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Max’s Group: Price hikes last option in mitigating headwinds

CASUAL dining restaurant group Max’s Group, Inc. is betting on its “creative” strategy to manage the impact of some “serious headwinds” on its operations, but price increases will be the last thing to go, the company’s president said.

“There are definitely serious headwinds that we are looking at… Headwinds come in the form of very sharp raw materials price hikes. They come in the form of fuel as everyone knows, and, of course, the mandatory wage increase,” Max’s Group President Ariel P. Fermin said during a briefing on May 20.

“What we are very clear on is that there is no one part of the value chain that can completely neutralize the headwinds. The commissary cannot absorb them in full, the stores cannot absorb them in full, and definitely the consumers cannot absorb them in full. So, what we’ve done was that we’ve been quite creative in mitigating those headwinds through operational excellence from our end,” he added.

He said the group has likewise harmonized its ingredients across its brands, a program that started prior to the public health crisis. “It’s now coming in full force.”

At the store level, the company is “revisiting” its bundles. “[We] identify based on analytics what sells most, what has the most margins and, obviously, design our product assortment in such a way that makes the consumers buy the profitable mix.”

“So, the last thing to go, at least from our end, would be consumer price increases, because we do want to be mindful of the transaction count that we are enjoying at this moment, which is, of course, critical to restaurant operations,” Mr. Fermin added.

At the same time, he said the company has done some forms of hedging. “We’ve identified some materials that are critically important for the brands that we are selling. Of course, we want to make sure that there is business continuity, and, you know, we get those materials in prices that are favorable to [us].”

Max’s Group saw its attributable net income for the first quarter fall 87.7% to P41.47 million from P335.98 million in the same period last year.

The company’s total revenues climbed 17.9% to P2.17 billion from P1.84 billion in the same period a year ago.

“Local sales were still tempered as a result of the strict lockdown in January due to the Omicron surge, while international business continues to flourish, surpassing even pre-COVID levels,” it said in an e-mailed statement.

“March demonstrated significant growth in sales with a 14% month-on-month increase as restrictions on dine-in were loosened further,” it said, adding that core brands Max’s Restaurant, Pancake House, Yellow Cab Pizza Co., and Krispy Kreme “all realized upsides with the relaxed restrictions and are expected to further realize gains as dine-in continues to surge amidst heightened mobility.”

Max’s Group shares closed 5.45% higher at P5.80 apiece on Friday. — Arjay L. Balinbin

Pat Aquino resigns as National U Lady Bulldogs head coach

GILAS Women’s head coach Pat Aquino

By John Bryan Ulanday

PAT Aquino has stepped down from his post as head coach of the National University (NU) Lady Bulldogs in the University Athletic Association of the Philippines (UAAP) women’s basketball tournament, ending an era of dominance and excellence highlighted by six straight titles and the longest streak in UAAP history.

Mr. Aquino said he came to the tough decision to focus on his role as also the head coach and program director of the Gilas Pilipinas women’s coach that has just captured the gold medal in the Hanoi Southeast Asian Games.

“I am officially stepping down as head coach of the NU Women’s Basketball team. After six straight years of being a champion, I know that we’re able to sustain a winning culture,” Mr. Aquino said in a statement.

“I thank NU and the management, Mr. Herbert Sy and our major supporter Dioceldo Sy for believing in me since day one,” he added, promising to still help in any capacity.

Mr. Aquino will be leaving an unparalleled legacy in NU, which he authored to a six-peat UAAP championship in 2019 before the pandemic.

Included in that dynasty is an astounding 96-game winning streak since 2014, the longest win spree in any sport of the league’s rich history.

Without Mr. Aquino from here on though, NU is still determined to extend its reign with Aris Dimaunahan taking over the program as per his confirmation to The STAR.

For Mr. Aquino, a bigger responsibility awaits him with a busy schedule ahead for the Gilas women’s U16, U17, 3×3 and 5-on-5 tournaments.

Mr. Aquino will also be more active in his deputy role with the Blackwater squad in the PBA.

Who’s on first?

The Mitsubishi Xpander is set to continue its dominance in the segment. — PHOTO BY KAP MACEDA AGUILA

Mitsubishi looks to, well, expand its MPV leadership

FOR MITSUBISHI Motors Philippines Corp. (MMPC), the numbers do the talking. Across more than 70 countries, 430,000 units of the Xpander have been sold. Since debuting in 2018 in the Philippines, more than 60,000 garages now have a unit of the multipurpose vehicle (or MPV).

That’s why you can’t blame MMPC for creating commensurate buzz to herald the newest iteration of the seven-seater.

