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Shipping costs seen to drive inflation

REUTERS
Cargo containers are seen at a shipping yard in Cavite, July 23, 2015. — REUTERS

By Luz Wendy T. Noble, Reporter

THE SURGE in global shipping costs will likely continue causing faster inflation in economies that are reliant on imports until the end of the year, according to the International Monetary Fund (IMF).

In a blog titled “How Soaring Shipping Costs Raise Prices Around the World,” IMF analysts Yan Carrière-Swallow, Pragyan Deb, Davide Furceri, Daniel Jiménez and Jonathan D. Ostry said global shipping costs that have soared during the pandemic due to supply chain disruptions are expected to remain elevated this year.

“Our results suggest the inflationary impact of shipping costs will continue to build through the end of 2022. This will create complicated trade-offs for many central bankers facing increasing inflation and still ample slack in economic activity. Moreover, the war in Ukraine is likely to cause further disruptions to supply chains, which could keep global shipping costs — and their inflationary effects —higher for longer,” they said.

Using data from 143 countries over the past 30 years, the IMF analysts found shipping costs are an important driver of inflation.

“When freight rates double, inflation picks up by about 0.7 percentage point. Most importantly, the effects are quite persistent, peaking after a year and lasting up to 18 months. This implies that the increase in shipping costs observed in 2021 could increase inflation by about 1.5 percentage points in 2022,” they said.

Countries that import more of what they consume will likely experience faster inflation, they said.

Philippine Chamber of Commerce and Industry President George T. Barcelon said supply chain issues, including soaring shipping costs, are expected to persist throughout 2022. He said this has affected the input cost for both exports and imports.

Mr. Barcelon noted the logistics issue began during the pandemic but is worsening due to the rising global oil prices. Firms are hopeful that the Russia-Ukraine conflict would be resolved soon, easing the pressure on crude oil prices.

“In the next two weeks, we hope fuel prices subside, but the problem on supply chain logistics and the shipping will not go away,” Mr. Barcelon said in a phone call.

Lockdowns in some major cities in China have also aggravated the situation, he said. Port congestion has worsened in cities such as Shenzhen and Hong Kong as Chinese authorities continue to pursue a COVID-zero strategy.

Mr. Barcelon said the supply chain issues and higher shipping costs are a big problem specifically for exporters of perishable goods like fruits.

The IMF study found the increase in shipping costs is reflected in the prices of imported goods at the dock within two months. “But the impact on the prices consumers pay at the cash register builds up more gradually, hitting its peak after 12 months,” IMF analysts said.

Last week, Philippine Liner Shipping Association President Mark Matthew F. Parco has said freight fees have already increased by 25% on average.

Shipping is crucial for an archipelago like the Philippines as about 90% of trade is transported via water, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.

“This could then have a big impact on inflation, and could most likely hit the transport index,” Mr. Asuncion said in a Viber message.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the surge in shipping cost is a case which proves that inflation pressures are unlikely to be transitory.

“On top of expensive oil, the shortage of tankers is also playing a role in keeping freight costs expensive. This is likely to continue until we get more tankers plying shipping lanes and when we start to see global energy prices slide,” Mr. Mapa said in an e-mail.

The Bangko Sentral ng Pilipinas (BSP) last week raised its inflation forecast for the year to 4.3%, which is already beyond their 2-4% target range, reflecting the surge in oil and commodity prices due to the war in Ukraine.

Headline inflation was steady at 3% for the second straight month in February. March inflation data will be out on April 5.

Filipinos ride NFT gold rush before the predicted bust

A NON-FUNGIBLE TOKEN (NFT) is displayed on the website of NFT marketplace OpenSea in this illustration picture taken on Feb. 28, 2022. — REUTERS

By Brönte H. Lacsamana, Reporter

AJ DIMARUCOT, 46, is one of a slew of Filipinos who use so-called non-fungible tokens (NFTs) to collect and sell digital art on the internet.

The Philippines ranked first out of 20 countries in terms of ownership of NFTs, which represent real-world objects such as art, music, in-game items and videos that are traded online, usually with cryptocurrency.

About a third of Filipino internet users claim to own these tokens, according to a December online survey by Australian information service provider Finder.

“Whether you’re a small or big artist, you immediately have a way to monetize your efforts and work using NFTs,” he said via Zoom.

Mr. Dimarucot sees a future when people, instead of providing free content to companies such as Facebook and Instagram in exchange for likes and followers, can monetize their creativity by getting their audience to pay $.001 or a peso for every like.

One in three NFTs have ended up as a dead collection, with little or no trading activity after minting, blockchain analytics firm Nansen said in a March 26 report.

Another third of the tokens were trading below the price it cost issuers to mint the tokens, according to the firm, which analyzed 8,400 collections made up of more than 19 million NFTs on the Ethereum blockchain.

“Our analysis revealed that NFT minters’ behavior could be taken as a signal for the short-term market trend, just as how we observe miners’ behavior as a proxy for Bitcoin’s price,” Nansen said.

As failed projects pile up, long-time crypto observers are having flashbacks to the initial coin offering bust of 2018, when thousands of digital tokens quickly became worthless after regulators warned they’re probably unregistered securities, Bloomberg reported.

