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Rates of T-bills, bonds to drop

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THE RATES of government securities on offer this week may continue to go down on easing inflation concerns and as they track the decline in yields on US Treasuries.

The Bureau of the Treasury (BTr) wants to borrow P15 billion via the Treasury bills (T-bills) on Monday, broken down into P5 billion each via the 91-, 182-, and 364-day papers.

On Tuesday, the BTr will offer P35 billion in reissued 10-year Treasury bonds (T-bonds) with a remaining life of nine years and 24 days.

Two bond traders interviewed on Friday said they expect the rates of the T-bills to decline by 5 to 10 basis points (bps) this week.

Meanwhile, for the reissued 10-year bonds, the first trader sees the tenor’s rate ranging from 3.75% to 3.875% while the second trader gave a lower forecast range of 3.6% to 3.8%.

The first trader said yield movements at this week’s auctions will reflect easing concerns over inflation as well as declining US Treasury rates.

The second trader echoed this, adding that markets are also awaiting the results of the upcoming Federal Open Market Committee (FOMC) policy meeting of the US central bank.

“Despite US inflation figures rising, US Treasury yields fell. That might just mean that both local and foreign traders view inflation levels as temporary and are expecting the Fed to set a tone which is accommodative regarding the setting of interest rates and tapering,” the trader said via Viber.

Headline inflation was steady for the third straight month at 4.5% in May and fell within the 4-4.8% estimate of the Bangko Sentral ng Pilipinas (BSP).

Year to date, inflation averaged at 4.4%, higher than the 2-4% target of the BSP and its revised forecast of 3.9% for the year. May was the fifth month in a row that inflation went beyond target.

Meanwhile, the yield on the benchmark 10-year US Treasuries fell to 1.47% on Friday from 1.56% a week ago, and further down from its peak at 1.73% in early April.

The US Federal Reserve’s policy-setting body is set to meet on Tuesday and Wednesday and while it is widely expected to keep borrowing costs steady, it may discuss tapering its massive asset purchases.

At the secondary market on Friday, the 91-, 182- and 364-day T-bills were quoted at 1.254%, 1.434% and 1.671%, respectively, while the 10-year tenor was at 3.852%, based on PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

The BTr upsized the volume of T-bills it awarded last week to P21 billion from the initial plan of P15 billion as rates dropped across the board. Total bids stood at P92.52 billion.

Broken down, it raised P7 billion from the 91-day papers, up from the P5-billion program, from P26.359 billion in tenders. The tenor’s average rate fell to 1.176% from the 1.235% fetched in the previous auction.

The Treasury also upsized the 182-day T-bills it awarded to P7 billion from P5 billion at an average rate of 1.422%, down from 1.472% previously.

Lastly, the Treasury borrowed P7 billion via the 364-day securities, higher than the planned P5 billion. The one-year papers yielded 1.649%, down from 1.723%.

Meanwhile, the reissued 10-year T-bonds on offer on Tuesday were first issued in July 2020 and carry a coupon rate of 2.875%.

The last time the BTr offered this bond series was on March 23, where it raised P30 billion as planned from P53.92 billion in bids. The notes fetched an average rate of 4.614%, a sharp increase from the 3.066% seen in the previous auction of the same bonds on Feb. 2.

The Treasury wants to raise P215 billion from the local debt market this month: P75 billion via weekly offers of T-bills and P140 billion from weekly auctions of T-bonds.

The government is looking to borrow P3 trillion from domestic and external sources this year to help fund a budget deficit seen to hit 9.4% of gross domestic product. — Beatrice M. Laforga

EU-backed Mindanao programs seek production boost via green energy

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TWO PROGRAMS that combine agricultural and renewable energy development in off-grid areas of Mindanao were recently launched as part of the rural growth strategy for the southern Philippines.

One project, the Integration of Productive Uses of Renewable Energy for Sustainable and Inclusive Energization in Mindanao (I-PURE Mindanao), will cover 10 pilot areas that are already agriculturally productive but lack power supply to expand.

With 4.5 million euros (P264.91 million) worth of funding from the European Union (EU), I-PURE Mindanao will set up solar-powered facilities to run coffee dryers, ice-making machines, and irrigation systems in communities in the Bangsamoro and Soccsksargen regions.

These communities include: Picong, Lanao del Sur; Sitangkai and Sibutu, Tawi-Tawi;  Kalamansig, Lebak, Bagumbayan, and Ninoy Aquino, Sultan Kudarat; Tulunan, Arakan, and Kidapawan City, Cotabato; and Glan, Sarangani.

