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Discounted sale of DITO shares raises financial health concerns

By Justine Irish D. Tabile, Reporter

THE SALE by DITO CME Holdings Corp. of 2.2 billion shares to “unrelated third-party” investors bring funds to the Dennis A. Uy-led telecommunications company but raises concerns about its financial health, analysts said.

“The share issuances will provide DITO with fresh funds to support the network rollout of its flagship subsidiary, DITO Telecommunity Corp.,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

However, Mr. Colet said the fresh funds would hardly improve the company’s equity deficit, which exceeded P21 billion in the previous quarter, increasing the likelihood of more capital-raising activities.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the issuance is a sign of a “significant development” for the company.

“By selling 10% of its shares, DITO is effectively diluting the ownership of its existing shareholders by 10%. This means that each existing shareholder will own a smaller percentage of the company,” Mr. Arce said.

In separate disclosures on Aug. 16 and 17, DITO reported that it had entered into subscription agreements with unrelated third-party subscribers for 1.59 billion and 610 million common shares, respectively, at par value.

However, since the sale was at a very steep discount compared with its price of as high as P2.40 per share last week after the disclosures, analysts said the move could raise concerns about the company’s financial health.

“Investors may question why the company is selling shares at a discount, and whether this is a sign that the company is in financial trouble,” said Mr. Arce.

“If management thinks a peso per share is a fair price for an arm’s length transaction, then this implies that the market is significantly overvaluing the company,” Mr. Colet said.

He added that the recent transactions are in contrast to the private share placement to Loden Infra Technologies Ltd. on Aug. 2021 for P8 per share.

“Although that was a smaller deal, some public investors may worry that the deep discount given to the latest share issuances reflects a fundamental change in the company’s prospects,” he said.

Last Thursday, DITO disclosed that it had completed the applicable requirements for the listing of 35 million shares for a total price consideration of P280 million from Loden Infra. It added that the number of DITO’s listed common shares will be adjusted on the listing date or Aug. 22, 2023.

However, Mr. Arce said that the share placement of Loden Infra implies that the company believes in the long-term prospects of DITO.

With the sale of 2.2 billion shares, analysts expect DITO’s public float to increase as they are said to have been sold to unrelated parties.

“The placements to what the company has described as unrelated third parties will increase the public float, assuming they do not own at least 10% of the outstanding shares and are nonstrategic investors in DITO,” said Mr. Colet.

Mr. Arce said that issues could also be raised from the entry of a new shareholder as its management may have a different vision for the company.

“This could lead to changes in the company’s management team, as well as its strategic direction,” he said.

The company did not disclose the third parties to which the 2.2 billion total shares were issued even if the first sale, which constituted 1.59 billion shares, represented 10.18% of the total number of issued and outstanding shares of DITO after the issuance, which was 15.63 billion.

“A holder of at least 5% of a company’s outstanding shares is required to disclose such ownership,” said Mr. Colet.

“Thus, at the very least, we should expect a disclosure of the subscriber to the 1.59 billion shares,” he added.

At the stock exchange on Friday, shares in DITO declined by five centavos or 2.08% to P2.35 apiece.

MGen allots P18B for renewables

MANILA ELECTRIC CO. (Meralco) through its power generation arm Meralco PowerGen Corp. (MGen) is allocating P18 billion for renewable energy expansion, the power distributor unit said on Sunday.

“We will continue to work with the energy industry, government, and other pertinent stakeholders to help further accelerate the country’s energy transition as we aggressively pursue more renewable energy projects,” Jaime T. Azurin, president and chief executive officer of MGen, said in a statement.

The investment will help fast-track Meralco’s long-term sustainability aspiration to transition to clean energy, MGen said.

It will cover about 2 gigawatts (GW) of gross renewable energy capacity from solar and wind, the company said, adding that it intends to build the renewable energy capacity by 2030 along with its partners.

MGen said its renewable energy unit MGen Renewable Energy, Inc. (MGreen) will hasten its target of about 1,500 MW or 1.5 GW of renewable energy capacity with investments in additional and larger renewables projects like battery energy storage systems.

Mr. Azurin said more projects using renewable energy are under development and assessment.

“This is in line with Meralco’s long-term sustainability strategy to embark on a just, affordable, and orderly transition to clean energy,” he said.

The aspiration of the Meralco group includes a target of reducing its direct emissions by about 20% by 2030 as MGen strives to fully phase out coal by 2050.

