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RLC plans 2-4 more project launches this year

CEBU CITY — RLC Residences is planning to launch two to four more projects this year, as it sees continued growth in demand for residential condominiums.

John Richard B. Sotelo, senior vice-president and business unit general manager of RLC Residences, said the company is looking to launch the new projects in Metro Manila.

“We’re planning to launch anywhere from two to four more projects depending on how the market responds,” he told reporters at the sidelines of the launch of its new premium condominium project Mantawi Residences, Friday.

Mantawi Residences is a four-tower premium condominium located along Ouano Avenue in Mandaue City.

This is the third project launched this year by RLC Residences, the residential brand of listed developer Robinsons Land Corp. (RLC). Earlier this year, it unveiled Le Pont Residences in the Bridgetowne estate and the fourth tower of Sierra Valley Gardens in Cainta, Rizal.

Despite rising interest rates, Mr. Sotelo said there appears to be sustained demand for residential projects, as evidenced by the growing pre-reservation sales as reported  by listed property companies, including RLC.

The Bangko Sentral ng Pilipinas’ policy-setting Monetary Board has raised borrowing costs by 425 bps since May last year, bringing the benchmark rate to 6.25%, the highest since 2007.

“We are not experiencing a slowdown at least in the residential business. We have a couple of clients worried about bank loans but when we tell them that they will only need a bank loan in seven years, they say ‘oo nga pala’ (Yes, that’s true). For now, we’re pretty confident that the market for residential condominiums will continue to grow,” Mr. Sotelo said. 

RLC has reported its residential business, which includes RLC Residences and Robinsons Homes, posted a 44% increase in revenues to P9.1 billion in 2022. Full-year net residential pre-sales rose 57% year on year.

Asked where RLC Residences is looking at expanding, Mr. Sotelo said it is easier to expand in an area where RLC already has a presence, whether a mall, hotel, or office building.

“Montclair (RLC’s destination estate in Porac, Pampanga). I’m very interested to launch there. It’s just a matter of timing,” he said.

Aside from high interest rates, the rising prices of construction materials is also a concern for property developers like RLC.

Mr. Sotelo noted prices spiked last year due to the Russia-Ukraine war but has “settled down.”

“It is still higher pre-pandemic. Electricity and oil prices are more expensive. Labor costs also went up,” he said.

Retail price growth of construction materials in Metro Manila slowed to 4.1% year on year in March, the Philippine Statistics Authority (PSA) reported on Friday. This is the slowest rate of growth in over a year, according to PSA data.

Based on preliminary PSA data, the construction materials retail price index was up 5% in the first quarter, from 3.7% during the same period a year ago. — Cathy Rose A. Garcia

Two out of three hit the spot

THEUNBRANDEDSKINCARE.COM

By Joseph L. Garcia, Reporter

Product Review
The Unbranded Skincare Co.
Cleansing Wash, Day Shield, and Overnight Cream

WHILE the London City airport has dropped the 100 mL limit for liquids in one’s carry-on luggage, the rest of the world is yet to follow suit. This means that we still have to pack our skincare in our check-in luggage, and we’re not quite willing to open our suitcase to a sight of broken bottles of serum.

Last year, we received bottles from homegrown skincare company The Unbranded Skincare Co. —  and ignored them. During a trip to Paris last March, we decided to finally use the three-piece skincare kit. The promise of Unbranded is to reduce longer routines and condense them into one facial wash, plus a Day Shield and an Overnight Cream. To be fair, my facial routines never go into the extreme 11 steps that lots of people adopted before the pandemic. My own routine uses a facial wash, a toner, a Niacinamide serum, a hyaluronic acid moisturizer, and sunscreen during the day; another facial wash, another toner, a retinol serum, face oil, and another moisturizer at night —  well below 11. Still, the need for more space in the suitcase might benefit from what is essentially a two-step routine.

