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By Luz Wendy T. Noble, Reporter
HEADLINE INFLATION likely accelerated in March as the spike in global crude oil prices probably caused a faster increase in food and transport costs, according to analysts.
A BusinessWorld poll of 18 analysts yielded a median estimate of 4% for last month’s inflation, nearer the upper end of the Philippine central bank’s 3.3% to 4.1% projection.
If realized, this would be much quicker than the 3% in February and matches the high end of the 2-4% target range by the Bangko Sentral ng Pilipinas (BSP). However, it will still be slower than the 4.5% seen a year earlier.
The Philippine Statistics Authority will release the March inflation data on April 5.
Analysts said the surge in pump prices was a major inflation driver in March.
Crude oil prices have become more volatile since Russia’s invasion of Ukraine in late February. There were fears over disruption in oil supply as Russia is a major oil exporter.
Since the start of 2022, prices of gasoline, diesel, and kerosene increased by P18.30, P27.85, and P25.75 per liter, respectively.
“As a net oil importer, Philippines is highly exposed to the surge in commodity prices directly through higher fuel prices and subsequently higher electricity prices,” said Makoto Tsuchiya, an economist at Oxford Economics.
Concerns over global supply of grains and wheat also drove their prices higher as Ukraine and Russia are major exporters.
“Upward pressure will likely emanate from private vehicle transport costs (pump prices) on top of utilities,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said.
Mr. Tsuchiya also pointed out there are several petitions to raise minimum daily wages and transport fares, which are being reviewed by the government.
“Second-round effects [are] likely amid growing calls for transport fare hikes and an increase in the minimum wage which has been unchanged for three years,” he added.
China Banking Corp. Chief Economist Domini S. Velasquez said inflation could already surpass the BSP’s target from April to June due to the continued rise in commodity prices.
As mobility curbs have been further relaxed, ING’s Mr. Mapa said higher demand may have contributed to quicker inflation in March. Metro Manila has been under the most lenient Alert Level 1 since March.
“We cannot rule out the emergence of demand-side pressures as the economy, as described by the BSP, has turned the corner and is on the mend. This suggests that demand has returned, albeit not quite at pre-pandemic levels just yet,” Mr. Mapa said.
At its policy review on March 24, the Monetary Board acknowledged that economic activity has already gained traction as mobility restrictions were relaxed but the outlook remains clouded due to the Russia-Ukraine war and the pandemic.
At the same meeting, the central bank raised its inflation forecast for 2022 to 4.3% from 3.7% previously, citing the impact of higher oil and commodity prices.
While the BSP kept rates at record lows, it vowed that it will be ready to respond when needed to tame inflation and to keep its price and financial stability objectives.
The central bank will likely remain patient in keeping rates low to support recovery, said Sonia Zhu, an analyst at Moody’s Analytics.
“We maintain our expectation that monetary policy will begin normalizing in the September quarter as BSP looks past inflation risks arising from the Russian-Ukraine military conflict to focus on domestic economic growth,” she said.
BSP Governor Benjamin E. Diokno has earlier said they would remain patient and would only assess the possible rate hike in the second half of the year to ensure a more sustainable recovery. He told Bloomberg last month that a 2.75% key rate “might be reached by next year.”
The BSP chief also said they would not need to move in lockstep with the US Federal Reserve, which started to increase interest rates in March. He noted the BSP only takes into account external developments to the extent it affects growth and inflation outlook.
However, analysts have warned that BSP’s space to remain accommodative is narrowing if inflation remains elevated.
“The possibility of raising rates earlier than planned is increasing and a rate hike in the second quarter is now in the horizon,” China Bank’s Ms. Velasquez said.
“Paramount to the BSP’s decision is the effectiveness of the government’s non-monetary measures in preventing inflation from becoming more broad-based and preventing a de-anchoring of inflationary expectations,” she added.
For Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr., a continued accommodative policy could result to unintended effects like mispricing of risk and de-anchoring of inflation expectations that may be difficult to reverse.
“These side effects may already be slowing the pace of our much-needed recovery as allocation of the financial system resources have likely favored less productive sectors instead of the more productive ones like startups and future-proofed businesses,” Mr. Neri said.
The Monetary Board will have its next policy review on May 19.
By Revin Mikhael D. Ochave, Reporter
MORE INVESTMENTS are expected to enter the country after the May election as investors await the new administration, according to the top Philippine Economic Zone Authority (PEZA) official.
“We’re not yet off from the coronavirus disease 2019 (COVID-19) pandemic, plus the Ukraine war… then we are now in the election period. Investors have that wait-and-see attitude on the result of the election. Investors’ enthusiasm and heightened hopes come after election,” PEZA Director-General Charito B. Plaza told BusinessWorld via mobile phone message.
The Philippines is holding its national elections on May 9. Investors typically seek more clarity on the possible policies by the incoming President before making any investment decisions.
“Investors are watching the change of policies by the new administration affecting investments,” Ms. Plaza said.
Last month, a Bloomberg survey of 28 investors and analysts showed Vice-President Maria Leonor G. Robredo was their top pick, while frontrunner Ferdinand R. Marcos, Jr. was second to the last.
However, recent data from the Trade department showed combined investment pledges approved by the PEZA and the Board of Investments (BoI) plunged by 90% to P12.82 billion in the first two months of 2022, from the P133.24 billion recorded in the same period last year.
Broken down, PEZA investment pledges dropped by 53% to P5.27 billion in the January to February period, while BoI investment pledges fell by 94% year on year to P7.55 billion.