To date, MGreen’s portfolio includes the 55-MW-alternating current (MWac) BulacanSol solar plant in San Miguel, Bulacan in partnership with Powersource Energy Holdings Corp.; and the 68-MWac solar farm in Ilocos Norte of Nuevo Solar Energy Corp., a joint venture between MGreen and Vena Energy.

MGreen’s renewable energy portfolio also includes the 75-MWac solar farm of PH Renewables, Inc. (PHRI) with Mitsui & Co.’s Mit-Renewables Power Corp. in Baras, Rizal.

The renewable energy unit of MGen said PHRI had just completed commissioning tests for the first phase of its project, which involves 67.5-MWac energy capacity.

The first phase is expected to commence operations by this month, while the second phase is expected to be operational by at least the first semester of 2024.

Two solar projects — the 49-MWac solar plant in Cordon, Isabela, and the 18.75-MWac solar plant in Bongabon, Nueva Ecija — are among the winning bidders in the second round of the government’s green energy auction program, which provides an additional market for RE through competitive electronic bidding of RE capacities.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

JG Summit expects sustained growth for 2nd half

JG SUMMIT Holdings, Inc. expects to sustain its growth for the second half of the year due to the country’s continuing economic recovery, its top official said in a corporate event on Thursday.

“We expect the second half to continue to be positive relative to the previous year,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei told BusinessWorld.

Mr. Gokongwei added that the company’s core businesses would mainly benefit from confidence among consumers as they return to malls, travel, and retail shopping.

“It’s [the] economic growth in the country and we’re benefiting again from people going back to being more mobile,” he added.

His optimism comes after the company reported an attributable net income of P10.38 billion in the first half of the year, a reversal of the P2.75 billion net loss the prior year.

JG Summit’s consolidated revenues for the six-month period went up by 11.8% to P163.39 billion from P146.14 billion in the same period last year.

The company’s budget carrier Cebu Pacific is also expecting continued passenger growth for the latter half of the year as the demand for travel increases.

“People are more confident [with travel],” Mr. Gokongwei said, adding that the airline is restoring more flights, particularly for international destinations, while bringing in additional aircraft. 

“So that [bodes] well for the future in terms of growth,” he said.

“The dark cloud now is oil prices are rising so that may affect our cost structure, but overall, we are seeing some return to travel,” he said.

Cebu Air, Inc., the listed company that operates the airline, saw a reversal of its net loss during the first semester, reporting an attributable net income of P3.75 billion, a turnaround from the P9.5 billion the prior year.

Its revenues more than doubled during the period to P43.55 billion from P20.68 billion the prior year, driven by a significant increase in passenger volume and flight activity.

Meanwhile, Mr. Gokongwei said that the group would look into the effects of the proposed “junk food” tax on the company’s food and beverage unit Universal Robina Corp.

“We have to see first what the law says. First, I think it is inflationary, and second, it can be anti-poor,” he said, citing the proportion of lower-income people who allocate a larger part of their basket for food compared with wealthier people.

“I think it’s very difficult to define what’s junk food so I think it could create potential imbalances. But, I don’t think it’s the best way to collect taxes,” he added.

Finance Secretary Benjamin E. Diokno said earlier that the government is pushing for taxes on junk food and sweetened beverages to address “diabetes, obesity, and noncommunicable diseases related to poor diet,” as well as raise P76 billion in additional revenues in the first year of implementation.

On Friday, JG Summit shares fell by 2.93% or P1.15 to P38.05 apiece. — Adrian H. Halili

Davao Light sets aside P2.4-B capex for next year

BW FILE PHOTO/

DAVAO Light and Power Co., Inc., a subsidiary of Aboitiz Power Corp., is setting aside about P2.4 billion for next year’s capital expenditure (capex), the company’s top official said.

Rodger S. Velasco, president and chief operating officer of Davao Light, told reporters in Davao City last week that the capex will be funded by both internally generated funds and debt.

For 2023, the company allocated around P2.4 billion for capital investment, he said.

Of this year’s capex, between P200 million and P250 million was earmarked for underground cabling while the rest is for expansion and new substations.

The electricity distribution utility has also set a target to complete its underground cabling project in Davao City by 2029.

It said the project started through separate city ordinances issued in 2014 and 2017 mandating the transfer of electric power and telecommunication wires and cables underground from overhead.

The company said that the recent city ordinance further expanded the target locations covered in the project to include the areas of C.M. Recto, R. Magsaysay Ave., and the streets of San Pedro, C. Bangoy Sr., Bonifacio, Pelayo, and E. Quirino in Davao City. The project is expected to be completed by 2029.

