Affluent splash out on pricey Birkin bags but clouds loom

October 21, 2022 | 11:53 am

PARIS — Brushing off higher prices, affluent spenders continue to splash out on luxuries including $10,000 handbags and premium drinks, updates from Birkin bag maker Hermes and spirits company Pernod Ricard showed on Thursday.

Yet with prices set to rise further, analysts were asking how long the boom can last before even the wealthy decide they must tighten their belts.

Hermes and Pernod Ricard both said they will continue to raise prices, after beating expectations in the July–September quarter. Business was boosted by Americans returning to Europe and Asia and taking advantage of the strong dollar. Mainland China also saw a strong rebound after coronavirus disease 2019 (COVID-19) restrictions were lifted, although some restrictions have since been reimposed.

Analysts were looking closely for signs that the post-pandemic spending boom could ease after months of robust appetite from shoppers drawing on pandemic savings to treat themselves to designer labels and champagne.

Some expect the industry’s rapid sales growth to begin to slow in the fourth quarter or starting next year, with the strongest labels expected to grab market share as consumers flock to best-known names.

The fourth quarter will likely start to show a deceleration with “very different performance from different brands,” said Flavio Cereda, an analyst at Jefferies, predicting stronger labels like Chanel, Hermes, Louis Vuitton, and Dior, as well as some smaller brands like Moncler will accelerate market share gains.

Mr. Cereda expects “no big bounce” in business in China next year citing signals from the Communist Party Congress that authorities plan to maintain COVID curbs, and in Europe, predicts the “likely disappearance of the marginal buyer,” or someone who is not a regular or core luxury consumer.

Jefferies forecasts 13% sales growth for the industry this year and 7% next year.

PRICE RISES

The world’s biggest luxury group LVMH last week kicked off the earnings season with forecast-beating sales — and no signs of a let-up in demand.

The US market, which rose to become the world’s largest luxury market last year, has been closely scrutinized for any signs of weakness, particularly among less affluent shoppers and after data from credit card sales showed a decline in luxury spending in recent months.

“There was no slowdown in consumer demand,” in the United States over the quarter despite price hikes, Pernod finance chief Helene de Tissot said on Thursday, noting the company had raised prices at the start of the month in that market by mid single digits.

Pernod Ricard, which raised prices by around 7% globally over the quarter, said it was confident sales growth would remain dynamic through its 2023 fiscal year, as consumers continue to trade up to its premium spirits.

Hermes plans to raise prices sharply next year, following in the footsteps of rival luxury giants which have taken advantage of booming demand for fashion and handbags carrying designer labels.

Hermes, which has waiting lists for its prized $10,000-plus handbags, increased prices by around 4% this year and by 1.5-2% on average in previous years. That compares with double-digit price hikes at Chanel.

Companies catering to less affluent consumers have also so far been able to pass on price increases, trading updates from the world’s two biggest consumer firms, Nestlé and Procter & Gamble showed this week. Shoppers continued to pay more for goods like Nescafe coffee and Gillette razors despite surging inflation.

The results from Pernod and Hermes bode well for beauty giant L’Oreal and Gucci-owner Kering, which both report results later on Thursday. — Reuters

Improving infrastructure for better connectivity

October 21, 2022 | 9:00 am

Being online is part of the everyday lives of many Filipinos, whether for work or education, procuring services, or leisure. Filipinos are, in fact, spending long hours daily online. The Philippines ranked third among the countries spending the most time using the internet, as We Are Social and Hootsuite’s Digital 2022 October Global Statshot Report recorded that Internet users aged 16-64 years old in the country spent an average of nine hours and 39 minutes per day.

Connection to the online world has increased because of the lockdown, but it would much liklely remain vital in various aspects of Filipinos’ lives moving forward. Hence, there is a need for accessible and reliable connectivity across the country. And this involves bolstering and expanding digital infrastructure.

Based on Ookla’s Speedtest Global Index, last month, the country’s mobile median download speed was at 22.54 Mbps. Though its rank lowered from August’s 82nd spot to 85th out of 139 countries. Meanwhile, the country’s median fixed broadband download speed was at 78.69 Mbps, and inched a spot down to 46th out of 181 countries. But the Philippines had seen some improvements in its download speed. The country’s median mobile and fixed broadband download speeds in September last year were at 17.16 Mbps (ranked 99^th) and 45.85 Mbps (66^th), respectively.

World Bank also noticed progress in improving the country’s digital connectivity, as per its Philippines Economic Update June 2022 Edition. But it also noted that there are still challenges.

“The quality of Internet service (indicated by average download speeds) improved in 2020 and 2021 due to network upgrades and increased infrastructure deployment. However, there is scope for further improvement, particularly in smaller urban centers, rural areas, and islands planned for accelerated tourism development,” World Bank said.

Among the challenges in accelerating digital infrastructure rollout in the country, according to World Bank, is the underinvestment in broadband infrastructure, which is rooted in decades of lacking competition and out-of-date legal, policy, and regulatory frameworks.