Unbranded’s Cleansing Wash (P575) has squalene that aims to restore lipidic barriers in the skin to keep moisture better, and also contains lotus, green tea, calamansi, angelica, and guava extracts; as well as brightening niacinamide and antimicrobial tea tree oil. It’s designed to join cleanser and makeup remover in one, and it really works that way. What we did was use it as a makeup remover, applying it first on a dry face to melt off our makeup, then wiping it off with a cloth, and then rinsing it off. We felt that our skin really was softer and calmer during the trip.

The Unbranded Day Shield (P850) also has squalene for hydration, allantoin to soothe and calm skin, and hyaluronic acid, also for hydration purposes. It also has a measure of sun protection with SPF 35, thus condensing moisturizer, serum, and sunscreen in one. This cream has to set upon application —  the sunscreen component left a white cast on the face —  but otherwise, it felt rich and quite thick, and a little goes a long way.

Well —  it was our fault for using this at the beaches of Normandy, an environment that punished Allied soldiers during the Second World War (and Lord knows they didn’t bring any skincare). Punishing winds, sand, and the hot sun combining with the mild cool of the spring thaw had terrible effects on the Unbranded Day Shield. We remember leaving a makeshift morgue at one of the D-Day landing beaches with our skin feeling like it was cracking.

We tried soothing this that evening with the Overnight Cream (P975). This had Centella Asiatica that helps repair skin; as well as ameliox, bee venom, and hydrolyzed collagen (from starfish) that act as anti-aging elements. We woke up with our skin feeling light, though a bit too shiny.

We gave the Day Shield another chance, but this time, we weren’t taking any chances: on a trip to the former home of the French royals at the Palace of Versailles, we layered the day shield with another moisturizer. And you know what? It still did not work; and the same windy conditions in Versailles punished the face once again. To be fair to it, the Day Shield performed quite well (but not as well as my own five-step routine) in Paris itself, as well as in Amsterdam.

Our verdict is to kick the Day Shield out of the routine and keep the Overnight Cream and the Cleansing Wash. The Day Shield might show good results in a pinch, but never in a harsh climate, and preferably somewhere humid. The Overnight Cream can even be used at home when you’re just not in the mood to rub more things on your face and just want to hit the sack. Still, with just two bottles in your bag for a “spartan” evening routine, that would at least help save space so you can buy better day creams in another city.

One can get The Unbranded Skincare Co.’s products from their website (theunbrandedskincare.com).

AirAsia posts 99% on-time performance during Holy Week

NEWSROOM.AIRASIA.COM

BUDGET CARRIER AirAsia Philippines recorded a 99% on-time performance (OTP) during the Holy Week despite the influx of passengers amid the holidays, it said in a statement.

“The World’s Best Low-Cost Airline recorded a high of 99% OTP during the Holy Week where the Manila International Airport also experienced an influx of departing and arriving guests,” AirAsia Philippines said.

It said it achieved a 100% OTP on April 7, 11 and 12, registering the highest OTP in the whole AirAsia operations center with a 94% rating from April 1 to 9. For an airline to be considered on time, they have to arrive or take off within 15 minutes of their scheduled time.

“We know how important it is for our guests to reach their destinations safely and on time. Whether it be a business trip or a family vacation, every minute counts,” AirAsia Philippines Communications and Public Affairs Head Steve F. Dailisan said in a statement.

The company said that in an internal meeting with the Air Association of the Philippines, the Civil Aeronautics Board proposed the publication of the airlines’ OTP, which will be made accessible to all passengers who will be booking their flights.

“This will enable guests to carefully plan their flights and travel itinerary especially those with connecting flights or traveling from one airport to another,” AirAsia Philippines said in a Viber message.

The low-cost airline has been publishing its OTP across all its operations centers on its website.

Beginning April 15, all travelers are required to register and accomplish the E-Travel System, which replaces the paper-based documents used by inbound and outbound passengers.

The airline reminded its guests to register within 72 hours before their scheduled departure and arrival on www.etravel.gov.ph. — J.I.D. Tabile

Lacoste dresses up ‘Netflix and Chill’ uniform in fashion collab

LACOSTE.COM.PH

NETFLIX, Inc. and Lacoste SA are launching a clothing collaboration that will see the garment-maker’s iconic crocodile dressed up as show characters, with the steaming service saying it wanted to go beyond “the Netflix and chill uniform.”

