Philippines sugar imports still possible, Marcos says

August 15, 2022 | 11:27 am

MANILA – Philippines President Ferdinand Marcos Jr said the country’s doors remain open to additional sugar imports, though volumes are likely to be much less than a previously proposed 300,000 tons.

Mr. Marcos last week rejected the proposal to import up to 300,000 tons of raw and refined sweetener, purportedly approved recently by the Sugar Regulatory Administration (SRA), of which he is board chairman.

But in a vlog posted on the Office of the President’s Facebook page on Sunday, Mr. Marcos assured the public that the country has sufficient sugar supplies.

SRA officials had warned of a domestic sugar shortage before Mr. Marcos took power on June 30 and retail prices of the sweetener have risen substantially in the Philippines this year.

“Before we import sugar, let us use the supply that we have. Maybe by October the supply in the Philippines will almost be used up. Maybe then we may need to import,” Mr. Marcos said in the vlog.

“Probably, 150,000 tons is enough for the rest of the year.”

The SRA has estimated that raw sugar output in the crop year ending Aug. 31 will be 1.8 million tons, down 16% from the previous season because of crop damage from a typhoon and unfavourable weather.

The Philippines is not a regular sugar importer, but when necessary it usually buys from Thailand, the world’s second-largest sugar exporter behind Brazil. — Reuters

[EXPLAINER | The Philippine Constitution] Constitutional amendments for more foreign investments

August 15, 2022 | 10:19 am

Bernardo M. Villegas, economist and one of the framers of the 1987 Philippine Constitution, explains what provisions of the Constitution can be amended to allow more foreign investments.

Interview: Patricia B. Mirasol
Production: Earl R. Lagundino and Joseph Emmanuel L. Garcia

Listen to the related B-Side episode: What I’ve learned after helping write the 1987 Constitution

BSP may hike rates by 50 bps — poll

August 15, 2022 | 12:33 am

crowd-face-mask — People walk inside a market in Marikina City, June 17. — PHILIPPINE STAR/ WALTER BOLLOZOS

By Keisha B. Ta-asan

THE BANGKO SENTRAL ng Pilipinas (BSP) is widely expected to raise the benchmark rate on Thursday, with most analysts forecasting a 50-basis-point (bp) increase after inflation quickened to a near four-year high in July.

A BusinessWorld poll last week showed 16 out of 18 analysts anticipate the Monetary Board will increase its benchmark interest rate at its meeting on Aug. 18.

For 13 analysts, the central bank may deliver a hike of 50 bps, while three analysts see a 25-bp increase. Only two analysts expect the BSP to keep rates unchanged.

“Given the fifth consecutive month of pickup in inflation rate to… 6.4% in July resulting in year-to-date inflation rate of 4.7% vs 3.9% last year, and given our view that monthly inflation rate will stay elevated and peak around 6.5%-6.6% only in September to October before easing, we expect BSP to continue raising interest rate by another 50 bps at its meeting next week,” Maybank Investment Bank Chief Economist Suhaimi Bin Ilias said.

Latest data from the Philippine Statistics Authority (PSA) showed the consumer price index (CPI) climbed 6.4% year on year in July, the fastest growth in 45 months or since the 6.9% logged in October 2018.

“Inflation remains the key consideration as it affects growth and reopening and thwarts consumption — the main engine of the economy,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in an e-mail.

“Thus, the deeper-than-expected slowdown in 2Q GDP (gross domestic product) is unlikely to deter the BSP from raising interest rates by 50 basis points on Aug. 18,” Mr. Roces added.

The Philippine economy expanded by 7.4% in the second quarter as rising inflation weighed on consumer spending, based on preliminary data released by the PSA.

The second-quarter growth print was slower than 12.1% a year earlier and 8.2% in the first quarter.

MUFG Bank analyst Sophia Ng said in an e-mail that taming inflation itself could help boost private consumption, which saw a slowdown in the April to June period.

Household spending fell by 2.7% quarter on quarter, as inflation accelerated due to higher prices of food and fuel.

“The recent GDP figure further demonstrates that demand-pull inflation may not be at work yet in the Philippines,” China Banking Corp. Chief Economist Domini S. Velasquez said.

With the off-cycle hike of 75 bps in July, the Monetary Board has raised benchmark interest rates by a total of 125 bps so far this year.