Gary Vaynerchuk, the entrepreneur and chief executive at VaynerMedia, has predicted that 98% of NFT projects will fail after the gold rush fades, according to CNBC.

Mr. Dimarucot’s son is also involved in NFTs through Axie Infinity, an online video game where one can collect and mint NFTs that represent creatures known as Axies.

“It’s probably through gaming that we onboard more people into the space, and they might not necessarily know what an NFT is,” Mr. Dimarucot, an artist and graphic designer, said.

Unlike cryptocurrency, non-fungible tokens are unique and can’t be exchanged for one another. While one Bitcoin is always equal to another Bitcoin, NFTs have a digital signature that makes it impossible to exchange them for another NFT (hence, non-fungible).

By trading art via blockchain technology, such items become “non-fungible,” or unique due to authentication by digital certificates that also track each asset’s movements.

In 2020, non-fungible tokens took the Philippines by storm, with many home-bound Filipinos playing games to earn amid a coronavirus pandemic.

Axie Infinity, the most popular of these games, allowed Filipino players to buy in-game pets called Axies to win battles and reap rewards. These were then traded or sold for the cryptocurrency Ethereum.  (Related story, “Hackers steal about $600 million in one of the biggest crypto heists”)

“I learned about Axie Infinity in July from a friend who was earning lots of money from it,” an anonymous collector who goes by the name Vector said via Discord. “He told me how to apply for a scholarship with Axie University.”

While he still doesn’t completely understand what NFTs are, he’s keen on improving his game to earn more.

Play-to-earn gamers like Vector spurred the rising popularity of the NFT gaming scene in early 2021, which led to an increase in the prices of in-game assets.

Yield Guild Games (YGG), which invests in blockchain games and NFT assets, loans out Axies to “scholars” who want to play and earn. Vector is one of these scholars.

“It’s not easy to earn, though,” he said. “You have to work hard to play really well.”

Aside from YGG, many other outfits have popped up to fill the so-called NFT supply chain to support the growing community since the play-to-earn boom.

BreederDAO, a Philippine-based blockchain startup, has raised $10 million in series A funding through a token sale co-led by Andreessen Horowitz and Delphi Digital.

“If you look at the space right now, it’s still very raw,” Renz Carlo Chong, chief executive officer and one of the co-founders of BreederDAO, told BusinessWorld in a video interview. “Nobody has a full grasp of how play-to-earn really works.”

Axie Infinity is struggling and a number of games that followed are also barely keeping up, he pointed out. “It’s really interesting because nobody knows where the space will head towards.”

Axie Infinity has been losing about 50,000 players a month since January, based on data from activeplayer.io, due to supply-and-demand imbalance and volatile crypto assets, which developers at Sky Mavis have been trying to fix.

Mr. Chong is optimistic because of new blockchain startups and traditional gaming companies see value in the NFT space and are moving into it.

“You get to own these assets and you get to sell them in a decentralized marketplace, so you can see all of these projects — YGG, for example, tackling the player liquidity sides, bringing on the demand for all of these play-and-earn games,” he said.

BreederDAO seeks to tackle the asset liquidity side by bringing in the technology, human resources, and share in the market to increase their asset base and production capacity.

‘SCAMS’
As a digital artist with a son earning from Axie Infinity, Mr. Dimarucot thinks more Filipinos would probably join the NFT space due to both art and gaming. “More people will understand that there’s utility, there’s community and there’s a lot of opportunities in the space, so I’m excited.”

A staggering $174 million has been spent on NFTs since November 2017. Their sales surged to $25 billion globally in 2021 alone, fueled by the rising interest of celebrities and tech evangelists, according to market data tracker DappRadar. But some experts believe NFTs are a bubble that could eventually pop.

There are also concerns about the token minting process consuming a huge amount of energy and carbon footprint as well as accusations of the entire space being a Ponzi scheme.

“Please take the time to study NFTs,” said Marvin Germo, a financial consultant and author of the Stock Smarts book series, in a YouTube video discussing whether they’re a fad or the future. “Similar to cryptocurrencies and the metaverse, they’re technology. They’re disrupting the way we’re seeing things.”

There are scams and schemes everywhere and NFTs can harm people in the wrong hands, so it’s best to do your homework, he said via Zoom.

“No matter how much celebrities talk about it, you don’t invest in it or buy it just because other people are buying it,” Mr. Germo, who collects NFTs, said. “You should study anything that requires you to put your money in it.”

Mr. Chong said learning about non-fungible tokens is important, especially because it’s a new thing. “It’s really the same with a lot of new innovations.”

Because the blockchain is decentralized without banks to run the economy, there are also no operating expenses. The NFT community is instead governed by a code of trust that gives value back to users.

This makes it prone to all sorts of exploits, scams and hacks, something all innovations have to go through and address as they mature, Mr. Chong said.

Platforms like YouTube have been looking into features for video creators to capitalize on NFTs. Twitter now has a paid service where users can integrate NFT profile pictures by connecting their account to their Metamask wallet.

But artists looking to mint their works on the blockchain struggle with the newness of it all, Mr. Dimarucot said.

The urgent need to earn on the part of gamers becomes a driver to learn about the process.