Prince Rainier Yamyamin, who is Davao Light’s lines and substation design engineer, said that to date, the project is 25% complete, representing two kilometers of the 7.5 kilometers covered under the underground cabling project.

Davao Light serves Davao City, portions of Panabo City, and the municipalities of Carmen, Braulio E. Dujali, and Santo Tomas in Davao del Norte.

To date, it has served a combined customer count of about 476,428 customers with a peak demand of nearly 500 megawatts.

As of May, Davao Light said its demand growth resulted in a total of 1.13 million megawatt-hours, further increasing its energy sales by 4.29% and demand by 4.2% in 2023. — Ashley Erika O. Jose

Bayo looks to the future

AT THE opening of Bayo’s multibrand store in Glorietta on Aug. 8, the brand showed off three of its brands, namely Bayo itself, Viseversa, and Tela. Tela, founded by the Bayo Group co-CEO Anna Lagon’s daughter Alyssa, seems to be its response to the future.

The younger Ms. Lagon toured us around the store, showing off their mannequins covered in abaca. According to her, the mannequins were old, but by rewrapping them in a new, sustainable material, they’re being given new life. This is all part of their Journey to Zero initiative, which sees hangers made of cornstarch, water-based printing on their clothes, and recycling textile cut-offs.

Ms. Lagon told us why their brand decided to open a store with all three brands inside: “During the pandemic, we noticed that the consumer wanted convenience. One perfect way was to have all the brands in one space. I’d notice that when people go to the malls, (they’re) usually with family.” The family can thus take its pick from all three brands: Viseversa has clothes meant for older women, Bayo has clothes for those in their thirties, while Tela caters to Ms. Lagon’s own teen to early-20’s age bracket.

“I couldn’t find any local clothes that fit my aesthetic,” she said. “I felt like there’s a big gap, also in terms of sustainability. Tela fills in that gap.” Tela’s clothes are made from recycled and natural materials, and the clothes on view at the store were printed with a pattern like splashes of watercolor.

She pointed out that while Bayo did have a younger line a few years back called Love by Bayo, “I felt like it’s better to create a brand that’s separate. Some people don’t like wearing the same clothes as their mom’s. Important pa rin iyong brand differentiation (Brand differentiation is still important).”

Bayo was founded in the 1990s by sisters Corazon Bitong and Lynn Agustin, but was acquired in 2014 by clothing manufacturers Anna and Leo Lagon. In the span of time since it began, local brands have come and gone, but Bayo still stands. On that note, it also faces a new landscape that sees more and more affordable global brands filling the country’s retail spaces. Ms. Lagon told us their secrets for staying in the game. “Constantly innovating and always putting the consumer at the forefront; also trying to see what they need, and addressing it.”

As for staying relevant as a local business in a market saturated with foreign brands, she said, “Our pieces aren’t similar to the global brands. You could see weaves here that aren’t available in the other brands.” She pointed out pieces made in partnership with communities in Aklan, Argao, and Bulacan. “We have the manufacturing capability. It’s easy for us to produce clothes that really cater to the Philippine market.”

She takes pride that all their clothes are produced 100% locally. “We do everything in-house,” she said. “To control the cost, to make sure that the people behind the scenes are well-taken care of.

“We control the wages, benefits, and we can control the environment where they work in,” she said, citing the Rana Plaza collapse in Bangladesh that killed more than 1,000 clothing factory workers. The 2013 incident displayed the uglier side of fashion, considering that the workers there were making clothes for foreign brands. “It’s important for us to support local and support the livelihood here,” she said.

Ms. Lagon had a quick answer when asked why all these measures are important for the company. “Fashion is one of the largest contributors in terms of harmful effects in the (environment). Bayo, as one of the leading brands [locally], it’s important that we start the movement that we give consumers better alternatives.”

But it’s important for her, personally, too. “I’m the future generation. I’m going to live in the world for more years.

“I want to live in a world that’s better.”

Bayo Group’s multi-brand store featuring Bayo, tela, and Viseversa is now open at the ground level of Glorietta. One can also shop online at www.styleshops.com.ph and www.telamnl.com. — Joseph L. Garcia

SEC to impose new fines, penalties on erring firms

THE SECURITIES and Exchange Commission (SEC) is urging corporations and associations to avail of its amnesty program as it is set to implement a new set of fines for late or non-filing of disclosure requirements.

“We reiterate our reminder to all corporations that starting a business does not end with registration with the SEC. This is just the first step — they must faithfully comply with reportorial requirements thereafter to ensure their continuity and sustainability,” SEC Chairman Emilio B. Aquino said in a statement over the weekend.