“The slow rate of rollout of telecommunications infrastructure has been in part due to barriers to competition and restrictions on foreign direct investments,” it noted.

Efficient digital spectrum management is also lacking, bringing about an uneven playing field for prospective newcomers.

Digital infrastructure expansion is hampered by investment and competition restrictions as well. “The requirement for congressional franchise limits the ability of new telcos and independent internet service providers to deploy infrastructure, access spectrum, and use distinct types of Internet technologies,” it said.

It also took note of the complex permitting for network equipment and the lacking policy on infrastructure sharing, which slow down the rollout of network.

For its key policy recommendations concerning digital infrastructure, therefore, World Bank suggests expanding pro-competition legislation for the shared deployment of network infrastructure and simplifying the permitting.

“The government has taken steps to promote market entry and simplify complex permitting processes for cell site construction and cable laying through the passage of the implementing rules and regulations of the Public Services Act amendment, the National Broadband Plan, and the Common tower and pole attachment policy. However, more can be done in terms of enacting regulations for passive infrastructure sharing (ducts for optical fiber) and regulations for active infrastructure sharing (mobile),” it said.

In addition, the government could promote investment in connectivity through an efficient allocation of spectrum to stimulate an improved mobile network expansion in rural areas and furthering public-private partnership models for infrastructure to draw private investment.

Policies that could enhance connectivity in the country were also pushed by the Philippine Chamber of Commerce and Industry (PCCI) and Better Internet PH to the 19^th Congress.

The partnership seeks to champion the Open Access in Data Transmission Act, Rural Wired Development Act, Satellite Liberalization Act, and Spectrum Management Act.

“We have been laggards behind our ASEAN neighbors for the longest time in terms of better internet and we should prioritize legislation that will improve our overall connectivity,” PCCI President George T. Barcelon said in a statement in May.

Mr. Barcelon considered that better Internet would have “profound impacts” on various sectors, including the government, economy, tourism, and education, given that having such would induce more foreign direct investments.

“We want to update policies to make it easier for ISPs (internet service providers) to build digital infrastructure,” Better Internet PH Lead ICT Policy Analyst Grace Mirandilla-Santos added. “Technology will overtake regulation, therefore our policies should be future-proof.”

Meanwhile, back in March, the Department of Information and Communications Technology (DICT) shared its three-year investment plan of about P50 billion for the development of the country’s digital infrastructure.

“Most of the budget will go to the National Fiber Backbone and the Accelerated Fiber Build through the regional and provincial rings,” then-DICT Acting Secretary Emmanuel Rey R. Caintic was quoted in a BusinessWorld report.

“We are very optimistic that they will give us that budget,” he had said. “We have been advocating, evangelizing, and promoting this digital infrastructure for the past two to three years. I believe they have come to realize, especially with the pandemic, that all the more this digital infrastructure is the way to go and it is the right investment to be done by the government.” — Chelsey Keith P. Ignacio

Globe is PHL’s Most Reliable Mobile Network in Q3, sustains network performance for better customer experience

October 21, 2022 | 9:00 am

Leading digital solutions platform Globe continues to cement its dominance as the Most Reliable Mobile Network in the Philippines, logging the highest consistency and availability scores in the third quarter this year.

This feat sustains its Q2 leadership, obtaining the highest scores in All Technology Consistency with 82.55 and All Technology Availability with 92.03, according to the third quarter analysis by Ookla® Speedtest Intelligence® data.

Consistency score is calculated based on the percentage of a provider’s data samples that meet the minimum 5 Mbps threshold for mobile download and 1 Mbps for upload. Smart and DITO scored 80.82 and 70.40, respectively, in this category.

On the other hand, availability identifies the network whose users spend the highest percentage of their time on all technology and is based on coverage scans taken on Android devices. Globe again emerged on top versus 90.69 and 90.68 of competition.

Reliability is an elusive recognition in the industry, with only a few telcos from around the world getting this rating. It is also the most sought after attribute of network performance that has a clear impact on customer experience.

“Ookla’s latest data is proof of Globe’s commitment to delivering the most reliable mobile connectivity to its customers across the Philippines, which goes beyond just speed. Only a few mobile operators in the world have managed to attain supremacy in both consistency and availability, which translates to best-in-class experience for our customers,” said Darius Delgado, Head of Globe’s Consumer Mobile Business.

Globe has been ramping up network expansion in line with its commitment to the United Nations Sustainable Development Goals, particularly UN SDG No. 9, which underscores the importance of infrastructure and innovation in driving economic growth and development.

To deliver a #1stWorldNetwork, Globe spent an unprecedented P92.8 billion last year to build 1,407 new towers, upgrade over 22,300 mobile sites to 4G/LTE, and install 1.4 million fiber-to-the-home lines and 2,000 5G sites nationwide.

For 2022, it has already spent P50.5 billion in the first half of this year for network upgrades to meet the growing data requirements of its customers.

To learn more about Globe, visit www.globe.com.ph.