“It was difficult at first, but the opportunities motivated me to research NFTs,” said Vector, the Axie Infinity scholar. “So far, it’s been worth it.”

The rewards trump both the hassle and the risks, as anyone already in the space would say, but Mr. Chong thinks there’s a vision to work towards.

Mr. Dimarucot claims the future of digital ownership will benefit those slaving away under the current Web 2.0 system, where people provide free content to companies such as Facebook and Instagram in exchange for likes and followers.

In the Web 3.0 metaverse — an idea for a new iteration of the World Wide Web based on blockchain technology — a small artist can monetize their efforts and everyone can supposedly give value to a digital creation.

“I think we’ll reach the point where you’re naturally doing NFTs without necessarily knowing it, like buying a ticket to a concert or a plane ticket or renewing a passport or license or getting a birth certificate,” Mr. Dimarucot said.

“Everything will be NFTs and tokenized on the blockchain.”

Treasury sets P200-B borrowing plan for April

BW FILE PHOTO

By Tobias Jared Tomas

THE NATIONAL Government is planning to raise P200 billion from the domestic market in April, the Bureau of the Treasury (BTr) said on Wednesday.

In an advisory, the BTr said the April auction of Treasury bills (T-bills) is targeted to generate P60 billion, while auction of Treasury bonds (T-bonds) is targeted to bring in P140 billion.

The April borrowing plan is smaller than the P250-billion programmed domestic borrowing this month. However, the government only raised less than half of the program in March.

A trader said in a Viber message that next month’s borrowing plan is lower as March had five auction weeks, compared with April’s four.

The weekly borrowing volume remained the same, however, as P15 billion in T-bills and P35 billion in T-bonds will be auctioned off every week.

The Treasury will offer P15 billion in short-dated T-bills — P5 billion each in 91-, 182- and 364-day bills — on April 4, 11, 18, and 25.

For the longer-term T-bonds, the Treasury will auction off P35 billion in three-year securities on April 5, P35 billion in four-year papers on April 12, P35 billion in the seven-year instruments on April 19, and the 10-year papers on April 26.

“Despite numerous rejections this month, the government had a borrowing boost via the offshore dollar bond issuance which amounted to a total of $2.25 billion,” a second trader said in a Viber message.

The Treasury raised $2.25 billion from its first triple tranche, US dollar-denominated bond offering last week, which included its first-ever green bonds.

The government said it raised $1 billion from the inaugural 25-year green bond offer, as well as $500 million from five-year bonds, and $750 million from 10.5-year bonds.

The second trader added that the lowered borrowing program in April also serves as a “breather for market participants,” who have been on the defensive amid expectations of rate hikes by the central bank.

The Bangko Sentral ng Pilipinas (BSP) kept its key interest rate unchanged last Thursday, although BSP Governor Benjamin E. Diokno has signaled rate adjustments in the second half.

The government borrows from local and external sources to help fund a budget deficit seen to hit 7.7% of gross domestic product this year.

The National Government has a gross domestic borrowing program of P1.91 trillion this year. Of this amount, T-bills will generate P52 billion, while fixed-rate T-bonds will bring in P1.86 trillion.

Diokno sees rate rise to 2.5%-2.75% as reasonable

BANGKO SENTRAL NG PILIPINAS GOVERNOR BENJAMIN E. DIOKNO — PHILIPPINE STAR/ GEREMY PINTOLO

PHILIPPINE CENTRAL BANK Governor Benjamin E. Diokno said raising the key policy rate to between 2.5% and 2.75% as part of an exit from pandemic-era accommodation would be “reasonable and consistent” with the nation’s economic growth and inflation targets.

“We plan to start the normalization process in the second half of the year,” Mr. Diokno said in a mobile-phone message on Wednesday, when asked about the plan for rate hikes. “It is not date specific, but we will continue to be data dependent,” he said, adding that a 2.75% key policy rate “might be reached by next year.”

Bangko Sentral ng Pilipinas last week held interest rates steady at a record low 2%. While the authority sees inflation averaging above its 2%-4% target this year, it expects consumer-price increases to be within the goal next year. Economic planners forecast output to grow between 7% and 9% this year.

The Philippines is among many Asian nations that has so far refrained from the global rate-hiking cycle led by the US Federal Reserve, choosing to nurture economic recovery even as price pressures rise.

“This is as clear a signal as it gets that again BSP is in no rush to start hiking despite forecasting inflation already above target this year,” said Euben Paracuelles, economist at Nomura Holdings, Inc. in Singapore. It “suggests BSP will be quite gradual in the pace of normalization, in contrast to the US Fed.”

The peso rose as much as 0.3% to its strongest against the dollar since March 7 in early trading on Wednesday.

Mr. Diokno on March 26 said a rate increase isn’t the appropriate tool to address supply-driven price pressures, and suggested non-monetary moves to the government. BSP has kept interest rates on hold since November 2020, and is scheduled to set the benchmark rate next on May 19. — Bloomberg

Deadline for ITR filing moved to April 18 — BIR

PHILIPPINE STAR/KRIZ JOHN ROSALES

THE BUREAU of Internal Revenue (BIR) moved the deadline for filing income tax returns (ITRs) to April 18, as the annual April 15 deadline falls on Good Friday this year.