In a release, MMPC President and CEO Takeshi Hara said, “We are excited for Filipinos to finally be able to see in metal the new Xpander. Mitsubishi Motors wanted to further evolve the Xpander and assert its number-one position in the market. We have enhanced its unique selling propositions while upholding the traits that have made it the MPV that it is today. Expect a reimagined ride that will tap into your adventurous spirit and re-excite you to hit the road and go outdoors.”

While it is a refresh of the current (and, thus far, sole) generation, Mitsubishi says that this version (referred to as a 2023 model), pushes forward aspects and features that make it a “new-generation crossover MPV.”

The adjectives fly fast: practical, spacious, convenient, fuel-efficient — tenets that will surely continue to endear the people-mover to Filipinos who like to travel as a group — and over long drives.

MONTERO SPORT-LIKE
If the Xpander looks strangely familiar, it’s by design. Designers have taken cues from the Montero Sport — reinterpreting its image in the Xpander to endow it with an “advanced SUV concept.” To give that SUV poise and presence, the new Xpander bears a front fascia meant to make it appear wider and bolder. Lamps have been brought up higher for a more dignified look as well. Even the familiar Dynamic Shield grille receives some tweaking.

On the sides, immediately noticeable are the bigger 17-inch wheels and larger side sill garnish. Moving over to the back reveals changes as well. The T-shape is adopted there too through the taillights which are integrated in the recast bumper. The brand throws in a tailgate garnish for effect.

In the cabin, there are lots of changes, too. The so-called “Horizontal Axis” design identity makes its way to the dashboard “for a more robust feel.” The Xpander now gets accents of soft-padded material with, get this, real stitches. Even the steering wheel (which can be adjusted for reach and tilt), undergoes changes, with “a compact center to enable a better grip.” The instrument cluster has been refreshed as well, and boasts a dynamic opening graphic.

For those giving tons of value to infotainment connectivity, the seven-inch Smartphone-link Display Audio (SDA-3) plays nice with both Apple CarPlay and Android Auto. You can interact with it through a touchscreen or hands-free functions. Below it is a new digital LCD A/C panel purposefully made “not only to match the overall aesthetic but also to be easy-to-understand.” And even as it features a 12V outlet and USB port, the front console has been converted into a larger capacity open tray to accommodate gadgets and a sundry of stuff.

A new floor console has armrests that can hold a tissue pack on the back of its lid and (count ‘em) four 600 ml-sized bottles in the main compartment. “The layout of the console cupholders have been reoriented sideways and now bears a larger circumference. All these offer better organization and maximization of space,” reports Mitsubishi.

Further bringing the Xpander to the present are second-row USB ports for easy charging. The familiar Type-A port is joined by the higher-capacity Type-C. A/C dials and louvers in the rear are also in a different hue to update the feel; while cupholders have been placed into the seat armrest. Favorite features such as the easy-folding seat mechanisms, front row and luggage under trays, multi-function seatback pockets and third-row power outlets make a return in this latest iteration.

Mitsubishi says that the Xpander “has more than enough room for full-size adults plus luggage,” with the MPV configured to provide passengers space while being able to fit four four-gallon water bottles or a stroller directly behind the last row. With the seats collapsed, the vehicle offers a flat cargo deck.

The Japanese brand insists that the Xpander is the only model in its class to get cruise control. A reversing camera also makes maneuvering and parking more convenient.

CHANGES APLENTY
Even steering and suspension settings have also been enhanced in the new Xpander — with the rear absorber getting larger, and extra front and rear springs being fitted into the system, along with high-performance valves. These are said to result in a flatter and more comfortable ride even on winding roads. MMPC adds that a steering wheel return control was integrated for better maneuverability at low speeds to relieve driver stress.

The MPV’s new version gets an electronic parking brake and brake auto hold, plus active stability control, hill start assist, and traction control — standard on the AT variants. In aid of the aforementioned SUV cred, the Xpander’s ground clearance has been upped to 225 millimeters (best in class yet again). Rumbling under its hood is the familiar 1.5-liter MIVEC DOHC 16-valve, serving up 103hp and 141Nm, known for its power and fuel frugality.

The price of admission starts at P1.03 million for the GLX M/T, up to P1.11 million for the GLX A/T, and P1.18 million for the GLS A/T. The Xpander comes in these colors: White Pearl, Graphite Gray, Black, Red, Sunshine Orange and Blade Silver Metallic.

FIVE TO 10% GROWTH
MMPC is anticipating sales of 1,500 units a month for Xpander, which should continue to cement its share (over 50%) of the market. “We’re still hoping to sell more than that,” underscored MMPC FVP for Sales and Marketing Cecil Capacete in a Q&A after the model’s unveiling last Friday at the Mall of Asia Concert Grounds.

Meanwhile, MMPC AVP for Sales and Marketing Mark Parulan said that the MPV’s enhancements are a result of customer feedback, when asked whether our market could possibly see a CVT option in addition to the five-speed manual and four-speed automatic.