Disclaimer:
Most Reliable Mobile Network in the Philippines:
Reliability based on analysis by Ookla® of Speedtest Intelligence® data for all technology Consistency and Availability data in the Philippines Q3 2022.
Ookla trademarks used under license and reprinted with permission.

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BSP ready to use tools to support peso

October 21, 2022 | 12:35 am

Peso-coins-currency — PHILIPPINE STAR/ WALTER BOLLOZOS

THE Bangko Sentral ng Pilipinas (BSP) is prepared to use other tools to manage the peso’s volatility, which is contributing to inflation.

BSP Senior Assistant Governor Iluminada T. Sicat said the central bank’s approach “has been to smooth out excess daily volatility rather than defend a specific level or trend of the peso.”

The local unit closed at P58.94 per dollar on Thursday, barely changed from its P58.945 finish on Wednesday, based on Bankers Association of the Philippines data. It has weakened so far by 13.5% or P7.94 from its P51 close on Dec. 31, 2021.

“The BSP responded by raising interest rates aggressively while also participating in the foreign exchange market, although at a lesser extent than some of the major economies,” Ms. Sicat said during a Senate hearing on Wednesday.

“The BSP is also prepared to utilize other tools to respond to fluctuations in the exchange rate and to ensure that legitimate demand for foreign currency is satisfied,” she added.

Ms. Sicat identified the BSP’s liquidity-enhancing and management tools such as the US dollar repo facility, the exporters’ dollar and yen rediscount facility, and the enhanced currency rate risk protection program.

She said the BSP has access to its international financial arrangements that can provide insurance against crisis and has “pre-deployed non-monetary measures to respond to challenges, augmenting in financial stability.”

The BSP also has a bilateral swap arrangement with the Bank of Japan, and is part of the Association of Southeast Asian Nations (ASEAN) Swap Arrangement for $2-billion short foreign exchange liquidity support.

“Looking ahead, the Philippine peso is expected to be supported by sustained foreign exchange inflows that could help counterbalance the pressures on the currency,” Ms. Sicat said, citing gross international reserves, remittances and foreign direct investments.

“(These) can help provide insulation against the spillovers from the policy normalization in advanced economies as well as the geopolitical conflict between Russia and Ukraine,” she added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the BSP’s tools and measures have been used in the aftermath of the Asian Financial Crisis.

“Partly as a result of all or a combination of these measures, local authorities have a good track record of stabilizing the peso for 18 years or from 2004 to Sept. 1, 2022 when the record high was maintained at P56.45,” he said.

“These measures help stabilize both the peso exchange rate and overall inflation, as well as inflation expectations. All of these measures would help prevent any speculative attack on the peso,” he added.

John Paolo R. Rivera, an economist at the Asian Institute of Management, said these measures can help temper inflation and manage the volatility in the foreign exchange market.

“However, it can also be reinforced by non-monetary means such as fiscal prudence as excessive government spending triggers inflation that triggers forex depreciation,” he said.

“A whole of government approach is key since monetary tools can only do so much. Sound economic leadership is also key,” he added.

BOOST LOCAL INDUSTRIES
Meanwhile, economists said the Philippines must boost the productivity of local industries and diversify its exports if it wants to take advantage of the strong dollar.

“In the past, we thought that all we needed to do was to depreciate the peso and exports would surge. We’ve now come to realize that it would take more than just a weaker currency to boost exports,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a Viber message.

In theory, a weaker local currency against the dollar should be more beneficial for local producers who export.

Exports grew by 4.4% year on year to $51.155 billion in the first eight months of the year, amid sluggish global demand. Imports climbed by 26% to $92.966 billion, as the peso continued to weaken.

Year to date, the trade balance ballooned to a $41.811-billion deficit, wider than the $24.77-billion trade gap in the comparable eight months last year.

University of Asia and the Pacific Senior Economist Cid L. Terosa said that the country’s export growth is still below the 7% full-year target amid slowing global demand and rising inflation.

“Weak global demand (is) due to recessionary conditions has constrained demand for cheaper exports from the Philippines. Depressed commodity prices in world markets have limited opportunities for exporters to gain from a weaker peso since Filipino exporters are price takers,” he said in an e-mail.

“Finally, cheaper exports from the Philippines have not resulted in greater demand for them because of their nature. Many of our exports are semi-processed or don’t have considerable value-added.”

Jefferson A. Arapoc, who teaches Economics at the University of the Philippines Los Baños, said the country is heavily reliant on imports, “which is further amplified by our supply issues with some key agricultural commodities.”

“The government must devise a way to increase our domestic production capacity,” Mr. Arapoc said in a Messenger chat.

On Twitter, former Socioeconomic Planning secretary and economist Solita C. Monsod said this is the best time to make “exports more attractive and imports less attractive” to “get the benefit of the strong dollar.”

ING’s Mr. Mapa said the country needs to diversify its exports.

“We need to support our export sector to diversify our products to insulate us from episodes such as this where the bulk of our exports are from only one sector,” he said, citing the electronics sub-sector, which is the Philippines’ top export.