Ileana Miritescu, program manager for energy of the EU delegation to the Philippines, said the power facility will also provide electricity to households in these communities.

“It will provide electricity to widely dispersed households. It will also increase the quality of life in those areas and bring clear benefits including to women and children. We hope that this will serve as a platform to scale up (in increasing) access to renewable energy solutions in far-flung areas,” Ms. Miritescu said during the Mindanao Power Forum last month.

I-PURE Mindanao is expected to be completed towards the end of 2022.   

SEAWEED
Meanwhile, P262 million in EU funds have been allocated for a solar and diesel hybrid power facility for four seaweed farming towns in Tawi-Tawi, the Philippines’ southernmost province.

The Renewable Energy for Tawi-Tawi Seaweeds (RETS) Project, with implementation led by the United Nations Industrial Development Organization (UNIDO), will benefit some 5,000 households.

UNIDO Regional Director Stein Hansen said the project is expected to increase value-added activities in Tawi-Tawi, one of the country’s top seaweed producers.

“This will serve as a catalyst in terms of increasing economic capacity and increase access in the availability of electricity of off grid areas like Sitangkai (town),” Mr. Hansen said.

The RETS Project is undertaken in partnership with the Mindanao Development Authority (MinDA), local governments, the Tawi-Tawi Electric Cooperative, Mindanao State University in Tawi-Tawi, Island Light and Water Energy Development Corp. (ILAW), and the Bangsamoro regional government.

“These projects concretize our efforts to help accelerate agricultural growth while promoting renewable energy deployment in Mindanao,” said MinDA Secretary Emmanuel F. Piñol. — Maya M. Padillo

CTA cancels SM Synergy’s P513-M taxes

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THE Court of Tax Appeals (CTA) has stopped the Bureau of Internal Revenue (BIR) from collecting the deficiency taxes it assessed from SM Synergy Properties Holdings Corp. for taxable year 2009 amounting to P512.76 million.

The said taxes include income, value-added, expanded withholding, and documentary stamp taxes.

In the CTA’s 29-page decision promulgated on May 28, it said the BIR “is enjoined and prohibited from collecting the said amount against [SM Synergy]” as “the tax examiners assigned to the case “were not authorized to conduct the investigation.”

As such, “all of the subject tax assessments cannot be enforced against [SM Synergy].”

Under the BIR’s Revenue Memorandum Order 29-07, “the equivalent of a Regional Director in the Large Taxpayers’ Service is the Assistant Commissioner/Head Revenue Executive Assistants, for they are the ones authorized to issue a (Letter of Authority)” or to delegate it.

However, the Memorandum of Assignment to conduct the tax audit of SM Synergy was signed only by the Officer-in-Charge-Chief LT Regular Audit Division 2 of the Large Taxpayers Service of the BIR.

The petition to declare the assessed taxes “null and void” was filed by SM Synergy on July 27, 2016.

SM Synergy is a real estate company that is a subsidiary of SM Development Corp. owned by the Sy family. — Bianca Angelica D. Añago

Driving a well-traveled subcompact crossover

PHOTO BY MANNY N. DE LOS REYES

Discovering great value (and impressive performance) in the Changan CS35 Plus

IT’S NOT EVERY DAY I get to test drive a “brand-new” car with 100,000 kilometers on the odometer. In fact, I’ve never officially tested a demo unit with that kind of mileage. However, I have owned several cars that have seen six figures on the odometer. And boy, can I tell you how old those cars felt!

But the 100,000-km-old Changan CS35 Plus was a totally different matter. Here was a subcompact crossover that looked new, smelled new, and more importantly, ran like new.

Of course, that’s mostly because all those kilometers were accumulated in just a span of two months of nonstop driving — which means that all the age-related wear and tear won’t appear at all — no wear on the steering wheel or upholstery or carpeting, no doors that won’t stay open, no windows that get misaligned when rolled down, no roughness at idle. Other than all the kilometers under its belt, the car was practically two months old.

Changan says that the only parts replaced over the course of the 100,000 kilometers were the distance-related wearables like motor oil, filters, tires, and brake pads.

And I believe them. Back in 1991, I was part of a team that drove a new Nissan Sentra 31,000 kilometers in 30 days. That’s a thousand kilometers a day, which is roughly 50 times the average distance a motorist travels every day. The car also received regular maintenance service — and nothing else — throughout the 30 days. And guess what? The rest of the car didn’t look any worse for the wear (which means that for a car, time results in more aging than distance).

But it doesn’t take anything away from the Changan CS35 Plus, which has a surprisingly low introductory price of P999,000 (SRP is P1.069 million). Driving 100,000 kilometers — whether accumulated in months or in years — is no mean feat. That it did so while leaving everything feeling nice and tight is a testament to a car’s build quality and reliability.