The Xpander launch was also the occasion for MMPC to kick off its nationwide test-drive tour to let customers get behind the wheel of its vehicles and maneuver them through a specially designed test-drive track simulating varied road conditions. Said Mr. Hara in a statement, “As the economy reopens, we want to reignite the love for outdoors among our Filipino customers and show to them how and why Mitsubishi cars are the perfect adventure buddies. One of our goals for the year is to reach out to more customers outside the walls of our dealerships. So customers can expect us to be in their cities whether Luzon, Visayas, and Mindanao.”

Dubbed “Reimagine Your Ride: The Mitsubishi Test Drive Tour,” the series continues in Cebu (June 24 to 25), Davao (July 15 to 17), Laguna (Aug. 12 to 14), and Pampanga (Aug. 26 to 28).

In a subsequent interview, with a group of writers, Mr. Hara admitted that MMPC must be “more aggressive” in making people see the merits of its vehicles, hence the test-drive tour. “In normal test drive, people can’t see the difference,” he said, and added that he hopes to add more stops in the tour.

When asked by “Velocity” about business projections for the year, Mr. Hara said that he expects the company to register at least five to 10% growth. However, he confessed it would be “very hard” to accurately make predictions owing to the country’s economic situation and the pandemic. He also said that banks are thankfully starting to open up and provide more car loans, although they are “still careful with checking customer profiles.”

Will the dealership network grow this year? “Of course, but I cannot mention (specifics),” he replied with a laugh. However, he did hint that they are looking at getting a “great dealer group” on board.

Mr. Hara also revealed that with the onset of the pandemic, people were (and still are) looking at more affordable cars like the Mirage and Mirage G4. He believes the Xpander also fits the bill here. Still he looks forward that, from 2023 onward, “maybe the market can go back to its original position (in 2019)” and restore the appetite for more expensive models.

Style (05/23/22)

Ben Farrales exhibit to open this month

“FARRALES@BENILDE,” a physical exhibition on some of the most desired pieces in Philippine fashion by the legendary couturier Ben Farrales, opens on May 27 at the 12F Main Gallery of the Design and Arts Campus, De La Salle-College of Saint Benilde. Known as the Dean of Philippine Fashion, Mr. Farrales was considered an artist ahead of his time since he stepped into the industry in the 1950s. His 60 years of success introduced signature Muslim-inspired gowns, traditional ternos, and sophisticated traje de mestizas as well as a series of contemporary loungewear, cocktail dresses, and draped frocks. With over 200 runway shows here and abroad, he instilled his significant role in strengthening the identity of local fashion on a global scale. Produced by the Center for Campus Art (CCA) of the De La Salle-College of Saint Benilde, the exhibition showcases an assemblage of Filipiniana ensembles, beaded ball gowns, pleated dresses, satin garments, and single items from skirts to capes. All these demonstrate the outstanding craftsmanship, and the range of artistry and talent of the designer. “The collection was a gift from the family of Ben Farrales,” curator and Benilde CCA Director Architect Gerry Torres said. Forty pieces from this body of work form part of the “Farrales@Benilde” gallery. The exhibition likewise features 40 14-inch miniature designs by Benilde Fashion Design and Merchandising students, inspired by the works of the late icon. The exhibit will be on view until Sept. 10 at De La Salle-College of Saint Benilde, 950 Pablo Ocampo Street, Malate, Manila. For viewing appointments, visit Benilde CCA on Facebook and Instagram. For more information, visit www.benildecampusart.com.

Max Mara opens its first store in Manila

MAX MARA has opened its first store in Manila at Greenbelt, Makati. The new Max Mara store features around 100 square meters of show space, with one window on the inside of the mall and a glass facade with lightbox on the external side. It overlooks Makati Avenue at the entrance of Greenbelt mall. Existing architectural elements of the building, such as vaulted ceilings and a skylight, naturally embellish the rooms and interact with the Max Mara’s Italian heritage and contemporary spirit. A balanced mix of strain gré, brass, metal, oak wood, and colorful marbles, creates a welcoming atmosphere across the main living area, which is centered by a column of raw stone. Sophisticated furnishings from leading Italian design brands make the new store evoke Max Mara’s fundamental brand values of Italian craftsmanship and timeless construction. The Max Mara store shows the latest collections including Max Mara mainline, ‘S Max Mara, and offers a selection of accessories.