The collaboration, which will cover eight of Netflix’s most popular shows, signals a doubling-down by Lacoste, owned by Maus Freres Holding AG, in its attempt to turn around the almost century old clothing brand by appealing to a younger audience. Traditionally known for its polo shirts and high-end tennis gear, the brand’s other recent unlikely partnerships include Bruno Mars and the skater magazine Thrasher.

The deal also suggests Netflix will continue its recent forays into clothing merchandise. The streaming service partnered with French fashion house Balmain for a Western-themed collection inspired by The Harder They Fall. Other collaborations, like a 2020 Hennes & Mauritz ABM collection for teen romance movie To All The Boys I’ve Loved Before, more specifically targeted a younger audience.

Netflix says the Lacoste collaboration, launching April 12, is designed to appeal to romance fans and teen show enthusiasts. The eight featured shows are Stranger Things, Bridgerton, Lupin, Money Heist, The Witcher, Sex Education, Shadow and Bone and Elite.  Bloomberg

Court convicts officials of lending company for falsifying documents

OFFICIALS and incorporators of Dr Verma Lending Corp. have been convicted for falsifying documents that were submitted for registration with the Securities and Exchange Commission (SEC), the regulator said.

“In a decision dated April 5, the Pasay Metropolitan Trial Court Branch 47 found three officials of Dr Verma Lending Corporation guilty beyond reasonable doubt of violating Article 172 (1) of the Revised Penal Code (RPC), providing penalties for the falsification of public documents by a private individual,” the SEC said in a statement on Friday.

“The SEC filed the criminal case against Dr Verma Lending after the SEC Corporate Registration and Monitoring Department (CRMD) found irregularities in the Certificate of Bank Deposit in the amount of P1 million, purpotedly issued by BDO-Pasay Two Shopping Center Branch in April 2017, which the former submitted as part of the requirements for registration with the Commission,” it said.

The bank certificate was made to comply with Republic Act No. 9474 or the Lending Company Regulation Act, which prescribes a minimum paid-up capital of P1 million for lending companies.

Jelyn Orillo Borja, Uldarico Sahay, and Jessie Basarte Borja were each sentenced to imprisonment of up to two years and six months and were slapped with a P100,000 fine.

“As [Jelyn Borja, Uldarico Sahay, and Jessie Borja] knowing fully well that the bank certificate is a requirement and that their corporation does not have the money to put up the same, their reliance on fixers to procure such certification necessarily negates their excuse or purported lack of knowledge over the falsification of the same, thereby making them liable for the act,” the SEC quoted the court decision as saying.

The commission said this marks the second conviction the regulator has secured against illegal lenders for falsifying public documents.

“The SEC remains vigilant over the registration and operations of lending and financing companies, as part of the government-initiated crackdown against illegal lenders engaged in a “5-6” scheme and other usurious practices since 2016,” the regulator said. — AHH

Ex-MNLF bases awaiting OIC farm investments

PRESIDENTIAL Peace Adviser Isidro L. Purisima (right) and Bangsamoro Labor Minister Muslimin G. Sema, also the central committee chair of the Moro National Liberation Front, during their engagement on April 14 in Datu Odin Sinsuat, Maguindanao del Sur. — JOHN UNSON  

FORMER BASES operated by the secessionist Moro National Liberation Front (MNLF) have been declared “peace zones” ready to accept agriculture investments from Muslim countries, according to an MNLF leader who is also a member of the Bangsamoro government.

“Since there is peace now in these areas, we are optimistic that investors from member-countries of the OIC (Organization of Islamic Cooperation) will soon come in to invest in viable ventures,” MNLF Central Committee Chair Muslimin G. Sema said on Friday following a meeting with Acting Presidential Peace Adviser Isidro L. Purisima.

Mr. Sema, the labor minister of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), said the former camps are suitable for large-scale propagation of corn, soybeans, or Cavendish bananas for export.

MNLF has blocs in the region’s provinces in mainland Mindanao as well as the island provinces of Basilan, Sulu, and Tawi-Tawi. The “peace zones” have been de-militarized and have been set up to become agricultural development sites.