In August, exports of electronic products fell by 1.6% to $3.66 billion. It accounted for 69% of manufactured goods and 57.1% of total exports during the period.

Mr. Mapa noted the Philippines could follow Indonesia’s example, as it shifted from raw material exports to exports of electric vehicle batteries and electric vehicles.

Mr. Terosa said that the country can also look into service-related exports instead of products.

“We can diversify export markets to reduce the impact of weak demand from a few markets. Since export in goods may not yield beneficial outcomes given weak global markets, the development of more exports in services can be pursued,” he said.

“Also, we can maximize benefits from free trade agreements and similar trade arrangements to ward off the negative impact of unstable global markets,” he added.

In the short term, Ibon Foundation Research Head Rosario J. Guzman said the government can implement policies that will facilitate the use of local materials in infrastructure projects and reschedule debt servicing.

Outstanding debt rose to a record-high P13.02 trillion at the end of August due to additional domestic borrowings and a weak peso.

For the eight-month period, the debt service bill dropped 24.91% year on year to P682.85 billion, with around 50.2% going towards interest payments, and the rest to amortization.

Ms. Guzman also proposed the regulations on foreign corporations’ use of foreign exchange amid the peso depreciation. The peso depreciation raises the cost of dollar-denominated loans. — Keisha B. Ta-asan, Luisa Maria Jacinta C. Jocson and Kyle Aristophere T. Atienza

Economic growth seen to slow to 6.2% in 2023

October 21, 2022 | 12:34 am

Fitch Solutions Country Risk and Industry Research expects the Philippines to grow by 6.6% this year and by 6.2% in 2023. — PHILIPPINE STAR/ MICHAEL VARCAS

PHILIPPINE economic growth is expected to slow in 2023, amid higher interest rates.

“We expect GDP (gross domestic product) growth in the Philippines to come in at 6.6% in 2022 and 6.2% in 2023, after the economy grew by 7.8% in the first half of this year,” Fitch Solutions Country Risk and Industry Research Head of Asia Country Risk Raphael Mok said in a webinar on Thursday.

Fitch Solutions maintained its Philippine growth outlook, which is at the low end of the government’s 6.5% to 7.5% full-year target.

Mr. Mok said the Philippine economy benefited from the reopening of borders and election-related spending in the first half.

“However, we believe that these tailwinds will start to fade, while growth headwinds such as higher domestic interest rates and a deteriorating external position intensify, leading to a slowdown in growth over the coming months,” he said.

The Bangko Sentral ng Pilipinas (BSP) has hiked benchmark rates by a total of 225 basis points (bps) so far this year, bringing the policy rate to 4.25%. According to Mr. Mok, this has made the BSP one of the most aggressive central banks in the region.

“A combination of elevated inflation, foreign exchange weakness and tightening global monetary conditions will prompt the BSP to continue its rate hiking cycle,” Mr. Mok said.

Inflation zoomed to 6.9% in September, marking the sixth straight month that inflation breached the BSP’s 2-4% target.

Average inflation quickened to 5.1% in the nine months to September, higher than 4% a year ago. However, it was still below the BSP’s 5.6% forecast for 2022.

As of Thursday, the Philippine peso weakened against the US dollar by 15.56% or P7.94 from its P51 close on Dec. 31, 2021

In a note dated Oct. 14, Fitch Solutions said it expects the peso to reach an all-time low of P60 per dollar, bringing the average exchange rate to P55-a-dollar by yearend.

“Weak external demand, combined with strong import growth, will see the current account deficit remain wide, exerting further downside pressures on the peso,” Fitch Solutions said.

“However, the aggressive hiking cycle undertaken by the BSP will help provide some support for the unit, informing our view that peso weakness has only a little further to run,” it added.

Mr. Mok said he expects the BSP to hike rates by an additional 75 bps in its remaining policy meetings this year, bringing the policy rate to 5% by yearend. Fitch also expects the BSP to hike by another 25 bps next year, to bring the benchmark rate to 5.25%.

“The Philippines’ external position has also deteriorated significantly over the last couple of months as seen from the widening of the current account deficit to record high,” Mr. Mok said.

In the first semester, the current account balance ballooned to a $12-billion deficit from the $1.3-billion gap seen in the same period last year.

“This came on the back of weak export growth and surging import bills due to elevated energy prices and high demand for imports of capital goods and raw materials for infrastructure projects,” Mr. Mok said.

“We are now forecasting the current account deficit to widen to 5% of GDP this year, and 4.5% next year, from just 1.5% in 2021,” he added.

The BSP expects a current account deficit of $20.6 billion (-5% of GDP) for this year. Imports of goods are expected to grow by 20%, while goods exports are seen to increase by 4%. — Keisha B. Ta-asan

Marcos vows to boost local markets, attract more FDIs

October 21, 2022 | 12:33 am

BBM-Marcos — PHILIPPINE STAR/KRIZ JOHN ROSALES

PRESIDENT Ferdinand R. Marcos, Jr. on Thursday told the business community that he would ensure the growth of local markets, as well as attract more foreign direct investments (FDIs).

