021, he was elected to the largely ceremonial presidency, a role that requires him to act as Israel’s moral north star.

Those unburdened by such responsibility and hewing to the opposite end of the political spectrum have gone much farther than Herzog in placing collective blame for Hamas’ crimes on all Gazans — and proposing collective punishment. In the most extreme instance of this absurd syllogism, Heritage Minister Amichai Eliyahu implied that dropping an atom bomb on the strip was an option.

So, why haven’t Gazans risen up against Hamas? Before I address that question, please permit a short detour to explain how Hamas came to rule the strip.

The group won the last election to be held in Gaza and the West Bank, in 2006. Back then, Hamas was identified mainly as a radical offshoot of the Islamist, pan-Arab Muslim Brotherhood political movement, but its main attraction to voters was as an alternative to Fatah, the faction running the Palestinian Authority (PA) — the deeply corrupt and inept government responsible for the West Bank and Gaza. Hamas’ election campaign leaned heavily on the corruption issue, which resonated with voters.

The prospect of Islamists running the PA alarmed Israel as well as the US. But Fatah contested the results, and the two groups fought pitched battles. When the dust settled in 2007, Fatah was left in control of the PA, but its remit was restricted to the West Bank. Hamas was supreme in Gaza.

Hamas didn’t take long to prove it was as venal and incompetent as Fatah, with its unstinting opposition to Israel its only source of legitimacy. Its goal, stated in a revised charter issued in 2017, was the destruction of the state of Israel. Armed and trained by Iran, its fighters periodically clashed with the Israel Defense Forces, bringing devastation upon Gaza.

In the meantime, Hamas cemented its control by systematically eliminating all opposition. It maintains a network of spies, informers, and enforcers and exercises a monopoly of violence. Human rights groups like Amnesty International raised alarms about a “brutal campaign of abductions, torture and unlawful killings” against Palestinians. Invariably, the victims were blamed for being in cahoots with Israel.

With Gaza essentially sealed off from the wider world by Israeli restrictions on travel and trade, Hamas also took control of the economy as the principal employer and paymaster of Palestinians. It decides how foreign aid is doled out, and its leaders siphon out large sums into an international portfolio of investments. Meanwhile, it cracks down on Gazans complaining about economic hardship.

Ismail Haniyeh, who heads the group’s political bureau, claims Hamas’ actions represent Gazans. But after 17 years of Hamas rule, Gazans have few political rights or civil liberties. The vast majority are too young to have participated in the 2006 election, and none have had a chance to vote Hamas out.

Given the chance, would they? We can only know for certain when — or if — a free and fair election is allowed. To the extent that poll opinions in a populace that lives in fear are possible, there’s some evidence that Gazans would like Hamas gone. A recent survey by the Washington Institute showed a large majority want the PA to rule Gaza. This result is doubly remarkable given that the Fatah leadership has only gone from bad to worse since it last had any authority over Gaza.

But to expect Gazans to rise up against Hamas is to require them to risk their lives and livelihoods, to face down a terrorist group that has repeatedly demonstrated willingness to slaughter Palestinians as well as Israelis. And while Hamas can rely on a regional power, Iran, to supply it with arms, all Gazans can expect from the wider world is qualified sympathy — and unreasonable expectations.

BLOOMBERG OPINION

EEI sells 60% stake in subsidiary for P50 million

EEI Corp. said its board had approved the sale of its stake in subsidiary BiotechJP Corp. for P50 million to Earthman Consulting & Development Corp.

In a stock exchange disclosure on Wednesday, EEI said it had executed a deed of assignment on Nov. 7 with Earthman, which is engaged in agricultural business.

The listed construction company is assigning its 181,815 common shares in BiotechJP, which accounts for 60% of the total outstanding capital stock, to Earthman.

The sale of its BiotechJP interest is part of EEI’s exit from its noncore business, it said.

In September, EEI announced that it was finalizing the terms and conditions of its planned divestment from BiotechJP, which is into food manufacturing and therapeutic food products.

Last month, the company said its board approved  P743 million in additional investments in a unit of its subsidiary EEI Ltd., which will fund the latter’s current and future projects.

EEI is primarily engaged in the construction of power-generating facilities, oil refineries, chemical production plants, rails, ports, expressways, and high-rise towers.

At the local bourse on Wednesday, shares in the company shed one centavo or 0.18% to end at P5.49 apiece. — Ashley Erika O. Jose

Mindful, strategic technology usage needed among youth

PHILIPPINE STAR/MIGUEL DE GUZMAN

YOUNG INDIVIDUALS must be mindful and strategic in using modern technology to better manage their mental health, according to experts.

While going online is regarded a way to manage emotions, digital addiction can increase the risk of developing social and behavioral issues among young people, a research article from the University of Melbourne titled “Your Phone, Your Emotions and Everyday Life” said.

“Technologies like social media are by no means universally helpful. They certainly can and do cause problems,” it said.

“Attempts to mitigate technology overuse should include education about alternative, healthy ways to manage emotion,” it added.

Filipinos aged 18 to 24 years old comprise 30.6% of total social media users in the country, according to analytics from intelligence firm Meltwater.

Data from the University of the Philippines Population Institute (UPPI) showed about 1.5 million Filipino youth aged 15 to 24 have considered ending their life.

This was equivalent to 7.5% of the demographic in 2021, from 3% or about 547,000 in 2013, according to the UPPI Young Adult Fertility and Sexuality Study.

It added that six in 10 kept their mental health condition to themselves, with only 25% seeking help from close friends or peers.

“For some, scrolling on social media, watching videos online and playing games are ways to de-stress after school or work and before moving on to other tasks for the day,” Monash University said.

“The problem is when the supposedly occasional, short, fun online session becomes frequent and longer and then turns into an addiction, which can cause sleep deprivation, stress, anxiety, and depression,” it added.

Craig Hassed, deputy director of Monash Centre for Consciousness and Contemplative Studies, urged “mindfulness, strategic, and guided technology and Internet use” among the youth to curb this.

“Depending on your level of motivation, carve out 5, 10, 15, or 20 minutes twice a day to practice mindfulness meditation,” he said. “Call these full stops punctuating your day.”

“As often as you remember, between the completion of one activity and the commencement of another, have mini-meditations of 5, 10, 20, 30, or 60 seconds. Call these commas punctuating your day,” he added.

These breaks can help the youth be conscious of their well-being and not be too reliant on digital tools, Mr. Hassed said.

Chris Bain, professor of practice in digital health at Monash University, also noted the importance of seeking support from family in times of both distress and joy.

“Knowing there are people with whom they can share their confusions, frustrations, and problems can spell a difference as it makes them feel seen and heard and therefore important,” he said.

The University of Melbourne said young people need to include “digital emotional intelligence” in digital skills education to address the issue. — Miguel Hanz L. Antivola

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