“The BSP has no other recourse but to increase policy rate by another 50 basis points to follow the almost 200 basis points that the US Federal Reserve has instituted to soften the impact of the US recession,” Colegio de San Juan de Letran Graduate School Associate Professor Emmanuel J. Lopez said in an e-mail.

The Federal Open Market Committee (FOMC) raised the target range for the federal funds rate by 75 bps in July. The US central bank’s overnight interest rate is now at a level between 2.25% and 2.50%.

Despite US inflation cooling to 8.5% in July from 9.1% in June, Fed officials said they are open to the possibility of a bigger rate hike in September if inflation remains persistently elevated.

“Against such a backdrop, uncertainties surrounding the US monetary policy direction and global growth could exacerbate peso weakness and increase the risks of further inflation,” ANZ Research economist Debalika Sarkar said.

The local unit ended at P55.61 per dollar on Friday, weaker by 31 centavos from its P55.30 close on Thursday, based on Bankers Association of the Philippines data. It also depreciated by 41 centavos from its P55.20-a-dollar finish a week earlier.

On the other hand, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion expects the BSP to raise interest rates by 25 bps due to the lower-than-expected second-quarter GDP.

“Even with the fairly respectable year-on-year 2Q22 GDP print, it is difficult not to notice the annual growth’s 2Q sequential dip especially after a year of quarterly gains,” Mr. Asuncion said in an e-mail.

PSA data showed the country’s economic output shrank by 0.1% on a seasonally adjusted quarter-on-quarter basis.

Mr. Asuncion said the Philippine economy will continue to face headwinds that will likely slow growth in the second half, such as recession risks in major economies, geopolitical tensions, and rising inflation.

A PAUSE SOON?
For Pantheon Chief Emerging Asia economist Miguel Chanco, the “very disappointing” second-quarter GDP may prompt the BSP to keep its rates unchanged on Thursday.

“We’ve been saying since the bank’s last rate hike that a weak Q2 GDP report would force the BSP into a pause in August, especially if it’s accompanied by signs that inflation is finally easing,” Mr. Chanco said in an e-mail.

“Crucially, the latter is now also taking shape, with global oil prices and domestic pump prices starting to roll over materially,” he added.

Philippine National Bank economist Alvin Joseph A. Arogo said the BSP should only consider a temporary pause in tightening once the key rate reaches 4.25%.

“We forecast 4.25% by end-2022: 50 bps in August, 25 bps in September, 25 bps in November,” Mr. Arogo said.

For Ms. Velasquez, she expects the BSP to continue raising rates by 25 bps, until it reaches 4% by end-2022.

Meanwhile, Ms. Ng said a pause after August is unlikely as inflation is seen to remain elevated and above the BSP’s 2-4% target band for this year.

“Further, if the BSP expects inflation to take a longer time to return to its inflation target range, the need for further tightening remains although that is likely to be done at a more gradual pace,” Ms. Ng said.

Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said the central bank may deliver another off-cycle rate hike if the peso depreciates further in the coming months.

“BSP might be compelled to hike off-cycle again if the FOMC hikes more aggressively in Sept. forcing BSP to sell foreign exchange reserves,” Mr. Neri said in a Viber message.

After Thursday, there are three more Monetary Board meetings scheduled this year — Sept. 22, Nov. 11, and Dec. 15.

Debt service bill falls 70% in June

August 15, 2022 | 12:32 am

THE NATIONAL Government paid P44.29 billion to service its debt in June, down by 70.51% from a year earlier, as a rise in interest payments was offset by the significant decline in amortization, preliminary data from the Bureau of the Treasury (BTr) showed.

In June, around 82.99% of debt repayments went to interest, while the rest went to amortization, the BTr said.

Overall interest payments rose by 22.81% to P36.75 billion in June, with interest paid on domestic debt up by 22.94% year on year to P33.33 billion. This consisted of P9.08 billion for Treasury bonds, P22.53 billion for retail Treasury bonds, and P942 million for Treasury bills.

Interest paid on foreign debt rose by 21.6% to P3.42 billion.

Amortization payments plunged by 93.74% to P7.53 billion in June. Principal payments that went to foreign creditors during the month amounted to P7.17 billion, while the BTr settled P362 million with domestic lenders.

For the six-month period, the debt service bill dropped by 40.76% year on year to P458.36 billion, with around 56.12% going towards interest payments, and the rest to amortization.

Principal payments from January to June stood at P201.14 billion, down by 64.41% from a year earlier. This consisted of P153.38 billion in domestic debt and P47.76 billion in foreign obligations.