The OIC, a global bloc of Muslim countries that includes petroleum-exporting states in the Middle East and North Africa, helped broker the Philippine government’s separate peace agreements with the MNLF and the Moro Islamic Liberation Front (MILF).

At the meeting, capped off by an iftar or the first meal after a day-long Ramadhan fast, Mr. Sema reaffirmed the MNLF’s commitment to supporting the peace process and economic development programs in the Bangsamoro region, with governance led by the MILF.

“The Moro issue in Mindanao is best addressed via diplomatic and political interventions. We cherish our final peace agreement with the National Government,” Mr. Sema said.

The MNLF and the National Government forged on Sept. 2, 1996 a final peace agreement that ended the group’s more than two decades of secessionist activities in provinces that now comprise BARMM.

The MILF, on the other hand, has two compacts with Malacañang, the 2012 Framework Agreement on Bangsamoro and the 2014 Comprehensive Agreement on Bangsamoro.

The two agreements came after 22 years of government-MILF peace talks that paved the way for the creation of BARMM in 2019, replacing the then 29-year-old Autonomous Region in Muslim Mindanao.

Former MILF camps are also in the process of transformation via agricultural and non-agricultural livelihood training for inhabitants, and improving access to basic services and social infrastructure.  

The MNLF has representatives in the 80-seat MILF-led BARMM parliament. — John M. Unson

World of Barbie experience brings iconic doll into the real world

AVA RIOS poses inside Barbie’s box as her mom Brenda Cisneros takes a picture during the World of Barbie immersive experience preview in Santa Monica, California, US, April 12, 2023. — REUTERS/MARIO ANZUONI

LOS ANGELES — From the first blonde haired Barbie created by Mattel in 1959 to the upcoming Barbie film, the iconic doll with small feet continues to make a large impression on generations of fans at the new World of Barbie immersive experience in Los Angeles.

This trip is not just for young girls, said Lucy Treadway, producer for Kilburn Live, which built the life-sized version of Barbie’s Dreamhouse.

“It’s for grownups too,” Ms. Treadway said in an interview. “To see people’s faces when they walk in, it is really is fun. I mean, their jaws hit the ground, all ages.”

Gender does not matter, she added, noting that both little girls and boys scream with excitement when they arrive.

Guests can explore rooms in the 20,000 square-foot attraction dedicated to Barbie’s careers and hobbies as well as an assortment of doll selections that celebrate diversity.

“The message is you can be anything, and it’s such a huge value for kids when they can walk into a room and see astronaut Barbie and see all the different careers that would never dawn on a child, that they could be something,” Ms. Treadway said.

The dolls have come to represent inclusivity over the years with the message that children, no matter their background, can be anything, she added.

Fans are encouraged to express their own style at the World of Barbie through the viral Barbiecore fashion trend of girly pink outfits and accessories.

The craze took off in 2022 when celebrities, including Barbie star Margot Robbie, Zendaya, Lizzo, Florence Pugh, and Anne Hathaway, began sporting themed outfits at events ahead of the Barbie live-action film opening in July.

Fans can also buy Barbies and Barbiecore accessories at the World of Barbie, with plenty of options for customers to embrace their love for the Barbie world. — Reuters

Acquiro targets to create 15,000 jobs in 3-5 years

GLOBE GROUP’S Acquiro Solutions and Tech, Inc. is planning to scale up its operations as part of its goal of generating 15,000 jobs in the next three to five years.

“Our expansion efforts reflect our dedication to helping both talents and businesses adapt to the ever-changing modern workplace,” Acquiro’s Deputy General Manager Ged Gutierrez said in a statement.

Since its launch in January 2023, Acquiro has already supported over 1,300 talents in tech and non-tech services, while it has opened 300 new job opportunities.

Among the industries it supports are telecommunications, fintech, health, education, digital banking, and information technology, among others.