Speaking at the annual business conference of the Philippine Chamber of Commerce and Industry (PCCI), Mr. Marcos said he is committed to “foster a sound environment where businesses can flourish and continue to be a driver of our economic growth.”

“I reiterate my vision of improving our business climate and elevating the status of the Philippines as a top investment destination through various endeavors. As such, we continue to harmonize efforts of all investment promotion agencies, government agencies and local government units to effect greater synergies,” he said.

While the country wants to attract more foreign direct investments, Mr. Marcos said he wants to further develop the domestic market.

“However, what we sometimes have been missing and I think it is something we certainly recognize as a huge potential for the transformation of our economy is the development of our local markets. The Philippines now has a 107 million population more or less and that comprises a very large market that is undeveloped and with extremely good potential,” he said.

For the first seven months of the year, total FDI net inflows fell by 12% to $5.101 billion from a year ago, data from the central bank showed.

Mr. Marcos reiterated his commitment to developing the renewable energy (RE) sector in order to ensure the country has enough power supply and address high electricity rates that is one of the major concerns of investors.

To attract more foreign investors, he said the government is revising the implementing rules and regulation (IRR) of the Renewable Energy Act of 2008, which expressly limits foreign investment in the sector to 40%.

“It is necessary that we make these changes because the technology for renewable energy has moved forward so quickly that we have to catch up with our regulations,” Mr. Marcos added.

Mr. Marcos also reiterated his push for more public-private partnerships in infrastructure projects as he encouraged local investors “to take part in the great enterprise of building our nation.”

“We will need to work together in coming up with more infrastructure projects, more energy projects, more projects for our MSMEs, more projects for agriculture. All that will empower and strengthen both our economy and our nation,” he said.

As of August, the country had a total of 74 PPP projects in the pipeline with a combined estimated cost of P2.25 trillion.”

Also, Mr. Marcos said the government would focus on the manufacturing sector, noting the Philippine economy has been heavily dependent on the services sector.

“The key, the driving force to begin all of this,” the president said, will be local investors and businesses “that come into partnership with the government to find the synergy that we all need.”

“You will be the main driver of our success as we emerge from the setbacks posed by the COVID-19 (coronavirus disease 2019), the shocks that the world economy has suffered in the past few months,” Mr. Marcos said. — Kyle Aristophere T. Atienza

Masterful master planning

October 21, 2022 | 12:32 am

The Entrepreneur Of The Year Philippines 2022 has concluded its search for the country’s most undaunted and unstoppable entrepreneurs. Entrepreneur Of The Year Philippines is a program of the SGV Foundation, Inc., with the participation of co-presenters the Asian Institute of Management, the Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange. In the next few weeks, BusinessWorld will feature each finalist ahead of the awards ceremony next month.

Jeffrey Ng
CEO and President,
Cathay Land, Inc.

JEFFREY NG grew up in an entrepreneurial family — his grandfather owned a hardware store while his father had a steel company. Inspired by his father’s steel business and with a desire to help the economic development in the country, Mr. Ng sought to convert underutilized land into modern suburban communities with master-planned townships, green cities and quality homes for every Filipino to enjoy. He put his idea into motion and started Cathay Land, Inc. (CLI) in 1994, focusing on the southern suburbs of Cavite.

An Economics graduate of the University of the Philippines, Mr. Ng noted Metro Manila was becoming overpopulated, with the middle and lower classes being priced out of the housing market. He envisioned Cavite as viable alternative to Manila. CLI started its strategic land banking in Cavite, purchasing 250 hectares at a very low price. It targeted middle-class Filipinos with a subdivision that was affordable but with world-class amenities similar to Makati villages.

“I thought it was quite obvious considering the big mismatch in prices,” he said. “You have rural land worth a tiny fraction of Metro Manila prices and sooner or later, the market will appreciate along with the Cavite land. It turns out we were correct because the population has grown from one million to four million.”

CLI’s South Forbes Golf City was born, boasting of “world-class boutique communities.” It featured eight unique internationally themed subdivisions, eight mid-rise condominiums, two commercial centers, two schools and colleges, a hotel and an 18-hole golf course. The subdivisions featured reasonably sized and combinable lots, which makes them affordable for the middle class, while at the same time offering luxurious common amenities that differentiate them from those by other developers.

With a full commitment to servicing the diverse housing needs of middle-class Filipinos, Mr. Ng embarked on a strategic expansion across Cavite by delivering not just top-notch and affordable housing options, but also lifestyle developments.

An example of this is the Acienda Designer Outlet, which is described as the country’s first true international outlet mall. The outlet gives shoppers a new and innovative experiential retail experience south of Metro Manila. Through this, he said CLI was able to establish a new business model for an outlet mall in the country and put up a commercial anchor development for the rest of the new master-planned Acienda City.

Cavite is the front door of Metro Manila from the south and will become a central area, according to Mr. Ng. “With the extension of the Skyway up to Carmona, the Cavite-Laguna Expressway, and the Cavite-Tagaytay-Batangas Expressway, South Forbes Golf City becomes a 30-minute drive away from Makati. It’s now much more convenient,” he said. “Silang is now on the way to becoming a city, which will lead to more funding, investments and jobs in the area.”

