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SEC drafts registration rules for online lenders

THE Securities and Exchange Commission (SEC) has made public its drafted guidelines for the registration and operation of online lending platforms (OLPs).

In an e-mailed statement on Friday, the SEC said the draft rules for existing and newly registered financing and lending companies seek to stop “abusive and predatory practices.”

“The proposed guidelines will apply to both existing and newly registered financing and lending companies who have yet to own, operate, or utilize OLPs and other modes of financial technology (fintech), as well as those who are already engaged in fintech who look to provide their credit products and related services,” the SEC said.

Once the memorandum circular is deemed effective, companies with existing OLPs are required to comply with the new guidelines within 180 days.

They must apply for a new OLP license under the new set of requirements, which include an amended Articles of Incorporation. Otherwise, they will not be allowed to operate their OLPs.

“The SEC may, at its discretion, set a limit on the total number of OLPs that may be established. The commission shall take into consideration the total number of applications received, OLPs already existing, and its effects on the industry and the general public,” the commission said.

Under the new guidelines, financing and lending companies will not be allowed to operate or use OLPs or have fintech services that are not registered or approved by the SEC.

“The company’s ability to engage in fintech must also be included in its purpose as stated in its Articles of Incorporation,” the commission said.

OLPs will also be required to register as business or trade names of the financing or lending company as stated under the SEC Memorandum Circular No. 13, series of 2019.

Those applying for an OLP license should have at least five directors and at least two independent directors. The SEC said at least 20% of its board of directors should be comprised of independent directors, or whichever is higher.

Applicants are required to provide a detailed business and operational plan, which comply with Republic Act No. 3765 or the Truth in Lending Act (TILA) and the SEC Memorandum Circular No. 19, series of 2019, detailing the disclosure requirements of financing and lending companies and reporting of ALPs.

A panel from the SEC will discuss with the applicant its business plans, as well as its marketing strategy, target market, interest rates, loan products, and services.

The SEC said the financing or lending company applying for a license must also provide a walkthrough of its user interface, discuss how it will handle complaints, and how it will be handling the data it collects through the OLP.

Applicants must also comply with the SEC’s memorandum on prohibiting unfair debt collection practices or the credit information system act. It must also provide official e-mail addresses and cellphone numbers for its transactions with the commission.

“The SEC Corporate Governance and Finance Department (CGFD) will then evaluate the documents submitted by the applicant company,” the commission said.

A recommendation on the granting or denial of an entity’s OLP application will be submitted to the Commission en banc for their final decision. The SEC said those who have been rejected may reapply after a year, with tweaks showing “the reason for rejection no longer exists.”

“Under the draft guidelines, the OLP license shall have an initial validity of one year from the issuance date, subject to periodical examination and renewal by the SEC,” the commission said.

The OLP license’s validity will also depend on the company’s compliance with reportorial requirements, among others. Meanwhile, those with additional OLPs are required to undergo another application process for the prospective OLP.

Financing and lending companies with OLP licenses are required to report changes or termination of their OLP within 10 days before its implementation.

The draft memorandum circular also includes penalties for those who fail to comply with the conditions of the OLP license. Financing companies may be subjected to penalties worth P100,000 and P200,000 for the first and second offense, respectively, while lending companies may face a P50,000 and a P100,000 fine.

“For the third offense, the SEC may impose a fine of not less than twice the basic penalty but not more than P1 million; suspension of the OLP license for 60 days; or revocation of the OLP license, as appropriate for each circumstance,” the SEC said.

“The Commission may also impose a daily penalty of P400 and P200 for financing and lending companies, respectively, on top of the basic penalties,” it added.

The regulator said financing and lending companies that operate an OLP without complying with the guidelines set forth by the SEC will have their certificate of authority or primary licenses suspended or revoked, depending on the circumstances and gravity of the offense.

The commission is now calling on interested parties to comment on the draft memorandum circular until Dec. 3. — Keren Concepcion G. Valmonte

Property infusion into REITs seen to attract more investors

Filinvest Cyberzone Cebu — FILINVESTREIT.COM/

By Keren Concepcion G. Valmonte, Reporter

NEWLY listed real estate investment trust (REIT) firms have announced plans to expand initial portfolios, which are seen to further generate interest among investors.

In separate statements last week, Megaworld Corp.’s MREIT, Inc. and Filinvest Land, Inc.’s (FLI) Filinvest REIT, Corp. (FILREIT) said they are planning to inject new properties into their REIT portfolios. MREIT is eyeing to infuse four assets, while FILREIT is aiming to add three more properties to its portfolio.

“We expect continued positive reception for the REIT market following these portfolio expansions, especially for industrial assets as the sector has been one of the bright spots under the pandemic,” JLL Philippines Research Head Janlo C. de los Reyes said in an e-mail on Saturday.

Meanwhile, Timson Securities, Inc. Trader Darren Blaine T. Pangan said current investors also stand to benefit from the infusion of new properties into REIT portfolios.