Nike’s biggest store in SEA opens in Boni High Street

NIKE’s biggest store in Southeast Asia (SEA)opened yesterday at B3 Bonifacio High Street. The store offers immersive in-store experiences connecting consumers to sports and the community. Spread across two floors, the 14,000 sq.ft. store is the largest Nike retail space by area in the Southeast Asia region. It hosts the region’s most comprehensive range of Nike products, serving men and women across running, training, tennis, yoga, basketball, and golf. Nike Fort also has a dedicated kid’s section covering toddlers through grade school. Nike Fort’s services include the Women’s First Hour, where female members get prioritized shopping and appointment hours to browse without having to queue up; bra and tights fittings; and exclusive styling sessions for their family and friends. Nike Fort plays to three guiding principles: Bringing access to sport, adding value to the local community, and creating a destination that brings consumers closer to sport and one another. These principles are brought to life through three distinct zones: The Sports Hub, The City Replay zone, and the Experience Studio. The Sports Hub is a concierge service that helps shoppers find opportunities to participate in sports in the city and avail of styling services. These 60-minute one-on-one sessions with the store stylists aim to create looks tailor-made to the customer’s needs; help shoppers discover new sports by matching them with the apparel and footwear and new seasonal styles. The City Replay zone is a studio that brings an assortment of hyperlocal products through customization of tees, totes, caps, and shoes via designs of home-grown talent. The Experience Studio is a wellness destination that focuses on Nike’s five facets of fitness: Movement, mindset, recovery, nutrition, and sleep. Consumers can participate in group sessions or sign up for one-on-one expert sessions tailored to their health and wellness goals.

Foton plans expansion with six new dealership locations

FOTON Motor Philippines, Inc. Is planning to expand its presence in the country with six more locations, an official of the Chinese carmaker said on Friday.

“In terms of expansions, we’re planning to have more dealerships in the major cities in the Philippines,” Foton Vice-President for Sales and Marketing Levy S. Santos in a chance interview with reporters at the company’s branch in Clark Freeport Zone, Pampanga.

“Currently, we have 24 presences in Luzon, Visayas and Mindanao. We’re planning to add six more in the very near future to complement the demand of our local business and government requirements,” he added.

He disclosed the planned locations as Tuguegarao, Tacloban, Batangas City, Calamba, Pangasinan and Cainta. The expansion can be expected in the next two years, he said.

Foton, a Chinese vehicle manufacturer, ranks third in overall truck sales for 2021, according to the Chamber of Automotive Manufacturers of the Philippines, Inc., and ninth in the list of best-selling motor car brands in the Philippines.

Mr. Santos is hopeful that the company would be able to recover to pre-pandemic conditions by next year.

“We are at a double-digit growth compared to the 2021 performance,” Mr. Santos said. “Right now, we are at 26% growth compared to the same period last year, so we are looking forward to a better recovery.”

The growth was the result of rising demand and the reliance of Filipinos on online platforms, he said.

“The industry is introducing new models, new deals from our partner banks and aggressive down payment schemes from our dealers, so we are really looking forward to a better 2022,” he added.

The company expects the trend to continue under the next administration as presumptive President Ferdinand “Bongbong” R. Marcos has said that he plans to continue the programs initiated by outgoing President Rodrigo R. Duterte.

During the same event, Chery Auto Philippines Vice-President for Sales and Marketing Luigi Ignacio noted the development and proliferation of electric vehicles (EV) in the country as Filipinos have become more appreciative of technology amid the pandemic.

“What accelerated it further is the rising cost of fuel, so the total ownership cost of a plug-in hybrid will outweigh your eventual expense when you continue to use purely petrol-powered vehicles,” he said. “Eventually, the future will be all about electric-powered vehicles.”

The Chinese automotive brand has plug-in hybrid electric vehicles (PHEV), which take only three to five hours to fully charge. It can reach a total distance of 95 kilometers on pure EV, while saving 83 kilometers per liter in hybrid function, Mr. Ignacio said.

“If you really stretch the mileage of the hybrid, it can bring you up to a total of 800 kilometers,” he added, noting that Chery is continuously future-proofing its brand by enhancing engine design and performance.

Chery is one of the first to introduce the seven-seater PHEV, which it launched last month.

Chery and Foton vehicles are both under the United Asia Automotive Group, Inc., their exclusive Philippine distributor. — Alyssa Nicole O. Tan

Treasury bills, bonds may fetch higher rates after BSP decision

BW FILE PHOTO

RATES of government securities on offer this week are expected to increase following the central bank’s decision to hike borrowing costs amid rising inflation.

The Bureau of the Treasury (BTr) will offer P15 billion in Treasury bills (T-bills) on Monday or P5 billion each in 91-, 182- and 364-day securities.

On Tuesday, it will auction off P35 billion in reissued 10-year Treasury bonds (T-bonds) that have a remaining life of nine years and eight months.

A trader said in a Viber message that yields on the T-bills on offer on Monday could climb by 20 to 25 basis points (bps), while the average rate of the reissued 10-year bond could be between 6.625% and 7%.

“Market will now factor in prospects of high inflation in the months to come following Bangko Sentral ng Pilipinas’ (BSP) revised inflation outlook given continued elevated commodity prices,” the trader added.