Acquiro is a spin-off from Globe’s subsidiary Asticom Group of Companies’ staffing solutions which offers part-time, hybrid, and gig work through its talent platform NXT. — J.I.D. Tabile

An initial MIAS dispatch

The crowds are truly back. The Jetour booth is swarmed by people eager to see the brand’s lineup. — PHOTO BY KAP MACEDA AGUILA

The country’s biggest automotive spectacle is back to full speed

DAY ONE of the Manila International Auto Show (MIAS) 2023, quite appropriately, had a little bit of everything. Weather-wise, it was hot, humid, and cloudy when I got there an hour before the opening ceremonies were supposed to commence, and then rain started to fall in the afternoon when my knees and feet told me it was time to call it a day.

Still, people were arriving in droves because, well, it’s the MIAS. The 18th edition of the country’s biggest automotive spectacle, themed “Shaping Mobility,” happens just as two important developments are clearly suffusing the auto industry. First, we are seeing the continued electrification of mobility options — whether in the form of hybrids or BEVs (battery electric vehicles). It’s now almost expected for marques to roll out an electrified model or two, and the MIAS is the perfect platform to get the general public on the same page. Second, we’re seeing the continued influx of brands. Joining the fray are China-headquartered automakers Great Wall Motors and Jetour, adding to an already formidable presence from that country through the likes of Geely, Chery, and even MG. No matter how you slice it, more options mean a win for the consumers through increased competition for a finite spending power.

Taken from a macro view, MIAS inevitably represents a “desire for progress and a sustainable future,” said Worldbex President Joseph Ang. Commenting on the theme, he said, “Shaping mobility is more than just moving people from one place to another. It is also about moving the economy forward… (through meeting the) need for efficient and reliable transportation.” MIAS is also, of course, about showcasing a “range of vehicles that cater to different needs and preferences.”

Delivering a speech for Department of Transportation (DoTr) Secretary Jaime Bautista, Usec. Anneli Lontoc focused on the aforementioned EVs. “Times have changed, obviously, and we’re in the midst of an electric vehicle revolution with the advent of hybrid vehicles that are already out in the market today,” she stated. “The Department of Transportation recognizes the urgent need for transportation initiatives for green recovery.” Economic recovery should be pursued while being careful to “lessen environmental and climate impact.” Sustainability is the order of the day.

Continued Ms. Lontoc, “The DoTr sees this opportunity to harness sustainability and mobility by promoting active transport through cycling, walking, walkway concourses and efficient traffic control for easier access to work and goods while minimizing social and environmental cost.”

I for one certainly wish the DoTr well in this regard, and it will certainly take more than wishful thinking to realize this dream we can’t just append or supplant to the present reality. A case in point is how the well-meaning yet ill-planned bicycle lanes on major thoroughfares panned out. Instant noodles can taste great, but they are no substitute for a real, lovingly made meal.

Back to MIAS, it still proved to be the smorgasbord of delights that you remember. The dances, the production numbers, the colorful lighting, the models, the loud music. It’s a visual feast that’s in your face and your ears.

As I moved around to observe how we have finally seen a “healthy” MIAS since the pandemic upended everything around us in 2020, I did notice how the show seemed to have outgrown its haunt, the World Trade Center Metro Manila. The gaps and corridors between exhibits and booths were smaller, and filled up quite quickly — especially since the people have come back in full force. Even the venue of the traditional opening ceremony seemed to have shrunk, leaving little room for the media practitioners, such as myself, who wanted to snap away and record the goings on.

I ultimately did myself a favor by taking a Grab to the venue because parking has historically been  a challenge. I heard that the usual parking lot across Buendia (Sen. Gil Puyat Avenue) muddied up pretty good on account of the rain. It’s been a recurring problem for the MIAS faithful; I join them in praying for better parking facilities. I do note though that MIAS (with Foton) provided shuttles to and from the exhibit site. “(We) provide free transport to and from World Trade Center to nearby open parking lots across World Trade Center and Manila Film Center. Parking usually gets full in the early afternoon so it is best to come and visit the show as early as possible,” said MIAS in a release.