Despite the lackluster start to 2022, PEZA is now targeting a 7-8% growth in investment approvals for 2022. This is higher than the agency’s previous target of 6% growth.
Ms. Plaza said the PEZA revised its investment target after the passage of the three economic liberalization measures that are aimed at boosting foreign investments.
“With the three landmark laws (amendments to the Public Service Act, Retail Trade Liberalization Act, and Foreign Investments Act), we’re seeing high investments after (the) election,” Ms. Plaza said. “When we target, we also have to double our marketing efforts to reach the goal.”
The government has said these three measures will help the economy recover faster from the coronavirus pandemic. Economic managers are targeting a 7-9% gross domestic product (GDP) growth this year, faster than the 5.6% GDP expansion in 2021.
Under the amended Public Service Act, foreigners can now fully own public services such as telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports after being excluded from the definition of a public utility.
Before the amendment, these services were previously categorized under public utilities and were covered by the 40% foreign ownership cap provided for under the 1987 Constitution.
The amended Foreign Investments Act lets foreign investors invest in a domestic enterprise up to 100% of its capital, and allows foreigners to set up 100%.
The amended Retail Trade Liberalization Act lowered the minimum paid-up capital of foreign retailers to P25 million from $2.5 million.
In 2021, PEZA approved a total of P69.30 billion worth of investments. Some of the investments came from the manufacturing industry, which generated P25.51 billion worth of investments and the information technology (IT) industry at P7.322 billion worth of investments.
Further, the agency reported that its export income for 2021 rose by 14% to $63.061 billion from $55.309 billion in 2020.
THE RECOVERY in smartphone sales in the Philippines may be affected as consumers become increasingly price sensitive amid the spike in prices of basic commodities, analysts said.
“Higher prices among commodities will cause spending to fall especially in a price sensitive market such as the Philippines,” Angela Jenny V. Medez, client devices market analyst at International Data Corp. (IDC) Philippines, told BusinessWorld in a recent e-mail interview.
Ms. Medez said smartphone vendors and retailers have been anticipating a rebound in sales this year as consumers spend more amid the looser mobility curbs. The National Capital Region and 48 other areas will remain under the most relaxed Alert Level 1 until April 15, as the number of coronavirus disease 2019 (COVID-19) cases continues to drop.
However, she said smartphone retailers will “remain cautious for any price increase especially since everyone is still recovering from the pandemic.”
The Philippine smartphone market contracted by 5.6% to 17.8 million units in 2021, as lockdowns dampened buying activity and global supply bottlenecks restricted supply, according to the IDC.
The market research company said sales in the fourth quarter of 2021 declined by 23.3% year on year even as shipments increased by 18.4% quarter on quarter.
IDC initially expected “double-digit growth” in the smartphone market this year as global supply constraints ease.
Will Wong, client devices research manager at IDC Asia/Pacific, said the recent spike in fuel prices will have a direct impact on smartphone firms’ business operations, particularly on logistics and power consumption.
“Nevertheless, Chinese OEMs (original equipment manufacturers) have been more resilient after experiencing the COVID-19 disruptions and component shortages,” he said, adding that Chinese OEMs will be prepared to tackle any uncertainties.
Mr. Wong said it will be a reasonable move by the Chinese smartphone makers to shift some of their focus away from Russia due to uncertainty arising from the war with Ukraine.
“Nevertheless, one thing to note is that Russia’s smartphone market size is 1.7 times larger than that of the Philippines. Thus, instead of only one single market, it will be more favorable to shift the focus to the overall Asian market where the Chinese OEMs have a relatively stronger market position,” he added.
The top five smartphone brands in terms shipments to the Philippines last year were realme (3.96 million), OPPO (2.62 million), Transsion (2.47 million), Samsung (2.40 million), and vivo (2.39 million). — Arjay L. Balinbin
WHEN we think of Philippine textiles, we usually think of them as seen on the indigenous people who make them, in museums, or worn at absolutely formal occasions. But Studio Süg founder Bea Constantino has proven time and time again that Philippine textiles can be integrated into daily life, as seen in her own outfits.
During an eight-day interisland media familiarization tour organized by Philippine Airlines (PAL) and the Tourism Promotions Board (TPB) around Boracay, Cebu, and Coron, Ms. Constantino wore her creations during activities as mundane as lunches and dinners, and even slightly more taxing activities like boat rides and hikes. BusinessWorld observed how easy and functional these outfits were even in high humidity and water exposure, with minimal, and sometimes utilitarian, styling.
One of our particular favorites was her own Datu Boxy Set, shirt and shorts coordinates trimmed with Yakan weaves in the pockets and sleeves. Ms. Constantino, in an interview while waiting for our flight back to Manila, describes Yakan as feeling like tweed and having minimal stretch. “How do you produce and integrate that and still be able to produce easy wear that’s comfortable — especially in our climate, right? It’s tropical. That’s why I always mix it with really presko (cool) fabrics,” she said.
Ms. Constantino has been a stylist in the Philippine fashion industry for almost 20 years. She has parlayed that into a former career in publishing, as well as doing consultations with brands (we had first met her online, styling a summer collection for a Japanese brand earlier this year).
“In 2016, I had experienced a really terrible burnout,” she told us — she had about 13 years of experience in the field at that point. “I felt that I wasn’t really contributing anymore to the industry, or society.” She took a three-month break, emerging with a new idea influenced by her heritage.
“I grew up with stories from my aunts and parents about back in Mindanao, we have such a colorful heritage,” she said, noting that her family came from Zamboanga City and Sulu.