A second trader said in a Viber message that T-bill and T-bond yields may end higher this week to track the BSP’s move to raise borrowing costs.

“GS (government securities) yields were already elevated prior to the announcement, so expect market players to watch the 10-year auction and see how [the] BTr will award.”

The second trader added the market is also waiting for the BTr’s June borrowing plan set to be released later this week for leads and how this would be affected by the lower demand for government debt seen at recent auctions.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said T-bill yields could inch up by 0.05 bp to 0.09 bp. He added that the seven-year bond could see its average rate inch up by 0.12 bp to 0.33 bp.

He said auction rates could rise due to the increase in secondary market yields as well as the BSP’s decision and inflation fears amid higher global oil prices and wages.

The BSP raised benchmark interest rates for the first time since 2018 to tame rising inflation.

The Monetary Board on Thursday increased the key policy rate by 25 bps to 2.25%, as expected by eight out of 17 analysts in a BusinessWorld poll last week. Interest rates on the overnight deposit and lending facilities were also hiked by 25 bps to 1.75% and 2.75%, respectively.

Inflation climbed to 4.9% in April, the highest in more than three years, as oil and commodity prices soared amid the Russia-Ukraine war and supply chain disruptions.

At the meeting, the central bank upwardly revised its average inflation forecast for 2022 to 4.6% from the previous forecast of 4.3%, exceeding the 2%-4% target band. For 2023, the BSP’s inflation forecast was hiked to 3.9% from 3.6% previously.

The start of the BSP’s tightening cycle came a week after the release of data showing gross domestic product (GDP) expanded by a better-than-expected 8.3% in the first quarter.

At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 1.4627%, 1.7553%, and 2.0119%, respectively, based on the PHP BVAL Reference Rates as of May 20 published on the Philippine Dealing System’s website.

Meanwhile, the 10-year bond fetched a yield of 6.416%.

Last week, the government rejected all tenders for its T-bill offer as investors asked for higher rates on expectations of monetary policy tightening.

Broken down, the Treasury did not award 91-day T-bills even as bids reached P13.3 billion, higher than the P5-billion program. Had the Treasury made a full award, the three-month tenor would have fetched an average rate of 1.759%, 22.8 bps higher than 1.531% seen at the previous award.

The BTr also rejected the P7.33 billion in tenders for the 182-day debt papers, even as this was higher than the P5-billion plan. Had the BTr fully awarded its offer, the average rate of the six-month paper would have been at 2.215%, up 53.78 bps from the 1.6772% quoted for the tenor at the secondary market before Monday’s auction.

Lastly, the government turned down bids for the 364-day debt papers despite demand reaching P7.17 billion versus the P5-billion offer. Had the tenor been fully awarded, the one-year instrument would have been quoted at an average rate of 2.828%, 86.61 bps higher than the 1.9619% yield on the tenor at the secondary market.

Meanwhile, the last time the 10-year T-bonds up for auction on Tuesday were offered was on April 26, where the bonds were partially awarded. The government raised just P17.559 billion at that auction, less than the programmed P35 billion, at an average rate of 6.313%, 22.1 bps higher than the 6.092% quoted at for the bonds previously.

The BTr wants to raise P200 billion from the domestic market in May, or P60 billion via T-bills and P140 billion through T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of GDP this year. — T.J. Tomas

‘Start them young’ so athletes can bloom in international play

PSC CHAIRMAN WILLIAM RAMIREZ — POC

Says PSC Chairman William Ramirez

PSC CHAIRMAN WILLIAM RAMIREZ — POC

SPORTS leaders should scout and train their athletes early so they can develop and flourish in international competitions such as the Southeast Asian (SEA) Games, according to Philippine Sports Commission (PSC) Chairman William “Butch” Ramirez.

“Rome wasn’t built in a day, so athletes do not become champions overnight in international play like the SEA Games. It’s good to start them young since it takes time to develop them,” noted Mr. Ramirez on Sunday as the 31st edition in Vietnam was set to close after nearly two weeks of nonstop action.

He singled out Tokyo Olympic gold medalist Hidilyn F. Diaz and world champion Carlos “Caloy” Edriel Yulo, who stamped their class in weightlifting and gymnastics, respectively, in Hanoi, as products of long-term programs that made them elite athletes.

“(Ms.) Diaz is a product of the PSC grassroots development program when she first made her debut as wild card entry at the 2008 Beijing Olympic Games at the ripe age of 17,” recalled the PSC chief, who was the national team chef de mission of the PH contingent at that time.

“Haidie (Ms. Diaz’s nickname) did not do well in the 2012 London Olympics but won a silver medal in the Rio Summer Games in 2016 during the start of our second term as PSC chairman. She finally delivered the country’s first gold in Tokyo last year,” Mr. Ramirez stressed.