The commission said that about 40,000 firms have filed amnesty applications, which are a waiver or reduction of fees, allowing them to fully comply with reportorial requirements.

“The SEC Amnesty Program is a chance for corporations and associations to get a fresh start in their compliance with reportorial requirements, so they continue to enjoy the benefits and privileges of being a registered corporation,” Mr. Aquino added.

The regulator said that the deadline for the submission of amnesty application is set on Sept. 30, a further extension of the SEC’s earlier memorandum with an initial deadline of June 30.

“Corporations that are able to submit their correct reportorial requirements, including those reverted for compliance… will be considered to have undergone the complete amnesty process and are entitled to receive a Confirmation of Payment,” the SEC said.

The commission added that by Oct. 1, higher fines and penalties will be imposed on firms that have not yet submitted their financial reports.

It said earlier that penalties for corporations that filed their reportorial requirement late could range from P5,000 to P27,000 with an additional fine of up to P1,000 per month depending on their retained earnings.

Penalties for non-filing of reports could range from P10,000 to P18,000. A monthly fine of P1,000 will also be imposed.

Additionally, the regulator said that it would now begin to strictly impose fines for noncompliance with Memorandum Circular No. 28, which requires companies to disclose their official and alternate e-mail addresses and mobile phone numbers.

The SEC said it might place a company under delinquent status after three — consecutive or intermittent — failures to submit reportorial requirements within five years.

“The commission can also revoke a corporation’s registration should it incur a fourth offence and it has been given reasonable notice regarding its delinquent status,” it added. — Adrian H. Halili

From Spongebob Squarepants to EXO’s Chanyeol: Inside Ever Bilena’s back-to-back August launches

By Zsarlene B. Chua

AUGUST is shaping up to become one of Ever Bilena Cosmetics’ busiest months as the local beauty brand has given its fans not one but two launches across its Ever Bilena and Careline brands — from an exciting collaboration with a beloved animated series, to naming its first international male ambassador, here’s what Ever Bilena has prepared for this month.

CARELINE X SPONGEBOB COLLECTION
“Oh, who lives in a pineapple under the sea?” For over 20 years, Spongebob and his ragtag group of marine friends (if you can count a squirrel a marine animal) have regaled multiple generations with their hilarious hijinks and antics. And now, the fifth-longest-running American animated series collaborated with Careline in bringing a new collection of cosmetics featuring the beloved Bikini Bottom residents.

“We work[ed] closely with Viacom and Paramount Global to ensure the makeup collaboration accurately represents the quality, the personality, the colors, and aesthetic, essentially everything the Spongebob is known and adored for,” Denice Sy, chief sales and marketing officer of Ever Bilena Cosmetics, said in a press release.

The collection, which Ms. Sy said was a year in the making, was the first time Spongebob Squarepants collaborated with a Filipino brand.

Careline may be Ever Bilena’s cosmetics line that promises clean, vegan beauty and targets the younger generations (Gen Z), but as a millennial who grew up with Spongebob on Nickelodeon, I also enjoyed this collection very much.

The six-piece collection features Oh My Blush Liquid Blush (P325/9.5ml) in four shades — Girly Girl (a blue-red shade for those with deeper, cooler skin tones), Red Ahoy (a brick-red shade for those with deeper, warmer skin tones), Shell Pink (a mauve pink shade for those with fairer, warmer tones), and Pink Patricia (a bubblegum pink shade for those with fairer, cooler tones).

Each shade promises incredible mileage such that “one dot goes a long way” and staying power that will stay “one eternity later” (a Spongebob meme). It also contains Hyaluronic Acid and Vitamin E for a little boost of skincare.

Quick review: While this writer hasn’t had the chance to truly put the blushes through their paces, the few days I have been using this proved that the product does go a long way and less IS more when applying — one to two dots is often more than enough. Pigmentation and pay off are great as it managed to stay on during an entire work-from-home day (haven’t been able to use it when I go outside) with very minimal fading.It also does not apply streaky and patchy and gives you enough time to blend it in before it sets.

Another plus is the packaging is incredibly cute (each bottle          features a Spongebob character) and feels premium! Definitely a must-buy.

Aside from the liquid blush, the collection also includes Contour Y’all Liquid Contour (P325/9.5 ml) and the Shimmery Splash Liquid Highlighter (P325/9.5ml).