I like the styling of the CS35 Plus. It’s clean and minimalist with just the right amount of design details to set it apart from the many crossovers in the market. In keeping with the new generation of China-built crossovers, the overall design is very European, giving it an upmarket feel. The front end’s grille and headlights actually remind me of the visage of the newly launched Volkswagen T-Cross. The car rolls on nice, big 18-inch alloy wheels. 

I’ve also seen the black bar treatment on the D-pillar, the full-width taillights, the silver faux “skid plate” under the rear bumper, and the twin taillights (and dual tailpipes) on several new crossovers. It’s hard to say who’s copying whom, but suffice to say that we see many of these design elements on crossovers and SUVs from Japan, Korea, China, America, and Germany. So you can’t blame any brand if it offers all these positive styling touches. They actually deserve plaudits. 

The CS35’s unique styling touches are the squarish fender openings with reflectors above them. I’m not sold on the reflectors, but I like the squarish fender wells — something you’ll see in a Lamborghini Urus and the newly revealed Toyota Land Cruiser 300 (which isn’t even on the market yet).

On the road, the CS35 displays impressive quietness and responsiveness from its torquey 158hp/235Nm 1.4-liter gasoline direct-injection (GDI) turbo engine. The generous torque is available from as low as 1,500rpm all the way to 4,000rpm, endowing the CS35 Plus with diesel-like oomph from down low.

I’m not a big fan of dual-clutch transmissions, but the seven-speed wet-type DCT of the CS35 works very smoothly and responsively — with none of the jerkiness or hesitation of the earlier generations of DCTs that almost threatened to ruin their reputations.

The MacPherson strut/torsion beam suspension of the CS35 is clearly biased for comfort. There is some bounce when you go over humps and potholes, but nowhere near enough to make it feel floaty or wallowy. This suspension damping will make for a very comfortable long-distance cruise. The good news is that the car will still confidently track through a corner taken at a higher-than-average speed in the hands of a skilled and spirited driver.

Inside the spacious cabin, the CS35 is very refined, with very little noise and vibration filtering inside. There’s excellent legroom and headroom, thanks to the high roofline and long-for-a-subcompact 2,600-mm wheelbase. The dashboard and console are superbly executed in terms of aesthetics and ergonomics. It’s got push-button start and a nice and big 10-inch touchscreen six-speaker Bluetooth/USB infotainment system. The driver’s seat is six-way adjustable, but power-adjustable only in two ways (manual adjustment in four ways, like the passenger seat).

Nature-friendly faux leather covers the seats, steering wheel, and shift knob. There are A/C vents for the rear, remote engine start, blind-spot view camera, a touch-panel-activated automatic climate control system (with N95 cabin filter), electric parking brake, speed-sensing door locks, and a panoramic sunroof — all welcome upscale touches, especially for a car in the CS35’s price range. Safety features include six air bags (front, side and curtain) plus a full alphabet soup of ABS, ESP, EBD, etc.

There are many crossovers on the market today, but for its eminently reasonable price, the Changan CS35 packs a lot of compelling value, space, features, and surprisingly impressive performance in a very good-looking package.

Harden Vol. 5 ‘Manila Heritage’ made for the world

THE Harden Vol. 5 ‘Manila Heritage’ shoe is born out of the partnership between adidas and renowned Filipino toy designer and visual artist Quiccs.

“MADE in Manila, made for the world.” This is how adidas describes the latest colorway of the fifth iteration of its popular James Harden basketball shoe line, done in collaboration with renowned Filipino toy designer and visual artist Juanito “Quiccs” Maiquez.

It is part of the continued partnership between the global sportswear brand and Quiccs which started last year.

“This is big for local independent artists like me for a brand like adidas to reach out and give us an opportunity to show what we can do,” said Mr. Quiccs during the media launch of the Manila Heritage shoe on Thursday.

“I like the Harden Vol. 5 shoe, and I like James Harden, so I really put in the time and work to bring justice to the design of the Manila Heritage colorway,” he said.

The Harden Vol. 5 Manila Heritage boasts of a color palette inspired by the Philippine flag —  yellow, which symbolizes hope for a brighter tomorrow; red, for blood and valor; and blue, for freedom and imagination.

The flag’s Three Stars — representing the three island groups Luzon, Visayas, and Mindanao — also make an appearance in the design as three yellow dots on the shoe’s heel tab.

The Philippine country code “+63” can also be found on the shoe’s upper.