Interest payments jumped by 23.35% to P257.22 billion in the six months ending in June. These included P205.69 billion worth of payments to domestic creditors and P51.53 billion to external creditors.

The government borrows from foreign and local sources to fund its budget deficit as it spends more than the revenue it generates to support programs to stimulate economic growth.

The government wants to raise P2.47 trillion to help fund its budget deficit this year, with about 77% coming from domestic sources.

Fitch Ratings in February maintained the country’s investment grade “BBB” rating, but kept the “negative” outlook as it flagged uncertainties surrounding medium-term growth and hurdles to bringing down debt. A “negative” outlook means a downgrade is possible within the next 12 to 18 months.

S&P Global Ratings last affirmed the Philippines’ “BBB+” rating with a “stable” outlook in May 2021. Meanwhile, Moody’s affirmed its “Baa2” credit rating with a “stable” outlook for the Philippines in July 2020.

The National Government has taken on P1.022 trillion in gross borrowing as of May, down by 40.59% year on year, according to the BTr data.

The government plans to spend P1.298 trillion on debt payments this year, with P785.21 billion budgeted for principal and the remaining P512.59 billion for interest.

The Philippines registered a debt-to-gross domestic product (GDP) ratio of 62.1% as of the second quarter, still higher than the 60% debt-to-GDP ratio considered manageable by multilateral lenders for developing economies despite easing from 63.5% at the end of the first quarter. — Diego Gabriel C. Robles

Philippines, China agree to resume negotiations on 3 major railway projects

August 15, 2022 | 12:31 am

A motorist uses the Binondo-Intramuros Bridge on Wednesday, April 6. — PHILIPPINE STAR/KRIZ JOHN ROSALES

By Arjay L. Balinbin, Senior Reporter

THE PHILIPPINES and China have agreed to resume negotiations on three major railway projects, the Department of Transportation (DoTr) said on Sunday.

Transportation Secretary Jaime J. Bautista and Chinese Ambassador Huang Xilian “agreed to restart negotiations for major transport projects during their recent first official meeting at the Chinese Embassy in Makati City, Aug. 11,” the DoTr said in a statement.

“The two officials discussed resumption of talks for the major China-funded railway projects such as the PNR South Long Haul Project (North-South Commuter Railway), Subic-Clark Railway, and Mindanao Railway (Tagum-Davao-Digos),” it added.

Mr. Huang in a separate statement said he “hopes that the China-Philippines cooperation in infrastructure and railway would achieve more tangible fruits and bring about more benefits to the Filipino at an early date.”

The Chinese ambassador said his discussion with Mr. Bautista on railway cooperation was “constructive.”

“China is… devoted to promoting the connectivity of the Southeast Asian countries by sharing its experience and introducing the cutting-edge technology of railway construction and rolling stock manufacturing,” Mr. Huang said.

President Ferdinand R. Marcos, Jr. last month directed the DoTr to go back to the negotiating table to secure loan agreements for the three railway projects.

The Philippine government had recently canceled its loan applications for the three projects because the Chinese government was “unresponsive,” Transportation Undersecretary Cesar B. Chavez said in July.

Former Finance Secretary Carlos G. Dominguez III had also said China Eximbank (CEXIM) wanted an interest rate of 3% for the loans.

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said that the Philippine government should ensure that the new loan agreements will have “competitive interest rates.”

“It should be competitive to current interest rates for development loans being offered by other development agencies and bilateral partners. However, the government should be wary at the current level of interest rates, as central banks have been raising rates in the past few months to curb inflation,” he said in a phone message, when sought for comment.

“Government therefore should reconsider whether or not to proceed with these projects until such time that interest rates and inflation have stabilized,” Mr. Ridon added.

Central banks around the world, led by the US Federal Reserve, have been aggressively raising interest rates to tame inflation.

Mr. Ridon said the deal should also ensure that Filipino workers will be prioritized even in China-funded infrastructure projects.

Transport expert Rene S. Santiago said separately that the Philippines and China should make the loan terms public.

“The three (railway) projects are not economically viable, unfortunately,” he said in a phone message.

The DoTr also said that Mr. Bautista and the Chinese ambassador also talked about China-Philippines maritime cooperation projects, particularly the hotline communication and legal affairs cooperation arrangements between the Philippine Coast Guard and the China Coast Guard.