The Liquid Contour only comes in one shade, a medium-brown shade that will work for those with fairer, cool-toned skin — hopefully, Careline comes out with more shades so more Filipinos can enjoy the liquid contour. Its formula contains Hyaluronic Acid, Shea Butter, and Glycerin for extra hydration and moisturization.

Finally, the Shimmery Splash Liquid Highlighter, which Ms. Sy told this writer in a Viber message is her personal favorite, is a silvery-pink highlighter that provides a pearly glow. It also contains Hyaluronic Acid and Castor Seed Oil for that extra skincare oomph.

All in all, this new Careline line is a fun addition to its product line and perfectly combines childhood nostalgia with great skin-caring makeup products.

EXO CHANYEOL NAMED THE NEW EVER BILENA AMBASSADOR
Korean K-Pop superstar Park Chan-yeol of EXO is Ever Bilena’s newest ambassador and the brand’s first-ever male and first international brand ambassador. With him being the newest face of Ever Bilena, the brand is said to be doubling down on its “For Every Beauty” tagline that maintains that beauty is for everyone, and on its “continuous push to produce top-tier product innovations.”

The multihyphenate and multitalented idol is not only a singer and a rapper, but also a guitarist, an actor, a cook, and a philanthropist. Added to his world-class appeal, this makes him “a great representative for Ever Bilena. [As] His heart and positive personality are both aspirational and relatable to Ever Bilena users,” said Ms. Sy in a separate press release.

Park fronts the Every Bilena EB Plus collection that includes EB Plus Shape & Set Brow Duo (P275), EB Plus Fearless Serum Skin Foundation (P325), EB Plus Two-Way Cake Serum Foundation (P250), and the brand’s newest drop, the EB Plus Serum Tinted Lip Balm (P245).

The Spongebob x Careline collection is now available online at Careline’s official Shopee, Lazada and Tiktok shops. It is also available in physical stores at SM Beauty  at SM Department Stores, Robinsons Department Stores, and Watsons Mall Stores.

Shop for the EB Plus collection at all Watsons, SM Beauty at SM Department Stores, Robinsons Department Stores, The Landmark, W Department Store, and other premiere department stores nationwide and at Ever Bilena’s flagship stores in Shopee, Tiktok, and Lazada.

 

Zsarlene Chua is a former BusinessWorld reporter who is now a fledgling PR girl. She’s all about skincare, makeup, and video games. None of these products recommended are the writer’s clients. These are all independently reviewed and acquired products.

Globe says it is most consistent in 31 locations

GLOBE Telecom, Inc. said that it had been recognized by a global benchmarking firm as the most consistent broadband provider in 31 locations.

Citing a report from Ookla, the company identified the locations to include Las Piñas, Bustos in Bulacan, Mandaluyong, Don Carlos in Bukidnon, Sogod in Cebu, Mexico in Pampanga, General Tinio and Jaen in Nueva Ecija, Barotac Nuevo and Dumangas in Iloilo, and Santo Tomas in Batangas.

Consistency determines the internet performance and quality that network operators’ customers enjoy. Globe had the highest consistency score in Las Piñas with 89.16 points.

The consistency score is analyzed by Ookla through “logistic regression” which helps adjust the comparisons and provide more accurate assessments.

“We will continue to strive for excellence and set new benchmarks in the industry to ensure greater digital experiences for our customers,” said Raymond Policarpio, vice-president of Globe At Home brand management, in a statement.

Globe said that it recognizes the need for “more robust and quicker connections” as its customers are becoming more dependent on connectivity.

“To address this need, Globe has accelerated its fiber deployment, rolling out a total of 3.7 million fiber-to-the-home lines, 1.4 million of which were installed in 2022 alone,” the company said in a press release.

Knowing that quicker connection can be best achieved through fixed wired solutions, the company is also actively transitioning its fixed wireless and legacy technology customers to fiber connections.

Globe previously earmarked a capital expenditure of P71.5 billion or $1.3 billion for 2023. So far this year, the company’s spending reached P37.7 billion.

In the first half, the company said that it built 542 new cell sites, upgraded 5,087 mobile sites, and installed 356 5G sites.

At the stock exchange on Friday, shares in the company declined by P26 or 1.36% to P1,884 each. — Justine Irish D. Tabile

‘AC’celerating EV adoption

The Atto 3 is set to be introduced within the year. — PHOTO FROM AC MOTORS

Ayala-led AC Motors looks to crank up electric mobility volume as BYD distributor

By Dylan Afuang

IN THE RACE to carbon-neutral mobility via battery electric vehicles (BEVs), the Philippines falls some ways behind the world, as a number of hurdles continue to hinder our country’s adoption of this mobility type.