Brooklyn Nets superstar Harden also gets a shoutout in the shoe, with the date “06.26.19,” marking the player’s last Manila visit, seen on the shoe’s collar.

Mr. Quiccs is also well represented with the “QUICCS” and crossbones logo on the shoe’s heel counter and his signature character TEQ63 and Quiccs-ified Harden character on the sole.

As a nod to the world-class quality of the Manila Heritage shoe, Mr. Harden wore the shoe in Game Three of his team’s first-round National Basketball Association playoff game against the Boston Celtics.

“‘Proud’ is an understatement for how we at adidas Philippines feel about this launch. Basketball is such a big part of our culture and identity, so we’re beyond thrilled to get this opportunity to work with Quiccs in creating for and sharing with our kababayans (countrymen) something that’s uniquely Filipino,” said adidas Philippines Brand Activation Manager Jen Dacasin.

The Harden Vol. 5 Manila Heritage was officially released on June 12, Philippine Independence Day. It is available in adidas stores, adidas.com.ph, and through the adidas app for P7,000. — Michael Angelo S. Murillo

Water conservation advisory issued to rice farmers

RICE FARMERS have been advised to avoid excessive water use to prepare them for an expected water shortage, an expert from the Philippine Rice Research Institute (PhilRice) said.  

Kristine S. Pascual, PhilRice senior science research specialist, said studies indicate that 15 to 20 million hectares of irrigated rice land across the world will experience water shortages by 2025.  

She said improvements to water management hold the potential to save 1,400 liters of water per kilogram of rice.

“We need 4,000 liters… of water to produce 1 kilogram of rice. With proper water use, only 2,600 liters… will be needed to produce the same amount of rice,” Ms. Pascual said in a statement.  

“Farmers are encouraged to use controlled irrigation. During crop growth, farmers should practice alternate wetting and drying aided by (an) observation well (to determine) if water is insufficient,” she added.

According to Ms. Pascual, rice fields lack water if deep cracks appear in the soil for more than three days. Fields are considered to hold excess water if they are submerged in five centimeters of water for seven days or more.

She said the lack of water during vegetative stage causes leaf-rolling, leaf tip-drying, and stunted growth in rice, adding that too much water produces small leaves, lower tillering, and dark-colored roots. — Revin Mikhael D. Ochave

AbaCore turns profitable in Q1 after last year’s loss

ABACORE Capital Holdings, Inc. posted P74.8 million in first-quarter (Q1) net income attributable to parent firm equity holders, soaring from the P2.52-million profit logged in the same period last year.

The profit surge came despite an 89% decline in revenues to P112,819 from P1.04 million previously.

“For 2021, the company will be pursuing the implementation of its project involving its coal mining properties,” AbaCore Capital said.

Abacus Coal Exploration and Development Corp. is said to still be in its pre-operating stage completing post-approval requirements such as securing environmental compliance certificate for some projects and clearance from the National Commission on Indigenous Peoples for others.

“For its real estate portfolio, the company will be pursuing the completion of its project in Matuco and Pagkilatan, Batangas City,” AbaCore Capital said, adding that it will look into developing other properties.

In 2020, the company incurred P89.14-million net loss attributable to parent firm equity holders after revenues declined, reversing its previous year’s P618.41-million net income.

The company’s topline last year plunged to P824,048 from P414.34 million in 2019.

Shares of AbaCore Capital at the stock exchange went up by 1.89% or two centavos on Friday, closing at P1.08 each. — Keren Concepcion G. Valmonte

Shell Marilao is brand’s first ‘mobility station’ in North Luzon

Pilipinas Shell VP and General Manager for Mobility Randy del Valle (second from right) poses with Department of Trade and Industry (DTI) Bulacan representative Cristy Valenzuela (left) inside the Shell Select store of Shell Marilao. — PHOTO FROM PILIPINAS SHELL

It’s more than a place where you gas up

FOR SOME time now, Pilipinas Shell Petroleum Corp. has publicly shrugged off the moniker “gas company” or “energy firm” in its communications, preferring to call itself a “mobility company.” This is far from a semantic prerogative; this catch-all term more accurately reflects the breadth of the company’s activities — including, one may add, its corporate social responsibility (CSR) projects.

You could say that Shell rightfully takes terms and labels very seriously because some have, through the years, become downright dated, and even onerous. So, it was important for the company to drive home the point that its new Marilao, Bulacan facility was not “just” a gas station.

Rather, this “mobility station,” boasts “improved features for mobility, sustainable innovations, local enterprises, and customer-centricity at the core of its agenda.” Said Pilipinas Shell President and Chief Executive Officer Cesar Romero, “The pandemic demonstrated just how important mobility is in our daily lives. It kept some jobs and businesses afloat during a volatile period by expanding in new and innovative ways.”