For now, while there’s a growing chorus to reconsider an alternative venue, none in the metropolis really comes to mind that can meet the needs and girth of MIAS. One suggestion is to come up with a satellite venue to accommodate other exhibitors. If this can decongest the main venue, why not? However, there should be some sense in exploring that simultaneous second site. Would that change the way you view MIAS? I guess if organizers can also provide free shuttles to and from that second site, then it sounds much more feasible — while opening doors to more parking areas (you can park near either location).

Still, there’s no doubt that MIAS will continue to be among our favorite things about summer. I’m already looking forward to the next one.

Banana growers see exports declining

DA

PRODUCTION of Cavendish bananas, the main export variety, remains threatened by Fusarium wilt or Panama disease, likely dampening exports, according to the Pilipino Banana Growers and Exporters Association (PBGEA).

“For the first three months, our production was even worse than last year. We’re kind of worried that maybe at the end of this year, we might not be able to contribute even $1 billion,” PBGEA Executive Director Stephen A. Antig told BusinessWorld in a virtual interview.

Citing the Philippine Statistics Authority (PSA), the total land area planted to banana was 442,894 hectares last year, with 84,328 hectares dedicated to Cavendish, which is cultivated in large plantations for efficiency.

Mr. Antig said that about 15,000 banana plantations were hit by the disease, while the Department of Agriculture is currently monitoring the affected land area to arrive at a production estimate.

Fusarium wilt is a soil-borne fungal disease that is attaches to banana plants, blocking the plant’s vascular system and depriving it of minerals, nutrients, and moisture. Affected plants turn yellow until they die.

“When you’re hit with this disease, it will stay in the soil as long as 30 years. Habang nandiyan siya sa soil (while it is in the soil), you cannot plant the same varieties because they will be destroyed,” Mr. Antig said.

Mar de Guzman, officer-in-charge of Plant Health and Pest Status Section in the Bureau of Plant Industry, said that the Fusarium wilt strain called Tropical Race 4 (TR4) was first recorded in Davao City in 2009.

So far, this fungal strain is only present in the Mindanao region. Other types of Fusarium wilt have also been detected in the Cordillera Administrative Region (CAR), the Cavite, Laguna, Batangas, Rizal, Quezon region (Calabarzon), the Mindoro, Marinduque, Romblon, Palawan, region (Mimaropa), the Central Visayas, the Eastern Visayas, and the South Cotabato, Cotabato, Sultan Kudarat, Sarangani, and General Santos (Soccskargen) region.

Iniiwasan natin ’yong kumalat ’yong Tropical Race 4, so nagkaroon tayo ng quarantine measures at least hindi makaaabot sa Luzon (We’re trying to quarantine TR4 so it does not hit Luzon),” he said via Facebook Messenger chat.

Last year, banana output was 9.013 million metric tons (MMT) which was the lowest since 2020 when the Philippines produced 9.056 MMT, according to the PSA.

Banana exports totaled 2.24 MMT in 2022, down 6.21%, according to preliminary data from the United Nations Food and Agriculture Organization (FAO).

Baka nga ma-swerte na kami to hit 2 million (MT) (We would be lucky to hit 2 million MT) this year,” Mr. Antig said.

The value of banana exports dipped to $1.09 billion from $1.14 billion in the previous year, the FAO said.

“In 2022, the value of the total exports was about $1.09 billion, medyo maliit ’yun, bumagsak ’yun (that is small and reflects a sharp decline). I would say our peak season was in 2019,” said Mr. Antig.

In 2019, the volume of exports was 4.35 MMT, valued at about $1.95 billion, according to the FAO.

Guatemala recently surpassed the Philippines as the number two banana exporter in the world with 2.45 MMT in 2022.

“The only way to survive in this industry is if you’re big and the reason for that is because most of the production costs are fixed,” Mr. Antig said.

According to Mr. Antig, small and medium-sized banana producers who cannot rehabilitate their land or those who do not have easy access to financing either abandon bananas or shift to other commodities resistant to the disease such as coffee, cacao, and corn.

“We are actually trying to develop a new variety that it resistant to the Fusarium wilt but so far we have not really been successful in producing or developing one that is totally resistant,” he said.

He called for the establishment of a research center to combat the disease.