EVs command a considerable price premium over their internal-combustion-engine-powered counterparts, and public-access charging facilities are generally still few and far between. More glaring issues include our power grid continuing to rely on coal-fired plants. To be fair, nations across the world are in various state of readiness to switch to electric mobility.

Enter the automotive business led by the Ayala conglomerate, AC Motors. It now has taken over the local reins of distribution for BYD, an established Chinese EV brand. The vision, as explained during a recent press conference, is to not only add EV options in the market, but (through AC Motors and the Ayala Group in general) help develop an “EV ecosystem” — of which charging networks are part of.

The hope is that the AC Motors distributorship focus on BYD — a company which has recently marked a milestone five million EVs produced — could solve some problems facing BEV use.

During a media round-table discussion in Makati City, AC Motors Chief Executive Officer Jaime Alfonso Zobel de Ayala stated that distributing BYD plays a key component in the Ayala Group’s plans to lead the country’s transition to EVs.

“The Ayala portfolio is uniquely positioned to provide long-term value to customers in this emerging ecosystem,” Mr. Zobel de Ayala added. “Through our capabilities and efficient energy management of our strategic real estate assets for charging infrastructure or existing automotive distribution and dealership network and capabilities in digital connectivity and financing, we believe we are in a position to provide value to customers.”

The “efficient energy management” and “charging infrastructure” can be provided by ACEN Corp. and Ayala Land, Inc. (ALI). ACEN (formerly AC Energy) is the Ayala Group’s energy platform that aims to provide 100% renewable energy by 2025, while ALI is the company’s real estate arm that opened EV chargers in the country last year.

And as mentioned, the company’s “existing automotive distribution network” is handled by AC Motors, under which are Kia, KTM, Maxus, Volkswagen, and now BYD. The company is building BYD to “become a key brand in the Philippine market, with leading share among EV brands and meaningful presence in the automotive market as a whole,” declared Mr. Zobel de Ayala.

Leading the local BYD distributorship is industry veteran Antonio “Toti” Zara III, former AC Motors Automobile Group president.

With him at the helm, how will this EV brand make its mark here? “We need to communicate the BYD story, we need to communicate the technology, and we need to have a strong dealer network established in the Philippines,” Mr. Zara expressed to the media.

“BYD has an expansive lineup of both passenger and commercial vehicles at competitive price points, allowing the vehicles to be deployed at a larger scale,” AC Motors described in a statement, adding, “Its operations as an automotive manufacturer are also fully integrated, with capabilities not only in designing and assembling the final vehicles, but even in battery technology, electric powertrain development, and semiconductors.”

Mr. Zara stated that in the coming 12 months, the business aims to have at least 12 BYD outlets operational — 10 in Metro Manila and North Luzon, and two in Visayas and Mindanao.

“The plan is (to open) around 40 outlets in five years, but the growth would really depend on the adoption of EVs. We are looking at 15% to 20% EV adoption of total industry sales within about (a) five-year time frame,” the executive added.

And what about BYD cars?

In addition to growing and improving the dealer network, Mr. Zara revealed that the Atto 3 electric crossover will be introduced within the year. The Dolphin hatchback, Han sedan, and Tang SUV comprise the current BYD models.

Regarding pricing, Mr. Zara stated that vehicles supplied by AC Motors would be priced “competitively” as a result of relief and incentives under the Electric Vehicle Industry Development Act (EVIDA).

“We will have a stronger brand, a stronger dealer network, and a stronger product portfolio at price points that are now within reach of more Filipinos. We are coming in at the right time with EVIDA (and the exemption) of import duties and excise tax, so BYD products and its technologies will be made more accessible,” he announced.

“These are compelling models that target different market segments and allow us to promote EV adoption across a wide range of customers,” Mr. Zobel de Ayala joined. “With BYD’s leading presence globally in EVs and given its recent success in other Southeast Asian markets, we at AC Motors aspire to build the same level of respect and relevance for the brand in the Philippines.”

H&M says it will ‘phase out’ sourcing from Myanmar

LONDON — The world’s second-biggest fashion retailer H&M  has decided to gradually stop sourcing from Myanmar, it told Reuters on Thursday, as reports of labor abuses in garment factories in the country increase.

H&M became the latest brand to cut ties with suppliers in the country after Zara owner Inditex, Primark, Marks & Spencer and others.

“After careful consideration we have now taken the decision to gradually phase out our operations in Myanmar,” H&M said in an e-mail to Reuters.