In a BIR bulletin, the tax collection agency also reminded authorized agent banks (AABs) to extend their banking hours until 5 p.m., from the original cut-off time of 3 p.m. for the April 1 to 18 period.

BIR Commissioner Caesar R. Dulay also asked banks to accept payments on April 2, as two Saturdays before the tax deadline were declared as regular holidays. Araw ng Kagitingan falls on April 9, while Black Saturday is on April 16.

In a separate bulletin, Mr. Dulay reiterated the responsibilities of banks in accepting annual ITRs and payments.

Banks should accept all tax payments made by taxpayers using BIR official printed forms or copies of system-generated filing reference numbers; photocopies of returns or electronically filled tax returns; and downloaded annual ITRs.

Banks should also stamp “Received” on attached forms of specific pages of the ITRs, and ensure portions of the ITR and deposit slips are machine validated.

They should also accept payments made through checks, provided that check tax payments are made payable to the BIR.

Banks are also reminded that they cannot impose penalties on violations committed by taxpayers, as this responsibility falls to the BIR, Mr. Dulay said.

The BIR is targeting to collect P2.4 trillion this year. For the month of April, the BIR’s collection target is P256.89 billion. — Tobias Jared Tomas

D&L Industries’ earnings up 31% on exports growth

D&L Industries, Inc. on Wednesday reported a net income of P2.6 billion last year, up 31% from a year earlier, driven by increased economic activity and growth in the food ingredient maker’s export business.

“Our business faced incredible challenges during the pandemic. Now emerging two years later on a better footing both operationally and financially, with our earnings already back to pre-COVID levels, we feel that the company has not only proven but also strengthened its resilience,” D&L President and Chief Executive Officer Alvin D. Lao said in a statement.

He added that while the company is cautiously optimistic about the pandemic’s tailend, “we remain focused on our core competencies, ready to ride another wave of volatility brought about by recent geopolitical uncertainties.”

In the fourth quarter, earnings fell 25% to P480 million from P637 million in 2020, as margins dropped due to the lag in pass-through prices.

In its disclosure, the company said the rapid increase in commodity prices during the quarter and the tailend effect of the surge of the Delta virus variant “tempered” D&L’s consecutive quarters of earnings growth.

“With a lower COVID alert level in place and continued decline in new cases in the country, the company sees a buildup in momentum and renewed business optimism for further recovery,” it added.

D&L reported that prices of some of its key raw materials, including coconut and palm oil, surged in the past couple of months.

Average year-to-date prices of coconut oil and palm oil were up 23%, coming from over 60% year-on-year increases for both commodities in 2021.

“While D&L is able to adjust its selling price regularly to reflect higher input prices, there is a time lag of 30-45 days before the company can fully pass on price changes. As such, in an environment of rapid price increases, temporary margin contraction is possible. However, management sees this as temporary and expects margins to recover once commodity prices start to stabilize,” it said.

Meanwhile, the volume of high-margin specialty products (HMSP) grew 13% in the fourth quarter due to the eased quarantine restrictions.

“Had it not been for the lower margins due to the sharp increase in commodity prices, higher HMSP volumes would have resulted in meaningful earnings growth in the fourth quarter. Looking ahead, while the soaring commodity prices may weigh on volume recovery, the company sees the continued reopening of the economy to help fuel demand and offset potential weakness,” D&L said.

Exports, which accounted for 33% of total revenues, jumped 62% to P10.2 billion in 2021 and were up 81% in the fourth quarter.

Of the exports, coconut-based products under food and oleochemicals were the main drivers behind the growth.

“Coconut oil continues to gain traction in the global market due to its perceived natural antiviral, antibacterial, and antifungal properties. In addition, coconut oil remains a valued, sustainable substitute for petroleum-based raw materials used in many applications such as personal hygiene and home cleaning products. Going forward, the company expects its foothold in coconut oil-based exports to strengthen, which should offset some of the weakness in the domestic market in the near term,” D&L said.

The holding company is currently expanding its Batangas facility, which is expected to begin commercial operations in January 2023.

To accommodate additions and upgrades to the original plan for the facility, D&L increased the budgeted capital expenditures (capex) to P9.1 billion from P8 billion. The company had spent around P6.2 billion for the project as of end-December.

In September, the company executed its maiden bond offering, raising P5 billion to help fund the remaining capex for the expansion.

The facility will cater to D&L’s growing export businesses in the food and oleochemicals segments, by allowing the company to manufacture downstream packaging,

“This means that D&L will have the ability to process the raw materials and package them closer to finished consumer-facing products. This will enable D&L to move a step closer to its customers by providing customized solutions and simplifying their supply chain, which is of high importance given ongoing logistical challenges,” the company said.

D&L said it is also ramping up its sustainability measures through research and development.

“In the global scene, D&L is seen as an advocate for sustainable products derived from sustainable materials such as coconut oil, given its extensive technical know-how and wide array of product offerings,” the company said.

Its Batangas plant will be designed with sustainable infrastructure and operations with sustainable products in mind.