He added during the station’s inauguration, which was streamed online, “Gone are the days of dirty and dingy gas stations. Instead of getting out of there as quickly as you can, you can stay as long as you want because the experience is good.”

In a real way, Shell Marilao encapsulates the company’s avowed emphasis on environmental sustainability, and Pilipinas Shell said it is taking on the fundamental role in shaping the mobility future of the country through the recalibration of its stations and evolution of its retail business model. The new model delivers “improved features for mobility, sustainable innovations, local enterprises, and customer-centricity at the core of its agenda.”

Joined Pilipinas Shell Vice-President and General Manager for Mobility Randy del Valle, “We’re evolving to serve not only those who drive vehicles but even those who walk or ride a bike. We are here for you.” Shell can even deliver products from its Select stores via Grab or Food Panda.

An important component of Shell Marilao is livelihood. Every time the company builds a station, it adds more or less 20 jobs, but because of the retail component, that number can be doubled — good news that gets more amplified during the time of the pandemic.

Shell Marilao is a veritable one-stop destination where “customers can get fuel-based products as well as vehicle maintenance checks through the Shell Helix Oil Change+ and car wash facilities. To address the growing community of motorcyclists, the Shell Marilao mobility station also offers motorcycle care and free helmet and motorcycle seat cleaning through the Shell Advance Moto Care Express. Customers can also get essential items like food supplies through Shell Select and deli2Go, as well as from local locators like Chatime and Fariñas that offer various food choices.”

The change is stark, as mobility stations are not just the place to go when the gas tank needle approaches “E.” Shell is systematically changing the formula by rolling out “leisure and lifestyle destinations catering not only to motorists, but also tapping larger market segments with varying interests and needs like tourists and business travelers.”

Shell Marilao reflects this kind of paradigm where local flavors (sometimes quite literally) are adopted. People who drop by the Shell Select Station “will find that, aside from the aforementioned food and beverage brands, they can also buy some of the best products and goods that Bulacan can offer including turmeric tea, chicharon, mushroom chips, condiments, and processed meat.”

Pilipinas Shell Non-Fuel Retail Manager Rolyn Tomarong affirmed the role that the Shell Marilao Mobility Station plays in the larger entrepreneurial ecosystem, saying, “We do not exist within the confines of this site alone, but exist as part of a wider community. This is an exciting opportunity to use the Shell Select platform to serve more people and provide livelihood to the community. Some of the non-food products from Bulacan that we promote are native fans and bags, home furnishings, handicrafts and jewelry.”

Select today is a refined product of a hit-and-miss process. “(It) was a complete failure before because Shell wanted 80% to 90% of the products as standard. We ended up moving products and selections irrelevant to the community. It was 85% uniform and 15% discretion,” shared Mr. Romero. That formula has been turned on its head: 15% uniform and 85% discretion. This affords not just variety but the flexibility to accommodate local content.

He added, “We’re able to work with small and medium enterprises — and feature specialties of the region.” As for Shell Marilao, he explained that it makes sense for the company to strengthen its position there.

For his part, Mr. Del Valle said that people can expect more mobility stations to appear in North Luzon — specifically in Mexico, Pampanga and Pangasinan. The network of more than 1,000 Shell stations around the country are continuously evolving along with some 400 Select stores.

Again, Pilipinas Shell remains committed to support local micro, small, and medium enterprises (MSMEs) all over the country by providing entrepreneurs a venue to sell and promote their products through the network — aligned with the efforts of the Department of Trade and Industry (DTI) to “elevate locally made products from across the Philippine islands by showcasing the creativity, capability, and ingenuity of the Filipinos through the One Town One Product (OTOP) initiative.” The Shell Marilao Mobility Station currently has 100 partner suppliers that are OTOP-accredited.

DTI Secretary Ramon M. Lopez described the national relevance of the Shell Marilao Mobility Station: “We are excited with this program. This is a meaningful project that supports MSMEs and OTOP-reneurs. This partnership shows the spirit of bayanihan in times of crisis. It’s one way to build back better for a post-pandemic future.”

Shell also proudly shares that it is the first to offer carbon offset products to the market — in keeping with its vision to achieve low carbon operations through sustainable solutions. The station was built using Shell Bitumen FreshAir, which reduces emissions associated with the laying down of asphalt — equivalent to reducing 40 cars’ worth of NO2 per kilometer of asphalt laid per year. The perimeter wall, on the other hand, is made of eco bricks or reusable building materials made out of plastic bottles filled with solid plastic to make them denser. “This allows for greater insulation, which drastically reduces energy consumption in the long run, resulting in lower financial costs and environmental impact,” said Shell.