There were also discussions on possible partnerships on maritime traffic safety, ferry safety, and maritime search and rescue, as well as capacity building for maritime governance, safety supervision, and vessels safety inspection.

“The Chinese government’s funding support for these projects will serve to strengthen bilateral relations and enhance the partnership between the Philippines and China,” the DoTr said.

Globe expects healthier balance sheet after sale of 7,000 towers

August 15, 2022 | 12:10 am

By Arjay L. Balinbin, Senior Reporter

GLOBE Telecom, Inc. anticipates future earnings to increase as a result of the expected cost savings from the sale of its over 7,000 towers, a company official said.

Globe expects that by selling the towers, it will spend less, especially on rent, than it did when it owned these towers.

“Its impact on the bottom line is highly dependent on colocation of the towers. The more colocation, the lower the lease rate we will pay,” Globe Vice-President for Financial Planning and Analysis Carlo C. Puno said in a statement to BusinessWorld on Friday.

“Additionally, this will also avoid future capex (capital expenditure) costs as the tower company will be in charge of retrofitting the towers,” he added.

He expects the company to have a healthier balance sheet, which will allow more flexibility to compete in the market “as well as get access to cheaper capital, both of which could potentially lead to an increase in earnings in the future.”

The Ayala-led company announced on Friday that it signed two sale and leaseback agreements for 5,709 telecom towers and related passive telecom infrastructure for over P71 billion.

It said 75% of the total proceeds will be used to fund capex to support ongoing network expansion and sustain network consistency and reliability scores.

Meanwhile, the balance of 25% will be earmarked to cover the company’s 2023 debt servicing requirements.

“The first portfolio being sold consists of 2,180 telecom towers in Luzon, which will be acquired by MIESCOR Infrastructure Development Corp. for a total consideration of P26 billion, and leased back to Globe for an initial period of 15 years,” Globe said in a statement.

The expected pre-tax transaction gain from the first portfolio will be P10.6 billion.

Meanwhile, the second portfolio consisting of 3,529 towers will be sold to Frontier Tower Associates Philippines, Inc. for P45 billion, and also leased back over an initial period of 15 years. Pre-tax gain will be P15 billion.

The company is in “advanced discussion” with another tower company for the sale and leaseback of an additional 1,350 telecom towers and related passive telecom infrastructure.

“This last portfolio is made up of towers located in Visayas and Mindanao. Globe expects to sign the sale and leaseback agreement with this tower company within the third quarter, with first closing happening within the fourth quarter of the year,” it said.

Sought for comment, Philstocks Financial Senior Research Analyst Japhet Louis O. Tantiangco said Globe’s tower sale is seen as a good move.

“In doing so, Globe is letting go of the expenses connected to the depreciation and maintenance of the said towers. There will be an increase in lease expenses. But overall, the move is still seen to lead to operational efficiency,” he said in a phone message.

“Also, the selling of towers gives Globe additional capital which it can use to expand its network and improve operations. Overall, Globe’s selling of its towers is seen to have a positive impact on its bottom line’s prospects, and possibly, even on its dividend prospects,” he added.

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said Globe’s capital raising is credit-positive as its balance sheet could improve to become more aligned with an investment-grade profile.

“The telco is seeking shareholder approval to increase its capital stock, which may imply potential equity funding that could help fund capex,” he said in a phone message.

“Globe benefits from good funding access and strong shareholders, Singtel and Ayala. But it may face headwinds from increasing competition in mobile and a weaker position in fiber broadband. New mobile entrant DITO Telecommunity is investing to increase population coverage and could become a credible player in the medium term,” he added.

He noted that Globe’s EBITDA, or earnings before interest, taxes, depreciation, and amortization, may weaken further this year as capex stays high at over 50% of revenue.

“Although, there could be upside from potential equity funding and medium-term monetization of its digital assets.”

Globe saw its second-quarter attributable net income rise 5.3% to P6 billion from P5.7 billion in the same period last year.

Total revenues for the period increased 5% to P43.8 billion from P41.7 billion previously.

For the first half, its attributable net income climbed 51.5% to P19.7 billion from P13 billion in the same period in 2021. Total revenues for the period reached P87.3 billion, up 3.2% from P84.6 billion previously.

Globe Telecom shares closed 2.28% higher at P2,240 apiece on Friday.