The company offers various sustainable products such as plant-based replacements for dairy and animal-derived ingredients, biodiesel that is a more environment-friendly substitute for fossil fuels, coconut oil-based natural and organic raw materials for home and personal care products, organic fertilizers, and even sustainable packaging materials.

“As the world shifts toward a more sustainable consumption, D&L plans to continue to play on its strengths and develop more products designed to better lives while being kind to the planet. The company sees this trend as the next leg of growth and sees the next decade as transformational for the company,” the company said.

“Nonetheless, while 2022 won’t be without difficulties, we continue to pursue areas of opportunities that will bring the next leg of growth for the company. With coconut oil continuing to gain traction globally as a natural and sustainable substitute to many petroleum-based raw materials, we plan to further capitalize on this by entering more export markets and by using our research and development expertise to introduce more highly specialized, coconut-oil based products,” Mr. Lao said.

At the stock exchange, D&L shares went up by 0.77% or P0.06 to close at P7.85 apiece on Wednesday. — Luisa Maria Jacinta C. Jocson

JG Summit posts P3.5-billion profit ahead of full recovery

JG SUMMIT Holdings, Inc. on Wednesday reported a consolidated core net income last year of P3.5 billion, which it said was 672% higher than the figure a year earlier and largely driven by its property business as well as contributions from its investments.

In a statement, the Gokongwei-led diversified conglomerate said it remains on track to full recovery from the negative impact of the coronavirus disease 2019 (COVID-19) pandemic after last year’s mixed set of results.

“Our food and banking segments continued to be stable while the mobility restrictions and quarantine measures still affected our real estate (specifically malls) and airline businesses. It is noteworthy though that we have seen sequential recovery quarter on quarter as the vaccination rollout accelerated towards the second half of 2021,” said Lance Y. Gokongwei, president and chief executive officer of JG Summit.

Excluding airline Cebu Air, Inc., JG Summit last year recorded consolidated revenues that it said exceeded pre-pandemic levels by 7% while its core net income reached 96% of the level in 2019. The budget carrier continued to deal with heightened travel restrictions.

Including the airline’s performance, total revenues grew 13% year on year to P230.6 billion after the partial reopening of the economy helped JG Summit’s food, real estate, petrochemicals, and banking segments.

JG Summit said the airline also recorded “strong sequential improvements” quarter on quarter. Cebu Air ended 2021 with a net loss of P24.9 billion “driven by higher fuel prices, maintenance-related expenses, interest, and strong peso depreciation.”

Food business unit Universal Robina Corp. (URC) registered a 3% growth in revenues to P117 billion largely due to the growth of its commodities and international segments despite an overall market contraction.

In the local branded consumer food group, revenues fell by 2% although the company is said to have displayed sequential recovery from a “muted first half” as it posted a year-on-year growth of 5% in the fourth quarter.

URC said pricing actions, operating expense optimization, gains from asset sales, and tax savings outweighed the input cost pressures from “unprecedented spikes” in commodity prices. These factors brought a 23% increase in net income to P13.2 billion, apart from the gain on the sale of its Oceania business.

Meanwhile, the real estate and hotel business ended last year with Robinsons Land Corp. (RLC) posting a 53% increase in net income to P8.1 billion as revenues rose by 29% to P35.6 billion.

RLC attributed the improvement to the contribution from its Chengdu, China project, along with realized sales of its Bridgetowne properties, and the “resilience” of its offices, which offset the softer demand in the residential and mall divisions.

Last year’s income was also boosted by the sustained recovery of its earnings before interest, taxes, depreciation, and amortization (EBITDA) for most business units, along with the benefits of the Corporate Recovery and Tax Incentives for Enterprises or CREATE Act, and the listing of its real estate investment trust company.

Petrochemicals business JG Summit Olefins Corp. recorded a net loss of P2.1 billion last year because of higher depreciation cost and interest charges, as well as foreign exchange losses.

Banking unit Robinsons Bank Corp. posted a profit rise of 33% to P1.2 billion due to loan expansion, stable net interest margins and improved cost-to-income ratio. Revenues increased by 1% to P9.3 billion, driven by a 14% surge in loans, and higher commission income, which was offset by lower trading gains.

Mr. Gokongwei said that while 2022 started with the rapid spread of the virus variant Omicron, he is hopeful that the more relaxed mobility restriction would have a positive impact on the demand for the group’s products and services.

“We are cautious though that headwinds continue to affect us with the current volatility in oil prices, rising input costs and peso devaluation will result to margin pressures. To mitigate this, we will continue to be proactive in managing pricing and product mix while simultaneously putting in place productivity initiatives across our businesses.” he said.

Mr. Gokongwei said JG Summit had recalibrated its long-term objectives, goals, strategies and measures “and we are now actively implementing alignment to further enhance value creation through our ecosystem to ensure we emerge as a stronger business post-COVID and the years to come.”

On Wednesday, JG Summit shares rose by P1.10 or 1.83% to close at P61.30 each at the stock exchange.

Worth a flight

POACHED Red Grouper

Cebu’s Pig & Palm has weathered a pandemic and typhoon and is ready to serve as visitors return

WHEN the Michelin Guide was first published in the early 1900s, it was to provide a guide for motorists to find out where they could get a (very good) bite to eat. Now, they’re used to rate the world’s top restaurants with a system of stars. A restaurant in Cebu, set up by a chef with a Michelin-starred restaurant, is a worthy stop in the Queen City of the South.