A protégé of the Gymnastics Association of the Philippines since he was eight years old, Mr. Yulo has emerged as the country’s top athlete for the second straight SEA Games in the Vietnam edition with five golds and two silvers.

“Before Caloy became a world-class athlete, he excelled in the Batang Pinoy and the Palarong Pambansa,” said Mr. Ramirez, who first came to the PSC in 1998 as a commissioner under the late chairman Carlos Tuason, of the two-youth oriented meets that the government sports agency is associated with.

“(Mr.) Yulo’s skills were honed in both the Batang Pinoy and Palaro that helped him become an outstanding gymnast,” said the PSC chief, who lamented that both sportsfests were suspended for two straight years due to the COVID-19 (coronavirus disease 2019) pandemic.

He prayed that both events and the PSC’s Philippine National Games, another breeding ground of sports talent, would resume soon, as the country copes with the coronavirus crisis better and conditions continue to improve.

Mr. Ramirez cited boxing and archery as among those with sound grassroots sports development programs that enabled them to identify young boxers and archers in grooming them for overseas competitions.

“Tokyo Olympic veterans Eumir Felix D. Marcial and Nesthy A. Petecio rose up the youth boxing ranks while Pia and Abi Bidaure and Phoebe Amistoso, who won the women’s team recurve event in archery, are in their early 20s and began as junior archers,” he pointed out.

“What we are saying is that if we plant the seeds early in scouting and nourishing our athletes through grassroots programs, they and our country will reap the rewards and recognition later on as they stand out in international competition,” Mr. Ramirez explained.

A new chapter begins for Isuzu PHL

After serving for seven years, Hajime Koso (left) turns over the presidency of Isuzu Philippines Corp. to Noboru Murakami. — PHOTO FROM ISUZU PHILIPPINES CORP.

The country’s number-one truck brand turns 25 with a new president

ISUZU PHILIPPINES CORP. (IPC) — the exclusive assembler, importer, and distributor of brand-new Isuzu commercial vehicles and light commercial vehicles in the Philippines — last week announced the official turnover of their company’s presidency from the leadership of their much-loved Hajime Koso (who has served in the Philippines for seven years), to incoming Noboru Murakami.

Mr. Murakami was formerly the general manager for International Sales of Isuzu Motors Limited (IML) in Japan. He first joined IML with the responsibility of handling Isuzu’s international sales way back in 1995, and was later assigned to Corporate Planning. In 2014, he was appointed vice-president of Isuzu North America Corp. (INAC), and then by 2016 he was promoted to executive vice-president of the same company. Eventually, Mr. Murakami rose to become INAC’s president and CEO from 2018 to 2020. Soon after, he returned to his home country of Japan to become IML’s general manager for International Sales.

He officially became IPC’s president last May 17. Interestingly, 2022 also marks the company’s 25th year in the Philippines.

“I’ve always been intrigued by the market dynamics of the ASEAN region. The Philippines has become one of the most (promising) emerging markets when it comes to automotive… seen in the numerous models being introduced year after year. So it really makes me excited to start working in this country,” exclaimed an enthusiastic Mr. Murakami during the formal turnover ceremony held at Okada Manila last May 16.

Of course, one of Mr. Murakami’s foremost goals is to maintain IPC’s long-standing position as the number-one truck brand in the Philippines. If you will recall, based on the combined report submitted by the Truck Manufacturers Association, Inc. (TMA) and the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI), Isuzu still remains the leading truck company in the country based on sales — an honor it has held for the last 22 years.

Mr. Murakami further explained that he also intends to strive to achieve the ultimate “customer success” by improving on local business aspects that will better serve customers’ changing needs and requirements — say, for example, in the fields of sales and after-sales.

Another important point Mr. Murakami brought up is IPC’s intention to pursue a more sustainable path, starting this 2022. As a matter of fact, even months earlier this year, Mr. Koso already declared that the Japanese truck brand had decided to shift its direction toward sustainability.

“(Year) 2022 will be the start of a new era for Isuzu, as more sustainable and eco-friendlier plans will be introduced, in line with the United Nations’ sustainable development goals. This includes its products, operations and customer service. IPC will evolve into a company that creates economic value combined with social and environmental contributions to withstand the challenges ahead,” Mr. Koso explained.

Supporting this push for a greener IPC, Mr. Murakami pointed out, “This movement should not only be reflected in our products, but also from within — meaning changes in our values, operations, and the way we do business moving forward.”

Furthermore, Murakami shared with “Velocity” that aside from vowing to continue providing IPC’s customers with the best business solutions available, the company can now vouch that their latest products will not just be durable and fuel-efficient, but also environment-friendly.

“And with the Philippines slowly reopening its economy,” he continued, “we wish to support our goal of customer success by focusing on strengthening our nationwide parts distribution, alongside expanding our dealer network to 50 outlets within the year.”