Toyota wants car manufacturing incentives extended until 2027

August 15, 2022 | 12:09 am

TOYOTA Motor Philippines Corp. (TMP) is seeking the extension of the Comprehensive Automotive Resurgence Strategy (CARS) incentives program until 2027 to allow the car manufacturer to meet the required production quota.

“The CARS program has to be extended. Three years would be reasonable. We are asking for an extension until 2027 — three years from the original deadline which is 2024, because we were affected by so many factors,” TMP First Vice-President for Corporate Affairs Rommel R. Gutierrez said on the sidelines of the launch of Toyota Mobility Solutions Philippines, Inc. (TMSPH) last week in Taguig City.

TMP has until 2024 to produce 200,000 units of its Vios subcompact car under the CARS program signed in 2015 and managed by the Board of Investments. The other participant in the program, Mitsubishi Motors Philippines, Inc., has until 2023 to produce its Mirage model.

“We are continuing the program. Our commitment to produce 200,000 units is still there. We are currently at full capacity. We are trying to hit the target as soon as possible. But because of relative factors, the original schedule was disturbed,” Mr. Gutierrez said.

As of July, TMP has produced 60% of the 200,000 units required under the program, he said, adding that the company surpassed the 100,000 mark in October last year.

“We want to see it (CARS program) continue. The (program) participants have invested. We have yet to complete in fact our commitments to meet a production volume of 200,000 units,” Mr. Gutierrez said.

“Let’s give it to the government now. They are still discussing internally given the change in administration,” he added.

TMP on Friday inaugurated TMSPH, a wholly owned subsidiary that will serve as a provider of mobility-related services.

“We envision TMSPH to be at the center of the ‘new mobility’ ecosystem as an integrated, ‘one-stop’ mobility solutions provider to help advance businesses and address local communities’ needs,” TMSPH President Ma. Cristina Fe Arevalo said in a statement.

“TMSPH will primarily support the operating efficiency and growth of micro, small and medium-sized enterprises or MSMEs of various industries which are vital in driving economic growth,” she added.

According to TMP, the new subsidiary will offer fleet-connected service, on-demand shuttle booking app, car sharing or rental, logistics matching service, and fleet management service.

TMSPH is also seen to complement efforts in promoting and managing units under the KINTO full operating lease product of Toyota Financial Services Philippines Corp.

In a separate statement, TMP claimed that 95% of users of electrified vehicles in the country are using a model from Toyota or Lexus.

“Based on the recent official figures from the Chamber of Automotive Manufacturers of the Philippines (CAMPI), as of end of June 2022, there are already 1,013 total electrified vehicles sold in the market, surpassing the 2021 total volume of 843 and 2020’s 378. A total of 962 of the 2022 year-to-date sales are Toyota and Lexus models,” TMP said.

“Toyota and Lexus offer the widest range of hybrid electric vehicles in the country today with multiple variants across 10 models — Toyota’s Corolla Altis, Corolla Cross, Prius, Camry, and RAV 4 plus Lexus’ IS, ES, LS, NX and RX,” it added. — Revin Mikhael D. Ochave

CA upholds fine, suspension on Alphaland officials

August 15, 2022 | 12:08 am

Court-of-Appeals-053119 — PHILSTAR FILE PHOTO

THE Court of Appeals (CA) has upheld the decision of the Securities and Exchange Commission (SEC) that imposed a fine of P1 million and a five-year suspension on businessman Roberto V. Ongpin and several directors of Alphaland Corp. for issuing undervalued company shares in exchange for property and failing to disclose property valuations.

In a 19-page decision on Aug. 10 and made public on Aug. 11, the appellate court agreed with the SEC’s findings as it said the board members violated the Securities and Regulations Code (SRC) for making false statements and misrepresentations on the issuances of company shares.

Alphaland President Dennis O. Valdes, one of the petitioners in the case, did not immediately reply when sought for comment on Viber.

Mr. Ongpin, the chairman and chief executive officer (CEO) of Alphaland, along with other executives, argued that the SEC Enforcement and Investor Protection Department (EIPD) wrongly assumed jurisdiction in an intra-corporate dispute which stemmed from a complaint filed by British investment manager Ashmore Group.

The executives claimed Mr. Ongpin’s group and the Ashmore Group had already settled the complaint and agreed to withdraw all cases against each other in the regular courts.

The London-based investment manager filed a complaint in 2014 that alleged Alphaland Holdings (Singapore) Pte. Ltd. offered to lend P2.25 billion to Alphaland on the condition that Mr. Ongpin would resign as the firm’s chairman and CEO due to the negative publicity from his involvement in the Development Bank of the Philippines (DBP) behest loans controversy.