Located at the Cebu Business Park (one of the city’s posher districts), the Pig & Palm was founded by Jason Atherton. Mr. Atherton’s Pollen Street Social in London was awarded one Michelin Star in 2011 (and has managed to hold on to it in 2022). He has also co-hosted the TV show My Kitchen Rules in the UK.

“His wife is Cebuana. He wanted to open up in her hometown,” explained Jamie Doe, the Pig & Palm’s Head Chef, about how the English chef opened a restaurant on the other side of the world. The name is an ode to Cebu’s fondness for pig (“The pig in Cebu is very big, you know?,” he said), but also English pub-naming conventions. “The pig and the palm trees is the Cebuano part,” said Mr. Doe.

BusinessWorld met Mr. Doe, and dined at the Pig & Palm, during an interisland familiarization tour through Boracay, Cebu, and Coron, organized by Philippine Airlines (PAL) and the Tourism Promotions Board (TPB).

We were taken to an imposing all-wood function room that was innocuous enough in the daytime, but could have the air of being quite an imposing presence in the evening. It looks to be a setting for important meetings: either commercial or romantic in nature. Mr. Doe waves off the adjectives “imposing” and “intimidating”: “That’s the last thing I want!” Rather, these are the scenes in the restaurant he would remember: “We can have family dinners. We’ve had date nights. We’ve had people proposing here, which is amazing,” he said. “We have a bit of everything.”

The tour group — this reporter along with other guests from the media (and the celebrity father of one from the party), as well as officers from PAL and TPB —   started with giant seaweed crackers with wasabi and calamansi mayo (P200), and the restaurant’s signature brioche, with onion jam and chicken and thyme butter (P295). The crackers were appetizing enough. Still sleepy from a car ride across the hot city, the brioche opened my eyes. It was buttery, perfectly soft; and tasted like what an average brioche would like to taste like. Coupled with the onion jam and the chicken-flavored butter, it was an exercise for the senses.

While another table praised the KFC (Korean Fried Chicken) with kimchi ketchup (P580), we reserved this praise for the Poached Red Grouper (in Filipino, lapu-lapu, sharing a name with the city’s first hero) with a Gruyere crust, sitting on a bed of parsley adlai and topped with balsamic caviar (P970). It was light but filling, perfect for the heat of summer; while the parsley livened up perfectly textured adlai grains, displaying the integrity of the ingredient.

Perhaps the city’s proximity to the sea has hand in the grouper’s excellence. Mr. Doe said, “We try to use as many local suppliers as possible,” he said. “I’m very passionate about trying to find small, local suppliers.”

“I’m not mainstream. I’m trying to find the little people that I can help —  and they can help me. We can work closely and build a relationship,” he said.

Despite sharing a parent with a Michelin-star restaurant, Mr. Doe reminds us that there is no Michelin Guide for the Philippines. “We’re not trying to claim we’re a Michelin-star restaurant. We’re just doing great food that’s accessible to anyone.”

Asked whether they’d be opening a branch in the capital, he said, “It’s something we have talked about before, but it wouldn’t be Pig & Palm. Every one of Jason’s restaurants is unique.”

The restaurant has been standing for six years, and Mr. Doe has been working there for three. Two of those years have been spent holding the line during the pandemic, as well as holding up the restaurant during Typhoon Odette, which went through five provinces in the Visayas, including Cebu, last December.

“We’ve had hard times, but I’ve got a great team here,” he said.

He talked about reopening, but having to contend with curfews and liquor bans early in the pandemic. “It was really against us,” he said. Still, he said, “We kept all of our team.”

On Odette, he pointed out the restaurant’s roof: “We’ve literally just managed to fix it now.” The typhoon caused structural damage around the city, as well as power and water outages. “We really were lucky that we have a generator here. We had full power and electricity. But for many of my staff — me included — we didn’t have power, we didn’t have water [at home].”

With some optimism, he talked about the reduction of restrictions to enter Cebu after the pandemic. “With the borders reopening, we started seeing a lot of new faces coming. Tourists are coming back. It’s really nice.

“Especially after the pandemic… they’re starting to explore different local places.”

The Pig & Palm is located at the MSY Tower, Pescadores Rd., Cebu Business Park, Cebu City. For more information, visit the Instagram page @thepigandpalm. — Joseph L. Garcia

Benguet Corp. earnings jump on high metal prices, better market

LISTED mining firm Benguet Corp. reported on Wednesday that its net income climbed more than three times to P1.4 billion in 2021 from the previous year’s P381 million due to strong metal prices and favorable market conditions.

“The substantial growth was largely driven by higher demand for raw materials as global economies recover from the pandemic. Clearly, despite restrictive quarantine and strict adherence to minimum health protocols, the company remained focused on its production targets and business goals,” the company said in a disclosure.

Revenues more than doubled to P3.8 billion in 2021 from P1.6 billion previously while operating income quadrupled to P1.6 billion from P340 million.

Nickel operations under BenguetCorp Resources Management Corp. accounted for 72% of the revenue, followed by gold operations at 25% while lime operations and the healthcare business at 3%.