She means “colorful” quite literally: she was confronted with Tausug fabrics, particularly Pis Siyabit from Sulu, made with “bold geometric patterns” and “clashing colors,” seeing the colors fuchsia, orange, yellow, and teal. “I have this colorful heritage, and then I have this know-how in the fashion industry.
“I grew up in Manila, but I call that home as well. I just felt so attracted by the bold and bright patterns of the textiles in Mindanao. That’s what my eyes have always been opened to,” she said.
In 2016 she started the brand — then known as Herman & Co., named after a German ancestor who had settled in Sulu. And it was under this brand that she appeared in the 2019 edition of lifestyle fair ArteFino. She has since rebranded to Studio Süg.
A huge part of the beauty of these textiles are the stories behind them. However, devoid of context, can indigenous fabrics still be beautiful, displayed perhaps in a store window? “I think they’re very attractive, because of the bold and bright patterns,” she said. “As a brand, it’s important for us to communicate the history behind it,” she was quick to remind us.
“The patterns are attractive on their own, but knowing the story: that the weaver, she was doing it from memory, no set pattern or template; in all the millions of meters they’ve produced, no two weaves are the same,” she said. “The history behind it always goes hand-in-hand. I feel like the brand’s responsibility is to be able to communicate that alongside the actual fabric.”
Ms. Constantino, while helping indigenous communities with her products, does not describe her work as a social enterprise. “It’s really on a transactional basis,” she says, though she professes to buy their products with fair trade prices, practices, and transparency. Ms. Constantino, through a friend, had solidified the brand’s identity as a “cultural enterprise.” Explaining the difference, she said, “Much as I want to help the communities — and I see that they need a lot of help — I can’t afford, on my own, to nurture a community… I’m not sustaining a community. I don’t tie up with any LGUs or NGOs.
“I may not be able to sustain a community in the way of giving them resources, or to be able to grow and expand their artisanal crafts. The aim of the brand is really to keep continuing telling the story of culture and heritage.”
CULTURAL APPROPRIATION
She discussed the gaps that make for a minefield of cultural appropriation, such as using sacred fabrics for inappropriate uses. “How do you even know what lines you’re crossing? Who’s to say?”
She cites that there are efforts by the National Commission for Culture and the Arts (NCCA) as well as indigenous peoples’ councils, but, “There’s no specific handbook [that says], ‘don’t do this; you can do that.’ We don’t have that yet.
“The brands are in an on-your-own journey. Bahala ka na to research,” she said. “There’s no one to police it.
“I feel like education is key. But we don’t really have a reference book.”
Ms. Constantino rides on a wave of an awareness of indigenous textiles in the mainstream, rising in height since the mid-2010s. “I feel like it was the advent of people realizing how detrimental fast fashion was,” she said.
At the same time, while stakeholders in the Philippine fashion industry started to want to slow down, there was a rise in local platforms, such as fairs, that wanted to promote local industry. “Then you have all these platforms. There are so many products that are well-made. People started realizing that just because it’s made in the Philippines, it doesn’t mean that it’s cheap or poorly made. You can actually have world-class quality products that are made by artisans in the Philippines.”
It took a long time for indigenous textiles to hit the general public, thanks to efforts by numerous brands, as well as the Philippine Tropical Fabrics Law*, but she acknowledges that there’s still a long way to go. “I think the way to really sustain it is for consumers to keep supporting local brands. That’s really the only way. Plus, more platforms also. ArteFino was there, [but so is] Katutubo Pop Up Market,” she said. For the brands, “We have to keep churning out fresh ways or products, so you’ll keep consuming without getting saturated.
“There’s so much to do!” — Joseph L. Garcia
*Republic Act 9242 or the Philippine Tropical Fabrics Law prescribes the use of local fabrics as material for uniforms of all government officials and employees.
FOR a certain generation, a trip to Boracay meant a weekend of sin: drinking and dancing until the sun came up. Today things are different. After a major cleanup followed by the restrictions to deal with a two-year pandemic, the party island is now offering relatively wholesome fun.
For example, during a media familiarization tour last month organized by Philippine Airlines (PAL) and the Tourism Promotions Board (TPB), a few of the media guests organized a short trip to a bar and we noticed that there was no dancing and no particularly noisy parties in the numerous bars and restaurants that dot the island’s shore. This, it turned out, was due to certain coronavirus disease 2019 (COVID-19) restrictions that are still in place on the island.
“You can just enjoy na nasa seat na lang (in your seats),” said Cristine Mansinares, Regional Director for the Department of Tourism – Region VI. Region VI includes the provinces of Antique, Capiz, Guimaras, Negros Occidental, and Aklan (under which jurisdiction Boracay lies). People were also masked along the beach, and in most of the hotels, bars, and restaurants. “You cannot still do the 2019 na party-party talaga,” she said during a group interview after a dinner on the evening prior to the night out.
A highlight of the Boracay stop was a sunset cruise. In a boat that held about 25 people, we were taken to see Boracay’s sunset with a relatively wholesome pizza party, while listening to the Beach Boys and Belinda Carlisle from a Spotify playlist titled “Boat Party.”
Wholesome fun is at the forefront of Boracay’s reawakening after the pandemic, which saw the island close and open repeatedly for two years after lockdowns were announced in March 2020.
“The private sector here, after several events that happened here in Boracay, rebranded Boracay as a destination that is better than ever,” said Ms. Mansinares. “When it reopened for domestic tourism in Oct. 2020, we saw the trend that almost [all] family groups (went to the island). When kids were allowed to travel to the island, a majority of the travellers, really, were with their families,” she noted in a mixture of English and Filipino.