The future is digital

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Dentsu study looks into consumer marketing

IN THE next 10 years, it is projected that consumers will prioritize technology dependence, hold new concepts of identity, and demand real experiences.

A study conducted by global marketing services group Dentsu International titled the Dentsu Consumer Vision 2030: The Age of Inclusive Intelligence, included inputs from academics, authors, and experts, and multiple proprietary consumer surveys from more than 20 countries. The study focuses on how consumer behavior evolved during the pandemic and its outlook in the next decade.

“Dentsu’s study gives us a glimpse into how the consumer landscape will evolve and, in turn, how brands can seamlessly build loyalty. These trends are not just focused on brand survival but equip brands with long-term vision as they navigate the next 10 years,” Dentsu Philippines CEO JC Catibog said in a statement.

Mr. Catibog hopes that the study will help guide brands to incorporate new views, values, and behaviors in building lasting relationships with Filipino consumers.

Out of the 12 global trends in the study, Dentsu highlighted eight key trends that are most relevant to the Philippines. These are: Acclimatise Now; Kaleido-dentity; Virtual Sets the Standard; Tech Togetherness; Rise of the Titan Brands; Every Brand is a Health Brand; 5-Star Citizens; and Human Dividend.

At a presentation of Dentsu’s Consumer Vision 2030 held via Zoom on June 3, professionals from various fields were invited to share third-party insights on how brands can respond to these trends in the future.

One of them was Bea Evardone, the Chief Operating Officer of the Republiq Group of Companies, who works on marketing for consumers in Visayas and Mindanao.

She was reacting to the “Tech Togetherness” trend, in which people are expected to continue to immerse themselves in virtual technology for interaction, purchasing, learning, and events despite the distance.

She said that whether consumers follow the trends is dependent on the habits they created during the pandemic. She also said that the future is to go digital.

“We’ve been advocating for [digital] but there [had been] a bit of resistance for a while in the Philippines and in some parts of the world. The pandemic somehow catapulted us to that reality,” Ms. Everdone said.

She also said that all demographics are dependent on technology now in purchasing, learning, and consuming content.

“We get to connect with people from all over the world, and we feel included in the conversation. So, brands have to be on the lookout for making sure that our messaging is not just for the sake of looking like we care, but we really need to do something about it,” she added.

The study also found that the increase in e-commerce paved the way for the “Rise of the Titan Brands” trend, where online retailers will increase in size and scope.

Based on the study, Dentsu Philippines Connections Planning Head Roki Ferrer said that device user experience will meet customer experience in the retail sector. Mr. Ferrer noted retail space transforming with the integration of technologies such as augmented reality, and artificial intelligence. In addition, as more businesses move to contactless and cashless transactions, brick and mortar stores will need an e-commerce counterpart, and that shop streaming or live shopping on social media will increase.

Similarly, the “Virtual Sets the Standard” trend showed that the community quarantine increased interest for eSports and virtual gaming.

The study showed that under “Every Brand is a Health Brand” trend, consumers’ top priority is securing long-term health in the next decade. The “Acclimatise Now” trend focuses on the growing concern on businesses’ environmental impact and their response to climate change.

The “Kaleido-dentity” trend focuses on consumer confidence in realistic advertisements and media representation on diversity and identity.

“As an MSME, you can really find a viable market if you know your niche and if you go beyond how you segment your consumers today. It’s actually an exciting time, you can find your specialized area in the marketplace,” Dentsu One Manila’s Executive Planning Director Melissa Torre said.

For Dentsu Jayme Syfu’s Chief Strategic Planner Diday Alcudia, brands will focus on adapting to trends and understanding the consumer and their needs

“If you really want to take that leap, then you have to think of ideas, and ideas are not exclusive to big companies. You can think of ideas that are relevant to the times, consumers, and their needs. Human desires do not change — it’s the way we fulfill these desires that change,” Ms. Alcudia said.

The “Human Dividend” trend emphasizes putting a premium on human interaction where real experiences will translate to more active breaks from technology.

Lastly, the “5-Star Citizens” trend indicates that brands and governments will have a standard practice on rating their consumers and citizens. In a press release, this trend was explained thus: “Companies will increasingly use a reward and punishment system, based on their consumers’ behavior, to determine access to transportation, accommodation, and the quality of goods they can buy. At the same time, these ratings may determine how citizens can access exclusive and public services.”