Mr. Ng believes that every Filipino should have a home. “I have been fortunate to have led the Subdivision Housing Developers Association (SHDA) in the last few years. I have become intimately involved in the problems of the housing industry,” he said.

He has advocated for laws and measures that were instrumental in helping Filipinos have their own homes, while creating a conducive business environment to industry players. One of these is the amendment of Section 20 of Republic Act No. 7279, which encouraged the private sector to participate in socialized housing and reduced the cost of housing units for the underprivileged and homeless. He has also led efforts to make land conversion by the Department of Agrarian Reform (DAR) faster and easier.

As president of the UP School of Economics Alumni Association (UPSEAA), he also worked with the Department of Finance (DoF) and National Economic and Development Authority (NEDA) to work with Congress on the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE). The law lowered the corporate income tax rate and made it easier for investors to get incentives from the government. Mr. Ng also committed to a 9.7-hectare land donation in San Simon, Pampanga, which now hosts 700 free housing beneficiaries in the Nayong Tsinoy community.

Mr. Ng said CLI is looking at other sites in Central Luzon, Visayas and Mindanao to replicate the success of its projects in Silang, Cavite. As part of its partnership with Chang Kai Shek College, CLI donated 11.5 hectares of land to the institution for their satellite campus within South Forbes Golf City. From the initial K-12 programs, the satellite campus will also offer college degree courses and will be part of the upcoming college business district called Crestkey Estates.

From an initial equity of P125 million, CLI currently has P9.6 billion in equity as a result of consistent year-to-year growth. CLI today still remains true to its roots by maintaining value for money and flexible payment terms for all its properties — houses and lots, and residential, commercial and industrial lots.

“For some companies that also engage in the development of residential estates, their projects, while fully sold, remain vacant even 10 years after project completion,” Mr. Ng said.

“In our case, we go the extra mile by priming the surrounding areas commercial enclaves, recreational facilities, colleges, and places of worship. We cultivate communities that promote a healthy, convenient, and balanced lifestyle to the point that our satisfied customers often become our brand advocates,” he added.

The media sponsors of the Entrepreneur of the Year Philippines 2022 are BusinessWorld and the ABS-CBN News Channel. Gold Sponsors are SteelAsia Manufacturing Corp., Uratex, and Navegar. Silver Sponsors are Intellicare, OneWorld Alliance Logistics Corp., and Regan Industrial Sales, Inc.

The winners of the Entrepreneur Of The Year Philippines 2022 will be announced on Nov. 21 in an awards banquet at the Grand Hyatt Manila. The Philippine winner will represent the country in the World Entrepreneur Of The Year 2023 in Monte Carlo, Monaco in June 2023. The Entrepreneur Of The Year program is produced globally by Ernst & Young (EY).

PHL draws line in sand for peso as currencies reel

October 21, 2022 | 12:31 am

THE Philippines is defining the limit of its tolerance for peso weakness, as Asian central banks grapple with the mighty US dollar.

The peso slumped to a record low of P59 against the greenback in late September, but has held near that level ever since. Bangko Sentral ng Pilipinas (BSP) has repeatedly said it’s not defending a specific target, but analysts say authorities have drawn a line in the sand to prevent the peso from piercing the key psychological level of 60 per dollar.

Global central banks are starting to diverge in their approach to managing volatility in response to the unrelenting strength of the US dollar, with the Philippines now joining China and Japan in appearing to defend a particular level. Most other central banks are sticking with efforts to curb volatility, while some including Vietnam’s have signaled they’re willing to tolerate more currency weakness.

“Some central banks try to draw a line in the sand but in a strong dollar environment, foreign exchange intervention can only go so far and defending a particular level may be a fool’s errand,” said Eugenia Victorino, head of Asia strategy at Skandinaviska Enskilda Banken AB in Singapore. “I expect at least one more round of dollar strengthening. So Asian central banks must conserve their fire power.”

PESO DEFENSE
In the Philippines, the peso’s weakness has already drawn the attention of President Ferdinand R. Marcos, Jr., who said this week the nation is prepared to defend the currency.

“We intervene. We won’t tell you which days and at what rates,” BSP Governor Felipe M. Medalla told Bloomberg News in a mobile-phone message earlier this week.

Intervention can be costly. Asian nations spent about $50 billion of their foreign exchange reserves last month — the most since March 2020, according to Exante Data, Inc. Bangko Sentral has drained billions of dollars from the nation’s reserves, which have fallen more than 14% this year.

“The BSP does not normally react too much to movements in the exchange rate in keeping with our market-determined exchange rate policy,” Mr. Medalla said in a speech, a copy of which was posted on the BSP website on Thursday. “But the peso depreciation, while remaining in line with regional peers, has been adding to the buildup of inflationary pressures. This strengthened the case to act — and to act decisively.”

The peso will likely end the first quarter of 2023 at P59.2 per dollar, according to the median forecast in a Bloomberg survey.