She also noted that kids who were taking online classes brought school to the seaside, which allowed their families to increase the number of nights they stayed on the island since the children did not have to skip classes.
“Ngayon kasi (right now), we need open spaces to help us regain the health that we had prior to the pandemic,” said Ms. Mansinares. She spoke about the sun, the sea, and the clean air. “That’s what our families who visit the island value.”
“We were able to see and value the environment,” she said.
It would be remembered that Boracay had closed for several months in 2018 to rehabilitate the island’s infrastructure, sewage system, and environment.
She notes that people aged 29 to 50 are still the highest demographic in tourist arrivals. As of March, however, they have yet to recover the same number of tourists they used to welcome. Prior to the pandemic, she noted that the island could see up to 2 million people in a year, while they’ve only seen about 400,000 in arrivals since they reopened to limited capacities late in 2020.
Boracay’s new story is painted around family, as the emergence of new associations would suggest.
Ms. Mansinares discussed the tourism packages that have been developed around the island, like bike tours of the island, food crawls, and wellness treatments, all done with the help of new alliances between private and public stakeholders in Boracay. “Before, they did their individual marketing concepts. This time, they created this group to strengthen their presence, and to create their own standards,” said Ms. Mansinares. Included among these new groups is the Boracay MICE (Meetings, incentives, conferences and exhibitions) Alliance, which aims to improve and promote services for that market on the island.
It is one of the things that she wishes to stay after the island’s closure. Asked what she chooses not to bring back to the island after its reopening, Ms. Mansinares says, “Maybe it’s more of the attitude: Iyong kanya-kanya (every man for himself)?”
“For us, it’s a realization that for us to move forward, we have to come together.” — Joseph L. Garcia
By Luisa Maria Jacinta C. Jocson
PROPERTY developer Damosa Land, Inc. said that it sees growth in the office spaces segment this year, with business process outsourcing (BPO) companies looking to expand outside of the National Capital Region (NCR).
“Not to replace NCR, but to expand. We are starting to see that demand is coming in. If we look at the last major crisis we had, which was the financial crisis in 2008, right after that was when the BPO industry took off. I think the same thing is happening now,” Damosa Land President Ricardo F. Lagdameo said in a virtual interview.
“All of the companies abroad, especially in the United States, are looking to streamline and save on costs and we are probably one of the top two BPO destinations in the world. We hope that demand will continue to be the same,” he said.
This year, the property market in general will begin its recovery, Mr. Lagdameo said.
“Last year was not yet really the recovery year. We do feel 2022 will be the start of a true, meaningful recovery,” he said.
“In 2021, we started to see that projects sold well, we had various inquiries from tenants, we had some new tenants that opened businesses with us. There were certain months that were good, certain months that were not so good. But looking at 2022, it’s going to be a lot more consistent,” he added.
He said that real estate sales for the first quarter of the year were offset by the surge of the Omicron variant of the coronavirus.
“January was, for everyone, a bit of a hiccup because of that Omicron surge. But if we look at the numbers in February, and even leading to March, it looks very promising. We hope to keep this momentum up,” he said.
“Real estate sales are good so far, the inquiries and BPOs and office tenants really picked up this year. This year, there were actual visits, so that was very encouraging. Also, business travel is starting to come back. Even international travelers coming back to the Davao region,” he added.
Mr. Lagdameo said that sales spiked in February and March, as mobility restrictions eased.
“When we look at the whole of the first quarter, despite having a lackluster January, we will still be able to hit our target,” he said.
“I think the demand came from several factors. The people have become more open to real estate investing especially over the pandemic, people were looking at the value of having your own home. There are so many good projects in the market that people have really taken to real estate as an investment. When people were allowed to go out, meet with brokers and developers, it seems they were ready to execute,” he added.
In February, Damosa Land launched its mixed-use development Bridgeport in Samal, Davao del Norte.
“It was our first major launch this year and we timed it when the economy started to open up. It also came at a time where people were looking for certain attributes in projects, such as open space, health and wellness facilities, proximity to the ocean — these are all things we put into this development,” Mr. Lagdameo said.
The project sold out about 60% of the first building and racked up half a billion in reservation sales so far.
Bridgeport is Damosa Land’s newest mixed-use development that features low-density condominium buildings, premium open lots, a condotel, commercial and dining areas, and an exclusive marina.
“Bridgeport envisions a work-life balance for the hard-working accomplished individual or family aspiring to live a quality life without compromising work and business,” Damosa Land said in a statement.
In May, the real estate company announced that it signed an office space venture partnership with International Workplace Group (IWG).
“This was one of the major milestones we achieved in 2021. We acquired our first franchise center around April. For this year, we hope to start construction of one more center within Davao and we’ll be rolling out one to two of these centers in the coming years. We do have an obligation to our franchise partner, but it will depend on the demand. If it does fantastically and people start coming back to the office, we can accelerate construction,” Mr. Lagdameo said.
The next IWG center is expected to be built in Damosa Diamond Tower in Davao City.
“Hopefully by next year or the following year, we will start looking at not just Davao City, but also Cagayan de Oro and General Santos,” he added.
Amid the pandemic, Damosa Land completed two residential projects, including the Damosa Fairlane subdivision and Seawind condominium project, among other projects.
“Now, when people are ready to take ownership of their unit, the project is completely done. That’s kind of how we prepared ourselves this year,” Mr. Lagdameo said.
Since the beginning of the pandemic, Damosa Land said it shifted to online operations to cope with the lack of mobility and adapt with the “new normal” setup.
“In terms of operations, we had to really go online and go digital very fast. It was probably [in] the middle of 2020 [when] we implemented a virtual tour for all the different projects we have. From marketing to sales, virtual tours to payment, to accepting your unit, we did online turnovers,” Mr. Lagdameo said.