“The asset injections may result in the firms having a more enhanced and attractive asset portfolio,” Mr. Pangan said in a Viber message on Friday.

In a statement on Nov. 16, MREIT said its planned acquisition will increase its portfolio’s gross leasable area (GLA) to 280,131 square meters (sq.m.) from 224,431 sq.m. The acquisition is expected to be finalized by December this year so the properties may contribute to its revenues by January next year.

These properties include three assets in Iloilo Business Park, which are Two Techno Place, Three Techno Place, and One Global Center, and World Finance Plaza in McKinley Hill in Fort Bonifacio in Taguig. MREIT said the properties have an average occupancy rate of 99%, thanks to business process outsourcing (BPO) locators.

Meanwhile, in a statement on Nov. 18, FILREIT said the acquisitions will increase its GLA to 403,000 sq.m. from over 300,000 sq.m. It plans to infuse Filinvest Cebu Cyberzone Tower 2 in Cebu City, Filinvest Axis Tower Two, and PBCom Tower in Makati City within one to 1.5 years.

RL Commercial REIT, Inc. (RCR), the REIT firm sponsored by Robinsons Land Corp. (RLC), is also planning to infuse 40,000 to 100,000 sq.m. within the next 18 months. RLC previously said its potential pipeline for infusion into RCR spans 422,000 sq.m. from its office business portfolio alone.

Pioneering Ayala-led AREIT, Inc. has already recognized income from the properties that were part of its property-for-share swap transaction earlier this year, which also grew its GLA to 549,000 sq.m.

“We saw stable performance of REITs despite headwinds, and we anticipate this to be the case [until] end of the year,” JLL Philippines’ Mr. De los Reyes said.

“The initial REIT portfolios have been generally resilient on the back of diverse locations, solid occupancy levels, and balanced tenant mix, which have helped manage risk brought by the pandemic,” he added.

Timson Securities’ Mr. Pangan said REITs “seem to remain attractive to investors, especially that they continue to provide a good avenue for portfolio diversification.”

“Majority of the REIT issues have appreciated since their listing dates, and the market may be looking forward to upcoming REITs with unique exposures to various industries in the country,” Mr. Pangan said.

After an eruption, a pandemic, and other issues: Ikea finally opens locally

PHOTO COURTESY OF JOSEPH L. GARCIA

THE FIRST Ikea store in the Philippines is finally open, after rumors of its arrival in 2016, an announcement in 2018, and the events of 2020 and 2021 getting in its way.

Georg Platzer, Country Manager for Ikea in the Philippines, spoke about the delays during a group interview on the sidelines of a store tour last on Nov. 19. “Many reasons. Certainly, the pandemic is one of the reasons, because the supply chain of construction materials was impacted. We simply couldn’t get things from other countries imported to the Philippines,” said Mr. Platzer. These included the escalators and elevators that would help people go around the enormous store, the biggest Ikea so far in the world with about 68,000 sqm. This includes a showroom and market hall with a combined floor space of 15,000 sqm. Lockdowns imposed last year and this year also hampered construction, with about 3,000 workers stationed there then sent home due to lockdown work restrictions.

“We were also, I think, very optimistic in the beginning, because we did not have experience how it is to build something like this in a market like the Philippines. It was new to us, and we were super optimistic in the beginning. Now we know better. Some things in a country like the Philippines, being an archipelago, just take more time,” he said.

Adding to the delays were natural disasters, with Mr. Platzer counting among them the Taal volcano eruption in 2020. “What else? We got everything here. You don’t have these things in other countries in the world.”

Mr. Platzer also explained the size of the first Ikea store in the Philippines. Aside from the aforementioned 15,000 sqm. of space in the shopping floors, it also boasts 16,000 sqm. of space in the warehouse.

“It is so big, because it was driven by our logistics needs. Ikea has a promise we give to the customers, and it’s called instant gratification. Everybody who comes [who] sees something should be able to pick it and take it home on the same day,” he said. As such, the company has about seven- or eight-weeks’ worth of stock in their warehouse, determined by the seven-week lead time for something to be shipped from the central distribution warehouse in Shanghai. “For this reason, we needed a big warehouse which is like 16,000 sqm. on top here, and that’s basically one of the reasons why the building is so big.”

Some items, however, do come from the Philippines. There’s the restaurant (home of the famous Swedish meatballs), which has about 25 local suppliers for fish, dairy, meat, vegetables, and fruits. They also have a local supplier for live plants in Laguna. “We do not have any supplier yet for any furniture products,” he said, since a large percentage of their products are still made in Poland. China is also a lead manufacturer, with about 35% of their stock coming from that country, but they also source items from about 55 other countries.

Ikea also keeps its prices low. Mr. Platzer says, “We really try to be as low-priced as possible. That is mandatory by concept.