“For the last 10-11 years since we discovered this outbreak of Fusarium wilt, we have been pestering the government to put up a research center because on our own we cannot afford to establish one,” Mr. Antig said.

He said legislators attempted several times to file a bill seeking to establish a banana research institute. “Probably hindi nakita ng ibang mambabatas (Other legislators failed to see its) importance to Mindanao, that’s why it did not pass first reading.”

The Davao Region accounts for about 36% of total banana production with 3.29 MMT in 2022, Mr. Antig said. — Sheldeen Joy Talavera

LVMH’s caution points to Americans’ waning lust for luxury

PARIS — Luxury shoppers in the United States are curtailing purchases of high-end fashion and leather goods, LVMH’s first-quarter sales report showed, adding to evidence that a strong, months-long, post-pandemic splurge may be ending.

Shares in Europe’s most valuable listed company rose nearly 5% to record highs in early trade on Thursday after it reported a 17% jump in sales, thanks to a sharp rebound in China following the end of COVID-19 lockdowns.

US revenue grew 8% over the quarter but the French group’s finance chief Jean-Jacques Guiony said most of that was down to brisk business at its less exclusive Sephora beauty chain.

“For the rest, the business is slowing down a bit,” he said, citing softer demand for fashion and leather goods — where sales to US shoppers both at home and abroad were “flattish” — as well as jewelry.

“Maybe interest rate rises are taking their toll on spending,” Mr. Guiony said.

European labels including LVMH’s Louis Vuitton and Dior, as well as Chanel and Hermes have been riding a wave of strong demand from Americans, who emerged from lockdowns with savings and a desire to splash out on designer labels.

LVMH’s US sales grew 15% last year, and the US market accounted for 27% of overall revenue, as shoppers shrugged off rising prices and turbulent markets.

High demand prompted a flurry of investments, with brands including rivals Hermes and Kering-owned Gucci opening new retail spaces in sprawling malls like American Dream in New Jersey and South Coast Plaza shopping center in California, and in cities like Austin, Texas.

But the spending spree from shoppers is beginning to show signs of slowing.

Credit card data from Citi released last week showed that US luxury spending in March declined to the lowest monthly rate in nearly three years, down 18% as fewer people splashed out on high-end goods.

Younger shoppers, who drew on savings during lockdowns are now under more pressure from rising prices than older generations with higher incomes, Citi analysts said.

BIGGEST BEAR STORY
The United States is “the biggest bear story” in the luxury sector, HSBC said in a recent note, though it cautioned fears of a sharp downturn may be exaggerated.

“(The) softer US consumer is an important caution point,” said Oliver Chen, an analyst with Cowen, flagging possible risks for Tapestry and Versace owner Capri due to their exposure to the handbags segment.

LVMH saw a particular slowdown in US demand for its Hennessy cognac, as a steep price increase, meant to offset rising energy and glass costs, were “probably a bit difficult to absorb by some clients,” Mr. Guiony said.

He added the group is taking a cautious approach to price increases this year — not just for cognac.

LVMH will also soon show off a hefty investment in US jewelry group Tiffany, which it bought for $16 billion in 2021, with the reopening of the New York flagship store after three years of renovation.

The store, which accounted for around 10% of Tiffany sales before closing for refurbishment, is likely to reopen near the end of the month.

“It’s probably the most emblematic luxury store in the world,” said Mr. Guiony.

He said that developing Tiffany’s sales through product innovation and expanding and renovating stores would be a priority, while margin expansion would likely kick in at a later stage, in a strategy similar as that it applied to Bulgari.

Elliott Savage, portfolio manager of USbased fund YCG Investments, which holds shares in LVMH and other luxury brands, said a weakening US luxury market in the near term could present an opportunity for dominant players to take market share.

“It could actually end up being better (for LVMH) in terms of strengthening their position,” Mr. Savage told Reuters.

LVMH’s luxury divisions, which span fashion, leather goods, watches and jewelry, have been gaining on rivals in recent years, almost doubling their global market share to 22% from 12% between 2018-2023, according to Jefferies.

Many high-end labels are still moving further upmarket and rolling out new services for their wealthiest clients, seen as more resilient to economic headwinds.