“Even our property management services were done online as well. If you needed some kind of repair, you didn’t have to go to the property management office, you can do it digitally through an app. Those are all paths that I think will continue even post-pandemic, it’s very efficient and gives flexibility to us and our home owners,” he added.
For the coming year, Mr. Lagdameo said that the biggest challenge for the industry is the competition.
“One of the biggest challenges we might face, and are already facing, is that because we had almost two years of lost time, competition is fierce. Everyone is out there with very aggressive promotions, everyone is launching at the same time, everyone is trying to make up for lost key performance indicators this year. That’s why this year is not yet going to be the full recovery year, I would say it’s more of a survival year,” he added.
However, he said that demand will not be a problem despite the government’s proposed rate hike in the second half of the year.
“Buyers will still continue to obtain bank financing. Prior to the pandemic, in 2017 or 2018, interest rates were so high. If you were a homebuyer, you’d get 7% to 8% at that time. If buyers were willing to borrow at that rate, then they are willing now. I think it’s not a huge concern,” he added.
He said Damosa Land is ramping up for more growth for the rest of the year.
“This year is going to be critical because it’s the start of the recovery year, and I think [so far] we did quite well. Hopefully, there’s going to be no more hiccups. In 2021, we recovered very well and we are projecting an even better one in 2022,” he said.
“If I were to characterize the rest of the year, and we are hoping we can keep up this momentum… the way we positioned ourselves this year is we actually positioned our projects to absorb the demand right away for 2022,” he added.
AMONG the top things that infuriate watch aficionados: replicas, fashion timepieces and battery-powered movements.
And yet, the $260 Swatch homage to the Omega Speedmaster that debuted a week ago and caused shopping pandemonium checks all three of those snob boxes, making the collaboration an even more remarkable hit. From London to Berlin to Melbourne, eager consumers snaked around blocks, lining up patiently or pushing and shoving to snag a timepiece that’s not even limited.
The buzziest and arguably most successful Swiss watch release in decades borrowed marketing and promotional techniques that — while novel to the staid world of Swiss watches — are well worn in the sneaker and fashion sectors.
So-called hype collaboration drops are old-hat for brands including Nike, Adidas, and Supreme that have teamed with high-end fashion houses ranging from Prada to Burberry to Balenciaga for collaborations that drive consumer buzz and create long lines at stores or traffic online when they land. Both sides stand to gain: affordable brands receive a sprinkling of high-fashion stardust, while the expensive partners get to broaden and often rejuvenate their customer base.
“This was a massive watch release that in many ways taps into the same currents and the same release tactics as traditional street wear and sneakers,” said Jesse Einhorn, an economist at online auction and trading platform StockX, which brings together buyers and sellers of shoes, street wear and watches in the secondary market. “This is an intentional strategy by brands. With the Omega Swatch it’s rare that you see a watch release so thoroughly penetrate the discourse.”
High-fashion/fast-fashion collaboration has been around for years, perfected by a run of partnerships that Swedish discount retailer H&M initiated with designer names like Karl Lagerfeld, Versace, and Stella McCartney. The risk remains that the novelty factor wears off quickly, or that brands that fiercely protect their exclusivity and pricing power cheapen their image. Indeed, prices for the likes of Chanel and Hermes handbags have only gone up in recent months, helping preserve their cachet.
The only scarcity factor of the so-called MoonSwatch is that it’s available at Swatch boutiques but not online, though the watchmaker promised to swiftly replenish its stock and migrate to the internet at some future, unspecified date. Both brands are owned by the same parent company, facilitating their partnership.
Models commanding huge premiums quickly debuted on resale sites. The MoonSwatch was the biggest ever watch release on the StockX platform in its first week by both trading volumes and premiums, the company said.
Prices were averaging $843, more than three times the retail price as of Thursday at 6 p.m. New York time. More than 2,200 of the brightly colored timepieces that come in 11 different models had been sold, according to StockX. Influential YouTube watch bloggers posted scores of videos giving their hot takes on a bioceramic plastic version of the Speedmaster Professional, best known for being the watch worn by US astronauts on the moon.
Wait lists are common for sought-after timepieces, but physical lines outside shops have so far eluded the industry. Where there has been hype, it’s existed more around special or limited editions from stalwarts like Rolex or Patek Philippe that aren’t for the masses.
Rolex’s steel sportwatches are notoriously difficult to find at retail and can sell on secondary markets for three or four times the price they do in stores. Patek Philippe can’t keep any of its Nautilus model watches around and Chairman Thierry Stern told Swiss newspaper Le Temps this week he gets as many as 100 e-mails a week from customers desperate for a Nautilus.
Around the same time that Swatch’s Omega coup unfolded, Rolex and Patek were among manufacturers showing off their latest models at the Watches and Wonders show in Geneva, a genteel event drawing 20,000 people checking out minor updates to some models that haven’t been radically overhauled in 20 years or more.
Swatch and its brands — which include Breguet, Longines and Blancpain — don’t participate in the show, which is hosted by rival Richemont, the maker of Cartier, Vacheron Constantin, and Jaeger-LeCoultre watches, among others.
No matter. The MoonSwatch stole the show for an event where watches priced at more than 500,000 Swiss francs traditionally make their debut.
The MoonSwatch launch comes as the Swiss industry has enjoyed a tentative rebound from a pandemic-driven sales crash in 2020. Still, the comeback has been tempered with caution as Chinese tourists haven’t returned to Europe in significant enough numbers to drive sales and traffic in airports — where Swatch has many of its boutiques — has persisted below pre-pandemic levels.