“We also have challenges with the Philippine import taxes, and some other costs which just comes along if you do business in the Philippines,” he said, counting electricity bills, for one. “In other countries, it’s something else.”

Of the 8,200 items in the store, the most expensive one BusinessWorld spotted was a desk that moved up and down, at about P30,000.

BusinessWorld took three hours to walk around two shopping floors, without stopping to buy anything, during the Nov. 19 preview tour. The first floor is dedicated to furniture showrooms, with several booths depicting possible rooms for a customer, each with a story (newlywed family, or a family with kids, for example). The kitchen section (one of more than 20 sections on the floor) boasted a working kitchen for customers to test (and for future demos to be held).

A second shopping floor, the Market Hall, carries accessories like rugs, glasses, and even toys.

In the interest of safety since the pandemic is ongoing, shopping is by appointment through www.ikea.com/ph/en/, with first slots available for the official opening day, Nov. 25 (some people have already booked their appointments). According to Mr. Platzer, they can accommodate, at full capacity, 8,000 people in the building, but due to concerns about the pandemic, they can only fill the building with up to 4,000 people (staff included: Mr. Platzer counts about 525 in-store employees).

“If anybody asks somebody a year from now if they know Ikea, I would like first that they say ‘yes,’ and that what they like about Ikea would be the low price and the quality.” — Joseph L. Garcia

T-bill rates may inch up as funds shift to RTBs

RATES of Treasury bills (T-bills) could inch higher this week as funds are expected to shift to the government’s ongoing retail bond offer.

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

A trader said the rates of the short-term securities could move sideways or end 5 basis points (bps) higher as investors will likely choose to park their excess funds in the government’s retail Treasury bond (RTB) offer, which offers a higher yield.

“While the Bangko Sentral ng Pilipinas held rates steady in their recent meeting, the Fed may consider faster tapering due to surging inflation and good economic data,” the trader said in a Viber message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said T-bill yields could be slightly higher in line with a weekly increase in most short-term yields in the secondary market.

Short-term secondary market yields went up by 0.01 bp week on week, he said, “amid the ongoing RTB offering that could siphon off some of the excess liquidity in the financial system.”

The Treasury on Tuesday raised an initial P113.545 billion at its price-setting auction for its offer of 5.5-year RTBs. This was oversubscribed by more than five times versus the initial P30-billion offer. The RTBs had fetched a coupon rate of 4.625%.

National Treasurer Rosalia V. de Leon said the proceeds of the offering will fund the government budget. The RTB public offer will run until Nov. 26, unless closed earlier, and the bonds will be issued on Dec. 2.

Meanwhile, the Bangko Sentral ng Pilipinas (BSP) on Thursday kept benchmark rates unchanged, as expected by all 20 economists in a BusinessWorld poll held the previous week, saying an accommodative stance is key to economic growth that has gained solid traction.

The BSP left the key rate steady at 2%. It also kept the overnight deposit and lending rates at historic lows of 1.5% and 2.5%.

On the other hand, the US Federal Reserve recently announced the start of the reduction of its $120-billion monthly asset purchases at $15 billion per month. New York Federal Reserve Bank President John Williams on Thursday said inflation in the United States is becoming more broad-based and expectations for future price hikes are rising, a trend policy makers will be watching closely, Reuters reported.

At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 1.2171%, 1.4525% and 1.641%, respectively, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

The BTr raised P15 billion as planned via the T-bills it auctioned off last week as total tenders reached P37.99 billion, or more than double the initial offer but lower than the P42.52 billion in bids logged in the previous auction.

Broken down, the BTr raised P5 billion as planned via the 91-day debt papers from P11.34 billion in bids. The three-month T-bills fetched an average rate of 1.15%, up by 0.7 bp from the 1.143% seen at the previous week’s offering.

The BTr also borrowed the programmed P5 billion from the 182-day securities as bids reached P113.07 billion. The average rate of the six-month T-bills went up 1.2 bp to 1.413% from 1.401% a week earlier.

Lastly, the government made a full P5-billion award of the 364-day T-bills as the tenor attracted tenders worth P13.58 billion. The average yield on the one-year instruments stood at 1.621%, up by 0.5 bp from the 1.616% fetched the previous week.

The government previously planned to raise P200 billion from the domestic market in November: P60 billion via weekly T-bill auctions and P140 billion from weekly offers of Treasury bonds (T-bonds). However, the BTr canceled the auctions of P35 billion each in five-year and seven-year T-bonds on Nov. 16 and 23 to give way to its RTB offering.

The government wants to borrow P3 trillion from local and external sources this year to help fund a budget deficit seen to hit 9.3% of the country’s gross domestic product. — Jenina P. Ibañez with Reuters

PAL eyes more flights from Middle East, US for holidays

An airplane is seen on the runway at the Ninoy Aquino International Airport (NAIA) in Manila, March 14, 2016. — REUTERS/ROMEO RANOCO/FILE PHOTO

FLAG carrier Philippine Airlines, Inc. (PAL) said it is ready to add more flights from the Middle East, the United States, Australia and various Asian countries as more overseas Filipinos are expected to fly home next month.