The court disagreed as it affirmed the SEC’s jurisdiction over disputes that stem from violations of the SRC.

It added that EIPD’s investigation was not in connection with the Ashmore Group’s complaint but was rather made in line with the SEC’s mandate.

“To ensure compliance with the law and the rules, the Securities and Exchange Commission is also given the power to impose fines and penalties,” according to the ruling penned by Mary Charlene V. Hernandez-Azura.

The SRC mandates the SEC to conduct investigations and to determine if a corporate entity violates any of its provisions.

Under Section 26 of the SRC, it is unlawful for any person, directly or indirectly, in connection with the purchase or sale of any securities to “engage in any act, transaction, practice or course of business which operates or would operate as a fraud or deceit upon any person.”

The SEC is also mandated to conduct investigations into corporate violations motu proprio or without a formal request from another party.

Alphaland is a firm engaged in real property development.

The executives argued that the EIPD violated their right to due process since the show-cause order presented by the EIPD was on the Ashmore Group’s complaint and they were not served with the court summons when it was filed.

The tribunal pointed out that the petitioners’ right to due process was not violated as they were afforded the right to explain their side.

“We are convinced that the SEC En Banc did not commit reversible error in affirming the findings of the EIPD that bad faith attended the approval, ratification, and implementation of the above-discussed corporate acts subject of Board Resolution No. 2014-01-001 and related resolution/s as the same clearly prejudiced not only ALPHA (Alphaland) and its stockholders but the investing public as well,” the tribunal ruled.

It reiterated that the EIPD’s probe of the board members was not the result of the Ashmore Group’s complaint since the EIPD had already started the investigation weeks before the Ashmore Group filed a complaint.

“Indeed, petitioners were afforded all the opportunities to explain their side of the story. The evidence is too obvious to be ignored,” said the court.

The SEC earlier found executives to have violated the SRC and “to have repeatedly failed to make timely, adequate and accurate disclosures of material information, and willfully made false statements to the PSE and the investing public.”

In 2014, the board members also resolved to approve the issuance of shares of the company in a property-for-share swap in exchange for parcels of land in Itogon, Benguet valued at P1,393,917,500.00 at the issue price of P2.50 per share. The property was beneficially owned by Mr. Ongpin.

The tribunal noted that the initial valuation of the property was not submitted to the SEC for approval before the proposed exchange of shares for the said property.

Prior to the property-for-share swap, the Alphaland chairman only owned 22.1% of the company. Mr. Ongpin’s beneficial ownership rose to 39.19% after exchanging shares for land.

The executives also had a stock rights offering via private placements to Red Epoch Group, Inc., a firm not included in Alphaland’s list of shareholders, instead of minority stockholders that was initially proposed by the board members. — John Victor D. Ordoñez

CLI sets P8-billion capex for second half

August 15, 2022 | 12:07 am

CEBU Landmasters, Inc. (CLI) is expecting to spend the remaining P8 billion of its P13-billion capital expenditures (capex) budget in 2022 for property development and land acquisitions in the second half.

“The second half will be more busy, more productive for us. We are really expecting to spend the P13 billion that we’ve set to spend in capex this year with some key acquisitions in the second half,” CLI Chief Operating Officer Jose Franco B. Soberano said in an online media briefing on Friday.

In the first half, the company’s capital spending reached P5.52 billion: P3.81 billion for residential development, P1.23 billion for land acquisition, P345 million for property investment, and the rest for other expenditures.

In real estate, the company reported that it has 35 ongoing projects with a P64.64-billion sales value.

Meanwhile, in its office and retail segment, it has Astra Lifestyle Mall Cebu, which will have 8,308 square meters (sq.m.) in gross leasable area (GLA) that it expects to be completed next year; and Patria de Cebu, which will have 21,000 gross floor area that it expects to be completed in 2024.

By 2025, the company expects its gross leasable area to reach 200,000 sq.m. from 28,400 sq.m. at present.

In its hotel and recreational segment, CLI has Base Line Prestige located in Base Line Center in Cebu, which is a project with Lyf of Ascott Ltd. that it expects to be completed in 2022.

In 2023, the company expects the completion of Radisson RED Hotel in Astra Centre in Cebu, Citadines in Bacolod City, and The Pad Co-Living in Cebu.