Benguet Corp. is engaged in mining and mineral exploration, producing gold, silver, nickel ore and limestone. The company primarily operates mining projects in Benguet and Zambales.

Over the years, it invested in the development of the Balatoc tailings project and Surigao coal project. It continues to hold interest in the various projects, namely: Acupan gold, Ampucao gold-copper, Pantingan gold, Benguet oreline contract operation, and the Ilocos Norte and the Kalinga financial or technical assistance agreement (FTAA) prospects.

It also ventured in other businesses, including healthcare and diagnostics services through BenguetCorp Laboratories, Inc.; mining logistics through Arrow Freight Corp.; trading of industrial equipment and supplies through Benguetrade, Inc.; port services through Keystone Port Logistics and Management Services Corp.; and real estate development and lime production through BMC Forestry Corp.

At the stock exchange, Benguet Corp. shares surged 4.68% or 29 centavos to finish at P6.49 each on Wednesday. — Luisa Maria Jacinta C. Jocson

3 PHL restaurants make the top 100 best list

PHOTO FROM THEWORLDS50BEST.COM

THREE restaurants from the Philippines cracked the Top 100 of Asia’s 50 Best Restaurants for 2022. Taking the top spot for the country is Gallery by Chele at #69 (sharing the spot with India’s Comorin). Antonio’s in Tagaytay also carved a spot at #74, while Toyo Eatery sits at #94.

Antonio’s in Tagaytay, helmed by Tonyboy Escalante, was the first restaurant in the Philippines to get a spot in the list back in 2015 at #48 (it was ranked #84 last year). Gallery by Chele’s namesake Chele Gonzalez’s previous restaurant, Gallery Vask sat in the 30s in 2016 and 2017, and Gallery by Chele itself took the 90th spot last year. Toyo Eatery, headed by Jordy Navarra, made it to the list at #43 back in 2019, and has been placing in the 40s since.

The list, first created in 2013 by William Reed Business Media, had also honored chef Margarita Forés in 2016 by naming her Asia’s Best Female Chef for that year.

This year, Tokyo’s Den made it to the top spot, presented in an awards ceremony earlier this week streamed on YouTube and other online channels, as well as some live events in Bangkok, Macau, and Tokyo.

The list says about Den, “(Chef Haiyu) Hasegawa’s ever-creative take on the elevated cuisine of his homeland is innovative, at times humorous, and always satisfying. But what makes Den so unique among Japanese restaurants — and so popular — is how relaxed and welcoming it feels.”

Den is only the second Japanese restaurant to make it to the top spot since the list’s creation; the first one being Narisawa during the list’s first iteration in 2013.

“While firmly rooted in the framework of kaiseki, Japan’s hyper-seasonal dining tradition, Hasegawa’s menus draw inspiration from all quarters. Expect foie gras in the savory monaka appetizers, an ant or two in the classic 20-ingredient Den salad, and all kinds of surprises in his now-signature Dentucky Fried Chicken wings,” said the restaurant’s profile in Asia’s 50 Best. —  JLG

 

Asia’s 50 Best Restaurants are:

1. Den, Tokyo, Japan

2. Sorn, Bangkok, Thailand

3. Florilège, Tokyo, Japan

4. Le Du, Bangkok, Thailand

5. The Chairman, Hong Kong, China

6. La Cime, Osaka, Japan

7. Sühring, Bangkok, Thailand

8. Odette, Singapore

9. Neighborhood, Hong Kong, China

10. Nusara, Bangkok, Thailand

11. Sazenka, Tokyo, Japan

12. Fu He Hui, Shanghai, China

13. Ode, Tokyo, Japan

14. Villa Aida, Wakayama, Japan

15. Narisawa, Tokyo, Japan

16. Mingles, Seoul, South Korea

17. Sézanne, Tokyo, Japan

18. Joo Ok, Seoul, South Korea

19. Ensue, Shenzhen, China

20. Meta, Singapore

21. Masque, Mumbai, India

22. Indian Accent, New Delhi, India

23. Les Amis, Singapore

24. Caprice, Hong Kong, China

25. Blue by Alain Ducasse, Bangkok, Thailand

26. 7tth Door, Seoul, South Korea

27. Mosu, Seoul, South Korea

28. Da Vittorio, Shanghai, China

29. Sushi Masato, Bangkok, Thailand

30. Onjium, Seoul, South Korea

31. Samrub Samrub Thai, Bangkok, Thailand

32. Mono, Hong Kong, China

33. Gaa, Bangkok, Thailand

34. Wing, Hong Kong, China

35. Ministry of Crab, Colombo, Sri Lanka

36. La Maison de la Nature Goh, Fukuoka, Japan

37. Zén, Singapore

38. Logy, Taipei, Taiwan

39. Ultraviolet by Paul Pairet, Shanghai, China

40. Labyrinth, Singapore

41. Burnt Ends, Singapore

42. Été, Tokyo, Japan

43. Cenci, Kyoto, Japan

44. Cloudstreet, Singapore

45. JL Studio, Taichung, Taiwan

46. Raan Jay Fai, Bangkok, Thailand

47. Wing Lei Palace, Macau, China

48. 8 1/2 Otto e Mezzo Bombana, Hong Kong, China

49. Megu, New Delhi, India

50. Dewakan, Kuala Lumpur, Malaysia

Ginebra advances to finals

TEAM BARANGAY GINEBRA — PBA IMAGES

Barangay Ginebra beats NLEX Road Warriors, 112-93

By Olmin Leyba

THERE was no slip-up this time and with Justin Brownlee doing Justin Brownlee things, defending champion Barangay Ginebra took its familiar spot in the Philippine Basketball Association (PBA) Governors’ Cup finals.