But alternative gateways in the country need to be opened due to the Manila arrival limits. Rerouted passengers can fly onward to their final destinations at no extra cost.

“With the help of enlightened government intervention to open up alternative airports and liberalize health and quarantine protocols, we will do our best to adjust our network so that we can fly more people home and support the revival of our local economy,” PAL said in an e-mailed statement over the weekend.

The Air Carriers Association of the Philippines (ACAP) said in a statement on Saturday that the airline industry is experiencing “high demand” for flights based on forward bookings and passenger inquiries.

PAL said it recently brought in more than 10,000 overseas Filipinos by using alternate gateways such as Cebu, Bohol, Subic and Davao to prevent the cancelation of their flights.

“These include our recent rerouting of flights from Bangkok to Panglao; Dubai to Subic, Davao or Cebu; Los Angeles and San Francisco to Cebu; Kuala Lumpur to Laoag; Doha to Subic; and other routes,” the flag carrier noted.

“In the meantime, we are working with government authorities to open up alternative gateway airports in the Philippines,” it added.

ACAP said the government should simplify further the requirements for travelers “to meet the resurging travel demand during the holidays.”

The association wants the local government units to accept vaccine cards, with or without QR (Quick Response) codes.

“ACAP is also appealing to the government to increase the prevailing cap of four thousand to ten thousand passengers daily on international arrivals for inbound passengers carried by all international airlines into the country.”

At the same time, the airlines are calling for “a reduction of quarantine days for fully-vaccinated passengers from ‘yellow list’ (moderate-risk) countries, from the current five days to just two days.”

In a statement last week, the Tourism department said the task force had approved in principle the entry of fully vaccinated tourists from “green list” (low-risk) countries.

Fully vaccinated foreigners from these countries only need a negative RT-PCR test within 72 hours before departure.

No facility-based quarantine and additional testing will be required, but tourists should self-monitor for any symptoms until the 14th day after their arrival in the country. — Arjay L. Balinbin

L’Oreal offers vouchers to end spat with China’s ‘lipstick brother’

REUTERS

BEIJING/PARIS —  French cosmetics giant L’Oreal is offering shopping vouchers to some Chinese customers to settle a dispute over discounts that drew the ire of the country’s top two livestreaming sales stars, the pair said.

Li Jiaqi, known as “lipstick brother,” and fellow top influencer Viya gave details of the compensation scheme to followers during a livestreaming event late on Thursday. L’Oreal Paris confirmed the details on its Weibo account in China.

The duo said last week that they had cut ties with L’Oreal after some followers said facial products the pair had promoted as carrying the biggest discounts of the year during Alibaba Group’s 9988.HK Singles Day shopping promotion could be bought for less days later on L’Oreal’s own platform.

The spat has thrown the spotlight on the sway of popular culture personalities in China and how retail companies are relying on them to market products.

Mr. Li, 29, who counts 47 million followers on his Taobao livestream room and Viya, 36, who counts 92 million, have risen to become two of the country’s most influential shopping hosts.

Mr. Li started his career as a cosmetics counter sales person. He has built his popularity with entertaining and at times, critical commentary on cosmetics, famously trying on hundreds of lipsticks in one sitting.

Ms. Viya, who won a popular singing contest in China early on in her career, shot to fame selling products ranging from fashion apparel to houses.

She has grown her fan base with a laid-back, intimate conversation style, and has hosted Singles Day livestream shopping sessions featuring US stars including Kim Kardashian, patching in from abroad.

News that Ms. Viya and Mr. Li had suspended their collaboration with L’Oreal, giving the company 24 hours to come up with a plan to compensate customers who felt misled about shopping discounts, became one of the most viewed topics on China’s Twitter-like Weibo social media network on Thursday, with 450 million hits.

According to the pair, L’Oreal is to offer a coupon of 200 yuan ($31) to consumers who spent more than 999 yuan over the last 11 days in October on facial masks at the center of the dispute, redeemable for any L’Oreal products.

Those who purchased the facial masks but did not spend 999 yuan, are eligible for two coupons, worth 100 yuan each, that can be used when the buyer spends at least 499 yuan.

L’Oreal, which apologized to customers for a “too complicated promotion mechanism,” said earlier it had found a constructive and satisfactory solution to address the complaints.