What an exciting time to witness IPC build its greener “Isuzu Kingdom!”

A Virgil Abloh-created sneaker exhibit opens in New York

PHOTO FROM LOUIS VUITTON/ HIGHSNOBIETY.COM

NEW YORK — Late fashion designer Virgil Abloh is being honored in a New York exhibition featuring 47 pairs of Louis Vuitton Nike Air Force 1 sneakers he created before his death in November.

Nine shoes on display in the immersive show will be available for purchase in June.

Mr. Abloh was the artistic director of Louis Vuitton’s menswear collection from 2018 until his death from cancer at age 41.

A replica of the turntable set-up Mr. Abloh used as a DJ is featured, along with what organizers call “a magical treehouse symbolic of Virgil’s own childhood dreams.” Quotes from Mr. Abloh, who was also a visual artist, fill the room, with a floor of lights that create atmospheric patterns.

“He was one of a kind,” Elle.com Deputy Editor Claire Stern said. “Not just in his creative skill set, but how he broke down barriers in fashion. Racially, socioeconomically, he let people in.”

Installations of globes around New York City are promoting the free exhibit, which takes place May 21-31 at the Greenpoint Terminal Warehouse in Brooklyn.

“Virgil’s impact on our culture and the fashion world especially was huge,” Ms. Stern said. “I think this will be one of the first of many exhibits honoring him and his legacy, and his impact will be felt for generations to come.”

In July 2021, LVMH Moët Hennessy Louis Vuitton gave Mr. Abloh a mandate to launch new brands and partner with existing ones in sectors beyond fashion. — Reuters

PSE aims for better stock liquidity after ‘investor day’

THE Philippine Stock Exchange (PSE) is hoping that its upcoming “investor day” event will improve liquidity among non-PSE index companies should new investors come in and prompt follow-on offerings.

“We are pleased to offer a platform for these non-PSE index and recently listed companies to come together to provide relevant corporate information and developments to the event participants,” PSE President and Chief Executive Ramon S. Monzon said in a statement.

“By communicating their story and their growth plans and strategy, we hope to see improved liquidity among these non-PSEi stocks. Attracting new investors, which will increase demand for its shares, may even prompt these companies to do follow-on offerings in the next year or so,” Mr. Monzon added.

The PSE STAR (Strengthening Access and Reach) investor day event will feature top officials and finance executives from participating publicly listed companies (PLCs) to share their first-quarter financial performance and future business strategies.

“We hope this briefing will help investors and analysts understand the prospects of these companies, which are mostly comprised of second-tier issues and gauge the value of their stocks listed in the PSE,” he added.

The event will run from May 24 to 26 and is co-hosted by Bloomberg L.P. with the Fund Managers Association of the Philippines (FMAP) and Trust Officers Association of the Philippines (TOAP) as event partners.

Companies that will participate in the event include Monde Nissin Corp., Max’s Group, Inc., Century Pacific Food, Inc., The Keeper’s Holdings, Inc., Axelum Resources Corp., Filinvest Land, Inc., RL Commercial REIT, Inc.,  Megawide Construction Corp., Cemex Holdings Philippines, Inc., AllDay Marts, Inc., China Banking Corp., Security Bank Corp., Pilipinas Shell Petroleum Corp., Nickel Asia Corp., and Converge Information and Communications Technology Solutions, Inc.

Bloomberg economists and analysts will also provide their outlook on the economy and the food and beverage, property, construction, services, financials, and mining sectors.

The event will also have virtual booths for each participating PLC that attendees may visit. — Luisa Maria Jacinta C. Jocson

Yields on government debt rise as central bank hikes borrowing costs

YIELDS on government securities (GS) rose across the board last week after the Bangko Sentral ng Pilipinas (BSP) hiked benchmark rates to contain rising inflation.

GS yields, which move opposite to prices, jumped by an average of 17.45 basis points (bps) week on week, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rates as of May 20 published on the Philippine Dealing System’s website.

Debt yields on all benchmark tenors climbed last week. Rates of the short-dated 91-, 182-, and 364-day Treasury bills went up by 8.83 bps, 7.81 bps, and 5 bps to end the week at 1.4627%, 1.7553%, and 2.0119% respectively. 

At the belly of the curve, yields on the two-, three-, four-, five, and seven-year Treasury bonds (T-bonds) rose by 32.7 bps, 27.5 bps, 22.21 bps, 20.2 bps, and 22.05 bps, respectively, to 4.0380%, 4.8096%, 5.4452%, 5.9256%, and 6.3589%.

At the long end, the rates of the 10-, 20-, and 25-year papers climbed by 17.19 bps (to 6.416%), 15.1 bps (6.5354%), and 13.31 bps (6.5342%), respectively.