Dentsu’s report is available to download at: https://consumervision.dentsu.com/consumer-vision-2030 Michelle Anne P. Soliman

Gov’t debt yields decline

YIELDS ON government securities (GS) at the secondary market went down last week following the release of several key economic reports and the results of the Bureau of the Treasury’s auction of bonds.

GS yields fell by an average of 7.91 basis points (bps) week on week, based on the BVAL Reference Rates published on the Philippine Dealing System’s website as of June 11.

The short end of the curve saw rates on the 91-, 182-, and 364-day Treasury bills (T-bills) fall by 4.83 bps, 4.03 bps, and 8.34 bps, respectively, to 1.2543%, 1.4335%, and 1.6714%.

Tenors at the belly also rallied, with yields on the seven-year Treasury bonds (T-bonds) falling by 16.83 bps to 3.5092%. This was followed by the five-, two-, three-, and four-year papers whose yields went down by 11.69 bps (to 3.0547%), 10.99 bps (to 2.0308%), 9.29 bps (2.4055%), and 9.25 bps (2.7510%), respectively.   

At the long end, yields on the 10-year T-bonds dropped by 15.71 bps to 3.8515%. On the other hand, the rates of the 20- and 25-year bonds rose by 1.67 bps and 2.27 bps to 4.9927% and 4.9936%, respectively.

“Local yields declined…on the average as Philippine inflation remained manageable at 4.5% in the past three months which was within market expectations,” a bond trader said in an e-mail.   

“Yields likewise declined amid the uptick in Philippine unemployment rate at 8.7%, and due to some market caution ahead of the release of US consumer inflation report for May 2021,” the bond trader added.

Headline inflation was at 4.5% in May, unchanged for the third straight month, the Philippine Statistics Authority (PSA) reported. The figure matched the median estimate in a BusinessWorld poll and likewise fell within the 4%-4.8% estimate given by the Bangko Sentral ng Pilipinas (BSP) for the month.

The year-to-date average of 4.4% settled slightly above the BSP’s 2-4% target, as well as its revised inflation forecast of 3.9% for the year.

Meanwhile, the country’s unemployment rate stood at 8.7% for the month of April, inching up from the 7.1% reported in March, the PSA reported last week.

Economic managers and private sector analysts attributed this uptick to the reimposition of stricter lockdowns in Metro Manila and nearby provinces due to a surge in coronavirus cases.

On the other hand, US consumer prices rose solidly in May, leading to the biggest annual increase in nearly 13 years as a reopening economy boosted demand for travel-related services, while a global semiconductor shortage drove up prices for used motor vehicles, Reuters reported.

The consumer price index (CPI) increased 0.6% last month after surging 0.8% in April, which was the largest gain since June 2009. Food prices rose 0.4%, but gasoline declined for a second straight month. In the 12 months through May, the CPI accelerated 5%. That was the biggest year-on-year increase since August 2008 and followed a 4.2% rise in April.

For his part, Philippine Bank of Communications (PBCom) Senior Trader Justin Robert G. Ladaban attributed last week’s yield movement to strong demand for the Treasury’s offer of reissued seven-year debt, which added to the momentum from the week prior.

“We saw strong interest in the secondary market from market players as the yield curve flattened,” Mr. Ladaban said in a Viber message.

The Treasury raised P35 billion as planned on Tuesday via the reissued seven-year T-bonds, which have a remaining life of six years and 10 months. Tenders reached P83.684 billion or more than twice as much as the initial offer, albeit lower compared with the P90.386 billion in bids recorded when papers were first offered on April 21.

The seven-year bonds fetched an average rate of 3.685%, up by 0.7 bp from 3.678% previously and by 6 bps from the 3.625% coupon fetched for the series.

For this week, analysts said the market will watch out for US data for leads, as well as policy meetings of major central banks.

“Domestic bond yields might rise amid likely strong US producer inflation and retail sales reports might fuel hawkish policy views. However, this upward bias might be capped as the US Federal Reserve and Bank of Japan are still expected to keep their monetary policy settings unchanged, while possibly hinting at some tapering of asset purchases,” the bond trader said.

“[W]e’ll see if the momentum continues heading into the 10-year auction… Market players will likely take its cue from there, although we could see some demand still as portfolios look to lengthen their duration,” PBCom’s Mr. Ladaban said.

The Treasury wants to raise P215 billion from the local debt market this month: P75 billion via weekly offers of T-bills and P140 billion from weekly auctions of T-bonds.