According to Chinese media, Mr. Li and Ms. Viya pre-sold a combined 18.9 billion yuan ($2.96 billion) worth of goods on Oct. 20 in pre-Singles Day promotions. China is the biggest sales growth engine for luxury goods and cosmetics groups. —  Reuters

Every day’s a hauler day

­Three variants of the new Mazda BT-50 — all powered by a 3.0-liter diesel engine — will be offered here. — PHOTO FROM MAZDA PHILIPPINES

The pickup wars continue to, well, you know, with the all-new Mazda BT-50’s arrival

IT’S NOT VERY often that you find a pickup as sophisticatedly handsome as the all-new Mazda BT-50. After all, pickup trucks are stereotypically aggressive and brusque, often serving a primarily utilitarian nature. But Mazda, as we know, always chooses to be different. And as in the case of the latest-gen BT-50, I bet you would not have even guessed that you were staring at a pickup, when you first had the chance to look straight into its front fascia.

And perhaps the best thing about it is that, being a Mazda, it shares all the company’s latest brand values which capitalize on perfecting every vehicle’s human-machine ergonomics and driving synergy — not to mention its premium materials and workmanship, especially at its given price point. Combined with fluidic looks and that very specific “zoom-zoom” driving pleasure that encourages strong bonds to form between drivers and their cars, you know what I’m getting at.

“The new BT-50 brings power, stature, and prestige into the pickup market as it sits proudly among the rest of our Kodo: Soul of Motion-inspired lineup,” explained Mazda Philippines President and CEO Steven Tan during the local launch. He added that, “It is a confident expression of strength and versatility tempered by style and boldness that will allow its driver to experience life to the fullest. Our customers will surely find in the new BT-50 the same premium quality, comfort, durability and driving satisfaction that they have come to expect from every Mazda.”

The all-new BT-50 will only be sold with a 3.0-liter turbodiesel, six-speed automatic in the Philippines. It is an engine-transmission spec carefully selected by its local distributor — Bermaz — based on the country’s market trends and its demographic of Mazda clientele. The engine’s electronically controlled VGS turbocharger offers power that is now available over a wider range. It is also gifted with very strong low-end torque to keep the vehicle more relaxed, with a maximum of 450Nm at just 1,600rpm.

The BT-50 will be available here as a double cab carrying a tub that is 1,530mm wide, 490mm deep, and 1,571mm long. All variants will come with a bedliner that is meant to serve as a membrane to protect the cargo bed. As the units will also come in both 4×4 and 4×2 variants, the 4×4 will also carry a functional roof rail for customers who wish to have overhead cargo-carrying ability.

As Steven Tan emphasized that “you can’t get more utilitarian than a pickup truck,” more related features are also now integrated into the latest BT-50’s design and architecture. Inside the cabin are larger bottle holders that can accommodate containers bearing up to 1.5 liters. Available in the front and rear are 2.1A USB ports; and an auto-dimming rearview mirror also makes it more convenient to fight glare while driving at night. Its car key now has a remote engine start button that allows the driver to switch on the engine from a distance and start cooling the cabin before he or she boards the vehicle. Along with its keyless entry and walk-away auto-lock system, there are lots of little conveniences that make life a tad bit easier.

Among the BT-50’s other useful niceties are its secret compartments located underneath the rear seats to enable occupants to store items that are out of temptation’s sight. The pickup is also equipped with a nine-inch LCD touchscreen infotainment system that is already Apple CarPlay- and Android Auto-ready. An eight-speaker surround setup with door woofers and on-dash tweeters gift the cabin with audible pleasures. Moreover, with the meticulousness of Mazda engineers, they have strategically lined the cabin with foam fillers to further reduce noise, vibrations, and harshness — providing only the best quality of quietness possible.

When it comes down to off-roading business, the BT-50 4×4 variant offers an electronically controlled Drive Selector that can enable either 2WD Low, 2WD High, 4WD Low, or 4WD High power delivery. Of course, it also comes with a rear differential lock, to make it a true off-roading machine.

Furthermore, the BT-50 has a cache of goodies in the safety department with its Mazda Active Safety Technology suite. These include Adaptive Cruise Control (which adds a lot of extra convenience to the driver for certain applications), Autonomous Emergency Braking, Lane Departure Warning System, Forward Collision Warning, a Blind-spot Monitoring system, and Rear Cross Traffic Alert. And should there be a collision, the pickup is equipped with seven air bags, which include a driver’s knee air bag and front side air bags.

But equally impressive is the BT-50’s price point, which is at P1.39 million for the 4×2 MT, P1.43 million for the 4×2 AT, and P1.79 for the top-of-the-line 4×4 AT. They are all offered alongside Mazda Philippines’ five-year/100,000-kilometer free service plan, which covers the expenses for each new vehicle’s periodic maintenance — including the engine oil, all scheduled replacement parts, and of course, the labor.

The all-new Mazda BT-50 is available at all Mazda dealers nationwide.

China FX committee urges banks to cap speculation as yuan surges

AN ORGANIZATION formed by key participants in China’s currency market urged banks to limit speculative foreign-exchange (FX) trading after the yuan climbed to a six-year high versus peers.

The China Foreign Exchange Committee (CFEC) — founded under guidance from the central bank — encouraged lenders to be risk-neutral when trading foreign exchange for themselves and for clients, according to people familiar with the matter. Banks were advised to better track their proprietary trading and improve risk management, the people said, citing a proposal made by core members of the organization that was circulated to members.