“We have been monitoring the latest developments in Myanmar very closely and we see increased challenges to conduct our operations according to our standards and requirements.” — Reuters

No drama

PHILIPPINE STAR/KRIZ JOHN ROSALES

The State of the Nation Address (SONA) message of President Ferdinand “Bongbong” Marcos, Jr. on July 24 was very revealing of his style of leadership and perhaps what we can expect from him in the future.

The President’s SONA was very clinical and reportorial — crammed with facts, figures, and lists of programs. It was dramatically different from what we got from former President Rodrigo Duterte who peppered his speeches with cuss words and lambasted his enemies. Former President Duterte could ramble on and on, from promising the death and destruction of drug lords to condemning the depredations of alleged oligarchs.

What came to mind about President Marcos Jr. after the SONA was the American press’ description of the cerebral and unflappable former US President Barack Obama, “No drama, Obama.”

The SONA indeed was chill, not meant to bring offense to anyone. One could say it had a “friends to all and enemy to none” theme. Even on the controversial Military Pension Reform, he assured there would be no ill effects on the military personnel. “We are inclusive in our pursuit of social protection. The pension of the military and the uniformed personnel is as important, as urgent, and as humanitarian as that of all other civilian Filipino employees. Efforts are underway to make it fully functional and financially sustainable. We are once again working closely with Congress to ease the transition from the old system to the new one, to be able to guarantee that no effects are felt by those in the uniformed services.”

Come to think of it, this “friends to all and enemy to none” mindset can be traced as far back as candidate Bongbong Marcos’ campaign. His campaign theme was “Unity.” He refrained from attacking his political opposition, saying a nary bad word about Leni Robredo. You didn’t hear any red tagging from him, as you would have from his vice-presidential teammate. He relied on nostalgia and a recognizable brand name to move his campaign. In Pinoy lingo, he was “chill lang.”

Perhaps, President Marcos Jr. is trying hard to prove what he’s not. While he tries to evoke nostalgia or recycles some of his father’s programs like the Kadiwa stores and Masagana 99, he’s certainly not his father in some ways.

For example, before the election, I heard it said that “he will be a dictator like his father.” The very first thing he would do is declare martial law and jail the opposition, said the critics. Of course, these critics were exaggerating but the consensus, not the confrontational or bullying, style seems more suited to Marcos fil.

I’m wondering, however, whether this friend to all, enemy-to-none strategy can work, especially on difficult issues like food liberalization. We are facing a possible perfect storm of food crises: India has banned exports of non-Basmati rice, driving rice prices higher; Russia has rescinded the grain deal allowing Ukraine to ship out wheat, increasing speculation on wheat prices; and El Niño, or the unusually dry spell phenomenon, which is expected later this year and could negatively affect food production.

For sure, we must import more food. Not just rice, but also corn, which had also increased in price as corn is a substitute for wheat. Increased corn prices will mean higher prices for livestock since corn accounts for as much as 60% of the cost of livestock.

Allowing more food imports to quell possible rising food inflation will be a politically sensitive issue. The protectionist farmer groups will make noise. President Bongbong Marcos is unlike former President Rodrigo Duterte who could not care less when farmer groups protested the Rice Tariffication Law. And unlike former President Duterte, who was the former City Mayor of Davao who had no farmers among his constituents, President Marcos Jr. was a former Ilocos Norte Governor who is aware of the plight of farmers.

Tackling the food issue will test President Marcos Jr.’s political skills. There’s also no way forward in increasing agricultural production but by allowing more land consolidation. It’s fine to talk about farm consolidation through cooperatives but cooperatives don’t work in the Philippines. The only possible solution is to promote bigger and better-managed farms.

Again, this is a politically sensitive issue because the small, marginalized farmer has been romanticized in Philippine political culture. How President Marcos Jr. modernizes Philippine agriculture without being criticized for displacing the poor Filipino farmer will test his political skills. If he does not move toward greater farm consolidation, by ownership or leasing, Philippine agriculture will remain stagnant, and the economy will likely be weighed down by high food prices.

Another example of how President Marcos Jr.’s political skills will be tested is the issue of the flooding of the North Luzon Expressway. The only long-term solution, according to the President himself, is to build a catchment basin in the Candaba area. But this is being opposed by politicians and farmers in the area. Can he craft a win-win solution and get the catchment basin done? Contrast this with former President Duterte who had a damn-the-torpedoes approach to rehabilitating Boracay.