The company also disclosed that it will be launching P22-billion worth of projects all over the Visayas-Mindanao area.

Among these pipeline projects are the: P2.2-billion Casa Mira Homes and P1.5-billion Velmiro Heights in Magtuod, Davao; P1.25-billion Costa Mira Beachtown Mactan Tower 3, P1.5-billion Mandtra Residences, and P2.5-billion Calle 104 Towers 1 and 2 in Cebu; P1.96-billion Casa Mira Towers 1 and 2 in Palawan; and P1.3-billion Costa Mira Beachtown Panglao Towers 1 and 2 in Bohol.

In the third quarter, CLI will be starting the construction of a project near Xavier University – Ateneo de Cagayan that will break ground next month.

“We acquired a 14.3-hectare township property and adjacent to it will be the new location of Xavier University,” Mr. Soberano said.

CLI Chief Finance Officer Beauregard Grant L. Cheng said that by the end of 2022, the company expects a 20% earnings growth versus last year.

“This is a number that we will comfortably hit if not exceed,” Mr. Cheng said.

In the first half, CLI reported a 39.6% increase in its attributable net income to P1.55 billion from P1.1 billion last year.

Its topline surged by 45% to P7.5 billion in the first six months with the continued buildup of P27 billion of unrealized revenues.

On the stock market on Friday, CLI shares rose by 1.2% or P0.03 to P2.52 apiece. — Justine Irish D. Tabile

PSE’s income slips 25% to P170M

August 15, 2022 | 12:06 am

THE Philippine Stock Exchange (PSE) recorded a 25.1% decline in its attributable net income in the second quarter to P170.46 million from P227.57 million a year earlier after allotting mark-to-market provisions.

“Net income was slightly lower […] because of a big mark-to-market provision for our investments of P106 million,” PSE President and Chief Executive Officer Ramon S. Monzon said in a press conference on Saturday.

In the second quarter, the PSE’s mark-to-market loss on financial assets at fair value reached P140.52 million, a reversal from last year’s P57.68 million mark-to-market gain.

Mark-to-market losses happen when securities are priced at a market value lower than the price paid to acquire them.

“The funds were invested in traded equity securities and US dollars-denominated locally issued bonds,” the company said in its report on Friday.

The PSE’s net income attributable to the parent firm slipped by 1% in the first half to P374.05 million from P377.98 million a year ago.

Its first-half mark-to-market loss rose to P145.29 billion, a big jump from the previous year’s P3.58 million.

Meanwhile, the local bourse operator is encouraging more applications of offerings in order to reach its target of P200 billion from capital raising activities in 2022.

“We hope to get more applications and hope to reach P200 billion by the end of the year,” Mr. Monzon said at the press conference.

PSE was able to raise P76.17-billion capital from year-to-date offerings, which came from eight initial public offerings (IPOs), five private placements, and three stocks rights offers (SROs).

“At the rate we’re going, we think we will be having a record number of IPOs in a given year for 2022. However, we do not believe that we can […] break the same amount of capital raised last year,” Mr. Monzon said.

“Our listing pipeline remains robust. We have four IPOs and two SROs applications. An additional P72.61 billion in capital is targeted to be raised from these six fund-raising activities,” he added.

The SROs are from Ayala-led Globe Telecom, Inc. worth P32 billion and Solar Philippine Nueva Ecija Corp. amounting to P3.3 billion.

The IPOs that the operator expects to list this year are: Upson International Corp. worth P5.43 billion, Prime Infra Capital, Inc. worth P28.19 billion, ORCA Cold Chain Solutions worth P1.6 billion, and Alternergy Holdings Corp. with P2.18 billion.

“At the moment, we don’t think we could hit the same record that we did last year but we are hoping that we can at least reach the P200-billion level in terms of the amount of capital raised,” Mr. Monzon said.

On the other hand, he said that market volatility remains a factor in the success of the second-half IPOs.

“With the market volatility and the market level down, some companies who have plans to do an IPO might be deferring these IPO plans because they will not be able to realize the pricing or the valuation that they have for their companies,” Mr. Monzon said. — Justine Irish D. Tabile

PLDT: Smart offers ‘substantial discount’ to DITO on payments for fraudulent calls

August 15, 2022 | 12:05 am

PLDT, Inc. said its wireless arm Smart Communications, Inc. had offered a “substantial discount” on compensation that DITO Telecommunity Corp. should pay for alleged fraudulent international calls.