Trading volume last week thinned to P7.105 billion from P10.705 billion previously.

First Metro Asset Management, Inc. (FAMI) said trading volume remained light last week with an upward bias in yields ahead of the anticipated rate hike from the BSP.

“Overall defensiveness ensues from higher inflation expectations and sustained level of debt supply,” FAMI said in an e-mail.

“BSP moved policy rates higher to reduce demand and rein in inflation. Given the lag effects of monetary policy moves, central banks are challenged to strike a balance between controlling inflation and not dampening growth,” FAMI added.

Security Bank Corp. Chief Investment Officer for Trust and Asset Management Group Noel S. Reyes said in an e-mail: “Market was anticipating higher yields [last] week at the onset given strong GDP (gross domestic product)…that made a move by the BSP during this week’s meeting highly likely in order to contain coming inflation.”

Mr. Reyes said trading last week was mostly end-user driven “as dealers try to remain light ahead of the increased uncertainty on where the yields will be capped.”

As expected by eight out of 17 analysts polled by BusinessWorld, the central bank’s Monetary Board on Thursday started unwinding its pandemic-era support for the economy as it raised benchmark rates by 25 bps to quell rising inflation.

The central bank will also reset its bond-buying into a regular liquidity facility that will ensure the sustainability of its balance sheet.

At last week’s meeting, the BSP revised its inflation forecast this year to 4.6% from 4.3% previously, above the 2-4% target band. The central bank also hiked its 2023 inflation forecast to 3.9% from 3.6%.

“With inflation risks dominating the market, we think that the peso yield curve will join the bear-flattening trend (short-term rates rising faster than long-end) as the central bank poises to hike further and wind down GS purchases,” FAMI said.

For the coming weeks, the trend for a flatter yield curve will remain in focus, tracking US Treasury yields, Mr. Reyes said.

“Note that curve inversion should not be in our picture given our strong GDP expected performance. Stagflation is not in our forecast for the Philippines and the slope of our curve should not be as flat as the US,” he said.

Mr. Reyes added that the market will attempt to move higher after the average rate of the seven-year paper auctioned off last week breached 6%.

The Treasury raised just P20.1 billion out of the programmed P35 billion via the fresh seven-year T-bonds it offered last week despite tenders reaching P46.94 billion as investors asked for higher returns due to expectations of a BSP rate hike.

The tenor was partially awarded at 6.5%, 31.1 bps higher than 6.189% quoted for the seven-year paper at the secondary market prior to the auction. The government capped bids at 6.6%.

“Speculative talk of 7% on the 10-year (bonds) auction abound, but this will just be rejected by the BTr (Bureau of the Treasury), likely,” Mr. Reyes said.

The Treasury is scheduled to offer reissued 10-year debt worth P35 billion on May 24. The paper has a remaining life of nine years and eight months. — A.O.A. Tirona

CTA affirms ruling granting Ayala Corp. partial refund

THE Court of Tax Appeals (CTA) has affirmed a February 2020 decision partially granting a tax credit certificate to Ayala Corp. worth P44.7 million over its excess creditable withholding tax for 2014.

In a 19-page decision on May 18, the CTA full court denied the company’s petition for review to issue a new decision granting a tax credit certificate in the total amount of P62.4 million.

The company argued that it presented sufficient evidence to substantiate the previously disallowed P17.3 million of excess creditable withholding tax for 2014. It added that the revenue chief did not question or raise any objections to the company witness’ testimonies.

The commissioner of internal revenue (CIR) claimed that Ayala Corp.’s evidence was not clear and convincing enough to justify its claim for refund.

The tribunal ruled that Ayala Corp. did not file a motion for reconsideration or a new trial, which voids the CTA en banc’s jurisdiction over the case.

The tax court also junked the CIR petition to deny the company’s claim for a tax credit certificate for the same non-filing.

According to a copy of the ruling written by CTA Associate Justice Maria Belen M. Ringpis-Liban, since Ayala Corp. and the CIR failed to comply with the procedural requirement, “the court en banc cannot validly acquire jurisdiction over their appeals.”

”Accordingly, the assailed amended decision has already attained finality and can no longer be questioned by the parties,” the ruling read. “Undoubtedly, therefore, the assailed amended decision is a ‘new or different’ decision, which was based on the Second Division’s reevaluation of the parties’ allegations and existing evidence that were not considered in the original assailed decision.” 

The tax court said that the court could not rule over the case because it did not attain jurisdiction from the required appeals from the parties.

In a separate dissenting opinion, CTA Associate Justice Roman G. Del Rosario said that mandatory filing of a motion for reconsideration is required only when the amended decision resolves an entirely new issue.

“The assailed amended decision in the present case resolved the very same issue of [the company’s] entitlement to its refund claim,” he said. — John Victor D. Ordoñez

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