Gucci last week opened a salon catering to high-end clients in Melrose Place in Los Angeles where red carpet-ready evening wear is displayed on mirrored pedestals. The group plans to open nine more similar boutiques including in New York and Shanghai. — Reuters

Rates of T-bills, bonds may climb as market awaits Fed, BSP moves

BW FILE PHOTO

RATES of Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week could rise amid continued uncertainty over the US Federal Reserve’s and the Bangko Sentral ng Pilipinas’ (BSP) next moves.

The Bureau of the Treasury (BTr) will auction off P15 billion in T-bills on Monday, made up of P5 billion each in 91-, 182-, and 364-day papers.

On Tuesday, it will offer P25 billion in fresh 13-year T-bonds.

“Unless the market gets more clarity on the central banks’ coming pause or better yet confirmation, the CPI (consumer price index) data on material disinflation like what we got in March, or the lower-than-expected March US CPI will lack the gravitas to reactivate risk appetite,” Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a report.

“Even the minutes of the FOMC (Federal Open Market Committee) meeting in March did not provide clarity as the Fed expects the banking turmoil to cause a recession, which argues for a pause sooner than later, although the Fed should not be distracted from its primary task of taming inflation by hiking its policy rate,” Mr. Asuncion said.

US CPI climbed 0.1% last month after rising by 0.4% in February.

In the 12 months through March, the CPI increased 5%, the smallest year-on-year gain since May 2021. The CPI rose 6% on a year-on-year basis in February.

The Fed has hiked rates by a total of 475 basis points (bps) since March 2022, bringing its key rate to a range between 4.75% and 5%.

Its next meeting is on May 2-3.

Meanwhile, Philippine headline inflation eased for a second consecutive month in March to 7.6% from 8.6% in February.

For the first quarter, inflation averaged 8.3%, higher than the BSP’s 6% forecast and 2-4% target for the year.

Mr. Asuncion said they expect the BSP to hike rates by another 25 bps in its May 18 meeting to bring the policy rate to 6.5% before pausing.

The Monetary Board has raised benchmark interest rates by 425 bps since May 2022.   

“The BTr’s bond auction results will provide strong guidance on secondary market yields at this time when the BSP and the Fed’s pause is still uncertain,” Mr. Asuncion added.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that T-bill and T-bond rates could track the increases seen at the secondary market.

At the secondary market on Friday, the 91-, 182-, and 364-day T-bills went up by 28.95 bps, 11.94 bps, and 0.54 bp week on week to end at 5.4374%, 5.7605%, and 5.9998%, respectively, based on the PHP BVAL Reference Rates data published on the Philippine Dealing System’s website.

The 13-year bond’s yield “could be similar/slightly higher versus the comparable 12-year PHP BVAL yield at 6.24% as of April 14, 2023, which increased week on week by 0.05 bp,” Mr. Ricafort said.

He said demand for the T-bonds on offer could be high due to a large amount of maturing securities in the third week of April, which means increased liquidity in the market.

Last week, the Treasury raised just P13.9 billion from its offer of T-bills, below the P15-billion program, even as total bids reached P21.609 billion.

Broken down, the Treasury borrowed P4.6 billion from the 91-day T-bills, below the P5-billion plan, despite tenders for the tenor reaching P6.744 billion. The average rate of the three-month paper rose by 26.90 bps to 5.314%, with the accepted rates ranging from 5.05% to 5.5%.

The BTr likewise raised only P4.3 billion via the 182-day debt papers, lower than the P5-billion program, with bids at P8.578 billion. The average rate of the six-month T-bill went up by 2.60 bps to 5.7%. Accepted yields were from 5.673% to 5.75%.

Meanwhile, the government made a full P5-billion award of the 364-day securities as demand for the tenor stood at P9.287 billion. The one-year paper was awarded at an average rate of 5.991%, inching up by 1.40 bp the previous week, with accepted rates ranging from 5.95% to 6%.

The Treasury wants to raise P160 billion from the domestic market this month, or P60 billion via T-bills and P100 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — A.M.C. Sy