Two days after botching their sweep job in Game 3, the Gin Kings made sure they did it right and secured a finals-clinching 112-93 triumph over NLEX before a big Wednesday crowd at the Smart Araneta Coliseum.

Mr. Brownlee erupted for 47 huge points, including 11 in their third-quarter breakaway, as the Gin Kings quickly bounced back from their 86-85 heartbreaker in the previous match to close out the series, 3-1.

Seeded sixth in the playoffs, the crowd darlings progressed to the championship round for the fourth time in the last five editions of the Governors Cup. They won the three prior finals stints, including the last one back in 2019, and will try to add another one in the coming series against either Meralco or Magnolia.

“Life is a lot easier when you have Justin Brownlee around,” said Ginebra coach Tim Cone of his ever-reliable import, who complemented his production with 10 rebounds, six assists, three steals and three blocks.

“What a phenomenal performance by Justin (Brownlee). You kinda see it coming when you see the intensity he had in practice, before the game and even at half time.”

Jeff Chan rifled in 20 spiked by five triples and played a key role in helping Ginebra get back after NLEX jumped to an early 12-3 margin while LA Tenorio, atoning for his endgame blunder last time, fired 14.

“I thought his (Mr. Chan’s) couple of treys at the beginning of the game when NLEX came out with so much fire and jumped ahead of us kinda settled the whole team down. I thought that was the key to the whole game,” said Mr. Cone.

It was quick redemption for Mr. Tenorio, whose turnover and mental lapse in the dying seconds hastened Ginebra’s fall last Sunday.

“He’s a vet and he knows as a leader he can’t dwell on that. He has to move forward and get his teammates to move forward. So I’m really proud of him today,” said Mr. Cone of the Ginebra skipper.

Cameron Clark finished with 34 and 12 for the Road Warriors, who will have to continue their quest for a breakthrough title next season.

With Mr. Clark active on offense early, NLEX created a 16-8 separation in the first four minutes of play as it put Ginebra on the backfoot.

But just as quickly, Ginebra countered with 10 unanswered points behind Messrs. Chan, Joe Devance, Tenorio and Brownlee to wrest a two-point spread and make it a tight battle.

Then with a Mr. Brownlee-led 31-21 salvo in the third, the Gin Kings ripped the game apart, 84-71, and didn’t look back.

The Scores:

Ginebra 112 – Brownlee 47, Chan 20, Tenorio 14, Pinto 12, Standhardinger 10, Thompson 4, Tolentino 3, Devance 2, R. Aguilar 0

NLEX 93 – Clark 34, Trollano 15, Chua 10, Paniamogan 9, Alas 6, Rosales 5, Ighalo 5, Soyud 4, Semerad 3, Quinahan 2, Miranda 0

Quarterscores: 22-22, 53-50, 84-71, 112-93

AboitizPower, IFC study RE for baseload power

ABOITIZ Power Corp. on Wednesday said it had partnered with International Finance Corp. (IFC) to study the potential of renewable energy (RE) to generate baseload power for a “more reasonably priced” electricity.

“We eagerly look forward to learning about how we can generate baseload power that is technically and financially feasible and also scalable,” AboitizPower President and Chief Executive Officer Emmanuel V. Rubio said in a statement.

Aside from exploring the potential of RE for baseload power, the study will also evaluate hybrid photovoltaic and energy storage technology, and assess the technical and economic viability of combining different RE sources to generate power.

Mr. Rubio said AboitizPower expects the study to be “bespoke” based on the country’s national resources, climate, and geography so it will fit the energy system.

Meanwhile, IFC Regional Vice-President for Asia and the Pacific Alfonso Garcia Mora said the company is “confident that renewables will offer a viable path” for the country.

“Harnessing cleaner and natural resources, including solar and wind, will enable the country to diversify its energy mix and improve energy security while also tackling climate change impacts,” Mr. Garcia Mora added.

IFC, a member of the World Bank group, invests in the private sector specifically in projects that can boost sustainable economic growth such as renewable energy.

The Aboitiz group’s power generation, distribution, and retail electricity services company earmarked P190 billion for investment in clean energy. It aims to add 3,600 megawatt (MW) of capacity to reach its 2030 RE target of 4,600 MW, or more than half of its projected 9,200-MW total generation capacity.

“To grow RE above and beyond the 2030 ambition and to begin reducing carbon dioxide emissions from the Philippine power system, we must find ways to displace fossil fuel burning baseload power with zero-emissions power generation technologies,” Mr. Rubio said.

At the stock exchange, shares in AboitizPower went up by 75 centavos or 2.15% to close at P35.70 apiece on Wednesday. — Marielle C. Lucenio

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