President Marcos Jr.’s slow, consensus style, however, doesn’t mean he’s afraid to make strong political decisions. Charging Negros Oriental Congressman Arnie Teves, the suspected mastermind and ringleader behind the assassination of Negros Governor Roel Degamo, with terrorism is indicative of a strong state determined to squash warlordism and uphold the rule of law.

I also suspect that President Marcos Jr. sometimes takes extra steps not to appear to be like his father, at least when the issue of cronyism is raised. Cronyism is what his critics during the election said he would practice, but the first thing he did when he assumed office was to veto the bill creating the Bulacan Airport Economic Zone.

It was also expected that the Marcos Jr. administration would favor the unsolicited proposal of the Manila International Airport Consortium (MIAC), which consisted of the country’s big business groups in rehabilitating the Ninoy Aquino International Airport (NAIA). The MIAC had a tempting offer of P267 billion at a concession period of 25 years. Many of the members of the MIAC were also members of the Presidential Advisory Council, so it was assumed that the unsolicited proposal was a slam dunk.

However, lo and behold, the government said it would go for a solicited proposal for 15 years, but extendible for another 10 years. It was a good signal since a solicited proposal would mean it would have to go through competitive bidding.

In appointing the new Governor of the Central Bank, President Marcos Jr. didn’t choose a politically connected banker, but instead selected an internationally recognized central banking expert, Eli Remolona. Eli spent 19 years at the Bank of International Settlements and 14 years at the Federal Reserve Bank of New York. He has a Ph.D. in economics from Stanford University. He probably doesn’t even know President Marcos Jr. personally.

I sometimes yearn for the drama associated with Duterte, his cuss words notwithstanding. There were no boring days during Duterte’s presidency and you either loved him or hated him. (I once described him as the “finger in the ass of the oligarchy.”) On the other hand, President Bongbong Marcos is indicating that he’s bringing a new style to the presidency: less drama, more technocracy, more good vibes. However, the country faces major headwinds: economic growth is decelerating, food inflation shows no sign of abating, and geopolitical tensions are rising. Can President Marcos Jr. do much-needed structural reforms and remain chill? Let’s see.

 

Calixto V. Chikiamco is a board director of the Institute for Development and Econometric Analysis.

idea.introspectiv@gmail.com

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Supermarkets await stronger sales ahead of school opening

EDUARDO SOARES-UNSPLASH

SUPERMARKETS are expecting stronger sales ahead of the opening of classes for the school year 2023-2024, particularly for items consumed by students.

“Supermarkets are hopeful that with most schools going face-to-face completely, sales for ‘baon,’ bread spreads, and drinks will be revived this year,” Philippine Amalgamated Supermarkets Association President Steven T. Cua told BusinessWorld in a Viber message.

“Household expense on these have been put on hold since the pandemic with schooling done from home,” he added.

The Department of Education previously announced that all public schools would start classes on Aug. 29 for the school year 2023-2024, while private schools are allowed to open classes starting from the first Monday of June but not later than the last day of August, as provided under Republic Act No. 11480.

According to Mr. Cua, local supermarkets have prepared their inventories ahead of the school opening.

“Supermarkets have prepared for this but operators have been scratching their heads as to the official class opening for which type of school and grade level. Most are looking forward to end of August as the start for majority of pupils for 2023,” he added.

“It is that time of the year when school supplies sell well,” he added.

The Department of Trade and Industry (DTI) previously said the pending increases in the suggested retail prices (SRPs) of basic necessities and prime commodities range from 10 centavos to P7 for food products and P1.50 to P9.75 increase for nonfood products on the back of surging prices of raw materials.

It added that 43 shelf-keeping units (SKUs) from 13 manufacturers have pending price hikes. These products include canned sardines, condensed milk, evaporated milk, powdered milk, coffee, instant noodles, bottled water, canned meat, and toilet soap.

The latest DTI SRP bulletin was released on Feb. 8, which granted SRP increases ranging from 45 centavos to P7 for 76 SKUS, while the prices of 141 SKUs were carried over from the previous SRP bulletin issued in August last year.

Separately, the DTI released its updated price guide for school supplies on July 25, which covers specific brands of notebooks (composition, spiral, and writing), pad paper (Grades 1-4 and intermediate), pencils, ballpoint pens, crayons, erasers, sharpeners, and rulers.

The DTI’s guide reflected price increases ranging from P4 to P8 on various school supplies. Before the July 25 issuance, the last school price guide issued by the DTI was on Aug. 12 last year.

School supplies are deemed prime commodities under Republic Act No. 7581 or the Price Act. — Revin Mikhael D. Ochave

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