Omega has long perfected its marketing pitch as the watch of choice for aspiring astronauts and the world’s favorite secret agent, James Bond. Swatch, conversely, has struggled to hang onto its iconoclast image, having previously won credit for saving and reviving the Swiss watch sector from the so-called quartz crisis of the 1970s with its colorful, cheap designs.
The plastic Swatch was once a global phenomenon with customers thronging stores in search of new releases. But that was back in the 1980s and ‘90s. Lately, smartwatches and fitness bands have become the more common wrist accessory. In fact, exports of Swiss quartz watches dropped to a 38-year low in 2021, according to trade statistics.
“It is about time that Swatch Group invents something new and exciting for its eponymous brand,” Bernstein analyst Luca Solca said.
For now though, the MoonSwatch is “a stroke of genius,” he said. — Bloomberg
YIELDS on government securities on offer this week are expected to increase further in anticipation of rate hikes by the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).
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 fresh three-year Treasury bonds (T-bonds).
A bond trader said in a Viber message that T-bill rates are likely to move sideways from the previous auction, while the three-year bond could fetch a rate ranging from 4% to 4.250%.
“Market players are still cautious coming in to the week in anticipation of more interest rate hikes by the US Fed and BSP,” the trader added.
“Moreover, the market will also watch this Tuesday’s domestic CPI (consumer price index) print for a lead.”
The BSP chief has said the central bank is looking to end its pandemic-driven accommodative policy by the second half. BSP Governor Benjamin E. Diokno last week signaled the key policy rate could reach up to 2.75% by next year.
The central bank has kept its key rate untouched for the 11th straight meeting last month despite warning that its inflation target might be breached this year due to surging global oil prices brought by the Russia’s invasion of Ukraine.
Analysts said headline inflation likely accelerated in March as the surge in global oil prices amid the Russia-Ukraine war caused faster increases in food and transport costs.
A BusinessWorld poll of 18 analysts yielded a median estimate of 4% for last month’s inflation, nearer the upper end of the central bank’s 3.3% to 4.1% projection.
If realized, this would be faster than the 3% in February and would match the upper end of the 2-4% target of the BSP. Still, it would be slower than the 4.5% seen a year earlier.
The Philippine Statistics Authority will release March inflation data on Tuesday.
Central banks around the world have been tightening their monetary policies to temper inflation even in the face of risks to economic growth.
The Fed hiked its policy rates for the first time since 2018 by 25 basis points (bps) last month to combat its surging inflation that reached a 40-year high. It also signaled more aggressive hikes in the coming meetings.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message that the rise in rates of government debt could be tempered by lower BSP term deposit facility (TDF) auction yields for the past two weeks, the decline in global oil prices, and a stronger peso.
On Friday, global oil prices dipped ahead of a meeting of International Energy Agency member countries to discuss a release of emergency oil reserves alongside the US planned release of up to 1 million barrels of oil per day for six months, Reuters reported.
Brent crude futures were down 6 cents or 0.1% to $104.65 a barrel by 1055 GMT on April 1. US West Texas Intermediate crude futures were down 37 cents or 0.4% at $99.91.
At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 1.3493%, 1.5347%, and 1.7434%, respectively, based on the PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.
The government partially awarded the T-bills it offered last week as yields continued to rise amid expectations of more aggressive Fed rate hikes.
The BTr only awarded P5 billion in 91-day T-bills at its auction last week even as total tenders reached P35.804 billion, over two times as much as the P15-billion program.
The government raised P5 billion as planned via the 91-day securities as bids reached P17.802 billion. The average rate of the tenor went up by 5.1 bps to 1.587% from 1.536% last week.
Meanwhile, the government did not award 182-day T-bills even as tenders reached P9.4 billion versus the P5-billion program. Had the government made a full award, the average rate of the six-month papers would have gone up by 24.9 bps to 1.856% from the 1.607% fetched at the previous auction.
The government also rejected P8.602 billion in bids for the 364-day debt against the P5-billion plan. Had the BTr fully awarded its offer, the average rate of the one-year T-bill would have increased by 37.5 bps to 2.137% from the 1.792% quoted for the tenor previously.
Meanwhile, the last time the government offered three-year bonds was on March 1 where it rejected all bids as investors asked for higher yields amid rising inflation expectations due to the Russia-Ukraine crisis.
The BTr plans to raise P200 billion from the domestic market this month, or P60 billion via T-bills and P140 billion from T-bonds.
The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of gross domestic product this year. — T.J. Tomas with Reuters
By Arjay L. Balinbin, Senior Reporter
FOLLOWING its recent footprint expansion in Negros and Bicol, Eastern Communications, a broadband provider jointly owned by PLDT, Inc. and Globe Telecom, Inc., said it will expand further in Visayas and Mindanao this quarter.
Eastern Communications is also entering Panay Island (Kalibo, Boracay) and Butuan in the second quarter, the company told BusinessWorld in an e-mailed reply to questions on Saturday.
“More areas are in the pipeline such as Zamboanga and Bohol,” it added.
Eastern Communications noted that its nationwide expansion will allow the company to promote its connectivity and digital solutions in the “next normal.”
“The company continuously strives to be a one-stop-shop for telco and ICT (information and communications technology) solutions among businesses across the country.”
On Friday, Eastern Communications announced its footprint expansion in the provinces of Negros and Bicol.