“International calls using DITO SIMs, [which] should have been subject to proper toll rates, came through [Smart’s] network as local calls, with DITO mobile numbers as caller IDs,” PLDT said in a statement to the stock exchange.

PLDT issued the statement on Aug. 11 after DITO’s filing of a complaint with the Philippine Competition Commission against Smart and Globe Telecom.

“[Smart]… is not engaged in any act constituting abuse of dominant position or other anticompetitive behavior against DITO,” PLDT said.

PLDT noted that DITO’s vulnerable network has adversely affected SMART subscribers due to “low-grade calls from masked DITO numbers” and “spam or robot calls and scams from overseas sources that are difficult to trace.”

It also disclosed that DITO had sought additional interconnection capacity, but the new player must comply with Smart’s conditions.

Smart wants operational coordination and fraud detection measures to mitigate illegal bypass traffic, as well as an agreement that outlines the procedures for handling any bypass activity and the computation of penalties for fraudulent calls.

DITO said that Smart’s statement is an admission that it is “making interconnection, which is mandated by law, subject to the acceptance of their request for compensation.” It argued that the alleged fraudulent calls are “made by third parties, and that DITO is equally a victim of such calls.”

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

The Brutalist touch

August 15, 2022 | 12:04 am

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Young designer Ellis Co’s designs are inspired by architect Tadao Ando

A DEBUT SHOW by a 21-year-old fashion designer pays homage to a favorite architect and his life story.

Deep Japanese nuances can be found in the clothes of Ellis Co, who presented his first fashion show late last month at Whitespace, naming the collection “Memoirs of the Future” under his label, Archives. Violinists from the Manila String Machine performed Vivaldi’s The Four Seasons, Concerto No. 2, Summer III, while dressed in the designer’s clothes. They later accompanied the designer’s own music (in the past, he had produced underground rap).

His designs have a strong flavor of Yohji Yamamoto’s early work, favoring the style of Japanese urban avant-garde. That meant there was a lot of angst and shapelessness in his work. We saw a lot of kimono pants and black coats with their lapels cut to look like flames, or bat wings. A first line, one done almost all in black, looked like clothes worn by animé gangsters in the 1990s. The ambiguity of the models’ figures under the clothes contrasted with the sharpness of detail, from the sharp points on the aforementioned lapels flowing gracefully into cocoon-shaped coats, or else the just-so crumpling on huge hats worn over trench coats. Another line saw clothes in gray and brown, making the models appear as if they were in sepia.

The Japanese influences are no coincidence; however, instead of Japanese fashion, he said that his influences come from Japanese architecture, specifically, the Brutalist work of Tadao Ando, who won the 1995 Pritzker Architecture Prize (called the Nobel Prize of the architecture world).

“A lot of his Brutalist architecture actually kind of look like my designs. I try to bring Brutalist architecture and some of his designs and apply it to my clothes,” said Mr. Co.

Brutalist architecture, meanwhile, sees buildings with an eye towards the sharp, sturdy, and modern (once a favored style for low-cost housing, universities, and buildings by totalitarian regimes). That explains the drab color palette.

“It focuses not on the variety of materials, but on the quality of the materials,” the young designer said. For this show, he had used suiting materials and pigskin for the leather pieces, echoing Brutalism’s preference for raw concrete. He did, however, change his collection three times, eliminating prototypes, for example, that were made all in leather. All in all, he counts that the work running up to the show took six months to do, keeping 88 pieces from a total of 350 samples.

More than Mr. Ando’s aesthetic sense, it’s his life story that draws in Mr. Co.

Prior to becoming a self-taught architect, Mr. Ando had worked as a boxer, and that was why some of Mr. Co’s models wore boxing gloves and headgear to the runway. The autodidactic nature of Mr. Ando’s work appeals to Mr. Co as well. “I’m actually a dropout. I’ve never had any formal education in fashion. In a way, I kind of see myself in him,” he said. “From sketching, I just did it myself. Every time I had time to go to my factory, I would sketch and then I would just make clothes for myself, until it came to a point where people started liking my clothes, and I started getting projects.”

And all this at 21.

“Of course, a disadvantage is a lack of knowledge. Experience is the best teacher. The older designers are more experienced,” he admitted.

On the other hand, youth does have its virtues. “New designs, new concepts; it’s fresh. We’re from a different culture, with a different energy.”

Visit Archives’ official Instagram page @archives.galerie. — Joseph L. Garcia