“The trend of the peso remains tenuous with downside risks that could emanate from Federal Reserve hikes and dollar strength,” said Robert Dan J. Roces, chief economist at Security Bank Corp. in Manila. — Bloomberg

Netflix targets global TV ad market as next business to disrupt

October 21, 2022 | 12:09 am

NETFLIX, Inc. upended the global entertainment industry about a dozen years ago with a streaming video service that rendered network television programming schedules and movie screening times all but irrelevant.

Now, Netflix is gunning for the last reel of the pay TV business: its estimated $153-billion pool of global advertising revenue.

The company and some analysts see its new, cheaper ad-supported service, detailed in a rosy quarterly report on Tuesday, as a way to lift revenue as customers trim spending amid economic gloom. As TV’s audience shrinks, it becomes less attractive for advertisers — and a plum target for Netflix to disrupt.

Netflix Co-Chief Executive Reed Hastings said that insight dawned on him after listening recently to former Disney CEO Bob Iger describe traditional TV as marching toward a precipice.

“What I under-appreciated was just the impact on advertisers,” Mr. Hastings said during a video interview on Netflix’s third-quarter performance and outlook. The firm’s shares jumped 14% after it forecast it would pick up 4.5 million customers in the fourth quarter.

“They’re just being able to reach fewer people, and the 18-to-49 demographic is (declining) even faster than the decline in pay TV. So this is what is really fueling the cycle, is that … collapse of linear TV as an advertising vehicle.”

Netflix plans to launch an ad-supported version of its service in the United States and 11 other countries — Australia, Brazil, Britain, Canada, France, Germany, Italy, Japan, South Korea, Mexico, and Spain in November. It will be priced at $6.99 a month in the United States, or 30% less than its basic ad-free tier, and contain about five minutes of commercials per hour.

Eventually, Netflix, now operating in more than 190 countries globally, aims to provide “personalized” advertising, much as it recommends individualized viewing recommendations.

Chief Financial Officer Spencer Neumann said the new service would make money over time, but cautioned, “It’s going to be pretty small out of the gates.”

Some Wall Street analysts said the ad-supported version of the Netflix service might entice some price-sensitive existing subscribers to switch to the less-expensive option.

That may well work to its advantage in a time of economic volatility.

“While the strategic shift may cannibalize its existing market — particularly at the $9.99 tier — it’s a great move in this inflationary environment, where households continue to rationalize their streaming choices,” said Fred Boxa, associate director of consulting firm Arthur D. Little.

If Netflix can pull it off, revenue from the ad-supported version of the service and from a coming charge to subscribers for sharing their accounts, may well make up for any shortfall from a lower-priced streaming tier, said Haris Anwar, a senior analyst with Investing.com.

PP Foresight analyst Paolo Pescatore said Netflix’s embrace of advertising will potentially deal a serious blow to TV networks and broadcasters who rely on advertising as a major source of income.

“This could prove to be the final nail in the coffin for those players,” said Mr. Pescatore. — Reuters

MMFF 2022 films announced

October 21, 2022 | 12:09 am

The complete lineup of films to be shown in the 48th Metro Manila Film Festival (MMFF) was announced on Thursday in a post on the film festival official’s Facebook page.

The final four films that complete the festival’s lineup of eight films were chosen from 22 film submissions. They are: Mikhail Red’s techno-horror film Deleter (produced by Viva Communications, Inc.), starring Nadine Lustre, McCoy De Leono, and Louise Delos Reyes; Nuel Naval’s drama Family Matters (Cineko Productions, Inc.), starring Noel Trinidad, Liza Lorena, Agot Isidro, Mylene Dizon, Nonie Buencamino, JC Santos, and Nikki Valdez; Lester Dimaranan’s action drama Mamasapano: Now it can be Told (Borracho Film Production), starring Edu Manzano, Aljur Abrenica, Paolo Gumabao, Alan Paule, and Claudine Barretto; and Joel Lamangan’s drama My Father, Myself (3:16 Media Network), starring Jake Cuenca, Dimples Romana, Sean de Guzman, and Alan Paule.

The first four official entries were announced in July. They are: Coco Martin’s romantic comedy Labyu with an Accent (ABS-CBN Film Productions), starring Coco Martin at Jodi Sta. Maria; Shugo Praico’s suspense-thriller-romance Nananahimik ang Gabi (Rein Entertainment Productions), starring Ian Veneracion, Heaven Peralejo, and Mon Confiado; Cathy Garcia-Molina’s action-adventure comedy Partners in Crime (ABS-CBN Film Productions), starring Vice Ganda and Ivana Alawi; and Paul Soriano’s The Teacher (TEN17P), starring Toni Gonzaga and Joey de Leon.

The MMFF Selection Committee is headed by veteran actress Boots Anson Roa-Rodrigo.

The eight films were chosen based on the following criteria: artistic excellence (40%); commercial appeal (40%); Filipino cultural values (10%); and global appeal (10%).