The move could be the latest sign that Beijing has grown uncomfortable with a rapid ascent in the yuan. The currency is the best performer in emerging markets this year as it benefits from robust exports and foreign investments in onshore bonds.

The CFEC suggests banks conduct internal reviews when trading volumes at proprietary desks deviate significantly from the norm, the people said, asking not to be identified as the matter is private. Proprietary trading that is 50% higher than the level during the year-earlier quarter, or is more than 15 times the size of transactions done on behalf of clients could be considered abnormal, they said. Banks need to report their findings to the CFEC.

The proposal is targeted at more than 50 Chinese and overseas banks operating onshore, and covers over 90% of the country’s foreign-exchange market, the people said. It will not impact on liquidity in the currency market, they added.

The measures aim to strengthen standards for banks’ foreign-exchange businesses, especially proprietary desks, which tend to make speculative bets on one-way moves in currencies, the people said.

The People’s Bank of China (PBoC) last week asked financial institutions and enterprises to step up exchange-rate risk management and to refrain from making one-way bets on the yuan. Volatility of the currency may increase in future as overseas central banks have started adjusting monetary policy, the PBoC said in a statement, which was about a meeting held recently by the CFEC.

Reuters reported earlier that the CFEC proposed a plan to limit trading volumes at Chinese banks’ proprietary desks. The organization, founded in 2016, includes representatives from regulatory agencies and financial institutions. — Bloomberg

UBS, Deutsche set the course for new era with new chairmen

TWO of Europe’s banking giants picked the leaders who will help chart their next era as they named successors for the chairmen who steered them through a decade of restructuring.

UBS Group AG on Saturday nominated former Morgan Stanley President Colm Kelleher to succeed Axel Weber as chairman next year. A day earlier, Deutsche Bank AG proposed Dutch insurance veteran Alexander Wynaendts for the same role, replacing Paul Achleitner.

Mr. Achleitner and Mr. Weber are set to step down after reshaping European banking during a period of major upheaval. The chief executive officers they helped pick — Deutsche Bank’s Christian Sewing and UBS’ Ralph Hamers — are both expected to provide strategy updates early next year, setting a path for growth as ebullient markets and the potential for higher interest rates provide a rare tailwind.

Deutsche Bank touted Mr. Wynaendts’s tech savvy and experience dealing with regulators, as Germany’s largest lender is looking to revamp its digital platforms and improve its standing with authorities after costly misconduct fines. UBS, which tapped its own Dutch executive evangelizing digitalization with last year’s hire of Mr. Hamers, turned to a Wall Street veteran whose previous firm found success with UBS’s model of a giant wealth management unit and an investment bank focused on stock trading. 

While both firms have been reshaped over the past decade, they enter their next phase from very different starting points. UBS has returned to strong levels of profitability and its shares trade on par with the book value of its equity, one of the few major European banks to do so. Deutsche Bank only recently posted its first profit in six years and still trades at a 60% discount to its book value.

The biggest banks in Germany and Switzerland — which have faced political scrutiny at home in recent years — prioritized relevant financial expertise over national ties in turning to the Dutch and Irish executives. And both men have extensive experience in the US, where European banks have consistently lost share to stronger American rivals since the financial crisis.

Deutsche Bank did nominate Norbert Winkeljohann, a German who serves as Bayer AG’s chairman, as vice chairman. UBS followed a similar model by proposing Lukas Gaehwiler, currently chairman of the board at its Swiss unit, for the same position.

Together with Antonio Horta-Osorio — a Portugal native who ran a British bank before replacing Urs Rohner as Credit Suisse Group AG chairman earlier this year — they represent a new era for the traditional powers in European investment banking.

The two chairmen handovers aren’t set to take place until annual shareholder meetings in the spring, but both firms had aimed to have candidates in place well ahead of time to ensure a smooth transition.

Mr. Wynaendts, 61, ran Dutch insurer Aegon NV for 12 years before leaving in 2020. Aegon typically gets the majority of its profit from the US, where it owns insurer Transamerica. Mr. Wynaendts worked at ABN Amro’s investment banking and private banking units before joining Aegon in 1997. In 2019, he joined the board of Citigroup, Inc., which he will leave before taking on the Deutsche Bank role.

Mr. Kelleher, 64, spent three decades at Morgan Stanley, where he served as chief financial officer and ran the trading business before rising to president. One of nine siblings who grew up in Ireland’s County Cork and an Oxford University graduate, he helped Morgan Stanley’s investment bank rebuild client confidence after hedge funds pulled money during the crash.