“Eastern Communications introduced its Internet Direct Service (IDS), a premium and dedicated high-speed business-grade connectivity, and other borderless solutions such as Eastern Cloud, their business-grade cloud service that offers efficiency and collaboration, and Eastern Cyber Defense, a suite of premium cybersecurity solutions equipped by global partners such as Cisco, Fortinet, DOSarrest, among others,” it said in an e-mailed statement.
The telecommunications company has earmarked P3 billion for its nationwide expansion this year.
In 2021, the company allotted P2.8 billion for its expansion plans. It was able to complete the rollout of its services in Tuguegarao, Batangas, Lucena, Iloilo, Cagayan de Oro, and Davao City last year.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.
LONDON — French fashion photographer Patrick Demarchelier, known for his front covers and portraits of famous figures including the late Princess Diana, has died at the age of 78.
Mr. Demarchelier photographed fashion house campaigns and glossy magazine shoots throughout his career, and was even referenced in the 2006 movie The Devil Wears Prada.
His photographs of Diana became some of the best known images of her, including a black and white one of her smiling while hugging her knees wearing a strapless gown and tiara.
“It is with great sadness that we announce the passing of Patrick Demarchelier on March 31st 2022,” his representatives wrote in a post on his Instagram page late on Thursday.
“He is survived by his wife Mia, his three sons Gustaf, Arthur, Victor and three grandchildren.”
No further details were given.
In 2018, Demarchelier was accused of sexual harassment, allegations he denied. At the time, Vogue publisher Conde Nast said it would stop working with him for the foreseeable future.
Fashion industry figures, including models including Bella Hadid and Cindy Crawford, paid tribute to him.
“I am grateful to have been lucky enough to be in front of your lens. Most gentle, most legendary, soft but full of life. You will be missed Patrick,” Ms. Hadid wrote on Instagram.
“Thanks for so many great memories and beautiful, timeless images,” Ms. Crawford said.
Posting her own Vogue front cover shot by Mr. Demarchelier, actress Kate Hudson wrote: “So many memories. I had the pleasure of being photographed by Patrick often and always enjoyed him and his team so much. Sending a ton of love to his family.” — Reuters
LIKE THOR’s hammer (see what I did there), Geely smashed and carved a nook for itself in the highly competitive automobile industry of the Philippines. Hard to believe that the brand had just punched its time card in 2019 to mark its return — this time under Sojitz G Auto Philippines Corp. (SGAP) as its official distributor.
Driven primarily by the compelling, right-priced product that is the Coolray, Geely in the Philippines hit the ground running and quickly became one of the reasons that the term “China-made” turned into a, well, more palatable proposition for car browsers. The Coolray success here is, by no means, an aberration. In a recent press release, Geely Philippines reported that the “Coolray has been a best-selling model since its launch in China last October 2018. It quickly rose to the top three best-selling compact SUVs in the Chinese market. In September 2019, Geely Coolray officially began its worldwide trip, entering the automotive markets of over 10 countries including the Philippines, Russia, and Saudi Arabia. It quickly captured a large number of local customers. Two years after diving into the global market, the Coolray has become a sales legend with nearly 400,000 cars worldwide.”
Geely has been a juggernaut here as well. Last year, as the pandemic was (cautiously) being corralled, vehicle sales almost tripled. With but three models in its lineup, Geely Philippines moved 6,104 units — a 182% jump from the 2,158 units sold in 2020. All told, the brand kept ninth place in auto sales overall (even as it more than doubled its share of the market from 0.9% to 2.1%).
What makes this even more remarkable is that all three of the aforementioned models are SUVs. This perhaps underscores the fact (as if we need to be reminded) that Filipinos are such big crossover fans.
Nonetheless, Geely Philippines (or any brand for that matter) will not be served well by being a one-trick pony. There’s business to be had in other auto segments. With that in mind, SGAP recently launched the 2022 iteration of the Emgrand. Not only is the brand expanding its offerings, the Emgrand is going to do battle in what the distributor called “the country’s largest segment, the subcompact sedan market.”
Now, I can finally reveal that several of us motoring journalists were asked to participate in a focus group discussion last December. That was when SGAP was still examining the feasibility of actually bringing in the Emgrand or perhaps, more accurately, how the Emgrand would fare perception-wise versus the models it is slated to do battle with. Lined up shoulder to shoulder with the competition, the Emgrand looked modern and well-equipped. Save for one vehicle, it was also the biggest among the subcompacts.
Those of us present for the session agreed that the Emgrand would be a promising release for Geely if it was priced well below P1 million — the lower the better, actually. Now I will not surmise as to the importance ascribed to that opinion, but take a gander at the Emgrand’s price tags: P908,000 for the Premium variant and P798,000 for Comfort. Obviously, there’s a large gaping hole between the two price points, and I’d like to think that it’s by design so that Geely can fill in that void with more variants — depending on how warmly the Emgrand is received.
It’s a scorcher of a morning that greets us at the Geely North EDSA dealership. We’re here to get our noses swabbed (de rigueur in this pandemic era) ahead of a first-ever ride-and-drive for the Geely Emgrand (and first in the new normal for SGAP). The Azkarra and Okavango had been deprived of this activity when they were launched here.
SGAP President and CEO Yosuke Nishi is there at the showroom to talk to us and see us off. I ask him if there are enough units of the Emgrand, and he nods — adding there is adequate supply so that buyers don’t have to wait. He also intimates that it is important for SGAP to hold the activity as the company knows people are waiting for feedback from people like us before they put the car into their consideration set. SGAP General Manager for Sales and Marketing Froilan Dytianquin concurs.