It will auction off P15 billion in T-bills on Monday and P35 billion in reissued 10-year bonds on Tuesday. — AMPY with Reuters

DHSUD partners with DAR, LGUs for farmer housing 

BLOOMBERG

THE Department of Human Settlements and Urban Development (DHSUD) said it entered into agreements with the Department of Agrarian Reform (DAR) and 19 local government units (LGUs) to develop housing for farmers. 

The DHSUD said in a statement Sunday that the program aims to establish decent and affordable housing communities for farmers.  

Housing Secretary Eduardo D. del Rosario signed memoranda of understanding with the DAR and LGUs for the housing project.

“It is part of our responsibility to help informal settler families, especially the poorest of the poor, and capacitate them together with our key shelter agencies for them to be able to have a house of their own,” Mr. Del Rosario said.

“It also aims to uplift farmers’ morale and strengthen their emotional attachment to their farms; this in turn will help empower the agricultural industry,” he added.

LGUs are responsible for securing property for the housing scheme, while DHSUD will be in charge of land development.

Construction funding will be the responsibility of the Pag-IBIG Fund, the Social Housing Finance Corp., and the National Home Mortgage Finance Corp.

“This is a milestone. I hope we can sustain this,” Agrarian Reform Secretary John R. Castriciones said.

“This is a convergent effort. We need the cooperation of LGUs and other government agencies,” he added.  

The DHSUD said farmers and fisherfolk were identified as the poorest members of society with a 34% poverty rate between 2006 to 2015, citing Philippine Statistics Authority data.  

Other participants in the project are the Department of Trade and Industry and the Department of Social Welfare and Development, which will provide additional livelihood options for farmers and their families. — Revin Mikhael D. Ochave

ICTSI expansion spree attracts investors

By Lourdes O. Pilar, Researcher

INVESTORS loaded up on International Container Terminal Services, Inc. (ICTSI) last week as it continues to expand its operations locally and abroad.

Data from the Philippine Stock Exchange (PSE) showed a total of 8.57 million shares worth P1.28 billion exchanged hands from June 7 to 11, making it the third most actively traded stock last week.

The share price of the Enrique K. Razon, Jr.-led port operator finished at P151.00 apiece on Friday, up by 2% from a week ago. The stock has increased by nearly a fifth since the start of the year.

Philippine National Bank Senior Equity Research Analyst Jonathan J. Latuja noted news on Brazilian subsidiary ICTSI Rio Brasil adding rail logistics to its operations helped the port operator became one of the most active stocks last week.

“We believe the new service to be introduced in the port subsidiary can further improve volumes and yield,” Mr. Latuja said.

The Brazilian unit’s newly formed company, IRB Logistica, will take over the operations of the terminal from Multitex Logistica starting July 1, ICTSI said last week.

It will offer cargo handling, transport, and storage services to the growth centers in Rio de Janeiro, Minas Gerais, and São Paulo.

“Despite the pandemic, the company continues to expand its operation as it bought additional stake in Africa under their subsidiary ICTSI Africa and bought 100% of Manila Harbour Center Port Services, Inc.,” Mercantile Securities Corp. Analyst Jeff Radley C. See said in a Viber message.

Earlier this month, ICTSI entered into a P2.45-billion share purchase agreement with its related party, Prime Strategic Holdings, Inc., to buy 100% of the shares of Manila Harbour Center Port Services, Inc. (MHCPSI).

MHCPSI is a 10-hectare international breakbulk and bulkport facility at the Port of Manila.

Transfer of the facilities to ICTSI will take place by mid-2021, once all conditions precedent and all required regulatory approvals have been secured.

The transaction is seen to generate synergies and value-accretive returns for ICTSI’s shareholders.

Meanwhile, ICTSI announced last May that its unit, ICTSI Africa B.V., had concluded the acquisition of an additional 10% stake in International Container Terminal Services, Inc.–DR Congo (IDRC).

This increased ICTSI Africa’s ownership of IDRC to 62% from 52%.

Mr. Latuja expects a 12% year-on-year growth in ICTSI’s revenue this year.

ICTSI’s gross revenues from port operations went up by 15.9% to $435.59 million in the first three months of the year.

Its attributable net income in the same period likewise jumped by 51.1% to $90.07 million from $59.60 million last year.

It handled 2.71 million twenty-foot equivalent units (TEUs) in the first quarter, 8% higher than the 2.51 million TEUs handled in the same period a year earlier.

For this week, Mr. Latuja expects near-term selling pressure to limit potential upside of the stock.

“ICTSI went beyond its all-time high at P148.90 last week,” Mr. See said.

“Resistance levels that stock might hit next will be P172.60, P185.00 and P202.70 but be cautious as the stock is trading at overbought levels,” he added.

He pegged the stock support levels at P145.00 to P147.00.