The appointments will do little to change the stark lack of diversity at the top of European banking. Ana Botin is the only woman among the chairmen and CEOs of the 10 biggest lenders on the continent, and there are no minority executives among their ranks. Mr. Weber had suggested in May that UBS should consider appointing a chairwoman after he exits next year, as the bank seeks to address a lack of gender diversity on its board. — Bloomberg

Solar Philippines pushes for collaboration with other power companies

SOLAR Philippines Power Holdings, Inc. (SPPHI) said the country can achieve its goal of increasing the share of clean energy sources through collaborations between power companies.

“We believe that the best way to bring change to the Philippine power industry is not to compete with the country’s power companies, but to convince them that solar is the best source to build in hopes that all of us can work to accelerate the renewable energy transmission,” Solar Philippines Founder Leandro L. Leviste said in a recent online interview.

The country’s Energy department is targeting to source 35% of its power from renewable energy sources by 2030 and 50% by 2040.

“The best way for us to grow this market is to meet the demand of these other companies that have been publicly saying that they want to do solar, but they need land,” Mr. Leviste said.

Solar Philippines’ strategy, according to Mr. Leviste, is to secure all the sites and enter into partnerships with other companies.

In a statement last month, its unit Solar Energy Zones, Inc. is said to be finalizing agreements for 10,000 hectares of land, which will be used to develop solar energy zones that will host other power companies.

Solar Philippines said the solar energy zones will be located near its power projects in Batangas, Tarlac and Nueva Ecija.

“We have also been entering into partnerships with the country’s leading power companies — some of which have been disclosed, much of which is soon to be disclosed,” Mr. Leviste said.

“We are hopeful that over the next few months, we would be able to show the market that solar will become the largest source of energy in the Philippines, not just from our own efforts, but from the collective efforts of the entire Philippine power industry,” he added.

Meanwhile, Solar Philippines subsidiary Solar Philippines Nueva Ecija Corp. (SPNEC) is preparing for a P2.7-billion initial public offering to fund the first phase of its 500-megawatt (MW) solar farm project.

SPNEC plans to use the first P1.3 billion of the proceeds to fund the first 25% of the solar farm plant’s first 225 MW. The next P1.3 billion raised will be used to secure more land in Nueva Ecija.

“Solar Philippines is used to trying to spread its resources so that it can get the most done. Why build only let’s say the first phase of the project when you can plant the seed for the second phase, while raising lower-cost financing thereafter to complete the first phase of the project,” Mr. Leviste said.

SPNEC will be offering to the public 2.7 billion shares for as much as one peso apiece. Its target offer period will run from Dec. 1 to 7, while its market debut is slated for Dec. 17. It will be the first entity of Solar Philippines to tap the capital markets.

On the other hand, Solar Philippines Tarlac Corp., owned by Solar Philippines and Prime Metro Power Holdings Corp., is also looking to raise P4.15 billion through its bond offering.

Solar Tarlac is developing a 150-MW solar plant in Concepcion, Tarlac. Proceeds from the offer will partially be used to fund a P2.225-billion loan, which was utilized for the plant’s 100-MW portion. — Keren Concepcion G. Valmonte

Pinoy personal care brand reduces plastic packaging

FILIPINO personal and home care brand Human Heart Nature has released a feminine wash bar as part of its ongoing mission to reduce plastic packaging in their products.

“One of the best ways to manage our plastic problem is to battle the bottle: go plastic bottle-free. By moving towards plastic-free, sustainable options through breakthrough waterless formulations such as bars and concentrated powders, consumers can now truly start breaking free from plastic themselves,” the brand said in a statement.

The Feminine Wash Bar (P139.75/35gm), said to contain mangosteen extract, chamomile, and virgin coconut oil, was formulated to be gentle and contain “no harmful chemicals” like parabens, PEGs, and synthetic fragrances. It was launched in October and followed the release of a shampoo bar in 2019.

The new product is one of the ways the product is trying to combat plastic pollution — the brand has been using recyclable plastic for its packaging, instituted a Balik Bote (bottle return) program where returned bottles are turned into eco-bricks, and, in 2018, introduced efforts to encourage upsizing and refilling.

“The concept started in 2018 when we realized that despite the fact that we use recyclable plastic for our products, only 9% of all recyclable plastic actually undergoes that process and the majority still end up in landfills,” Anna Meloto-Wilk, president and co-founder of Human Heart Nature, told BusinessWorld in an e-mail interview.

Upsizing means encouraging customers to buy bigger containers because the practice results in 73% less plastic use.

Ms. Meloto-Wilk said that their efforts successfully prevented over 17 tons of plastic waste from ending up in landfills and eventually the ocean as of Oct. 2021.

“You can see the progression of our sustainability efforts from using recyclable bottles to upsizing and refilling efforts to lessen our plastic usage, but we still weren’t satisfied with the impact we were making, especially since not everyone was adapting to these new ways of product delivery due to convenience or budget constraints,” she explained before adding that they are looking to create more “waterless formulations” to eliminate plastic bottle packaging together with its new product development team.

Human Heart Nature is looking to convert its facial washes, conditioners, and other categories to plastic bottle-free versions in the coming months.