The theme of this year’s film festival is “Balik Saya sa MMFF 2022.”

“Let us watch the MMFF in theaters once more. We are happy with the list of entries, which has a wide mix of genres. We are excited and looking forward to MMFF 2022 becoming a success,” said Carlo Dimayuga III, the acting chairman of the Metropolitan Manila Development Authority (MMDA) and the acting chairman of the MMFF. The MMDA runs the film festival.

The 48th MMFF will run from Dec. 25, 2022 to Jan. 7, 2023 in theaters nationwide, with observance of required health protocols due to the ongoing coronavirus 2019 pandemic.

The film festival’s Gabi Ng Parangal (awards night) will be held on Dec. 27.

For more information, visit www.facebook.com/mmffofficial. — MAPS

Haus Talk cancels projects in Pangasinan, Laguna

October 21, 2022 | 12:08 am

THE corporation decided to refocus its resources and cancel the projects in Calasiao, Pangasinan and Sta. Rosa, Laguna, and recognized the potential of the Biñan project. — BW FILE PHOTO

LISTED property developer Haus Talk, Inc. has canceled its projects and land acquisitions in Calasiao, Pangasinan and Sta. Rosa, Laguna to refocus funds to its project in Biñan, Laguna, its chairman said.

In a disclosure to the Philippine Stock Exchange, the company quoted its chairman, Terence Restituto D. Madlambayan, as saying that “the corporation decided to refocus its resources and cancel the projects in Calasiao, Pangasinan and Sta. Rosa, Laguna, and recognized the potential of the Biñan project.”

Mr. Madlambayan comments were culled from his response to questions asked during Haus Talk’s annual stockholders’ meeting on Oct. 19.

Slated to be launched by November this year, the Biñan project will have 1,400 units in a 12-hectare development. A company official previously told BusinessWorld that it was expecting P3.8 billion in revenues from the mixed-use project development.

The project is said to be classified under the government’s economic housing program, which has a price ceiling of P2.5 million for the basic unit.

Meanwhile, the company said that despite the cancelation of its projects in Calasiao and Sta. Rosa, it will still continue its two prime projects in Bacoor and Mariveles.

“In the pipeline are the Bacoor and Mariveles projects which are expected to be launched in the next few years,” Mr. Madlambayan said.

The project in Mariveles, Bataan is expected to increase the company’s housing units by 2,200.

Haus Talk’s chairman was also asked about efforts to return to its initial public offering (IPO) price of P1.5 a share in January, to which he said that the company’s fundamentals “are good, and it has been performing relatively well.”

The company also said that it was confident that its new projects in Biñan and Mariveles “will contribute to the increase in the market price of the [Haus Talk] shares.”

In a separate disclosure, the company said that it will be using proceeds from its IPO, which were previously allotted to acquire the Calasiao and Sta. Rosa properties, for the acquisition of the Biñan property.

It added that it will post the disbursement of the funds 30 days from the disclosure’s posting on Oct. 17.

On the stock market on Thursday, shares in Haus Talk closed unchanged at 85 centavos apiece. — Justine Irish D. Tabile

Medilines: Dialysis market to lift revenues by 43%

October 21, 2022 | 12:07 am

LISTED firm Medilines Distributors, Inc. expects 43% revenue growth from dialysis consumable products and better margins on its planned expansion into the dialysis consumable market.

“There is a significant opportunity to service the dialysis market in the Philippines, and Medilines is moving quickly to be a leader not just on the equipment side, but also in the much larger consumables side of the market,” Medilines Chairman Virgilio Villar said in a press release.

For full-year 2021, the company recorded revenues of P197 million from its dialysis consumables product line. By end-2022, it expects a growth of 43%.

Medilines, which trades and distributes medical devices, said it committed to fast-track the expansion of its dialysis consumable market, which it projects to boost its revenues and produce higher margins.

“This will be a significant driver of our company’s growth moving forward. More importantly, this is well in line with our mission to make quality healthcare more accessible to Filipinos,” Mr. Villar said.

Meanwhile, the company announced a share buyback program of up to P100 million, banking on Medilines’ strong fundamentals and growth prospects.

It said the program is meant to enhance shareholder value and to show confidence in the company’s value and prospects.

“We are very focused on business strategies that will deliver profitable and sustainable growth over time,” Medilines President and Chief Executive Officer Patricia V. Yambing said.

“In addition, we are working to enhance shareholder value through regular dividends declaration, the recently announced share buyback program, and other investor relations initiatives,” she said.

Since its listing on the stock exchange, Medilines has declared and paid two cash dividends amounting to P25 million or 15% of the company’s net income last year.

In the second quarter, Medilines recorded a 42.9% decrease in its attributable net income to P52.48 million due to the continuing impact of the pandemic on its business. It reported a 3.5% decline in its second-quarter revenue to P595.01 million.

In the first six months, its attributable net profit decreased by 19.1% to P80.96 million from P100.05 million.

On the stock exchange on Thursday, shares in Medilines lost four centavos or 5.13% to P0.74 apiece. — Justine Irish D. Tabile

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