An industry veteran, Mr. Dytianquin also shares that SGAP is looking at selling 12,000 total vehicles in 2022 — about 2,500 of which will be Emgrands. More good news is forthcoming for Geely fans: A new model will be unveiled this year, in addition to an “updated” one. It’s not all about bringing in nameplates, either. The executive further reveals that 27 Geely dealerships are now open, and six are in the works. By the end of the year, SGAP expects 40 facilities in total to be open. It’s pretty obvious that Geely Philippines is about doing things quickly.
Now that the economy and society in general is opening up, Geely is ready to dip its toes in an even bigger pool. “The Geely Emgrand aims to continue what we have begun from our young brand. We have heard and listened to our customers and this gave us the confidence to bring in a sedan for the Filipino market,” Mr. Nishi had said in a statement.
So, let’s get to the crux of the matter. Is the Emgrand the right-priced sedan you are looking for?
In China, the answer is obviously yes — there have been more than 3.38 million Emgrands sold cumulatively. Now, the Philippines is the first overseas market to get the model since the all-new edition’s global launch last year. SGAP said that part of the reason why we had dibs on the Emgrand has to do with the aforementioned robust sales and growth in such a short time. China is certainly looking at the Philippines with keen interest. Remember the Coolray Sport Limited? That was an example of China’s swift response to demands of the Philippine market.
The Coolray formula for success certainly comes to mind at first blush of the Emgrand. Here’s a product that punches above its price point in terms of fitments and execution. Even during the aforementioned focus group discussion, the Emgrand stood out as defying the conventions of the affordable class. It benefits from Geely’s advanced, so-called 5G smart factory in Changxing. Said to employ 100% automated welding, the Emgrand thus gets consistent gaps and flush (less than 3.5mm). “This factory also enables Geely now to adopt the longest roof laser welding instead of spot weld on the Emgrand, increasing its strength by 50%, making the vehicle safer.”
You can see this elevated level metalwork in the Emgrand, which sports not only a great finish but elegant styling — reminiscent of a certain Sweden-headquartered brand which Geely owns. Isn’t synergy great?
I don’t know about you, but “subcompact” seems like a misnomer for this model, which stretches 4,638mm and is 1,822-mm wide. The Premium variant assigned to me on this drive has all the bells and whistles — including leatherette and suede material that cover its seats. If you ask me, the blue-and-white color scheme is a little off-putting though, particularly if you happen to choose an exterior color that doesn’t match it (like the red-hued unit I’m driving).
But let’s look at the exterior first. The Emgrand Premium gets projector LED headlamps with auto headlight control. Daytime running lights are LEDs as well and are standard in the lineup. The Premium’s side mirrors fold automatically, and boasts a hands-free-opening, 500-liter trunk. Speaking of which, with the rear seatbacks folded, this capacity grows to 1,100 liters. Seventeen-inch alloy wheels with 205/50R17 tires complete the picture, along with nifty welcome and farewell lighting that showcases a lighting routine on the Emgrand when you unlock or lock it — courtesy of 190 LED bulbs in the rear which “project three unique light patterns.”
The first thing that calls your attention inside the cabin is a huge eight-inch infotainment screen with wireless screen mirroring via EasyConnection. Unfortunately, neither Apple CarPlay nor Android Auto is available, but we keep hoping an OTA update in the near future will make the Emgrand more accepting of our mobile devices. Having said that, I managed to pair my iPhone wirelessly for some hands-free calls and to listen to Spotify tunes through its six speakers. Not bad. The screen also turns into a reversing display.
“The inside is where all the magic happens,” says SGAP Product Planing Specialist Aaron Leang. Much of the magic is in the electronic air-conditioning with an “intelligent interactive system.” You can set it that when you unlock the car, the A/C can be switched on. Conversely, when you leave the car and lock it, a blower will activate after a minute. This dries the evaporator to prevent the growth of molds. The air-con also has a CN95 filter to keep the cabin free from viruses and bacteria.
“It adapts to what you do,” adds Mr. Leang. “It lowers the fan speed of the A/C when you make a Bluetooth call, when the sunroof is opened it switches to fresh air mode, and when the recirculation button is engaged, all windows will close — including the sunroof.”
The Emgrand is powered by a new 1.5-liter dual continuous variable valve timing normally aspirated engine, good for 102hp at 5,600rpm and 142Nm. Geely says the car is kept light through an all-aluminum alloy cylinder block. The driver accesses the goodness through an eight-speed continuous variable transmission (CVT).
As the output numbers would suggest, the Emgrand isn’t built for speed or agility — that would be missing the point altogether. What it does deliver in spades is what the lower variant (for now) is named after — COMFORT. NVH levels are managed, the aforementioned air-conditioning is adequate, there’s a lot of soft-touch materials within. Space is generous, as are places to stow your stuff. There’s even a USB port under the rear A/C vents. Thoughtful touches help the Emgrand elevate the category — such as an all-digital instrument cluster which even affords a real-time view of tire pressure. Other appurtenances and safety essentials include ABS with EBD, electronic stability program, traction control, hill hold control, electric parking brake with autohold, six air bags (on the Premium), and three ultra-sonic reversing radars and high definition wide angle reverse camera (Premium). There’s also a rear intelligent monitoring System that reminds you to check the rear seats before getting off the car.
If you check out the website of Geely Philippines and find your way to the Emgrand’s brochure, you’ll see a third variant, “S.” It appears to be the lowest trim, although it isn’t available just yet. Now that’s going to undercut a lot more of the competition.
But I think, for now, this is one thing Geely isn’t going to rush. It’s willing to wait on how the Emgrand will be received. If you ask me, there’s much reason to believe the reception will be as warm as the summer we’re now going through.