Ms. Meloto-Wilk said they are hoping to prevent 20 tons of plastic bottles from ending up in landfills by the end of 2021. — contributed by Zsarlene B. Chua

Mercedes-Benz GLA 200 AMG Line: A star among crossovers

PHOTO BY KAP MACEDA AGUILA

The entry point into the Mercedes-Benz sport ute line is far from basic

YOU DON’T NEED me to tell you that crossovers/SUVs are ruling the roads. We’ve been long enamored with the category ever since the first Land Cruisers and Pajeros stole our hearts with their tall-riding, terrain-conquering mettle.

Along the way to the present, the segment players multiplied like Gremlins in the rain. Across a galaxy of price points and propositions, the SUV is now the understandable category king. There’s an SUV for every budget.

Having said that, the GLA 200 AMG Line is the most affordable three-pointed crossover star. That’s something of a misnomer because the premium tenets of Mercedes-Benz have hardly been known for being affordable. Still, this star nebula exists in both realities — a dichotomous though immensely attractive realm where luxe and (comparatively) attainable intersect.

The price of admission for this crossover is P3.59 million. Yes, even if it is in the lower range of the MB price band, it still better earn our attention and evoke inspiration and enthusiasm.

So off I went with an example of the GLA 200 AMG Line, waiting for it to both figuratively and literally move me.

If you’re a spec sheet reader, a 1.3-liter engine might fail to impress you. In fact, you’d probably wonder how it could move a solidly built vehicle like the GLA 200. But hold your horses; this 1.3 mill is turbocharged. It corrals 163 ponies and a relatively stout 250Nm of torque — the latter coming at an early 1,520rpm. You don’t have to wait long for the GLA to get a move on.

But I’m getting ahead of myself. The experience begins when you climb aboard. There’s no mistaking its premium character. Materials, execution, and even the smell of our test unit were as calming as a five-star hotel’s chambers. Even if it’s not the biggest of the lot, you won’t feel claustrophobic. While we’re at it, Mercedes-Benz obviously listened to the feedback of its customers when it trotted out this all-new GLA. The first generation (which debuted in 2013) was a lot less roomy — particularly for the folks in the back.

So while the all-new GLA is a tad shorter and narrower than the model in replaces, it is taller and is given a longer (by 30 millimeters) wheelbase. It also is bestowed 116mm more headroom, 45mm additional elbow room, and 43mm more rear shoulder room. Even the front passengers get 22 more delicious millimeters. That’s good news.

“This is fit for a barkada or family. We see the GLA as a gateway car that’s very capable,” opined Mercedes-Benz Philippines Product Management Head Benjie Bautista, who I got to interview when I picked up the unit. He also said that the days of the Mercedes-Benz as an “old man’s car” are done and dusted. “The GLA comes with a lot of connectivity features and functionalities,” he added. And yes, that’s definitely one of the surprising value propositions you get in a Merc these days. The touted MBUX (Mercedes-Benz User Experience) and its accoutrements bring the brand into the here and now and even to tomorrow.

The system is predicated on a large seven-inch touchscreen which is ensconced in a single upright structure atop the dashboard — also housing the fully digital instrument cluster. These may be bells and whistles, but the execution speaks volumes about how Mercedes-Benz is charting its future.

Elsewhere in the cabin, you’ll see the luxury (and sustainability) executed in the choice of materials and textures. The seats are swathed in Artico man-made leather/Dinamica microfiber (a happy consequence of the “AMG Line” appendage), and there are nice carbon-structure touches within, along with AMG mats.

Four driving modes (Dynamic Select) are available to suit your mood and the conditions on the road: Eco, Comfort, Sport, and Individual. I was surprised by the steering column-mounted stalk to change gears, but it’s easy to learn and adapt to. If you’re inclined for a little more dynamic manual gear changes, a pair of sporty paddle shifters are just behind the steering wheel.

Speaking of the steering wheel, it’s pretty busy one with plenty of controls and a touch control button which allow you to do more than just change the song that’s playing. The MBUX also has a Linguatronic feature which lets you command the car with a simple, “Hey, Mercedes.” I’m happy to report that there’s both Apple CarPlay and Android Auto. You also get a trackpad (with a thoughtful wrist rest) for an additional way to access the myriad of functions. The graphics and reversing camera function (along with the exquisite guidelines) are tastefully executed. Remember, things can get very gimmicky real fast if you don’t know what you’re doing. The folks at Stuttgart thankfully do.

The riding height is not at par with a more proper SUV, but that’s not what the GLA is about. I think of it as a larger hatchback blessed with more space and a higher perch. Additionally, this is not just your typical crossover; the three-pointed star on its grille indicates that and more.

“The best thing we offer to our customers is the experience of Mercedes-Benz. We want to let would-be customers experience the brand and get behind the steering wheel,” concluded Mr. Bautista.

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